GBP/USD Outlook May 13-17

GBP/USD dropped sharply late in the week, as the pair lost over two cents. The pair closed the week at 1.5353. This week’s highlights is Claimant Count Change. Here is an outlook of the events and an updated technical analysis for GBP/USD.

The pound’s rally hit a brick wall late last week, as the British trade deficit did not narrow as much as expected. while solid US Unemployment Claims boosted the US dollar.

GBP/USD graph with support and resistance lines on it. Click to enlarge:  

1. RICS House Price Balance: Monday, 23:01. This important housing release is a good indicator of activity in the UK housing industry. The indicator has looked sluggish, posting three  straight declines. However, the markets are expecting a turnaround in the May reading, with an estimate of a healthy 2% gain. Will the index meet or beat the rosy prediction?
2. CB Leading Index: Tuesday, 21:00. This index is based on 7 economic indicators, but is a third-tier release since most of the indicators have already been released. The index has stayed in positive territory throughout 2012, and posted a gain of 0.4% in the past two readings.
3. Claimant Count Change: Wednesday, 8:30. This key indicator has posted drops in the number of unemployment claims since December. The previous release posted a decline of 7.0 thousand, easily beating the estimate of 0.0 thousand. The estimate for the upcoming release is another drop of 3.1 thousand. At the same time, the Unemployment Rate has actually risen in 2013, and edged up in April from 7.8% to 7.9%. No change is expected in the Unemployment Rate.
4. BOE Inflation Report: Wednesday, 9:30. The markets will be paying close attention to this quarterly report. It includes the BOE’s projection for inflation and economic growth for the next two years, which can have a major impact on the BOE’s monetary policy. BOE Governor Mervyn King will hold a press conference upon the release of the Inflation Report.
5. 30-year Bond Auction: Thursday, Tentative. UK 30-year bonds have been fairly steady, and usually do not have a major impact on the movement of GBP/USD. The previous auction saw yields climb back above the 3% level, with an average yield of 3.12%. No significant change is expected in the upcoming auction.

GBP/USD Technical Analysis

GBP/USD opened the week at 1.5574. The pair touched a high of 1.5598, but then took a dive, dropping all the way to 1.5314. GBP/USD closed the week at 1.5353.

Technical lines from top to bottom:

We start with resistance at 1.5875. This line has remained intact since early February. Next, there is resistance at 1.5750. This line saw a lot of activity in the first half of February, before the pound began a dive which lasted until mid-March. The next line of resistance is at 1.5648. This line was providing weak resistance in May, as the pound showed some strength against the US dollar. We next encounter resistance at 1.5560. This line was providing weak support at the start of the week, but broke as the pair dropped sharply. Next there is resistance at 1.5484. This is followed by 1.5416.

GBP/USD is receiving support at 1.5258. This line has remained intact since late April, when the pound started a rally which lasted until last week. Next, we encounter support at 1.5189. Below, there is a support line at 1.5061,  which was last tested in the first week of April. This is followed by 1.5010, protecting the all important 1.50 level. The final support level for now is at 1.4896, just below the round number of 1.49. It has held solid since mid-March.

I am bearish on the GBP/USD.

The markets are not bullish on the prospects of the British economy. This was underscored by the fact that a positive British Manufacturing Production release failed to prop up the pound, which took a tumble later in the week. We could see the pound move closer to the 1.50 level, especially if US numbers look sharp.

Read More

EUR/USD Forecast May 13-17

EUR/USD suffered a downfall at the end of busy week that saw the dollar surge across the board. Will the pair continue lower? German ZEW Economic Sentiment and GDP figures are the highlights of this week.  Here is an outlook on the events and an updated technical analysis for EUR/USD, now on lower ground.

German Industrial Production hit a ten-month high, climbing 1.2% in March. This positive reading was accompanied by another pleasant surprise; German manufacturing orders continued to impress with a 2.2% jump, contrary to the -0.4% forecast. However, this was not enough to break higher. Better than expected jobless claims in the US triggered resulted in USD/JPY breaking the 100 line. This snowballed into an all-out USD surge and the euro was certainly not immune, going back to levels seen a month earlier.

