USD/JPY Outlook August 5-9

USD/JPY gained about 100 points last week, as the dollar tested the 100 level. The pair closed the week just shy of the 0.99 line, at 0.9890. This week’s market-movers include Current Account and the BOJ Monetary Policy Statement and Press Conference. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY.

Japanese releases were not impressive, as Household Spending and Industrial Production were weak. US employment numbers were mixed, but strong GDP and manufacturing data helped boost the dollar.

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

1. Leading Indicators: Tuesday, 5:00. This index is based on 11 leading indicators, but tends to have a minor impact since most of the indicators were released previously. The index has been steadily rising and posted a reading of 110.5% in July. This easily beat the estimate of 96.3%. The markets are expecting a slightly lower reading in the August release, with an estimate of 108.0%.
2. Current Account: Wednesday, 23:50. This is the first key event of the week.  Japan continues to post monthly surpluses. In July, the surplus dropped from 0.85 trillion yen to 0.62 trillion, but this did match the estimate. The markets are  expecting a higher figure this time around, with an estimate of 0.73 trillion yen.
3. Economy Watchers Sentiment: Thursday, 5:00. This index measures consumer spending, which is a critical component for economic growth. The indicator has been above the 50 level since February, indicating optimism about consumer spending. At the same time, the past three releases have fallen short of the estimates. The markets are not anticipating much change in the upcoming release, with an estimate of 53.5 points.
4. BOJ Monetary Policy Statement: Thursday, Tentative. Analysts will be carefully combing through the BOJ’s policy statement, which provides details about the most recent interest rate decision and the factors behind the decision. Any clues as to future monetary policy could  affect the direction of USD/JPY. A press conference will follow the policy statement.
5. Tertiary Industry Activity: Thursday, 23:50. This indicator measures the change in the total services purchased by businesses. In July, the indicator rose from 0.0% to 1.2%, surpassing the estimate of 0.9%. The markets are expecting a downturn in the upcoming release, with an estimate of -0.2%. Will the indicator surprise the markets and remain in positive territory?
6. 30-year Bond Auction: Friday, 3:45. 10-year bonds posted an average yield of 1.89%, last month, almost unchanged from the June release. The markets are not expecting any major changes in the upcoming auction.
7. BOJ Monthly Report: Friday, 5:00 This release contains detailed statistical data related to the previous interest rate decision and also looks at current and future economic conditions. It is usually of minor significance, and rarely has a strong impact on USD/JPY.
8. Consumer Confidence: Friday, 5:00. Consumer confidence has been struggling, although there are signs that the Japanese economy is improving. In July, the indicator dropped form 45.7 to 44.3 points and was well short of the estimate of 47.2 points. The markets are expecting a better reading this time around, with an estimate of 45.3 points.

*All times are GMT.

USD/JPY Technical Analysis

USD/JPY started the week at 97.96. The pair touched a low of 97.58 but the dollar then posted strong gains, testing the 100 level as the pair climbed to a high of 99.94. USD/JPY closed the week at 98.90 (discussed last week), which started out as a support line at the beginning of last week.

Live chart of USD/JPY:

Technical lines from top to bottom

We start with resistance at 104.22. This line has not been tested since October 2008. At that time, the yen took a sharp tumble that saw it fall as low as the 87 level in December 2008.

103.50 provided support for the pair in July and September 2008 before reverting to a resistance line in October 2008. The line had been quiet since then but was briefly breached in mid-May. Next, 102.50 was a key resistance line in late May but has been quiet since that time.

101.44 was the post-crisis high seen in April 2009, and has not been tested since mid-July. 100.85 was busy in July as the dollar pushed above the 100 level.

The significant 100 level has seen a lot of activity recently. It was tested at the end of the week, and could see more activity if the US dollar pushes higher.

98.90 started off the week as a weak support line, and the pair parked itself right on this line at the end of the week.  97.80 was quite busy in June, and was breached last week, but held as the pair bounced back. It has strengthened as the pair trades at higher levels.

The March 2013 peak of 96.71 is providing support. This is followed by the round number of 95, which was last tested in mid-June.

93.79 marked the low point of a rally by the dollar which started in mid-June and saw the pair climb to the mid-101 range earlier this month.

The final support level for now is 92.86. This line saw action in early March and again in early April. The latter date marked the low point of a yen rally which saw USD/JPY climb very close to the 100 level.

