EUR/USD Feb. 28 – Breaks to 2 month high above 1.38 on strong inflation numbers

EUR/USD is screaming higher after stronger than expected inflation numbers. CPI is at 0.8% and core CPI at 1%. Strong German numbers gave the euro early support, but reports about a Russian invasion of the Crimea peninsula weigh. As implications for the ECB decision are digested, the focus moves again to the US with the second estimate of GDP and other important indicators. A strong end to the week and month are awaited.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

• EUR/USD remained stable on high ground after rising in the previous US session.

Current range: 1.38 to 1.3832.

Further levels in both directions:

• Below: 1.3773, 1.37, 1.3650, 1.3580, 1.3515, 1.3450 and 1.34
• Above: 1.3830, 1.3895, 13915 and 1.40 and 1.4214.
• 1,3830 is strong resistance.
• The previous double top of 1.3773 turns to support.

EUR/USD Fundamentals

• 7:00 German Retail Sales. Exp. +1.2%, actual +2.5%. 
• 7:45 French Consumer Spending. Exp. -0.8%. Actual -2.1%.
• 9:00 Italian unemployment rate. Exp. 12.7%, actual 12.9%.
• 10:00 Euro-zone CPI Flash Estimate. Exp. +0.7%. Actual +0.8%. Core CPI +1%. Big euro rally.
• 10:00 Euro-zone unemployment rate. Exp. 12%.
• 10:00 Italian CPI. Exp. +0.5%.
• 10:00 FOMC member Richard Fisher talks.
• 13:30 US GDP (second estimate). Exp. +2.6%.
• 14:45 US Chicago PMI. Exp. 57.9 points.
• 14:55 US UoM Consumer Sentiment. Exp. 57.9 points.
• 15:00 US Pending home sales. Exp. 2.9%.
• 15:15 US FOMC members Narayana Kocherlakota and  Jeremy Stein talk.

*All times are GMT

For more events and lines, see the Euro to dollar forecast.

EUR/USD Sentiment

• Breathing room for the ECB: The big surprise seems to have shelved plans for a negative deposit rate. With core inflation at 1%, Draghi can fend off criticism. ECB Governing Council member Ignazio Visco said that a negative deposit rate is on the agenda in the upcoming March meeting (currently the rate is at 0%). While the ECB may not take action, this comment certainly weighed on the euro. It joins similar sentiments out of the ECB and some complaints about the euro’s strength from the head of the Eurogroup.
• Russian invasion of the Ukraine?: There are reports that the Russian army captured airports in the Crimea peninsula. This lifts tensions once again, after things have already seemed to have calmed. There are reports of long lines to withdraw money in the Ukraine, and foreign reserves are running low. The Ukrainian Hryvna (UAH) has dropped in value, with USD/UAH almost reaching 10 and EUR/UAH around 13.60. The Ukraine has a lot of outstanding debt and a default could have serious contagion effects. Russian gas flows through the Ukraine to central Europe. So, events in this country are certainly relevant for the euro-zone and they already caused a loss of uptrend support.
• Germany leading the pack: German retail sales rose by 2.5%, calming fears seen in the previous months. The number of unemployed in the euro-zone’s locomotive also fell more than expected and this joins the strong German GfK Consumer Confidence that reached 8.5 points, its highest level since January 2007. and the upbeat German Ifo Business Climate, which also posted a multi-year high. Germany is certainly doing well, but others are lagging behind.
• US data improves: A nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand much better than expected. Another positive figure came from durable goods orders, and especially the core numbers. The focus is now on GDP, which is expected to be revised to the downside, from 3.2% to 2.6%.
• Federal Reserve may adjust forward guidance: Janet Yellen acknowledged the slowdown in the US economy but did not hint about any change in QE tapering. However, forward guidance could certainly be adjusted if the unemployment rate continues falling. The meeting minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. 

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Dollar broadly lower vs. rivals after positive euro zone data

The dollar was broadly lower against the other major currencies on Friday, as the release of positive euro zone economic reports supported demand for the single currency, while demand for the greenback remained under ahead of a report on economic growth in the U.S.

Dollar drops vs. rivals on euro zone data

The dollar was lower against the euro, with EUR/USD up 0.61% to 1.3793.

Preliminary data showed that consumer price inflation in the euro zone remained unchanged at an annualized rate of 0.8% in February, compared for expectations for a downtick to 0.7%.

