Equities - Weekly outlook: June 10 - 14

U.S. stocks rallied on Friday after U.S. jobs data for May eased concerns that the Federal Reserve would begin to unwind its asset purchase program this year.

The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April.

The data indicated that the economic recovery is continuing, but not strongly enough for the U.S. central bank to begin tapering off its USD85 billion-a-month asset purchase program.

The Dow Jones industrial average closed 1.38% higher and ended the week up 0.9%. The S&P 500 climbed 1.28%, and was 0.8% higher for the week. The Nasdaq rose 1.37%, and ended the week up 0.4%.

In Europe, the benchmark Stoxx Europe 600 rallied 1.37% on Friday and Germany's DAX was up 1.92% at the close. France's CAC 40 advanced 1.52%, while Britain's FTSE 100 closed 1.2% higher. 

In Asia, Japan’s Nikkei ended 0.21% lower in a volatile session, which saw the index rise as much as 1.6% and fall as much as 2.8%. 

China's Shanghai Composite fell 1.3%, while Australia’s S&P/ASX 200 Index fell 0.91% and New Zealand’s NZX 50 Index slid 0.4%. 

Elsewhere, oil prices were higher on Friday, with contracts for July delivery settling at USD96.20 a barrel, up 1.52% for the day. 

Gold was sharply lower, with futures for June delivery tumbling 2.36% to USD1,382.35 a troy ounce.

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USD/JPY Outlook June 10-14

USD/JPY showed some strong downward momentum as it fell about 300 points last week. The pair quickly dropped below the 100 line, and touched the 95 line before closing out the week at 97.53. Current Account and the BOJ Monetary Policy Statement are the major events this week. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY.

The drop of the Nikkei index continues to push the pair to lower levels. As well, weak US employment numbers led to a broadly weaker dollar, and the yen took full advantage and posted sharp gains.

USD/JPY daily chart with support and resistance lines on it. Click to enlarge:   

1. Current Account: Sunday, 23:50. Current Account is directly linked to currency demand, as a rising surplus indicates that there is a greater demand for Japanese yen by foreigners. The key indicator continues to register modest surpluses. The indicator posted a surplus or 0.34 trillion yen and the estimate for the upcoming release is slightly higher, at 0.39 trillion yen.
2. Final GDP: Sunday, 23:50. Japan’s GDP is a second-tier release, and is released each quarter. GDP bounced back in Q4 of 2012 with a 0.0% reading, after a disappointing Q3 reading of -0.9%. The markets are expecting a strong release for Q1, with an estimate of a strong 0.9% gain. If the indicator does meet expectations, it would be a strong indication that the Japanese economy is gaining strength and responding to Abenomics.
3. Consumer Confidence: Monday, 5:00. With the Japanese economy sputtering for years, it shouldn’t come as a surprise that consumer confidence has been weak. However, recent releases show some improvement, although the indicator remains well short of the 50-point level, which indicates optimism. The previous reading came in at 44.5 points, and the June estimate is similar.
4. Economy Watchers Sentiment: Monday, 6:00. This index is based on a survey in which respondents are asked to rate current economic conditions. Perhaps surprisingly, the index has been above the 50-point level since February, indicating optimism about the Japanese economy. The index came in at 56.5 points in the previous release, and little change is expected in the upcoming reading.
5. BSI Manufacturing Index: Monday, 23:50. This important manufacturing indicator is released on a quarterly basis. Five of the past six releases have been below zero, indicating a pessimistic outlook from Japan’s large manufacturers. Another reading in negative territory is expected, with an estimate of -2.1 points.
6. Monetary Policy Statement and BOJ Press Conference: Tuesday, Tentative. In the BOJ’s previous monetary policy statement, the BOJ stated that the monetary base would  increase by 60-70 trillion yen annually, as the BOJ pumps more money into the economy. Analysts will be waiting to hear the central bank’s take on the Japanese economy, which has shown some improvement.
7. Preliminary Machine Tool Orders: Tuesday, 6:00. This manufacturing indicator has not posted a gain since May 2012. The indicator came posted a sharp decline of 24.1% in May, and little change is expected in the upcoming reading.
8. Core Machinery Orders: Tuesday, 23:50. This indicator has been all over the map, making accurate predictions a difficult task. The indicator shined last month, jumping 14.2%. The markets are bracing for a sharp downturn, with a an estimate of -8.3%. Will the indicator surprise the markets with another strong performance?
9. CGPI: Tuesday, 23:50. With the Abe government declaring deflation to be Public Enemy No. 1, inflation indicators have been under the microscope. There was some good news from the corporate inflation indicator, which rose to 0.0% last month. Prior to this, the indicator had been in negative territory, indicating deflation, since April 2012. The estimate for the June reading stands at 0.7%, which would point to inflation creeping in to the Japanese economy.
10. BOJ Monthly Report: Wednesday, 5:00. This is a third-tier release, and has a muted impact compared to the monetary policy statement. Nevertheless, the markets will be looking for clues as to what moves the BOJ might take with regard to monetary policy.
11. Monetary Policy Meeting Minutes: Thursday, 23:50. The minutes provide details of the BOJ’s most recent policy meeting, and provide insights into the views of monetary and fiscal policymakers. A release which is more hawkish than expected is bullish for the yen.