I am neutral on USD/JPY

The pair can’t seem to make up its mind as to which direction to take. The Japanese economy has showed signs of improvement, and some solid numbers this week could boost the yen. US releases were a mix last week, but market sentiment is strong with regard to the US economy, and strong numbers could revive talk of QE tapering, which is dollar-positive.

Read More

GBP/USD Outlook August 5-9

GBP/USD fell sharply but managed to recover most of the losses by the end of the week. The pair dropped one cent on the week, closing at 1.5290.This week’s market-movers include Services PMI, Manufacturing Production and the BOE Inflation Report. Here is an outlook of the events and an updated technical analysis for GBP/USD.

The pound dropped for most of the week, as the US dollar got a boost from strong GDP and manufacturing numbers. The British Currency managed to turn around on Friday, as UK Construction PMI was excellent while US Non-Farm Payrolls disappointed.

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

1. Halifax HPI: Monday, 5th-7th. This housing inflation index provides a snapshot of activity in the housing sector. The index has been posting gains, and registered a rise of 0.6% last month, beating the estimate of 0.4%. The forecast for the August release stands at 0.3%.
2. Services PMI: Monday, 8:30. This key index has been steadily rising, and came in at 56.9 points in July, easily beating the estimate of 54.6 points. The markets are expecting the upward trend to continue, with an estimate of 57.4 points. If the index beats the forecast, we could see the pound post some gains.
3. BRC Retail Sales Monitor: Monday, 23:01. This retail sales indicator includes those shops which are part of the BRC (British Retail Consortium). The index posted a gain of 1.4% in July, and the markets are hoping for another respectable gain in the upcoming release.
4. Manufacturing Production: Tuesday, 8:30. This market-mover has not looked strong of late, posting two consecutive declines. The indicator dropped 0.8% last month, way off the estimate of 0.3%. The markets are expecting a sharp turnaround in the August release, with an estimate of a healthy 0.9% gain. Will the indicator meet or beat this rosy prediction?
5. NIESR GDP Estimate: Tuesday, 14:00. This indicator is released every month, helping analysts track official GDP, which is released once each quarter. The indicator has been very steady, with two straight readings of 0.6%.
6. BOE Inflation Report: Wednesday, 9:30. This key indicator provides the BOE’s forecast for economic growth and inflationary trends for the next two years. BOE Governor Mark Carney will host a press conference to discuss the report. We could see some volatility from GBP/USD, as both the report and Carney’s follow-up remarks could affect the movement of GBP/USD.
7. Trade Balance: Friday, 8:30. The UK continues to post monthly deficits. The July release came in at -8.5 billion pounds, edging above the estimate of -8.4 billion pounds. Little change is expected in the upcoming release, with an estimate of -8.4 billion pounds.
8. CB Leading Index: Wednesday, 9:00. This index is based on 7 economic indicators from a wide of array of sectors. However, it has limited impact since most of the indicators have already been released. The index has been very steady, with four of the past five readings coming in at 0.4%.

Live chart of GBP/USD: 

GBP/USD Technical Analysis

GBP/USD opened the week at 1.5391. The pair touched a high of 1.5413, but ran into trouble and dropped all the way to 1.5102, breaking past support at 1.5510 (discussed last week). GBP/USD pair bounced back on Friday, closing at 1.5290.

Technical lines from top to bottom:

1.5832 was busy in late January and has remained in place as a resistance line since February. 1.5752 was last breached in June, marking the peak of a rally by the pound which started in May.

1.5648 saw a lot of activity in June and continues to provide strong resistance. 1.5550 saw action in mid-June, as GBP/USD pushed past and climbed as high as the mid-1.5750 range.

1.5484 was breached in June, as the pound went on a sharp skid that saw it drop below the 1.49 line. 1.5350 was breached as the pair lost ground this week and finds itself in a resistance role.  April.

1.5258 is providing weak support to the pair. It saw action this week and could face more pressure if the dollar continues to improve.

1.5196 is the next line of support. It was easily breached as GBP/USD slid sharply, but remained in place at the  end of the week.

1.5110 was breached as the pair tested the 1.51 line. It has some breathing room as the pound pushed higher at the end of the week. 1.5000 is a critical support level. It has remained in place since early July.