A separate report showed that the unemployment rate in the single currency bloc remained unchanged at 12% in January, in line with expectations.

The positive data eased speculation that the European Central Bank could cut interest rates at its policy meeting next week.

Earlier in the day, official data showed that German retail sales rose 2.5% last month, exceeding expectations for a 1% increase. Retail sales in December were revised to a 2.1% drop from a previously estimated 2.5% decline.

A report also showed that French consumer spending dropped 2.1% in January, compared to expectations for a 0.2% rise. Consumer spending in December was revised up to a 0.2% increase from a previously estimated 0.1% slip.

The pound was higher against the dollar, with GBP/USD rising 0.34% to 1.6745.

The Nationwide Building Society earlier said that U.K. house price inflation rose 0.6% in February, in line with expectations. In January, house price inflation was revised up to a 0.8% increase from a previously estimated 0.7% rise.

The dollar was lower against the yen and the Swiss franc, with USD/JPYslipping 0.27% to 101.83 and with USD/CHF declining 0.68% to 0.8823.

In Japan, oreliminary data showed that industrial production in Japan rose 4% in January, more than the expected 3% increase, after a 0.9% gain the previous month.

A separate report showed that retail sales in Japan rose 4.4% last month compared to a year earlier, after a 2.6% increase in December. Analysts had expected retail sales to rise 3.8% in January.

Data also showed that household spending in Japan rose at an annualized rate of 1.1% last month, beating expectations for a 0.2% uptick, after a 0.7% rise in December.

Meanwhile, Tokyo's core consumer price inflation, which excludes fresh food, rose at an annualized rate of 0.9% in February, above expectations for a 0.8% advance, after a 0.7% increase in January.

Consumer price inflation in Tokyo rose 1.1% in February from a year earlier, after a 0.7% gain the previous month.

The greenback was steady to lower against the Australian, New Zealand and Canadian dollars, with AUD/USD down 0.04% to 0.8962, NZD/USDclimbing 0.59% to 0.8418 and USD/CAD inching 0.05% higher to 1.1129.

Data showed that the ANZ business confidence index for New Zealand rose to a nearly 20-year high of 70.8 in February, from a reading of 64.1 the previous month.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.54% to 79.86.

Later in the day, the U.S. was to release revised data on fourth quarter growth, as well as a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private sector data on pending home sales.

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Forex - USD/JPY falls to 2-week lows after Japan data

The U.S. dollar fell to two-week lows against the yen on Friday, after the release of positive economic reports from Japan, while markets awaited upcoming U.S. economic growth data for more information on the strength of the country's recovery.

Dollar declines against yen on positive Japan data

USD/JPY hit 101.56 during late Asian trade, the pair's lowest since February 17; the pair subsequently consolidated at 101.73, shedding 0.39%.

The pair was likely to find support at 100.80, the low of February 5 and resistance at 102.83, the high of February 21.

Preliminary data earlier showed that industrial production in Japan rose 4% in January, more than the expected 3% increase, after a 0.9% gain the previous month.

A separate report showed that retail sales in Japan rose 4.4% last month compared to a year earlier, after a 2.6% increase in December. Analysts had expected retail sales to rise 3.8% in January.

Data also showed that household spending in Japan rose at an annualized rate of 1.1% last month, beating expectations for a 0.2% uptick, after a 0.7% rise in December.

Meanwhile, Tokyo's core consumer price inflation, which excludes fresh food, rose at an annualized rate of 0.9% in February, above expectations for a 0.8% advance, after a 0.7% increase in January.

Consumer price inflation rose 1.1% in February from a year earlier, after a 0.7% gain the previous month.

Meanwhile, the dollar found some support after Federal Reserve Chair Janet Yellen on Thursday said the central bank will probably continue tapering its asset purchases while tracking data to figure how much recent softness in the economy is due to the weather.

Ms. Yellen was speaking in testimony to the Senate banking committee in Washington.

The yen was higher against the euro, with EUR/JPY declining 0.31% to 139.56.

Later in the day, the U.S. was to release revised data on fourth quarter growth, as well as a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private sector data on pending home sales.

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General Motors India Announces Leadership Change

By Arjun Kashyap - General Motors India has appointed industry veteran Arvind Saxena to succeed Lowell Paddock as president and managing director of GM India, the company announced in a statement Friday.

