Market analysis and trade recommendations by FBS

[riki143]

Forex Analytics

Trading plan for Sep. 30

EUR/USD tested levels above $1.2700 after it renewed low in the $1.2660 area. There was a minor recovery as, despite forecasts, German consumer prices didn’t contract, but came unchanged compared with the previous month. There’s scope for a bit more correction up as big traders may take some profits on USD. Resistance is at $1.2740, $1.2790 and $1.2830. Note though that the euro area’s flash inflation data is due at 09:00 GMT. This may turn out to be EUR-negative as it will remind traders of the looming ECB meeting on Thursday. Support is at $1.2640 and $1.2600.

GBP/USD was consolidative in the $1.6250/15 area. The pair breached support line last week, and we’ll view recoveries to $1.6280 as selling opportunities with the first target at $1.6160. There will be a bunch of important data released in the UK tomorrow at 08:30 GMT.

USD/JPY reached new high at 109.74, but didn’t hold there. Support is at 108.60. Tonight Japan will release industrial production and retail sales data. Further support is at 107.40. Later the pair is still expected to renew maximums at 110.00, 110.30 and 110.60.

The selloff in NZD/USD inspired by the Reserve Bank of New Zealand continued. The oversold pair is trying to get higher. There’s resistance at $0.7800 and $0.7970 (bottom of the previous channel). The pair will have some support at $0.7680/7700, but the market will expect more interventions from the RBNZ and remain bearish. Watch ANZ Business Confidence (00:00 GMT) and HSBC Final Manufacturing PMI (01:45 GMT). For AUD/USD resistance is at $0.8780 and $0.8830.

More:
http://www.fxbazooka.com/en/analitycs/show/2476

 

[riki143]

MARKET NEWS

Sep. 30: MARKET VIDEO REVIEW

• Risk sentiment: Most Asian markets softer amid uncertainty over Hong Kong. HSBC Final Manufacturing PMI for September revised down from the flash reading of 50.5 to 50.2.
• USD: pared its best quarterly gain since 2008 as technical indicators signaled the rally has been too fast.
• AUD: rose to $0.8767 as Australian investor lending now at the highest since March 2008.
• NZD: ANZ business confidence 13.4 vs. 24.4 expected.
• EUR: above lows, but below $1.2700, waiting for inflation data at 09:00 GMT.
• JPY: contradictive data, industrial production & household spending disappoints.
• USD/JPY down from recent highs around 109.50
• Japan PM Amari: economy tries to recovery from slump.

More:
http://www.fxbazooka.com/en/news/show/1775

 

[riki143]

Forex Analytics

Trading plan for Oct. 1

EUR/USD fell to $1.2570 as the euro zone’s core inflation surprised to the downside. There are no signs that euro’s planning to stop its freefall, while US dollar enjoys broad strength. Support is at $1.2587, $1.2550 and $1.2500. Resistance is at $1.2660, $1.2715 and $1.2750. On Wednesday the pair will be focused on the data due in the US – ADP Non-Farm Employment Change (12:15 GMT) and ISM Manufacturing PMI (14:00 GMT). The approaching ECB’s meeting will keep pressuring euro.

GBP/USD recovered back above $1.6200 after hitting Sep.16 low of $1.6160 on Tuesday. Break below the $1.6275 area was a strong bearish signal that confirmed a local peak at $1.6520. Fix below $1.6160 will open the way to $1.6060 (Sep.10 low). Don’t miss the UK manufacturing PMI on Wednesday at 8:30 GMT. The index is expected to have grown from 52.5 to 52.6 in August, but is still remains far below the yearly highs.

USD/JPY hit a new 6-year high of 109.85. Global demand remains elevated, so we expect our initial target of 110.60 to be hit on the current week. Short-term support lies at 109.10. Japan will release Q3 Tankan indices tonight – forecasts are downbeat, so USD/JPY could get more growth fuel.

AUD/USD recoiled down from the downtrend channel resistance in the $0.8770 area, but was getting support on the downside. The key support is at $0.8700. Watch whether Australian retail sales data and Chinese official PMI will surprise the market. Risk sentiment isn’t positive and we don’t recommend longs until the current downtrend is breached.