*All times are GMT.

USD/JPY Technical Analysis

Dollar/¥ began the week with at 100.42 and touched a high of 100.72. It was all downhill from their, as the pair dipped to a low of 94.99, briefly testing support at the 95 line (discussed last week). The pair then moved higher, closing at 97.53.

Live chart of USD/JPY:

Technical lines from top to bottom

With USD/JPY posting sharp losses, we begin at lower levels.

104.60 is a strong resistance line. It slowed the pair’s rise in early 2008.

103.73 is the new multi-year high and is now the key line to a fresh upside move. 102.80 capped the pair in May 2013, and could work as the immediate pullback line.

The round number of 102 provided support for the pair towards the end of May 2013. It has strengthened as the pair trades at lower levels. The 101.44 line, which was the post crisis high seen in April 2009, is now critical support.

The crash low of 100.66 provides support before 100. Next is the all-important round number of 100, which the pair crashed through early in the week. 98.90 capped the pair in June 2009 and has also strengthened. We next encounter resistance at 97.80, which had served in a support role since early May. This is a weak line, and could see activity if the US dollar bounces back.

The round 97 line worked as important support in May 2013. USD/CAD barreled past this line late last week, but was unable to hold onto these gains, and this support level remains in place.

The March 2013 peak of 96.71 continues to provide support. 95.88 provided a temporary stop on the way up and was also the swing low on a fall during April. The round number of 95 is also watched by many as the yen flexes its muscles, and will remain critical support on a reversal.

We next encounter support at 0.9406, protecting the 94 level. This is followed by 0.9277, which has held firm since April. The final support level for now is 91.19, which has not been tested since February.

I am neutral on USD/JPY

The correction of the dollar and the yen continued last week, as the yen pushed to levels not seen since early April. The yen got some help from a shaky Nikkei, and if the instability continues, the yen will reap the benefits. On the other hand, it is becoming clear that QE tapering will happen this year, even though economic signs are mixed.

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Forex - GBP/USD weekly outlook: June 10 - 14

The pound was lower against the dollar on Friday after U.S. employment data for May showed that the economy added slightly more jobs than expected.

GBP/USD fell to session lows of 1.5489 on Friday, before trimming losses to settle at 1.5551, 0.33% lower for the day, but up 1.48% for the week.

Cable is likely to find support at 1.5380, Thursday’s low and resistance at 1.5682, Thursday’s high and an almost four-month high.

The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April.

The data reassured investors that the U.S. economic recovery is continuing, but not strongly enough for the Federal Reserve to begin tapering off its USD85 billion-a-month asset purchase program.

The dollar fell sharply against sterling and the other major currencies on Thursday, after weaker-than-expected private sector jobs data lowered expectations for a strong economic recovery.

Payroll processor ADP said non-farm private employment rose by a seasonally adjusted 135,000 last month, below expectations for an increase of 165,000. 

The Bank of England left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion on Thursday at outgoing Governor Mervyn King’s final meeting.

The decision came after data on Wednesday showed that service sector activity in the U.K. expanded at the fastest rate since March 2012 last month.

Elsewhere, sterling was slightly lower against the euro on Friday, withEUR/GBP rising 0.14% to 0.8502 at the close. The euro was boosted after official data showed that German industrial production rose 1.8% in May, the largest increase in almost a year.