Saxena, who will join GM from Volkswagen India where he headed the German auto maker’s passenger car division, has also worked at Maruti (NSE:MARUTI), one of India’s largest automobile companies along with stints at Fiat and the two-wheeler division of Escorts (NSE:ESCORTS).

“GM is committed to India and with Arvind’s leadership, we look forward to recognizing the long-term growth potential of the market” Stefan Jacoby, GM’s executive vice president and president of GM’s international operations, said in the statement.

Paddock, who has led GM (NYSE:GM) in India since January 2012, will take over as vice president of planning and program management at GM International Operations, or GMIO.

GM's Chevrolet brand has been present in India -- one of the world’s fastest-growing car markets – since 2003 and offers products ranging from small hatchbacks to sedans and sport-utility vehicles in the country.

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Forex - China yuan falls to lowest in a year, state banks buy dollars

The Chinese yuan fell to its lowest level in nearly a year on Friday on dollar purchases by big state banks ahead of next week's annual National People's Congress gathering.

The yuan was last down 0.65% at 6.1637 against the U.S. dollar, the lowest since April last year and its sharpest one-day fall in the past year. The yuan fell as low as 6.1808, its weakest intraday price since late April last year. 

An official from the People's Bank of China told state-run Xinhua news agency that money rates have been falling and interbank liquidity levels are appropriate.

The currency turmoil carried over to Chinese stocks, which fell in the morning session with the Shanghai Composite Index ending the morning session down 0.95% at 2027.88. Hong Kong's Hang Seng Index was last down 0.49% at 22717.19.

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Forex Trading Signal for 28th Feburary 2014

                                                                                


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

Entry Point: 1.36966

Take Profit: 1.37300

Stop Loss:   1.36650

 

GBP/USD

Up Trend:

(1) BUY

Entry Point: 1.66711

Take Profit: 1.67100

Stop Loss:   1.66311

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.

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Forex - GBP/USD holds steady amid Ukraine events, Yellen speech

The pound held steady against the U.S. dollar on Thursday, as concerns over the outcome of political turmoil in Ukraine continued to weigh on market sentiment, while investors followed comments by Federal Reserve Chairwoman Janet Yellen.

Cable was likely to find support at 1.6584, the low of February 24 and resistance at 1.6742, the high of February 18.GBP/USD hit 1.6617 during U.S. morning trade, the pair's lowest since February 24; the pair subsequently consolidated at 1.6658, easing 0.06%.

Market sentiment remained under pressure amid fresh political and military tensions between Russia and Ukraine after Ukrainian President Viktor Yanukovych was ousted last week.

On Wednesday Russian President Vladimir Putin ordered 150,000 Russian troops to begin military exercises in central and western Russia, near the border with Ukraine.

Political uncertainty in Ukraine sparked renewed concerns over the outlook for emerging markets, and pressured the Russian rouble to five year lows against the dollar. Meanwhile, Ukraine’s hryvnia fell to record lows after the central bank abandoned its policy of supporting the currency.

Meanwhile, in testimony to the Senate banking committee in Washington, Ms. Yellen said it was hard to say how much the recent soft data was due to weather and added that the bank would be attentive to signals on whether the recovery is progressing in line with expectations.

The comments came after the Commerce Department reported that durable goods orders declined by a seasonally adjusted 1% last month, compared to expectations for a 1.5% drop.

Core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline.

Separately, the Labor Department said the number of individuals filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week’s total of 334,000. Analysts had expected an increase of just 1,000.

Sterling was fractionally higher against the euro, with EUR/GBP inching up 0.01% to 0.8211.

Also Thursday, data confirmed that Spain’s economy grew 0.2% in the fourth quarter, below the initial estimate for 0.3% growth.

A separate report showed that lending to households and firms in the euro zone fell in for a second month in January.

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U.S. stocks edge higher, eyes on Yellen testimony; Dow Jones up 0.06%

U.S. stocks opened moderately higher on Thursday, after the release of disappointing U.S. economic reports and as investors eyed Federal Reserve Chairwoman Janet Yellen's testimony later in the day.

U.S. equities open moderately higher ahead of Yellen speech

During early U.S. trade, the Dow Jones Industrial Average inched 0.06% higher, the S&P 500 eased up 0.06%, while the Nasdaq Composite index added 0.14%.