More:
http://fxbazooka.com/en/analitycs/show/2491

 

[riki143]

MARKET NEWS

Oct. 1: MARKET VIDEOREVIEW

Risk sentiment: Asian stocks fell because of continued civil unrest in Hong Kong. Chinese markets are closed for National Day. Chinese manufacturing data offered investors some relief with the official Purchasing Managers' Index was unchanged at 51.1 in Sep.

AUD/USD fell to 8-month low: retail sales grew less than expected (+0.1% vs. the forecast of +0.4%).

NZD/USD: under pressure, upside capped at $0.7820

EUR: on the downside, just above $1.2600 ahead of the ECB’s tomorrow meeting and amid concern inflation will keep slowing.

GBP/USD: bearish at $1.6180. Watch the UK Manufacturing PMI at 8:30 GMT.

JPY: Tankan Large Manufacturing Index is at maximum since Q1, Tankan Services Index is down for 2 consecutive quarters, lowest since Sep. 2013.

USD/JPY rose to 110 yen: dollar strengthened ahead of the ADP employment report (12:15 GMT).

More:
http://www.fxbazooka.com/en/news/show/1780

 

[riki143]

MARKET NEWS
1 October 2014

GBP: Manufacturing PMI disappoints

UK manufacturing PMI came at a 17-month low of 51.6 in August versus 52.6 forecasted. July reading was revised down to 52.2. Pace of UK growth is clearly slowing down in the second half of the year.

GBP/USD dipped to $1.6160 support on the news, but met buying interest and recovered into the $1.6180 area.

More:
http://www.fxbazooka.com/en/news/show/1782

 

[riki143]

MARKET NEWS
1 October 2014

EUR: Barclays lowered growth outlook

- Most euro area member states disappointed in Q2 with declines in Germany and Italy and stagnation in France. Although Germany is expected to return to moderate growth in the second half of the year, the situation remains worrying in Italy and France, where PMI indices dropped below 50 in August, and even further in France in September according to the flash estimate.

- The Russia-Ukraine conflict is likely to keep affecting the European economy.

- Barclays revised down euro area growth forecasts to 0.7% for 2014 and 1.1% for 2015, down by 0.4pp and 0.5pp than June projections.

More:
http://www.fxbazooka.com/en/news/show/1783

 

[riki143]

Forex Analytics

Trading plan for Oct. 2

EUR/USD was consolidating around $1.2600 forming lower highs and higher lows on the hourly chart. Euro’s under pressure before the ECB’s tomorrow meeting. The markets are nervous as the situation remains uncertain: the ECB has already done much, but so far it has failed to encourage inflation. One thing which is clear is that the ECB is interested in lower euro. Mario Draghi is expected to unveil the details of the ABS purchase program, and traders will be focusing on its size. The possible sum of 500B euro sum was rumored. If the market thinks that what the ECB will announce won’t be enough, euro will fall on the expectations of additional stimulus. On the other hand, the bigger the sum, the bigger is the risk of a relief rally. Technical outlook remains bearish with resistance at $1.2660, $1.2715 and $1.2760. Target $1.2500 and $1.2460 on the downside.

GBP/USD remains supported at $1.6160 in the early US trade. The cable is forming a long-legged candle for a second day in a row – this could be a bullish reversal signal if confirmed. We need to see a daily close above $1.6200 to buy with a target of $1.6270. On the other hand, fix below $1.6160 would open the way to $1.6060. Watch the UK construction PMI on Thursday – the index is projected to slip from 64.0 to 63.7. However, this is still an elevated level, confirming economic strength.

US Treasury yields keep on falling, giving some hope to the USD/JPY bears. The pair retraced from the daily high at 110.08 into the 109.50 area on Wednesday despite the increase of ADP nonfarm payrolls. Break below the 109.10 support could bring the pair down to 108.40. However, demand for the JPY will likely remain limited ahead of the US labor data on Friday, so we maintain a buy-on-dips strategy.

The dips of AUD/USD are being bought. A rise above $0.8770 will trigger an increase to $0.8830 (a place to sell). Inability to rise above $0.8770 will lead to another decline. Support is at $0.8680. Watch Australian building approvals and trade balance data. Consensus forecasts aren’t very good.

More:
http://www.fxbazooka.com/en/analitycs/show/2504

 

[riki143]

MARKET NEWS

Oct. 2: MARKET REVIEW

USD: down on the speculation its recent gains have been too fast, and after weaker data from America released yesterday.

