the macroeconomic calendar today gave us interesting data from the United States, such as GDP (+2,4% lower than expected), the personal consumption (above the forecast) and especially the jobless claims (worst than expected and generating a USD sell off), and from Europe with the consumer confidence which respected the forecast (at -21.9) but lower than the previous month.
Tomorrow, last day of the week (and of May), we will have the inflation in Japan and Europe and the Canadian GDP.
The main stock market had a good recovery except Tokyo that closed the session falling 5%.
ANALYSIS
Gold: thanks to the weak dollar, we can see a bullish move of this commodity back to the $ 1,410 resistance zone. In this static and dynamic level we could find one of my short trading signals to resume the downward movement until the potential target $ 1320.
today ends the month of May and a week characterized by a “standard” volatility: just one interest rate decision (in Canada), several economic data from Europe and U.S.A and stock markets that, although in a very short-term sideways range, continue to confirm the bullish move of this month denying the classic "Sell in May and go away!"
European macroeconomic data have generated a strong bullish move for the euro in the second half of the week, together with a simultaneous sell off for the U.S. dollar, especially after yesterday’s data on unemployment.
Next week, in my opinion, will be the most important of June with a series of interest rate decisions (and monetary policy) and also the U.S. Non Farm Payrolls with the volatility that it will certainly generate.
In my usual weekly video I specifically consider all the major market movers for the next days and, of course, some interesting situations in my daily charts to have good trading opportunities!
Have a great weekend!
Best Regards
Maurizio Orsini
I believe that the moving average that you are indicating is the 20-days EMA. It 's the second time in a matter of a few days that the market is going below, a good sign for gold.
this day might be called the PMI Manufacturing Day because we have this important market mover in different geographical areas: China (49.2 lower than expected), Germany (49.4 higher than expected), Euro zone and UK (respectively 48.3 and 51.3, both above forecasts), United States (49 lower than expected).
Almost all important stock exchanges closed a negative session.
Tomorrow the focus will be on the RBA rate decision (with a probable confirmation of 2.75%) and on the April inflation rate in the euro zone.
ANALYSIS
Eur/Yen: the pair is in an important area of support (130), slightly below the moving average and drawing a series of inside candles of accumulation.
All the yen pairs are showing similar situations, according to the more or less obvious strength of the corresponding base currency. In this specific case a confirmed breakout of 129.80 level, below the bottom of the Outside candle we had on May the 23rd, could generate a new wave of sales with target in the next support zone 127. Anyway we have to manage it carefully considering the expected volatility generated by the ECB rate decision.
as expected the RBA left the interest rate unchanged at 2.75%, also considering new restrictive measures and rate cuts in the future due to the actual strength of its currency against the USD and the difficult situation of its exports (generating weakness for the AUD).
From Europe we had today the producer prices index (-0.6% below analysts’ expectations).
Stock markets closed slightly positive, especially Tokyo and Madrid.
Tomorrow we will have the GDP in Australia and in the euro zone, and also the Beige Book from the Federal Reserve.
ANALYSIS
Gold: the yellow metal continues the consolidation phase just below the EMA21 and te resistance area $1415. The breaking of the upward short term trendline could lead to an important down move to the next target level at $1320. Obviously on the contrary (ie in case of breakout of the moving average and resistance) we might have an upward movement up to the previous month tops on levels $1480.
also today I start my daily post with an Australian data, the first quarter GDP, resulted lower than expected. Otherwise the gross domestic product in the euro zone, in line with expectations, had a decline of 0.2% in the first quarter of 2013.
From the United States we had the Fed’s Beige Book that reported a moderate growth of the economy (Dallas Fed was the only one of the 12 Fed districts to report a strong growth).
The main stock markets closed negative.
Tomorrow we will have high volatility due to the rate decisions in Europe and in the UK (and the respective monetary policy communications), in addition to the jobless claims the U.S.
ANALYSIS
Eur/Gbp: today we consider this cross that will be directly affected by the rate decisions of tomorrow! We are in the middle of a medium-term laterality and, just now, very close to the 0.85 support level. One of my bullish signals could push the price upward to level 0.86 while, on the contrary, a breakout of the support could generate a down trend to the static and dynamic area 0.84 and resume the uptrend line started almost a year ago. Anyway considering a good setup in one of the two extreme levels of this laterality would allow us to have a better risk/return!
today’s session confirmed the weakness of the stock markets that could continue this downward phase after the upward movement of May.