1.4897 saw action early in July, and was breached when GBP/USD began its present rally which saw the pair climb as high as the mid-1.54 range. 1.4781 is the final support level for now. It has remained intact since June 2010.

I am bearish on GBP/USD.

The pound had a rough week, and managed to avert sharp losses thanks to a superb Construction PMI release. The US economy is moving along nicely, although there are some hiccups along the way. This is in contrast to the UK economy, which is struggling. If we don’t see some excellent numbers this week, the pound could continue to lose ground.

Read More

EUR/USD Forecast August 5-9

EUR/USD had a volatile week, but eventually remained almost unchanged as central bankers left many open questions. Services PMIs, retail sales and German industrial Production and Trade balance are the major events on our calendar. Here is an outlook on the main market-movers of this week and an updated technical analysis for EUR/USD, which made false breaks.

Last week, ECB President Mario Draghi maintained the key ECB rates unchanged, noting an improvement in the Eurozone’s economic activity, even though not all figures were positive. Draghi also reiterates his low rates pledge to support gradual recovery, refusing to rule out further cuts in case of a fall in sentiment and activity data. The ECB is unlikely to withdraw any stimulus in the foreseeable future. Will the Eurozone continue to stabilize in the coming months? In the US, encouraging signs ended in a disappointing NFP, leaving the “Septaper” question open.

Updates:

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

1. Services PMIs: Monday. The final readings for the June Services PMI revealed small progress in the Eurozone and Spain, but a further decline for Italy. The Eurozone reached 48.3 from a preliminary 48.6 following May’s 47.2. Spain improved with a 47.8 reading, beating forecast for a 47.5 release and following 47.3 in May. However Italy continued to disappoint with a 45.8 reading vs. consensus 46.5 and last month’s 46.5. All readings were below the 50 point line, indicating contraction. Spain is expected to advance to 48.4, Italy to 46.6 and the Eurozone is predicted to remain 49.6.
2. Sentix Investor Confidence: Monday, 8:30. Euro zone investor climate, unexpectedly weakened in July after two months of gains, amid concerns over Portugal’s ability to meet its bailout conditions. Sentiment in the 17-nation area bloc declined to -12.6 in July from -11.6 in June, missing forecast for a rise to -10.  a sharp rise to 9.8 is expected this time.
3. Retail Sales: Monday, 9:00. Retail sales in the Eurozone picked-up for the first time in four months, rising 1.0% in May, after a 0.2% decline in April. The major increase occurred in food, clothes and computers, indicating recovery is on the way. The reading was way beyond the 0.4% rise predicted by analysts. On a yearly base there was a 0.1% decline in May far better than the 2.0% drop projected by economists. A drop of 0.6% is anticipated this time.
4. Italian Industrial Production: Tuesday, 8:00. Italy’s industrial output flipped to gain in May, following three months of decline rising 0.1% after a 0.3% drop in April. The reading was lower than the 0.4% increase forecast. The International Monetary Fund cut its economic forecast for Italy, saying it expected the economy to shrink by 1.8% this year. A rise of 0.5% is forecast.
5. Italian Prelim GDP: Tuesday, 9:00. Italy’s economy contracted more than expected in the first quarter, reaching a seven – quarter recession. Gross domestic product declined 0.5%, following a 0.9% fall in the fourth quarter of 2012. Analysts are pessimistic regarding a possible pick-up in Italian economic activity. A contraction of 0.4% is projected in the second quarter. In the meantime, the Italian opposition warns about a default and riots in the autumn.
6. German Factory Orders: Tuesday, 10:00. German factory orders dropped unexpectedly in May, down 1.3% from a 2.2% fall in April, contrary to predictions for a 1.3% increase. The ongoing decline indicates a possible downturn in Germany’s industrial sector. An increase of 1.1% is expected now.
7. French Trade Balance: Wednesday, 6:45. The French trade deficit, worsened sharply in May, reaching 6.01 billion following a deficit of 4.5 billion euros in April. May’s deficit increased above 6.0 billion euros for the first time since June 2012, while economists expected deficit to remain unchanged. Overall exports totaled 36.1 billion euros from 37.7 billion euros in April, while imports reached 42.1 billion euros. A trade deficit can be a strain on growth while a surplus indicated higher output. French trade deficit is expected to improve to5.0 billion.
8. German Industrial Production: Wednesday, 10:00 German industrial production took an unexpected hit in May, dropping by 1.0% after a 2.0% increase in the previous month. The reading was worse than the 0.5% decline projected by analysts. This was the first decline since January which was accompanied by other weak data such as a drop in exports and in factory orders indicating Europe’s largest economy is weakening rather than marching forward. A rise of 0.3% is expected now.
9. German Trade Balance: Thursday, 6:00. Germany’s seasonally adjusted trade surplus narrowed to EUR 14.1 billion in May, from EUR 17.5 billion in April coming below market expectations.  Exports declined a seasonally adjusted 2.4% following a 1.4% expansion. Nevertheless, the Federation of German Wholesale, Foreign Trade and Services projects that export growth will reach 5% this year. Germany’s trade surplus is expected to reach 15.2 billion.
10. ECB Monthly Bulletin: The ECB bulletin released in July reveals, ECB’s Weidmann made some contradictory remarks, saying that monetary policy has ventured into dangerous territory, but he also said that the economy, inflation, and lending justify the low rates. He went on saying, the ECB will raise rates in case inflation rises despite Draghi’s comments that rates will remain low.
11. French Industrial Production: Friday, 6:45. French industrial production fell less than expected in May, dropping 0.4% after a 2.2% gain in April. Economists expected a 0.5 percent decline. President Francois Hollande is struggling to boost an economy that has been frozen for more than two years. French manufacturing output gained 0.6% over the past three months, bolstered by a 5% advance in production and a 8.1% leap in refining. This rise indicates the economy expanded in the second quarter after shrinking 0.2% in the first three months of the year. An increase of 0.3% is forecast this time.

