The movement of the last two days seems quite clear to me. The bull market is started and a decline in the price of oil could make it worthwhile to go long on EurCad.
Good night,
this week confirmed the “risk appetite” that the market is showing in this month of May, denying all the bearish statistics presented in late April!
The US stock markets (but also the German Dax) highlight new highs and do not suggest, for now, a force to correct downward.
The European negative fundamentals we had this week (GDP, German growth, technical recession in France) have contributed to the weakening of the euro especially against the dollar that, on the contrary (and temporary uncorrelated with the market “risk-on”), confirms its moment of strength.
The Oceanic currencies are stll weak, due to the devaluation pressures of their central banks, as well as commodities (such as Gold) due to a general decline in global demand.
Next week we will have the interest rate decision in Japan, among the most important market movers. Let’s see them all, together with the most interesting trading opportunities, in my usual weekly video analysis.
Best wishes and happy weekend.
Maurizio Orsini
Attention to the volatility that we might have on May 22nd. Mr Bernanke will talk and the Fed will publish the minutes of the FOMC.
On May 22nd, I’m expecting volatility: Bernanke talking about the state of the economy and minute of the last FOMC.
Good night,
the major stock markets closed slightly positive today and with low volatility in the absence of special relevance market movers.
Tomorrow we will have from Oceania the Australian central bank Minute (very interesting to clarify the next monetary policy measures of the RBA) and the 2-yaers inflation expectations by the Reserve Bank of New Zealand. From England we will know the inflation rate in the previous month.
ANALYSIS
Eur/Yen: we are in a phase of accumulation of very short period with the price reaching the support area 131 (and the EMA21). The main trend remains bullish so I would be looking, in the level just mentioned, for one of my Long trading signals to resume a possible upward movement that could have as a first target the area 134.20 (maybe “helped” by the macro news that will arrive from Japan next Wednesday!).
Greetings.
Maurizio
Good night,
the Australian central bank announced this morning the Minute of the last interest rate decision by pointing out that reduction was due to the need to support investment of local enterprises, especially in the mining sector. The inflation target for the next two years provided by the New Zealand central bank remains almost unchanged (2.06%) while we had a decrease in the UK inflation rate of april at 2.4% below the expectations of analysts.
Tomorrow will be a day full of important market movers with the interest rate decision (and monetary policy statement) in Japan, the Minute in UK and the USA and the retail sales data in the UK and Canada.
ANALYSIS
US Oil: the short-term bullish trend (above EMA21) approaches an important static and dynamic resistance area at $97.50/98. In this level we could consider one of my bearish trading signals (although countertrend) entering a possible bearish movement with a target at $89, which corresponds to the bottom of the long term triangle evident in the chart.
Greetings.
Maurizio Orsini
Good night,
the Bank of Japan confirmed today the level of interest rates (0.10%) as well as the actual monetary policy, explaining that Japanese economy has started picking up not because of an increase in exports, but due to the end of its decrease.
In England, where retail sales fell sharply (0.2%) not so much compared to previous data (0.4%) but especially considering analysts’ expectations (1.8%), we had this morning the Minute of the central bank publishing that most of its members (6 vs 3) were not in favor of an increase of the “quantitative easing” (ie more direct intervention in the economy) because of a possible recovery in the economy and also to avoid inflationary pressures.
From Canada we had the retail sales data showing a zero growth in march (below the expectations).
The US Federal Reserve just published its Minute, anticipated by the testimony of his governor Mr. Ben Bernanke in front of the US Congress. Bernanke confirmed the continuation of the current accommodative policy in order to avoid the risk of slowing or ending the current economic recovery and a decrease of the inflation. Obviously the asset purchase could be reduced in case of a very positive outlook for the labor market.
Also tomorrow we will have a full economic calendar with the inflation expectations in Australia, the PMI manufacturing index in China, Germany and Europe, the British GDP, the consumer confidence in Europe and the U.S. data about the new home sales and the initial jobless claims.
ANALYSIS
Usd/Yen: the main trend is still bullish but we are in a very short term lateral move and near the resistance level 103.50. In this area we will be evaluating one of my short trading signals (very carefully because it would be a countertrend!) or perhaps a return to the intermediate static and dynamic support 101,50/102 to consider new buying opportunities with more ambitious target in area 105.
Greetings.
Maurizio Orsini
The response of the market after the Fed has been pretty clear. I doubt UsdJpy will return near the top of area 103 in the short term. A correction under 100 is quite more likely.
Good night,
as mentioned yesterday we had an economic calendar full of market movers: inflation expectations of 2.3% in Australia, the Chinese manufacturing index (lower than expected and with the danger of an economic contraction that let Asian markets drop), the European PMI (above expectations), the UK GDP confirmed at 0.3%.
From the Euro zone we also had the consumer confidence (slightly better than the previous month but not as analysts were expecting); while from United States we received the data of new homes sales and jobless claims, both positive respect forecasts. In a few moments Mr.Draghi will have a speech in London.
Tomorrow we will have different data from Germany, such as GDP and IFO confidence, and the “Durable goods orders” in the United States.
ANALYSIS
US Oil: as we saw 2 days ago, in my daily article, the price reacted in the resistance $ 97.50 breaking down the moving average 21. A temporarily correction in the intermediate resistance $ 94.20 would be interesting to evaluate one of my short trading signals with a first target in the support level $ 92 (which is important looking to the reaction the price had on May 15!) and then in the static and dynamic area $ 89.