In the week ahead, investors will be focusing on U.S. data on retail sales and consumer sentiment for indications of the strength of the economic recovery. The U.K. is to release official data on employment.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, June 11

The U.K. is to release official data on manufacturing production, a leading indicator of economic health.

Wednesday, June 12

The U.K. is to release government data on the change in the number of people unemployed and the unemployment rate.

Thursday, June 13

The U.S. is to release official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as the weekly government report on initial jobless claims.

Friday, June 14

The U.S. is to round up the week with data on producer price inflation, industrial production, the capacity utilization rate, the current account and preliminary data from the University of Michigan on consumer sentiment.

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Forex Trading Signal for 10th June 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: 1.32268

T/P: 1.31800

S/L: 1.32600

GBP/USD

UP Trend:

(1) BUY

E/P: 1.55554

T/P: 1.55800

S/L: 1.55000

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

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Forex Trading Signal for 7th June 2013

                                                                                


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

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

EUR/USD

Up Trend :

 (1) BUY

E/P: 1.32122

T/P: 1.32400

S/L: 1.31700

GBP/USD

UP Trend:

(1) BUY

E/P: 1.55586

T/P: 1.55900

S/L: 1.55000

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

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Chinese fixed asset investment fall more-than-expected

China’s urban fixed-asset investment fell more-than-expected last month, official data showed on Thursday.

In a report, National Bureau of Statistics of China said that Chinese Fixed Asset Investment fell to a seasonally adjusted 20.4%, from 20.6% in the preceding month.

Analysts had expected Chinese Fixed Asset Investment to fall to 20.5% last month.

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EUR/USD Forecast June 10-14

Eur/Usd moved higher in a turbulent week, riding on dollar weakness and on a calming message from Draghi. Industrial production, ECB Monthly Bulletin and Inflation data are the major events this week. Here is an outlook on the main events ahead and an updated technical analysis for EUR/USD.

Mario Draghi said there is no need for negative rates now and this certainly helped the euro. Together with aseries of mediocre figures in the US, EUR/USD broke higher, but stalled at a key level. Germany continued to falter moving between positive and weak releases. German Factory Orders slumped 2.3% in April worse than expected while industrial output leaped. A more positive trend was evident in Spain with relatively strong employment readings: Unemployment Change plunged by 98,300 in May, the biggest drop in record for May, indicating a positive trend in the Spanish economy, although this could be a summer effect. Will we see further gains now?

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

1. French Industrial Production: Monday, 6:45. French industrial output weakened in March falling 0.9%, after a 0.8% climb in February. Economists expected a smaller decline of 0.2%. The negative reading stresses the hardships that the French economy deals with in light of reduced domestic budget and weak demand among the Euro-zone countries. The ECB said that Hollande needs to restructure France’s labor laws and the pension system to prevent further regression. An increase of 0.2% is expected this time.
2. Italian Industrial Production: Monday, 8:00. Italian industrial production dropped more than expected in March, down by 0.8% following a 0.9% fall in February, indicating recession is far from over for the battered Italian economy. Economists predicted a monthly decline of 0.2% in March. Analysts believe this recession will last until late this year or in early 2014. A gain of 0.1% is predicted now.
3. Sentix Investor Confidence: Monday, 7:30. Investors were less pessimistic in May according to the Sentix Investor Confidence index, the reading showed minus 15.6 from minus 17.3 in the previous month. Analysts expected a higher figure of minus 14.6. A further climb to -10 is expected.
4. French Final Non-Farm Payrolls: Wednesday, 5:30. Paris - Non-farm workers declined by 0.3% in the final quarter of 2012 following a 0.2% decline in the third quarter. Analysts projected payrolls to decline 0.2% in the reported quarter. Employment, excluding the farming industry, declined by 44,600 jobs in the quarter ended December 2012 after falling 46,000 in the third quarter. A smaller drop of -0.1% is anticipated.
5. German Final CPI: Wednesday, 6:00. German inflation continued to weaken in April dropping 0.5% in line with market forecast, amid price fall of mineral oil products. This came after a similar decline in March. A rise of 0.4% is projected.
6. Industrial Production: Wednesday, 9:00. Industrial Output at euro zone factories surprised in March with a 1.0% jump, the highest climb in 20 months, following a 0.3% increase in February. The sharp rise occurred by energy related production. However the general picture remains unclear since French and Italian production continues to fall. Meanwhile, German production edged up 1.7% in March. A decline of 0.2% is predicted this time.
7. German WPI: Thursday, 6:00.  German Wholesale Price Index declined less than expected in April, dropping 0.2% following the same fall in March. Analysts projected a stronger fall of 0.3%. On a yearly basis German WPI plunged 0.4%, compared to the 0.3% gain in the previous month.
8. ECB Monthly Bulletin: Thursday, 8:00. The ECB bulletin released in March showed that the European Central Bank lowered its growth forecast for 2013 to -0.4% from a previous projection for 0% growth. The growth forecast for 2014 was downgraded as well 1.1% to 1%. Furthermore, inflation forecast was also cut to 1.7% from 1.8%, and inflation for 2014 is now forecasted at 1.6%.
9. Inflation data: Friday, 9:00. Consumer price index edged up in April, from a year earlier, increasing by 1.2% according to forecast, following the same rise in the previous month.  The highest inflation was recorded in Romania, Estonia and Netherlands, while the lowest inflation was in Greece with a 0.4% gain. Meanwhile core CPI, which excludes food, energy, alcohol, and tobacco slowed to 1% in April, in line with expectations. A rise of 1.4% is anticipated now.