*All times are GMT

EUR/USD Technical Analysis

Euro/dollar began the week capped by the 1.33 line (mentioned last week). After a move lower, the pair broke higher and tackled the 1.3350 line without success. It fell, but remained above 1.3175 before recovering and closing at 1.3281.

Technical lines from top to bottom:

1.3520 was a swing high in February, before the pair tumbled down. 1.3480 was part of a head and shoulders pattern seen in January and February.

The round line of 1.34 served in both directions when the pair traded in higher ground. The pair temporarily breached this line in June. 1.3350 provided support when the pair traded higher in February and is the next line if the pair breaks above 1.33.

1.33 capped the pair quite strongly during July and August 2013. 1.3255 provided support during January 2013 and also beforehand. This line is now pivotal within the range.

1.3175 capped the pair during July 2013 and works as another line of defense for any moves to the downside. It proved its strength during July 2013 . 1.3100 is worked as temporary resistance in December 2012 and is becoming more important once again, after capping a recovery attempt in June and then in July.

It is followed by 1.3050, which proved be strong support in May 2013, defending the round number in more than one occasion, but it is less significant now.

The very round 1.30 line was a tough line of resistance. 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. 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 becoming more important, as a clear separator of ranges. 1.2840 worked as a cushion for the pair during May 2013.

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 and then in July.

False break of long term downtrend resistance

The move above 1.33 was also a temporary and false break above the downtrend resistance line dropping from the February high of 1.37 throuhg the June high of 1.3415.

Uptrend resistance

Since early July, EUR/USD is running along an uptrend resistance line, and now got a bit far from it.

I turn from neutral to bearish on EUR/USD

While the ECB sounded a bit more upbeat and acknowledged the green shoots, it maintains a dovish bias. A recovery in the euro-zone is still to be seen, and political crises in Italy and Spain are still brewing. In the US, NFP didn’t meet the elevated expectations, but the economy is still creating jobs and growing. While we didn’t get a smoking QE tapering gun, the Fed’s course in reducing the pace of stimulus is clear.

If this is all EUR/USD can do in a week where the ECB isn’t negative and the key US indicator disappoints, it seems that the pair could fall from here.

More on EUR/USD:

• EUR/USD Stalls Under Major Resistance - By James Chen.
• EURUSD: Halts Upside Offensive On Pullback- By FX Tech Strategy
• Opinion:  Weaker jobs number is not end of USD rally- by Justin Pugsley.

Read More

Forex Weekly Outlook August 5-9

The US dollar managed to end the busy week a bit stronger, but the NFP took some of the wind out of its sails. ISM Non-Manufacturing PMI, US trade balance, and jobless claims, as well as rate decisions in Australia and Japan are the main market movers for the week ahead. Here is an outlook on the top events on our calendar.