Greetings and see you tomorrow with weekly video.
Maurizio Orsini
I will always have my weekly analysis done on sunday so that am ready to trade the week and then i make daily analysis to take up the best entry level possible to make good profits.
Could you now explain to us the cause of the current strength of the JPY?
Hi,
from a technical point of view it’s quite normal to have a correction after almost 6 months of continuous depreciation. Considering the macroeconomic outlook: the words of Kuroda about the possible (slow) recovery of Japan, the possible reduction of US QE and the weakness of Chinese production generated a rise of the Yen!
Any way the main trend is still bullish!
Bye
Good night,
another week of volatility is over and this time it’s been characterized not by interest rate decisions (only in Japan), but by a series of reports of central banks and macroeconomic data that caused strong movements on stock markets and foreign exchange. In particular, the difficult situation of the Chinese production generated tensions in global stock markets (especially in Asia) with downward corrections after the tops of the last days.
In their Minutes, several central banks (U.S., UK, Australia, Japan) have unanimously shown the intention to continue with the current expansionary monetary policy in order to ensure the system the necessary liquidity to drive the economic recovery (but the pockets of people will concretely have more availability?!) although the United States could decide a reduction of this intervention in case of very positive data from the labor market.
Next week too we will have many important market movers as the rate decision in Canada (the second-last of Governor Mark Carney before moving, next July, to the Bank of England!) and the manufacturing data in China.
Let’s watch together, in my usual weekly video, the economic calendar for next week and the trading opportunities that a new dollar’s rise could offer.
I wish you a very happy weekend!
Maurizio Orsini
Some members of the Boj have stated that obviously, the 2% inflation will be very difficult to achieve in this global economic environment, despite the weakness of Jpy.
Japanese Stocks Open -3%, JPY Under 101.00, JGBs -2bps | Zero Hedge
Good night,
this last week of May begins with less liquidity in the market due to the closing of the US and UK Stock Exchange for holiday.
In the Minute of the Bank of Japan it’s been told as some of its members highlighted skepticism about achieving the inflation target of 2% in the next two years and therefore the need for flexibility in the adopted monetary policy.
The main market mover for tomorrow will be the Consumer Confidence in the United States.
ANALYSIS
Usd/Chf: we are in a short and medium term uptrend, with the price in the support area 0.96/0.9620. One of my bullish signals (with the arrival of the moving average too) could be interesting to confirm the end of the retreat as well as the breakout of the long-term downtrend line. The possible targets of a Long entry could be 0.9760 and 0.9850 levels.
Greetings.
Maurizio Orsini
The most classic return move on the neck line … and now the re-start with resistance 0.98.
For the intraday bias, the USDCHF is still showing strong bullish signals in its price action, as prices are have broken all its key resistance lines of 0.9653, 0.9675, 0.9706, indicating strong bullish traction in its momentum. Currently prices are now showing bearish trend as its moving averages are now concocting its bullish pattern at the moment and its positive signal might continue for the coming session. In addition, the Bollinger Bands (21) is now showing its bands opening in support its bullish stance in its signal for the coming hours. The bullish pattern given by the 63-day SMA, 84-day SMA, 5-day EMA, 9-day SMA and 21-day SMA might continue for the coming hours.
Hello traders,
with the reopening of the U.S. and English market we saw a normal liquidity which led the major markets to close the session in a positive way, also considering the words of the Chief Economist and ECB member Mr. Peter Praet, according to which there will not be a decrease in monetary policy but, on the contrary, there is the possibility for further interest rate cuts to support the euro economy.
The only major macroeconomic data today was the Consumer Confidence in the U.S. which has been higher than expected waiting for the NFPR of next week.
Tomorrow, besides another BoJ governor’s speech, we will have some interesting data about the labor market and inflation in Germany (and therefore correlated with the euro area) and the interest rate decision in Canada with the analysts’ consensus for a maintenance of the current level.
ANALYSIS
Aud/Nzd: the strength of the New Zealand dollar (clears short/medium term downtrend) is decreasing by the current technical correction, which could draw on 1.1960 resistance area one of my clear short signals to enter the trade with a first target in the level 1.1830 and than 1.1770. Tomorrow we’ll see if the daily or H4 chart will present interesting opportunities.
Greetings.
Maurizio Orsini
Hello traders,
as expected the Bank of Canada kept the interest rate unchanged at 1% probably delegating the next governor about any decision on monetary policy changes (in fact Mark Carney will move to the Bank of England next July).
From Germany we had today the data on unemployment (confirmed at 6.9% as expected) and on inflation which was higher than the forecast.
The International Monetary Fund has reduced the estimated GDP growth of China taking it slightly below 8% (generating a weakness of the commodity currencies).
Tomorrow we will have many important data from the United States (including GDP, personal consumption, jobless claims) and also the consumer confidence in the euro zone.
ANALYSIS
Usd/Yen: the oscillation of the dollar in these days generated a slight laterality in the very short term. The main movement remains upward, above the moving average and above the most important support zone 100. So a clear Long trading signal in the level just mentioned could be interesting to enter with a target in the price level 103,50
Greetings.
Maurizio Orsini