The Commerce Department reported that durable goods orders declined by a seasonally adjusted 1% last month, compared to expectations for a 1.5% drop.

Core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline.

Separately, the Labor Department said the number of individuals filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week’s total of 334,000. Analysts had expected an increase of just 1,000.

Investors also remained cautious amid reports that Russian President Vladimir Putin ordered 150,000 Russian troops to begin military exercises in central and western Russia, near the border with Ukraine.

J.C. Penney shares soared 23.83% after the retailer forecast an increase in annual revenue and margin expansion, prompting Chief Executive Officer Mike Ullman to predict its turnaround will be completed this year.

Also on the upside, Tesla Motors Inc. rallied 1.78% after the luxury electric-car maker announced on Wednesday that it is selling at least $1.6 billion of convertible notes to finance the construction of what co-founder Elon Musk bills as the world's largest battery factory.

The project could reportedly trigger a bidding contest between states eager for the 6,500 jobs the $5 billion investment could create. Shares in the automaker surged 4.62% in early trading.

Elsewhere, Best Buy reported a larger-than-expected quarterly profit, sending shares up 6.51%.

Sears Holdings advanced 7.03% after the retailer posted a lower than expected fourth-quarter loss.

Other stocks likely to be in focus included LKQ, Mylan Labs, Ocwen and Sempra Energy, scheduled to report quarterly earnings later in the day.

Across the Atlantic, European stock markets were lower. The EURO STOXX 50 declined 0.79%, France’s CAC 40 slipped 0.23%, Germany's DAX tumbled 1.02%, while Britain's FTSE 100 fell 0.12%.

During the Asian trading session, Hong Kong's Hang Seng Index jumped 1.74%, while Japan’s Nikkei 225 Index slid 0.32%.

Market participants were looking ahead to testimony by Federal Reserve Chair Janet Yellen later Thursday, after a recent spate of disappointing U.S. economic indicators raised some doubts over whether the central bank will maintain the current pace of reductions to its stimulus program.

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Forex Trading Signal for 27th Feburary 2014

                                                                                


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

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

Forex Signal for 27^th    February  2014,,,,

EUR/USD

 Down Trend :

 (1) SELL

Entry Point: 1.36970

Take Profit: 1.36670

Stop Loss:   1.37370

 

GBP/USD

Up Trend:

(1) BUY

Entry Point: 1.66685

Take Profit: 1.66885

Stop Loss:   1.66385

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.

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Forex - GBP/USD touches session highs after U.K. GDP

The pound touched session highs against the dollar on Wednesday after data confirmed that the rate of fourth quarter economic growth in the U.K. was unrevised at 0.7%, but the annual rate of growth was revised slightly lower.

Pound edges higher against dollar after U.K. GDP report

GBP/USD hit highs of 1.6710 and was last up 0.04% to 1.6688.

Cable was likely to find support at 1.6610, the low of February 21 and resistance at 1.6740, the high of February 18.

The Office for National Statistics said gross domestic product increased by 0.7% in the three months to December, unrevised from the preliminary estimate and in line with forecasts.

On a year-over-year basis, the U.K. economy expanded by 2.7% in the fourth quarter, down slightly from the preliminary estimate for 2.8% growth.

The largest contributors to fourth quarter growth were household spending, business investment and net trade, the ONS said. Business investments were revised up to growth of 8.7% from the same period a year earlier.

The pound’s gains were held in check after two members of the Bank of England’s monetary policy committee reiterated Wednesday that the bank is planning to keep rates on hold for some time.

David Miles said recent falls in inflation meant there was less pressure to raise borrowing costs, while the bank’s chief economist Spenser Dale said it was not planning to raise rates any time soon.

Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.06% to 0.8233.

Overall market sentiment remained subdued following a disappointing reading on U.S. consumer sentiment on Tuesday, which fuelled concerns over the strength of the economic recovery.

Speculation that Ukraine could default on its loans, if an aid package can’t be agreed also weighed on sentiment. Earlier in the week, Russia's deputy finance minister said Moscow was under no legal obligation to give Ukraine the remainder of a $15 billion bailout package it negotiated in December.