Last week the NFP release was a big disappointmentwith a lower than expected gain of 162K jobs in July. Economists expected a bigger increase of 184K. This came after an encouraging number from ADP: a 200K addition in private sector jobs. This reading sends mixed signals to the U.S. Federal Reserve and will certainly make them more cautious about their QE tapering plan. Will the US job market show resilience and ease growth concerns? In the euro-zone, Draghi acknowledged some green shoots, but policy will stay accommodative. In the UK, the focus shifts to this week. Let’s Start

1. US ISM Non-Manufacturing PMI: Monday, 14:00. The U.S. business activity slowed in June to 52.2 from 53.7 in May, despite a pick-up in employment. Economists expected a further expansion, rising to 54.3. Despite the relative slowdown it is still better on yearly bases.  A rise to 53.2 is expected this time. This is usually a hint towards the NFP, but it will have a strong impact also afterwards, as the services sector is the largest in the US.
2. Australian rate decision: Tuesday, 4:30. The central bank maintained the cash rate at a record low of 2.75% in July, sounding more positive regarding the outlook on global economy. RBA governor Glenn Stevens noted global financial conditions “remain very accommodative” and the pace of borrowing has remained relatively subdued. Growth is expected to continue and the RBA board is waiting to see whether the Australian dollar will fall further before making changes in monetary policy. After a recent dovish speech and weak PPI, many expect the RBA to cut the rate to 2.50%. Here are 5 reasons for the Aussie’s crash.
3. US Trade Balance: Tuesday, 12:30. The U.S. trade balance in May widened unexpectedly to $45.0 billion from $40.1 billion in April amid a fall in exports and an increase in imports. However the rise in imports also indicated improvement in domestic demand. Analysts expected deficit to reach $40.3 billion. This result may hurt GDP but at the same time suggests an improvement in domestic demand.  U.S. trade balance deficit is expected to reach $43.1 billion this time.
4. NZ employment data: Tuesday, 22:45. New Zealand’s labor market improved in the first quarter with a fall to 6.2% in unemployment rate following a revised 6.8% in the fourth quarter of 2012 and a sharp increase in the number of 38000 new jobs equaling a 1.7% rise in the first quarter. The good results indicate a pick-up in New Zealand’s job market and economic activity. A job addition of 0.4% is expected, while unemployment rate is predicted to climb to 6.3%.
5. British Inflation Report: Wednesday, 9:30. In the rate decision announcement, the MPC said that a review about forward guidance will be released in the inflation report, making it a highly anticipated event. Mark Carney is expected to provide ammunition for pound bears, with a commitment for low rates. However, with the better economic signs and with inflation just under 3%, new QE will be a hard task.
6. Japanese rate decision: Thursday. The Bank of Japan issued its most optimistic announcement in two-and-half years, noting Japan’s economy is finally recovering from its long lasting deflation. The BOJ maintained monetary policy intact. However, the slowdown in China still remains a major downside risk for Japan’s economic recovery. Rates are expected to remain unchanged for now.
7. US Unemployment Claims: Thursday, 12:30. The number of Americans applying for unemployment benefits plunged by 19,000 last week to a seasonally adjusted 326,000, the lowest figure since January 2008. This decline suggests the job market continues to strengthen and would boost economic growth later this year. Economists expected a small rise to 346,000. The ADP report also turned out better than expected with a 200,000 rise providing further cause for optimism. An addition of 336,000 is expected now.
8. Canadian employment data: Friday, 12:30. The Canadian job market remained nearly unchanged in June, following May’s massive addition of 95,000 new jobs. Economists expected a contraction of 4200 jobs but Statscan reported a small loss of 400 jobs. Unemployment rate remained steady at 7.1%, in line with market expectations. However the economy lost 32,400 full-time positions while adding 32,200 part-time jobs, a major drawback for the Canadian job market. A job addition of 6,200 is expected with no change in unemployment rate.

Read More

Forex Trading Signal for 2nd August 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: 1.32897

T/P: 1.33200

S/L: 1.32500

 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

GBP/USD

Up Trend:

(1) BUY

E/P: 1.51964

T/P: 1.52200

S/L: 1.51500

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