AUD/USD: up to $0.8815 as Australian building approvals rose by 3.0% vs. 1.1% expected.

AUD, NZD: property restrictions in China have been eased (positive factor).

GBP/USD: up to $1.6250 ahead of the UK construction data (08:30 GMT).

EUR/USD: up to $1.2670. The market’s waiting for the ECB meeting and press conference (11:45 and 12:30 GMT).

JPY: strengthened as a safe haven on the concerns about global growth and Ebola health scare in the United States.

More:
http://www.fxbazooka.com/en/news/show/1784

 

[riki143]

MARKET NEWS
2 October 2014

What to expect from the ECB?

The European Central Bank will announce its latest decision on rates and monetary policy at 11:45 GMT, with the ECB president Mario Draghi taking press questions 45 minutes later.

Further rate cuts are very unlikely: the main refinancing rate is expected to stay at 0.05%, while the deposit rate - at -0.2%.

Market attention will be focused on the details of the asset-backed securities and covered bonds purchases programs that will likely start this month. The most important questions for the markets are how much and what exactly the ECB is going to buy.

According to the most recent Reuters forecast, the ECB will spend around 200 billion euros for asset purchases till the end of the year. Some experts don’t expect the overall volume to overcome 100 billion euros. The insufficient amount of stimulus won’t be enough to change the inflationary expectations and trigger the economic recovery. As a result, we could see EUR/USD falling further on increased economic uncertainty. Large amount of asset purchases could add to market optimism and support the pair - at least in a short term.

As we understood from the TLTRO (targeted long-term refinancing operations), announced in earlier September, the amount matters. The ECB offered banks to take cheap loans, but the demand was much lower than expected (only 82.6 billion euros). The markets became worried as the ECB ability to support the economy came under question. This time the ECB will likely sound more decisive and dovish to convince the markets. However, the unknown ECB officials said the initial amount of buying will be modest.

At the same time, the composition of the asset purchases is also important. Draghi is not really worried about the asset quality these days: he proposed buying some “junk” securities of Greece and Cyprus. The news could offer some support to the single currency.

The pressure on the ECB to launch full quantitative easing (QE) is mounting. However, the regulator doesn’t seem to be ready for such cardinal measures.

More:
http://www.fxbazooka.com/en/news/show/1785

 

[riki143]

Forex Analytics

Trading plan for Oct. 3

EUR/USD rose to $1.2690, but then returned down to $1.2650. The ECB kept rates unchanged. The most important piece of information from Mario Draghi’s press conference is that purchases of covered bonds will start in the middle of October, while ABS will be bought from Q4, 2014. The ECB gave no estimates of the size of the programs, but said that they will last 2 years. The market will be now digesting this information. The main question is: has the ECB done enough or it will have to do a full-blown QE in future? As the central bank has stressed that the medium-term inflation forecast has declined, expectations of more from the ECB may remain. Technically watch for support at $1.2600 – a slide below this level will confirm the continuation of the downtrend. Resistance is at $1.2700, $1.2715 and $1.2760. Today’s data from the US was mixed. Tomorrow watch the NFP and American unemployment rate at 12:30 GMT – traditional source of volatility.

GBP/USD extends the downside in the early US trade, approaching the $1.6100 support. Intraday rallies were capped at $1.6175. The cable kept on falling despite the outstandingly strong UK construction PMI release (8 month high of 64.2). Tomorrow will bring us probably the most awaited release – Service sector PMI at 8:30 GMT. The index is expected to have declined from 60.5 to 59.1. However, even is the figure comes out stronger, we doubt that the current bearish trend could be paused. Hold a short position with a target of $1.6070.

USD/JPY extends the decline from the 110 mark, hitting 108.30 in Europe. The pair found some support in this area, but we expect the short-term sales to continue. Break below 108.20 will open the way to 107.30 and 106.80. The picture remains bearish below 109.00 yen. On Friday all eyes will be glued to the US NFP release – strong figures will clearly push the pair higher.

More:
http://fxbazooka.com/en/analitycs/show/2512

 

[riki143]

Forex Analytics
3 October 2014

EUR/USD: 12th week of declines

EUR/USD fell for 12th week in a row.

The meeting of the European Central Bank wasn’t a big market mover. President Mario Draghi said only that the ECB will start purchasing covered bonds in the middle of October, while ABS will be bought from Q4. The ECB gave no estimates of the size of this private debt purchasing programs, but said that they will last at least 2 years.