EUR/USD daily graph with support and resistance lines on it. Click to enlarge:

1. Eurogroup Meetings: Monday. Eurogroup meetings will be held in Brussels, attended by the Eurogroup President, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. They will discuss the Cypriot rescue package and the ways to strengthen the EU’s monetary union to prevent the recurrence of a future financial crisis.
2. German Final CPI: Tuesday, 7:00. German monthly inflation rate was in line with predictions, rising 0.5% in March, following the same figure in the previous month. Meanwhile the annual inflation in March increased at a two- year low of 1.4%, below the 1.5% rise in February. A decline of 0.5% is expected now. Low inflaiton in Germany was certainly one of the triggers for the rate cut.
3. German ZEW Economic Sentiment: Tuesday, 10:00. The ZEW Economic Sentiment survey revealed that the economic climate plunged in April, due to rising pessimism on future economic conditions. The reading fell 12.2 points to 36.3, while expected a milder decline to 42 points. All in all, financial market forecasts remain confident but are less optimistic than they have been in the previous month. A rise to 40.7 is estimated. Economic predictions for the Eurozone continued to worsen in April, dropping to 24.9 from 33.4 in the preceding month, while analysts expected a smaller decline to 31.5 points. An improvement to 27.3 is expected now
4. Industrial Production : Tuesday, 10:00. Industrial output in the euro zone edged up more than expected in February, rising by 0.4% from a 0.6% decline in January. Economists expected the index to rise by 0.3%. The monthly indicator is volatile; however the yearly measure shows industry continues to suffer from the region’s fiscal crisis. A gain of 0.6% is predicted now. Germany’s industrial production was a positive surprise.
5. ECOFIN Meetings: Tuesday. Economic and Financial Affairs Council (ECOFIN), composed of Finance Ministers from EU member states.  The Council meets monthly to discuss budgetary issues.  The committee will try to reach an agreed framework for the recovery and resolution of credit institutions and investment firms. This plan is part of a broader plan to establish a banking union.
6. GDP figures: Wednesday: France begins at 5:30, Germany at 6:00, Italy at 8:00 and the euro-zone at 9:00. The Eurozone experienced its third consecutive quarter of decline at the end of 2012 amid weaker exports in Germany and France, deepening the regional recession and pushing unemployment to record highs. GDP in the Eurozone contracted by 0.6% after a 0.1% decline in the third quarter, worse than the  0.4% drop anticipated by analysts. The state of the region’s biggest economies Germany, France, Italy and Spain worsened compared to the third quarter. Germany contracted 0.6% from 0.2% expansion in the previous quarter, France’s economy shrank by 0.3% and Italian economy plunged 0.9% from 0.2% decline in the third quarter. Overall demand has weakened due to austerity measures prompting households and businesses to cut their spending. France is expected to contract by 0.1%, Germany is expected to expand by 0.3%, Italy is predicted to contract by 0.4% and the Eurozone is anticipated to contract by 0.1%.
7. French Non-Farm Payrolls: Thursday, 7:45. French non-farm payrolls declined in the last quarter of 2012, down 0.2%, from a -0.3% drop in the preceding quarter. The reading was in line with market expectations. A decline of 0.3% is anticipated.
8. Inflation data: Thursday, 10:00. The inflation rate declined in the Eurozone for the second consecutive month in March, reaching 1.7% from 1.8% in February. The lowest annual inflation was registered in Greece, with an inflation rate of minus 0.2%. CPI is expected to increase by 1.2% (like the initial read) and Core CPI is predicted to gain 1.0%.

*All times are GMT

EUR/USD Technical Analysis

Euro/dollar started the week with a drop to the 1.3050 linebefore making its way up and eventually challenging the 1.32 line  (mentioned last week). From there, it was all downhill. The big fall saw the pair trade between 1.30 and 1.3050, before a second round sent it lower.

Read More

Forex - Weekly outlook: May 13 - 17

The dollar rallied to its highest level against the yen in more than four years on Friday, rising above 101 after official data showed that Japanese investors increased their holding of overseas assets.

A report released by Japan’s finance ministry on Friday showed that investors purchased JPY309.9 billion in foreign bonds in the week ending May 4 after purchasing JPY204.4 billion in the previous week.

The data indicated that the Bank of Japan’s massive easing program was pushing investors to seek out higher yields overseas to compensate for lower yields on Japanese government bonds.

USD/JPY hit highs of 101.98 on Friday; the highest level since October 2008, before settling at 101.62, 0.99% higher for the day and extending the week’s gains to 2.21%.