As expected, nothing changed in Europe about the rate decisions of the ECB and the BoE which confirmed the current 0.50% and the current monetary policy. The English Central Bank confirmed the 375 billion pounds of monthly asset purchase while Mario Draghi, in his press conference, underlined that the ECB continues to monitor the economic development of the euro area (expected in slight decrease in 2013) and will take stimulus measures only if it’ll be necessary (the result was an upward move of the euro to the 1-month tops!).
From the United States we had the jobless claims data which was higher than expected at 346.000.
Always considering the U.S. labor market we will have tomorrow the unemployment rate and the most important market mover in Forex market, the change in nonfarm employment (Non Farm Payrolls). The same data are scheduled from Canada.
Pay attention to the volatility and the management of the opened positions!
ANALYSIS
Eur/ Usd: the confirmation of the ECB’s policy appreciated further the euro which continues its very short term ascending phase. The next key level to point out is the resistance 1.32 (also dynamic for the arrival of the moving average in the monthly chart!) with the view of searching one of my short trading signals with target 1,28 . Obviously, in case of breakout the view would change into “bullish” and therefore I would be looking for buying signals. Let’s wait and see what the market will decide and we’ll act accordingly.
we are at the end of the first week of June, which showed a continuation of the downward move of the stock markets after the excellent results of May. In this sense, the macroeconomic data coming from Europe (cut of the 2013 growth outlook in Germany and the euro area) and from U.S.A. (lower manufacturing production and higher jobless claims) have not helped the risk appetite of investors.
This week we had three rate decisions with the confirmation of the previous levels: 2.75% in Australia and 0.50% in Europe and the UK. In all cases we had the confirmation of the current monetary policy threatening new stimulus measures if it will be necessary, especially by the Reserve Bank of Australia (due to the weak exports and the still high appreciation of its currency) and by the European Central Bank (due to the slowdown in the economy).
Next week should be more “quiet” but, anyway, we will have two events to supervise in a special way that are the interest rate decisions in Japan and New Zealand.
All other major market movers as well as some interesting trading opportunities and the description of two good trades, realized in “Forex Friends” this week, can be found in my usual weekly video!
Happy weekend everyone, see you on Monday!
Maurizio Orsini
My preference goes to the short EurGbp. The sentiment is very unfavorable to the Pound with hedge funds all moved from the short side (see Cot Report).
the new week begins with a very positive news from Japan, with the upward revision of the GDP (4.1% annually) that, together with the increased confidence of Japanese consumers, let the Nikkei index rise almost 5%. We had also negative data from China with a decreasing export and a negative import.
The day was characterized by the absence of other important market movers (even Australian markets were closed for the holiday of Queen’s Birthday) and by the negative close of the main stock indices (with the exception of Frankfurt and New York).
Tomorrow we will have the interest rate decision in Japan (expected unchanged at 0.10%) with the monetary policy statement and the press conference of Governor Kuroda. From England we will receive data on industrial and manufacturing production as well as the GDP.
ANALYSIS
Dax Index: in line with the recovery of the U.S. indices, also the German index CFD confirms the strong candle of last Friday breaking up the moving average and the resistance level 8280 points (even loosing partially its strength during the session). Right in that area (now support) I will wait for one of my trading signals to enter a Buy position with targets on level 8450 first and 8550 after.
the Japanese central bank decided to keep everything unchanged in the level of interest rate and monetary policy (asset purchase) unlike what different operators were forecasting and generating a negative session for the Nikkei.
From England we had a good data on industrial production (upward) in line with expectations and on manufacturing production slightly below expectations, but higher than the previous month. From the UK we also had the estimated GDP that in may has been 0,6% (lower than the previous one). Stock markets closed a negative session today.
Tomorrow we will have another interest rate decision in New Zealand (expected unchanged at 2.50%) as well as several important data from European as the inflation in Germany, the industrial production in the euro zone and data about the english labor market (employment change and unemployment rate).
ANALYSIS
Eur/Aud: on the weekly chart of this pair we can see 6 weeks of straight upward movement due to the momentary strength of the euro and especially to the weakness of the Australian. Since past March lows, we saw an increase of almost 2000 pips that led this pair to an important area of resistance (1.4250/1.43) in which we could evaluate a sell entry to enter a possible technical correction movement with a target in the 1.36 support area. We must always wait for the presence of a clear short trading signal as it would be a countertrend operation and buying a currency which is not very strong in this period.