On the one hand, many market players doubt that the ECB will manage to expand its balance sheet enough to weaken the currency. This provided support to EUR/USD. On the other hand, some traders are worried that if the measures, which have already been announced, don’t work, the ECB will have to do a full-blown QE in future. This is keeping euro under pressure. So, the situation remains uncertain.

The fundamentals in the euro area are still weak and weaker than in the US. Inflation in the region experienced further decline in September: the headline reading fell to 0.3%, while the core figure declined to 0.7%. Draghi confirmed that the medium-term inflation outlook worsened. The US, on the contrary, showed an improving labor market.

As a result, the outlook for the pair remains bearish. Note that EUR/USD approached $1.2500 (74.6% Fibo of the advance from 2012-2014). This level may provide some support ahead of $1.2460 and $1.2400. Resistance is at $1.2660 and $1.2750. We’ll close out medium-term short position at $1.2500 and will sell on recoveries. The main event in the euro area’s economic calendar next week is Mario Draghi’s speech on Thursday.

More:
http://fxbazooka.com/en/analitycs/show/2527

 

[riki143]

MARKET NEWS

Oct. 6: MARKET REVIEW

USD index at 4-year high on solid U.S. payroll gains, Japanese stocks bounced

Bank holiday in Australia and China

EUR, GBP, AUD: consolidate around the Friday’s close

NZD/USD dipped to $0.7710, but recovered

USD/JPY dipped to 109.50

More:
http://www.fxbazooka.com/en/news/show/1797

 

[riki143]

MARKET NEWS

Oct. 6: MARKET VIDEOREVIEW

• USD index at 4-year high on solid U.S. payroll gains, Japanese stocks bounced;
• Bank holiday in Australia and China;
• EUR, GBP, AUD: consolidate around the Friday’s close;
• NZD/USD dipped to $0.7710, but recovered;
• USD/JPY dipped to 109.50.

More:
http://www.fxbazooka.com/en/news/show/1797

 

[riki143]

MARKET NEWS

Oct. 8: MARKET VIDEOREVIEW

USD: Dovish comments of the Fed member Kocherlakota (“falling unemployment is no reason to raise rates”). Market is expecting the release of the FOMC minutes (18:00 GMT).

EUR: Bundesbank President Weidmann criticizes ECB’s stimulus measures.

GBP/USD: upside capped at $1.6120

USD/JPY: found a local support at 107.70, Japan’s current account surplus below forecast

AUD: Australian Bureau of Statistics is going to have to revise the July and August employment data (August figures were exceptionally high).

AUD: Chinese HSBC Services PMI edged down reinforcing expectations of further stimulus measures

More:
http://www.fxbazooka.com/en/news/show/1806

 

[riki143]

MARKET NEWS
8 October 2014

IMF reduced growth forecasts

FXBAZOOKA.com – The International Monetary Fund reduced its global growth forecast for this year from 3.4% to 3.3%, warning of weakness in the euro zone, Japan and big emerging markets such as Brazil.

The IMF sees a 30% chance that the euro zone will fall into deflation and a nearly 40% risk that it will slide into a recession over the next year. Data on Tuesday signaled Japan may already be in a mild recession.

More:
http://www.fxbazooka.com/en/news/show/1807

 

[riki143]

MARKET NEWS

Oct. 8: key option levels

FXBAZOOKA.com - Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.2600 (large);

GBP/USD: $1.6130 (large);

USD/JPY: 108.00 (large), 108.50 (large), 108.90 (large), 109.50/55 (large);

USD/CAD: 1.1150 (large);

AUD/USD: $0.8770, $0.8815;

EUR/GBP: 0.7750, 0.7800.

More:
http://www.fxbazooka.com/en/news/show/1808

 

[riki143]

Forex Analytics

Trading plan for Oct. 9

The main theme of Wednesday was risk aversion and concerns about global growth. Still EUR/USD bulls are trying to stick to the $1.2670 area as the market awaits the release of the FOMC meeting minutes (18:00 GMT) later today. Main resistance is located at $1.2700. Given the better performance of euro in the past two days, there’s still a chance of $1.2790/1.2800 if the Fed is dovish. Support is at $1.2630, $1.2600 and $1.2570. On Thursday watch the ECB President Mario Draghi speak at 15:00 GMT. We expect dovish comments from Draghi as the recent data from the euro area was grim.