The dollar was also boosted as recent strong U.S. economic data fuelled optimism over an earlier-than-expected end to the Federal Reserve’s quantitative easing program.

Data on Thursday showed that showed that U.S. initial jobless claims fell to the lowest level since January 2008 in the week ending May 4. Earlier this month data showed that the U.S. economy added more jobs than forecast in April, pushing the unemployment rate to a more than four-year low of 7.5%.

The dollar rose to a one-month high against the euro on Friday, withEUR/USD hitting session lows of 1.2936, before settling at 1.2990, 0.40% lower for the day and down 0.64% for the week.

The single currency rose to three-year highs against the yen, withEUR/JPY climbing to highs of 132.26, before settling at 132.01, up 0.58% for the day and gaining 1.60% for the week.

Elsewhere, the Australian dollar briefly dropped below parity against the U.S. dollar on Friday, falling to the lowest level in more than 10-months.

AUD/USD hit session lows of 0.9962, before paring back losses to settle at 1.0021, down 0.69% for the day and ending the week 2.24% lower.

The Aussie came under pressure earlier in the week after the Reserve Bank of Australia cut interest rates to a record low 2.75% and warned that the strength of the Australian dollar was creating a drag on growth.

In the coming week, investors will be awaiting preliminary data from the euro zone and Japan on first quarter economic growth, as well as the ZEW report on German economic sentiment.

The U.S. is to release official data on retail sales, building permits, jobless claims and a closely watched report on consumer sentiment.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, May 13

Australia is to release official data on home loans and private sector data on business confidence.

China is to publish government data on fixed asset investment, industrial production and retail sales.

Switzerland is to produce official data on retail sales.

In the euro zone, Italy is to hold an auction of 10-year government bonds, while the eurogroup of finance ministers are to hold talks in Brussels.

Later in the day, the U.S. is to release official data on retail sales and business inventories.

Tuesday, May 14

New Zealand is to release official data on retail sales. Elsewhere, Australia’s government is to unveil the annual budget statement.

The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health. The euro zone is to release official data on industrial production. Meanwhile, the euro zone’s Economic and Financial Affairs Council is to hold talks in Brussels.

The U.S. is to publish official data on import prices.

Wednesday, May 15

Japan is to release official data on tertiary industry activity. Australia is to publish government data on new vehicle sales and wage price inflation.

The euro zone is to release preliminary data on first quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. Germany, France and Italy are to release individual data on first quarter growth.

Switzerland is to produce official data on producer price inflation, a leading indicator of consumer inflation, as well as data on ZEW economic expectations.

The U.K. is to release government data on the change in the number of people employed and the unemployment rate, a leading economic indicator.

The Bank of England is to release its quarterly inflation report. BoE Governor Mervyn King is to speak at a press conference following the release of the report.

Canada is to produce official data on manufacturing sales, a leading economic indicator.

The U.S. is to release data on producer price inflation, industrial production, the capacity utilization rate and a report on manufacturing activity in New York State.

Thursday, May 16

Japan is to release preliminary data on first quarter economic growth, the broadest indicator of economic activity and the leading measure of the economy’s health.

New Zealand’s government is to unveil its annual budget statement and the country is also to release data on manufacturing activity.

The euro zone is to produce official data on consumer price inflation, 
which accounts for the majority of overall inflation, as well as data on the trade balance. France is to publish preliminary data on nonfarm payrolls.

Canada is to release official data on foreign securities purchases, while the Bank of Canada is to publish its quarterly review.

The U.S. is to produce official data on building permits, the leading indicator of future construction activity as well as data on housing starts. The U.S. is also to release official data on consumer inflation, initial jobless claims and the Philly Fed manufacturing index.

Friday, May 17

New Zealand is to release official data on producer price inflation. Japan is to produce official data on core machinery orders, a leading indicator of production.

Canada is to publish government data on consumer inflation and wholesale sales, a leading indicator of consumer spending.

The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment and inflation expectations.

Read More

Forex Trading Signal for 13 May 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

Down Trend :

 (1) SELL

E/P: 1.29889

T/P: 1.29489

S/L: 1.30189

GBP/USD

Down Trend:

(1) SELL

E/P: 1.53727

T/P: 1.53400

S/L: 1.54027


NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

Read More