The interest rate decision in New Zealand is the most important market mover today and it will be released in a few hours with the possible measures of the RBNZ to help exports, in a difficult situation because of the appreciation of its currency and the recent negative data of China. The analysts’ consensus is for a continuation of the actual 2,50%.
The economic calendar also showed us some interesting data from Europe such as the German inflation (confirmed at 0.5%), the euro zone industrial production (in line with expectations) and data on the British labor market (with a stable unemployment and an increase in the number of workers).
Always from Oceania, tomorrow, we will have data about Australian labor market. From Europe it will be released the usual ECB “monthly report”, while from the U.S. we will have the retail sales and the jobless claims.
ANALYSIS
Ngas: on the daily chart we can appreciate a short term bearish movement that moved this Cfd from the top level $4.30 to the static and dynamic support $3.70 (with the arrival of the uptrend line of medium-long term) . A down break of this level could accelerate the drop to the next support level $3.30. Otherwise, a good bullish signal could suggest a continuation of the long-term movement with a potential return on the tops of two months ago.
“Nzd is still overvalued but there will be not more rate cuts by the end of the year”, this is what Mr. Graeme Wheeler, governor of the RBZD, said after the meeting of the last night. The economic situation is picking up (the GDP is expected to accelerate by the second half of 2014), the consumption is increasing and inflation is expected to trend to the expected target. The focus will continue to be over the currency that, despite having fallen in the last period, is still appreciated restricting export earnings.
Also from Australia we received positive data with an employment change higher than expected and a slight decrease in the unemployment rate (5.5% vs 5.6% expected).
The ECB monthly report highlighted a very worrying situation, especially for the labor market, with an unemployment rate (in April) to record levels and, unfortunately, not with a better forecast.
Since the United States we received the data on retail sales at 0,6% (better than expected) and the jobless claims which was lower than expected.
Stock markets closed another very difficult session (with a slight recovery in the last hours), affected by the fall of the Japanese Nikkei which lost today more than 6% burning all the gains realized since last April, after the BOJ announcement of the stronger expansionary measures.
Among the major market movers of tomorrow we will have the Minute of the Bank of Japan, the inflation in the euro zone and several important data from the United States such as the industrial production, the manufacturing production and the University of Michigan Confidence.
ANALYSIS
UsOil: the WTI continues its gradual upward movement above the intermediate support level $ 94.50 and above the moving average. The area $ 97.50/98 at the moment is the most important to look for one of my trading signals to enter a new potential bearish movement with target on level $ 92.50 firstly and $ 89 after.
Thanks a lot!
The two currency pairs are strictly correlated. According to the weekly chart they seem to be more bearish than bullish. Anyway the short term trend is upward and the breakout of the most important static and dymanic resistance 1,3450 / 1,35 (referring to Eur-Usd) might lead to the next key area 1,40. Let’s wait…
Have a nice week-end!
Maurizio
We are at the end of another week of negotiations, which was characterized by a lateral movement in equity markets as well as in some currency pairs and commodities (gold and silver in particular).
With the confirmation of the previous levels, we had the two interest rate decisions in Japan and New Zealand with the respective monetary policy measures. Good news for the oceanic country, with an economic situation picking up, while there are tensions in Japan’s stock market that completely canceled the positive performance began last April with the strong action of its central bank.
This week we also had positive data on the labor market in Australia, United Kingdom and United States while, unfortunately, the situation remains difficult in Europe, where the unemployment rate is still at record levels, as pointed out by yesterday’s ECB monthly report.
Next week we will have two more interest rate decisions but let’s see, in my weekly video, the most important news of the economic calendar for the next days and some trading opportunities through our “naked charts”.
The G8 meeting is beginning today Northern Ireland with the “greats” of the world who will face, among other things, the different economic situations and the possible in the world and possible growth measures and crisis solutions.
The equity markets had a moderately positive meeting with Japanese index recovered somewhat negative in recent sessions.
Today’s economic calendar did not show particularly important market movers, so we move our attention to tomorrow with the Australian Central Bank Minute, the Japan’s industrial production, the German ZEW index and the inflation in the UK and the U.S.A.
ANALYSIS
Eur/Yen: the pair is in a short period downward move, below the moving average and the 127 resistance zone. If the current correction will continue until that level, we might look for a short trading signal to enter the direction of the trend with a possible target in 124 area. If, on the contrary, there will be an upside breakout, we could evaluate a possible reversal of the short term movement (and therefore a medium term sideways range) with the possibility for the price to reach again the last month high level 132.50 .
