GBP/USD Outlook April 14-18

GBP/USD reversed directions last week and climbed 150 points. GBP/USD closed at 1.6728. This week’s highlights are CPI and Claimant Count Change. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

There were no surprises from the Bank of England, as QE and interest levels remained unchanged. Strong manufacturing and GDP data helped lift the pound against a sagging US dollar. In the US, unemployment claims dropped to a six-year low and consumer sentiment wrapped up the week on a high note.

Updates:

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

1. BRC Retail Sales Monitor: Monday, 23:01. This indicator measures retail sales in the BRC chain of stores. The February release disappointed with a decline of 1.0%, its worst showing since last April. The markets will be hoping for a turnaround in the upcoming release.
2. CPI: Tuesday, 8:30. CPI is the primary gauge of consumer inflation. The index has been dropping steadily since mid-2013. The February release came in at 1.7%, matching the forecast. The downward trend is expected to continue, with an estimate of 1.6%.
3. PPI Input: Tuesday, 8:30. The Producer Price Index Input looks at inflation in the manufacturing sector. The index has looked weak, with six declines in the past seven releases. Another drop is expected, with the estimate standing at -0.1%.
4. RPI: Tuesday, 8:30. Retail Price Index has been steady, posting a gain of 2.7% last month, edging out the estimate of 2.6%. The estimate for the March release stands at 2.5%.
5. Claimant Count Change: Wednesday, 8:30. Claimant Count Change is one of the most important indicators, and can have a significant impact on the movement of USD/CAD. The indicator, which measures the change in unemployment claims, looked solid in February, with a reading of -34.6 thousand. This easily beat the estimate of -23.3 thousand. Another sharp decline is expected in March, with the estimate standing at -30.2 thousand. Will the indicator repeat and beat the prediction? The unemployment rate is expected to remain unchanged at 7.2%.
6. Average Earnings Index: Wednesday, 8:30. The indicator is an important gauge of consumer inflation. It has been steadily rising, climbing to 1.4% in February, edging above the estimate of 1.3%. The upward trend is expected to continue, with an estimate of 1.8% for March.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.6578. The pair dipped to a low of 1.6565 but it was all uphill after that. GBP/USD broke above the 1.68 line and touched a high of 1.6820, stopping short of resistance at 1.6823 (discussed last week). GBP/USD closed the week at 1.6728.

Live chart of GBP/USD:

Technical lines from top to bottom

We begin 1.7180, which has served in a resistance since October 2008.

1.6990 is next. This line is protecting the key psychological level of 1.70.

1.6823 has remained intact since November 2009 and is a strong line of resistance. The line held firm as the pound broke above the 1.68 line before retracting.

1.6705 is providing support to the pair. It is a weak line and could see action early in the week.

The round number of 1.6600 is a strong support line. It has remained intact since early April, when the pound started its current rally. 1.6475 is the next support level.

1.6343 saw some activity in early February but has provided strong support since that time. The next support line is 1.6247.

1.6163 is the final support line for now. It was a key resistance line in October and November 2012.

I am neutral on GBP/USD.

GBP/USD continues to send mixed messages, as the pair rebounded nicely last week after losses a week earlier. Much will depend on the Claimants Count Change release. In the US, employment numbers have been decent and an expected QE taper later this month is dollar-positive.

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EUR/USD Forecast Apr 14-18

EUR/USD made an impressive comeback, breaking above the downtrend channel. Will the ECB talk the euro down, or is 1.40 the next target? Final CPI numbers and an important German survey are the highlights. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD.

The pair was already advancing nicely when the relatively dovish FOMC Meeting Minutes extended the dollar sell off, and the pair shot even higher. A successful bond auction from Greece also helped and the euro ignored the weaker than expected inflation numbers from France and from other countries and some attempts to talk down the euro. Is 1.40 still the line in the sand? Let’s start:

Updates:

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

1. Industrial Production: Monday, 10:00. Industrial production in the Eurozone declined 0.2% in January, despite predictions for a 0.6% rise and following a 0.4% fall in December. The reading suggests recovery is fragile in the Euro-area. On a yearly base, production increased 2.1%. Regardless of the three quarter expansion, the pace of growth hasn’t exceeded 0.3% with a high unemployment rate and low inflation rate. Industrial production is expected to climb 0.3%.
2. German ZEW Economic Sentiment: Tuesday, 10:00. German analyst and investor climate fell further in March, dropping at the fastest pace in nearly a year, reaching 46.6 compared to 55.7 posted in February. The sharp decline occurred amid concerns over the Ukraine crisis. The seizure of the Ukrainian region of Crimea by Russian-speaking troops has escalated East-West crisis. Analyst sentiment is expected to decline further to 46.3.
3. ZEW Economic Sentiment: Tuesday, 10:00. ZEW Economic Sentiment for the Euro area fell sharply to 61.5 in March from a 68.5 in February, missing predictions for 67.3 points. ZEW President Prof. Dr. Clemens Fuest noted that the Crimea Crisis has weighed on analysts’ economic expectations. The index has fallen 3 times in a row, while it has slid 4 times in a row in the German index. ZEW Economic Sentiment for the Euro area is expected to reach 60.7.
4. Italian Trade Balance: Wednesday, 9:00. Italian trade balance disappointed in January posting a smaller than expected surplus of €0.40 billion, following €3.61 billion  in the previous month. Economists expected the gap between imports and exports to reach €2.47 billion. Imports took a sharp dive while exports only rose by a fraction at 0.1%, indicating that the business activity is sluggish. Surplus is expected to widen to €1.27 billion.
5. Inflation data: Wednesday, 10:00.  Euro zone annual inflation fell to 0.7% in February; the same level posted in November 2013, when a rate cut was announced, triggering deflation fears in the Euro bloc. February’s fall was preceded by 0.8% inflation rate in January. Analysts expected inflation to remain at 0.8%. Meanwhile Core CPI  excluding food, energy, alcohol, and tobacco, increased to 1.0%, in line with market forecast, following a 0.8% rate posted in the previous month. The ECB president Mario Draghi said in March that the bank will act to guard against possible deflation, but noted the chances for deflations are low. CPI is expected to gain 0.5%, while core CPI is predicted to climb 0.8%.
6. German PPI : Thursday, 7:00. Producer prices in Germany remained unchanged in February, from a 0.1% decline in the previous month while analysts expected a 0.2% rise. On a yearly base, Germany’s producer price index, fell by 0.9% compared to the same period in 2013, following a 1.1% drop in January. prices of consumer non-durable goods increased by 1.3% while prices of intermediate goods were 1.9% low and energy 2.6% low compared with February 2013. Producer prices are expected to gain 0.1%.
7. Current Account: Thursday, 9:00. The Eurozone’s current account surplus increased to 25.3 billion euros ($35 billion) in January, after posting 20 billion euros in December. Analysts expected current account surplus to decline to 18.4 billion euros.Over the 12 months to January, the current account showed a surplus of 227.9 billion euros, compared with a surplus of 135.4 billion euros a year earlier, the data showed. Surplus is expected to narrow to 22.3 billion.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar started off the week by retaking the 1.3740 line (mentioned last week). From there it was all uphill, with the pair eventually struggling with the 2013 high of 1.3894

Technical lines from top to bottom:

We start from higher ground this time. 1.4105 provided support for the pair during August 2011. It is followed by 1.4055, which worked as a lower line in that period of time.

The all important round number of 1.40 is of high political importance. We have seen how getting close to the line triggered a critical comment that sent it down. Below, the 2014 high of 1.3964 will be closely watched.

The 2013 high of 1.3895 is a pivotal line in the high range. 1.3830, which was a long serving 2013 peak comes back into the focus after capping the pair in March 2014 and serving as a clear separator several times.

The round number of 1.38 is is weakening, but still important. It served as resistance in December. 1.3740, which provided some support at the end of 2013 is now key support to the downside. The round number of 1.37, is another support line after capping the pair in December.

1.3650 provided support in December and worked as resistance in September 2013, and is also a significant line. Also the February rally fell short of this line. Below, 1.3560 worked as good support twice during February 2014.

The January 2014 low of 1.3515 provides minor support on the way down. 1.3450 worked as resistance in August 2013 and as support in September and October. It is now a key line on the downside.

Broken Downtrend channels

The pair was trading along downtrend support and under two downtrend lines. After capturing the first line, the pair paused for a short while and then continued to the second line. These are now left behind.

I turn bearish on EUR/USD

The world of currencies was partying on the dollar as Yellen’s comment was undone in the FOMC minutes. However, this move is somewhat overextended, especially as US jobs data looks good. Regarding the euro, it is now too high and we could hear Draghi playing it down as it approaches 1.40. In addition, inflation numbers are likely to be revised to the downside, weighing on the euro.

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USD/JPY Forecast Apr. 14-18

The Japanese yen made a big comeback on the lack of action from the BOJ. Back in the previous range, what is next for the pair? Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

The Bank of Japan made no change, despite the hike in the sales tax. Is it waiting to see evidence of economic weakness before acting? The fall of USD/JPY was note solely a yen story: the US dollar weakened across the board in what seemed like a late reaction to the NFP and despite a positive JOLTS report. The move then accelerated after the release of the dovish FOMC minutes. The global stock market falls also boosted safe haven flows to the yen.