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Forex Trading Signal for 26th Feburary 2014

                                                                                


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

Entry Point: 1.37439

Take Profit: 1.37639

Stop Loss:   1.37139

 

GBP/USD

Down Trend:

(1) SELL

Entry Point: 1.66804

Take Profit: 1.66604

Stop Loss:   1.67104

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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GBP/USD Outlook Feb. 24-28

GBP/USD reversed directions last week, shedding about 150 points. The pair closed the week slightly above the 1.66 line. This week’s highlight is Second Estimate GDP. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

British CPI came in just under the 2.0% inflation and Claimant Count Change continues to impress. US releases hit some turbulence this week, as the Philly Fed Manufacturing Index and Existing Home Sales slipped badly in January.

Updates:

• Feb 25, 9:29: GBP/USD: Trading the British Second Estimate GDP: British GDP, published each quarter, measures the production and growth of the UK economy. Analysts consider GDP one the most...
• Feb 24, 18:30: GBP/USD looking bearish – technical analysis: The H4 trend has a bearish direction. Note that the likely potential for the movement will continue, until the price...
• Feb 24, 15:29: G20 concludes without concrete action plans: With most of the world’s gold on its way to Canada in the aftermath of yesterday’s game, paper-backed currencies are...
• Feb 24, 10:32: GBP falls hard following recent gains: Recently Sterling has not put a foot wrong in the currency market, with a plethora of positive fundamental economic data...
• Feb 24, 10:08: Asian equities lay low after Chinese property shares plunge: Currency markets are starting the week on a more cautious footing, with nervousness emerging from China over the weekend regarding...

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

1. Nationwide HPI: Tuesday, 25th-28th. This house inflation indicator posted a gain of 0.7% last month, matching the forecast. Little change is expected in the upcoming release, with the estimate standing of 0.6%.
2. BBA Mortgage Approvals: Tuesday, 9:30. This indicator has been moving up steadily, hitting 46.5 thousand in December. The upswing is expected to continue, with a forecast of 47.9 thousand.
3. CBI Realized Sales: Tuesday, 11:00. Realized Sales dropped sharply last month, coming in at 14 points, compared to 34 in the previous release. This  was well of the estimate of 28 points. More of the same is predicted, with an estimate of 15 points.
4. External BOE MPC Member Ben Broadbent Speaks: Wednesday, 9:25. Broadbent will deliver a speech in London. Analysts will be looking for hints as to the BOE’s plans regarding future monetary policy.
5. Second Estimate GDP: Wednesday, 9:30. GDP is one of the most important economic indicators. It is released each quarter, magnifying the impact of each release. The indicator came in at 0.8% in Q3, and the estimate for Q4 stands at 0.7%.
6. Preliminary Business Estimate: Wednesday, 9:30. This indicator is also released on a quarterly basis. The Q3 reading showed a respectable gain of 1.4%,  but this fell well short of the estimate of 2.3%. The markets are expecting a strong improvement in Q4, with an estimate of 2.6%.
7. GfK Consumer Confidence: Friday, 00:05. Despite the improving UK economy, Consumer Confidence continues to lag, and posted a disappointing reading of -7 points. The markets are expecting another weak reading, with the estimate standing at -6 points.
8. BOE Governor Mark Carney Speaks: Friday, 15:30. Carney will speak at a financial symposium in Frankfurt. Remarks which are more hawkish than expected are bullish for the pound.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.6763. The pair quickly hit a high of 1.6823, but it was all downhill after that. GBP/USD dropped all the way to 1.6611, closing the week at 1.6615.

Live chart of GBP/USD:

Technical lines from top to bottom

We begin with resistance at 1.7383. This line marked the start of a rally by the pound back in April 2006, which climbed as high as the 2.11 level.

1.7180 served as a key support line in early 2006. The line has served in a resistance role since October 2008.

1.6990 is next. This line has been protecting the key 1.70 level and has held firm since October 2008.

1.6705 has switched back a resistance role. It is not a strong line and could face pressure if the pound pushes upwards.

The round number of 1.6600 is providing weak support as the pound dropped sharply last week.

1.6475 remains a strong support line. 1.6343 is the next support level.

1.6247 was a key resistance line in October and November 2012.

1.6125 is the final support line for now. This line has held steady since late November.

I am neutral on GBP/USD.

The pound hit some turbulence last week but still remains at high levels. Inflation is within the BOE’s 2.0% target, and there is increasing speculation that the Bank may have to consider a rate hike in the near future. Over in the US, recent releases have missed expectations, but market sentiment remains upbeat and QE tapering is expected to continue, which would be a vote of confidence from the Federal Reserve.

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