*All times are GMT

EUR/USD Technical Analysis

Euro/dollar started the week with a quick slide, but the pair bounced from 1.2940 (mentioned last week) before climbing back up, It then traded in a range between 1.3050 and 1.31, and then made a surge and peaked at 1.3306 on the big dollar crash. Eventually it closed at 1.3218..

Live EUR/USD chart:

Technical lines from top to bottom:

We start from a higher point this time. 1.3710 was the peak in early 2013 and is the ultimate peak. 1.3580 capped the pair during February and is minor resistance.

1.3480 was the “shoulders” of an old H&S pattern. 1.3434 is a line in the middle of the 1.34 to 1.3480 range.

The round line of 1.34 served in both directions when the pair traded in higher ground. 1.3350 provided support when the pair traded higher in February.

1.3306 was the peak reached in June 2013 and December 2012. It also was the bottom in February, and remains a key line.  After many failures to break higher, the euro finally pushed through. 1.3255 provided support during January 2013 and also beforehand. A recovery attempt failed to reconquer this line.

1.32 is a clear top after capping the pair twice in April 2012 and then in May. This is a round number as well. 1.3160, which separated ranges in May 2013 is a now weakening.

1.3100 is a minor line after working as temporary resistance in December 2012. It is followed by 1.3050, which proved be strong support in May 2013, defending the round number in more than one occasion, and now works as support.

The very round 1.30 line was a tough line of resistance and is becoming stronger after serving as a double top in May 2013. In addition to being a round number, it also served as strong support and recently worked as a pivot line. 1.2940 is the next line of support, replacing 1.2960. It worked as such during April and May 2013.

Lower, 1.2890 worked in both directions during 2012 and was the beginning of the uptrend support line. It is somewhat weaker now. 1.2840 worked as a cushion for the pair during May 2013 and is a pivotal line at the moment.

Lower, the round number of 1.28 was the bottom of a long term wide range in 2012 and its breach in May 2013 was not confirmed. Below, 1.2750 worked as a separator of ranges during November, and stopped the pair’s drop in March. This is a key line on the downside, as clearly shown in the first week of April. This is followed by the round number of 1.27, which is a minor line.

Triangle Broken

As the thick black lines on the chart show, a narrowing channel can be seen on the chart. Downtrend resistance began in late April and was convincingly broken in June 2013.

I am neutral on EUR/USD

After Draghi put negative rates on the backburner, it’s time to reassess the pressure on the euro. The euro-zone’s issues are not going away too fast: while things aren’t that bad in Spain, Germany is not serving as an engine for all of Europe and France is certainly stuck. It’s important to remember that the ECB actually downgraded its forecasts.

In the US, the OK Non-Farm Payrolls provided a relief after mediocre data. In general, the slow and steady recovery continues. While tapering of bond buying will not happen very soon, it becomes clear that the Fed will reduce rather than enlarge bond buys.

All in all, the direction of the pair seems down, but with the immediate pressure on the euro removed, we could see stability after the correction.

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