GBP/USD consolidates below the $1.6120 resistance on Tuesday. The cable bounced from the $1.5950 support on Friday, but the upside remains contained by the trend line resistance, descending from $1.6520. On Tuesday we’ve seen a long-legged candle – market remains uncertain about pushing higher. Fix above $1.6120 could open the way to $1.6230 (July-October resistance). However, we still remain bearish in the medium term. The Bank of England will likely remain on hold on Thursday’s meeting – the meeting minutes later in the month are going to be a more important release.

USD/JPY consolidates around the 108.00 mark. According to our forecast, a daily fix below this level will trigger a more rapid bearish correction with a target of 106.00/105.80. Watch the core machinery orders data tomorrow - growth is expected to have slowed down. Next resistance lies at 108.50 and 109.00 yen.

AUD/USD is trading sideways between resistance at $0.8830 and support at $0.8750. Aussie has to overcome $0.8830 to rise to $0.8885 and $0.8930. Note that Aussie will be vulnerable for decline on Australian labor market data due tomorrow (00:30 GMT), and it makes sense to sell after the FOMC. Watch for a break of support at $0.8750 on the downside for a decline to $0.8660 with next target at $0.8605.

More:
http://www.fxbazooka.com/en/analitycs/show/2570

 

[riki143]

MARKET NEWS

Oct. 9: MARKET REVIEW

Risk sentiment: Asian shares rose on dovish FOMC meeting minutes.

USD: broadly weakened as the Fed was concerned about the downside risks to the global economy and USD’s strength, and investors pushed back bets for when the Federal Reserve will increase interest rates.

EUR/USD: at $1.2570 ahead of Draghi.

GBP/USD: extends recovery towards $1.6200, BOE policy announcement comes at 11:00 GMT.

USD/JPY trades below 108.00 yen.

AUD/USD: higher despite decline in employment.

NZD/USD recovered to $0.7950.

More:
http://www.fxbazooka.com/en/news/show/1812

 

[riki143]

Forex Analytics

Trading plan for Oct. 10

US dollar remained weaker on Thursday after a day earlier the Fed released dovish FOMC meeting minutes. However, concerns about other economies – primarily the euro area – start to return, and demand for USD on Friday may be higher.

EUR/USD reached $1.2790, but then retreated below $1.2750 ahead of Mario Draghi’s speech today at 19:00 GMT as there’s the risk of dovish comments. Support of the current short-term uptrend is located at $1.2690. A decline below this point will make the pair slide below $1.2600. As long as the pair’s above this level, the near-term outlook will remain positive. Further resistance is at $1.2830, $1.2860 and $1.2900.

AUD/USD reached the levels just below $0.8890. This corrective move up looks a bit weak, but support is at $0.8830 and $0.8795 (top of the H4 Cloud), and the bulls will retain chances until the pair’s trading above the latter. Lower, however, the negative pressure will intensify and a decline below $0.8730 will be a sure sell. Next resistance is at $0.8930.

GBP/USD pushed to $1.6225 in Europe before returning back below the $1.6200 mark. As it was expected, the Bank of England left policy unchanged on today’s meeting. Policy announcement came out together with the news that the strong rally in the UK housing prices has started to wane, reducing inflationary pressures. However, the medium-term market sentiment turned bullish by the end of the week due to the dovish Fed’s minutes. Our idea is to buy the cable on dips targeting $1.6240 and than $1.6300. This area remains strongly resistive these days. UK trade deficit is expected to show contraction on Friday – strong data could render support for GBP.

USD/JPY remains in a downward channel and holds below the 108.00 mark. The pair is testing the levels below 23.8% Fibonacci from the July-September rally. The current market setup is clearly bearish; we expect a correction towards our targets at 107.30 and 107.00. Don’t miss the BOJ meeting minutes and Tertiary Industry Activity data on Friday.

More:
http://fxbazooka.com/en/analitycs/show/2579

 

[riki143]

MARKET NEWS

Oct. 13: MARKET REVIEW

Risk sentiment: Asian stocks fell amid concern global growth is slowing.

JPY, USD, CAD: bank holidays.

AUD rose from almost 4-year minimum as China reported an unexpected pick-up in imports and better-than-forecast export growth.

More:
http://www.fxbazooka.com/en/news/show/1816