Updates:

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

1. Industrial Production: Wednesday, 4:30. The initial industrial output figure for February showed a disappointing contraction of 2.3%. This could be revised to the upside now, boosting sentiment. 
2. Consumer Confidence: Thursday, 6:00. This wide survey of 5000 homes came short of expectations in recent months, dropping to 38.3 points in February. Another fall is predicted for March, the month just before the sales tax hike.
3. Tertiary Industry Activity: Thursday, 23:50 The indicator from METI surprised in January with a rise of 0.9%. This may result in a drop for the following month, as the services bought by businesses could have already been adjusted to lower expectations.

* All times are GMT.

USD/JPY Technical Analysis

Dollar/yen kicked off the week with a downfall. After a temporary stop at the 102.74 line (discussed last week), the pair continued a gradual slide eventually finding support just ahead of the 101.22 line.

Technical lines from top to bottom

The top line is the peak seen in the turn of the year: 105.44. This was challenged several times. Below, 104.80 capped the pair during January.

104.10, the high of April 2014 is currently a minor line, but should be watched. Below, 103.77 provided support for the pair in January and served as a clear separator of ranges.

102.74 was a stubborn peak during February and is the top line of the current trading range. 102.15 capped the pair during April 2014 and now serves as a minor line within the range.

101.20 provided strong support for the pair during March 2014 and is the low line of support. 100.75 prevented the pair from falling lower during February and is the last backstop before the round number of 100.

100 is not just a round number but also worked as resistance several times in the past.

I am bullish on USD/JPY

After the pair took a severe beating, we could see a correction. It is important to remember that economic momentum is not strong in Japan and that the US remains on track to more tapering and also rate hikes in the not so distant future. Even though the BOJ opted not to act now, it could certainly make a move once data regarding the sales tax hike kicks in, and especially as the yen is now strong.

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Forex Weekly Outlook Apr. 14-18

The US dollar had a terrible week, falling across the board. Can it stabilize now, or will the sell off continue? US retail sales, German ZEW Economic Sentiment, US Inflation data, Janet Yellen and US Haruhiko Kuroda speeches, Unemployment Claims and the Philly Fed Manufacturing Index are the highlights of this week. Here is an outlook on the main market movers coming our way.

The greenback took a big hit following the relatively dovish FOMC minutes release where forward guidance was forsaken for a promise of low rates after the bond buying program ends. Fed Chair Yellen also surprised markets by saying that bond buying will finish in 6 months. However, later that week, the Jobless claims release was a positive surprise, plunging 32,000 to 300,000 claims, the lowest level since December 2013, indicating the US job market is on a solid growth trend. Will the US economy continue its growth trend after the QE is over? In the euro-zone, weak inflation data from France was dismissed. Strong industrial data from the UK boosted the pound,upbeat Australian data energized the Aussie and the lack of action from the BOJ fueled the yen. Let’s start,

Updates:

1. US Retail sales: Monday, 13:30. U.S. retail sales expanded more than expected in February, after harsh weather conditions slowed activity in recent months. Retail sales edged up 0.3%, following a revised 0.6% decline in January. The reading was higher than the 0.2% rise anticipated. Meanwhile Core sales, excluding automobiles, gasoline, building materials and food services increased 0.3% after a 0.3% decline in the previous month. Analysts anticipate retail sales would improve further in the coming months. U.S. retail sales  are expected to rise 0.8%, while core sales are predicted to gain 0.5%.
2. UK inflation data: Tuesday, 9:30. The UK inflation rate fell to a four-year low of 1.7% in February, amid a sharp decline of 0.8% in petrol prices. This was the second consecutive reading falling below the BOE’s 2% inflation target. Prime Minister David Cameron noted that the figures support the government’s economic strategy to provide stability and security for hard-working people. But Labour’s Shadow Treasury Minister Catherine McKinnell said prices are still rising faster than wages badly affecting household consumption. CPI is expected to rise 1.6%.
3. German ZEW Economic Sentiment: Tuesday, 10:00.  Investor sentiment in Germany continued to decline in March, falling for the third consecutive month to 46.6 points, from 55.7 in February. The release came in below forecasts of a 52.8 points reading. The possible reasons for this weak reading could be, a softer outlook for emerging market activity, a strong euro and mounting deflation risks and tensions in the Ukraine. Investor  climate is expected to reach 46.3.
4. US Inflation data: Tuesday, 13:30.  U.S. inflation stayed mild in February. Consumer Price Index inched 0.1% for the second month consecutive month after a drop in gasoline prices offset the largest rise in the cost of food in nearly 2-1/2 years. On a yearly base, consumer prices increased only 1.1%, weaker than the 1.6% rise in January. Meanwhile Core prices, excluding volatile energy and food components increased 0.1% for a third straight month and remained steady at 1.6% on a yearly base. However, the stable state of inflation is positive for business planning for hiring and capital spending. Both CPI and Core CPI are expected to gain 0.1%.
5. Janet Yellen speaks: Tuesday, 13:45, Wednesday 17:15. Federal Reserve Chair Janet Yellen will speak in Stone Mountain and in New York. Yellen may speak about the recent improvement in the US job market as well as the ongoing tapering process, its duration and its effects on the US economy. Volatility is expected, especially after her previous important comment triggered a big USD rally.
6. UK employment data: Wednesday, 9:30. The UK’ unemployment rate remained stable at 7.2% for the third consecutive month, however, the number of people claiming unemployment benefits declined more than expected, reaching 34,600, indicating the labor market continues to improve. The BoE revised its forward guidance policy, which linked interest rate decisions to the unemployment rate, since the rate fell unexpectedly  towards the 7%, marking the start of rate hikes. The Bank hinted that the first rate hike will occur in the second quarter of 2015. UK number of unemployed is expected to decline by 30,200, while the unemployment rate is expected to remain 7.2%.
7. US Building Permits: Wednesday, 13:30. The number of building permits surged in February to 1.018 million units from January’s total of 945,000. These four-month high topped analysts’ predictions for 970,000 units. Contrary to this release, U.S. housing starts declined by 0.2% in February a seasonally adjusted 907,000 units from January’s total of 909,000, disappointing expectations for an increase of 3.4% to 910,000 units. Nevertheless the rise in the number of permits ensures the continuation of growth in the housing industry. The number of building permits is expected to reach 1 million.
8. Canadian rate decision: Wednesday, 15:00. The Bank of Canada was concerned about the soft inflation rate on its last meeting in March, despite the rise in consumer prices occurred in January. The bank noted that a rate change is possible in the next policy meeting however analysts do not expect a rate change until the third quarter of 2015. The rate report was nearly unchanged from January when Governor Stephen Poloz said the door was “slightly more open to a rate cut. Meanwhile, the Canadian dollar, dipped in value against its U.S. counterpart in recent months which may help to boost exports, business confidence and investment. Interest rates are expected to remain unchanged at 1.00%.
9. Canadian inflation data: Thursday, 13:30. Canadian consumer prices edged up 0.8% in February, following a 0.3% rise in the previous month. The rise was better than the 0.6% predicted by analysts. However, on a yearly base, the index dropped to 1.1% from 1.5% in January. Canadian Core prices rose 0.7% while expected to reach 0.5%. The year-over-year core rate moderated to 1.2% from 1.4% in January. The sharp rise indicates that seasonal factors were involved. However, despite the recent increase, inflation remains rather tame. CPI is expected to edge up 0.4% and Core CPi is expected to increase by 0.3%.
10. US Unemployment Claims: Thursday, 13:30. The number of Americans filing initial claims for unemployment benefits dropped sharply last week to the lowest level since December 2013, reaching 300,000, signaling a pick-up in the US job market. Positive weather and stronger growth boosted the labor market causing the 32,000 drop. This stronger than expected release will also contribute to the second quarter growth rate. Unemployment claims are expected to increase to 316,000.
11. US Philly Fed Manufacturing Index: Thursday, 15:00. Manufacturing activity in the Philadelphia-region soared in March, reaching 9 points after posting minus 6.3 in February, easing concerns over the U.S. economic outlook. Analysts had forecasted the index to rise to 4.2 in March. The survey’s showed new orders, and shipments increased and recorded positive readings indicating growth trend is returning following weather-related weakness in February. Manufacturing activity is expected to improve further to 9.6 points.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.

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Forex Signal for 14th April 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: 1.38840 

Take Profit: 1.39240

Stop Loss:   1.38440

 

GBP/USD

Down Trend:

(1) SELL

Entry Point: 1.67450 

Take Profit: 1.67000

Stop Loss:   1.67850

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 Signal for 11th April 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: 1.38730 

Take Profit: 1.39130

Stop Loss:   1.38330

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

GBP/USD

Down Trend:

(1) SELL

Entry Point: 1.67860 

Take Profit: 1.67460

Stop Loss:   1.68260

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 Signal for 10th April 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: 1.38320 

Take Profit: 1.38720

Stop Loss:   1.37920

 

GBP/USD

Down Trend:

(1) BUY

Entry Point: 1.67720 

Take Profit: 1.68120

Stop Loss:   1.67320

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 Signal for 9th April 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: 1.37820 

Take Profit: 1.38220

Stop Loss:   1.37420

 

GBP/USD

BUY Trend:

(1) BUY

Entry Point: 1.6700 

Take Profit: 1.67400

Stop Loss:   1.66600

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 Signal for 8th April 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: 1.37280 

Take Profit: 1.37680

Stop Loss:   1.36780

 

GBP/USD

Up Trend:

(1) BUY

Entry Point: 1.65980 

Take Profit: 1.66400

Stop Loss:   1.65580

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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