GBP/USD Forecast Sep. 8-12

The British pound had one of its worst weeks in recent memory, shedding almost 300 points against the surging US dollar. Can the pound turn things around? This week’s highlights are Manufacturing Production and the Inflation Report Hearings. Here is an outlook for the main events moving the pound, and an updated technical analysis for GBP/USD.

The markets were not impressed with mixed British PMIs, which are pointing to unbalanced growth in the UK. The BoE kept a steady course with interest rate and QE levels. In the US, Nonfarm Payrolls slumped to a 7-month low, while services and manufacturing PMIs were solid and beat the estimates.

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

1. Halifax HPI: Monday, 8th-9th. This housing price index provides a gauge of activity in the housing markets. The index rebounded strongly last month, posting a strong gain of 1.4%. This easily beat the estimate of 0.5%. The markets are bracing for a weak gain of just 0.2% in the upcoming release.
2. BRC Retail Sales Monitor: Monday, 23:01. This minor event looks at retail sales in BRC shops. The indicator has posted back-to-back declines, pointing to weaker consumer spending.
3. BOE Governor Mark Carney Speaks: Tuesday, 8:30. Carney will address an event in Liverpool. The markets will be all ears, looking for any clues as to the timing of a rate hike by the BoE.
4. Manufacturing Production: Tuesday, 8:30. This indicator is a key event and can have a major impact on the movement of GBP/USD. The indicator posted rebounded last month, posting a slight gain of 0.3%. This was well below the estimate of 0.7%. The forecast for the upcoming release is 0.3%.
5. Trade Balance: Tuesday, 8:30. Trade Balance is directly linked to currency demand, as foreigners must purchase pounds in order to buy British goods. The trade deficit continues to widen, and hit GBP 9.4 billion in July, above the estimate of 8.9 billion. The markets are expecting a better result in the August reading, with an estimate of -9.1 billion.
6. NIESR GDP Estimate: Tuesday, 14:00. This monthly indicator helps analysts track GDP, which is released each quarter. The indicator slipped to 0.6 % in July, its weakest reading in over a year. Does this point to a slowing down of the UK economy? The markets will be hoping that the upcoming release beats the estimate.
7. Inflation Report Hearings: Wednesday, 13:45. This event should be treated by traders as a market-mover. BOE Governor Mark Carney and several MPC members will testify on the country’s inflation and economic outlook before Parliament’s Treasury Committee.
8. RICS House Price Balance: Thursday, 11:00. This indicator is a gauge of activity in the housing sector. The index has been losing ground, slipping to 47% last month, marking a 6-month low.
9. 30-year Bond Auction:  Thursday, Tentative. The yield on 30-year bonds has dropped slightly in recent releases and came in at 3.53% at the last auction. No significant change is expected in this week’s release.
10. Construction Output: Friday, 8:30. The indicator has struggled, but posted a strong gain of 1.2% in July, beating the estimate of 1.1%. The forecast for the upcoming release is 0.7%.
11. CB Leading Index: Friday, 8:30. This index is based on 7 economic indicators. It is considered a minor event since most of the data has already been released. In July, the index posted a gain of 0.6%.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD started the week at 1.6591, and managed to hit a high of 1.6644. It was all downhill after that, as the pair tumbled as low as 1.6281. GBP/USD closed at 1.6315, as support remained firm at 1.6310 (discussed last week).

Live chart of GBP/USD:

Technical lines from top to bottom

1.6740 capped the pair on a recovery attempt in August and is high resistance now. 1.6660 was a swing low in April and also in August.

1.6615 is the top of the current range after capping it in August. The bottom of the range is at 1.6535, which has reverted to a resistance role.

Below, we have 1.6465, which was the bottom in March. Further below, the round number of 1.64 is providing resistance.

1.6310 was a cushion during January and is an immediate support line. This is followed by 1.6250, the low seen in February.

1.6131 has remained intact since August 2011. At that time, the dollar posted an impressive rally which as GDP/USD dropped close to the 1.53 line.

1.6006 has held firm since October, and stands just above the psychologically important 1.60 level.

1.5909 is the final support line for now. It was last tested in late October.

I am bearish on GBP/USD.

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EUR/USD Forecast Sep. 8-12

EUR/USD had a dramatic week, falling once again and losing the 1.30 line as the ECB surprised with strong measures. Will we see more falls or can a correction be expected now? Trade balance figures, and industrial output numbers are among the indicators released this week. Here is an outlook on the highlights of this week and an updated technical analysis for EUR/USD, now on lower ground.

The ECB fired its guns: a surprising rate cut in all rates(including a deeper negative deposit rate) and anannouncement about a “sizable” ABS program. While Draghi is avoiding government bonds, it is clear that the balance sheet is about to grow significantly, and this is euro-negative. Elsewhere in zone, forward looking PMIs did not really shine in the euro-zone, while German figures looked good. In the US, the economy gained only 142K jobs in August, but the miss in the NFP did not have a big impact on the greenback, as the US economy looks good in general. What’s next for the pair?

Updates:

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

1. German Trade Balance: Monday, 6:00. Europe’s No. 1 economy enjoys a huge trade surplus. This inflow is one of things that kept the euro bid during long periods of time. After a surplus of 16.2 billion in June, a somewhat wider surplus is expected for July: 17.3 billion euros.
2. Sentix Investor Confidence: Monday, 8:30. This survey of 2800 analysts and investors dropped sharply in August to 2.7 points, reflecting minimal optimism and the lowest level in nearly a year. Another small bounce is expected now, to 3.2 points.
3. French Trade Balance: Tuesday, 6:45. Contrary to its neighbor, Europe’s second largest economy suffers from a chronic trade deficit. The deficits came out wider than predicted in the past two months. After 5.4 billion in June, a narrower deficit is likely now: 5 billion euros.
4. French Final Non-Farm Payrolls: Wednesday, 5:30. This quarterly measure of employment has gone nowhere fast. The preliminary read showed a minimal gain of 0.1% in Q2. This number will likely be confirmed now.
5. French Industrial Production: Wednesday, 6:45. After a few unexciting months, the French industry saw its output rise by 1.3% in June. The tables are expected to turn now, with a drop of 0.4%.
6. German Final CPI: Thursday, 6:00. According to the preliminary reading, prices remained unchanged in August, and y/y, CPI rose by 0.8%, just like in July. These numbers will probably be confirmed towards the final all-European CPI figures.
7. French CPI: Thursday, 6:45. This could be a more interesting release, as no preliminary numbers have been released, and it could impact the final read of CPI as well. A monthly rise of 0.4% is expected in prices.
8. ECB Monthly Bulletin: Thursday, 9:00. One week after the much anticipated rate decision and press conference, the central bank releases its internal data, and we can learn what led to the change in forecasts and the dramatic decisions. The report usually has some impact on the euro.
9. Italian Industrial Production: Friday, 8:00.  The euro-zone’s third largest economy enjoyed a rise of 0.9% in output during June. A small slide cannot be ruled out now: 0.1% is expected.
10. German WPI: Thursday, 6:00. The Wholesale Price Index index is yet another measure of inflation ,that is missing from the European scene. After a rise of 0.1% in July, a rise of 0.2% is expected in August.
11. Industrial Production: Friday, 9:00. While previous figures for the main countries is already out by this time, the euro-area data is important, as we’ve seen with the disappointing 0.3% drop seen in June. A rise of 0.6% is expected, following up on the bounce seen in Germany.
12. Employment Change: Friday, 9:00. This is a lagging figure: it relates to the second quarter of the year. After two consecutive rises of 0.1%, a third one is likely. Unemployment is very gradually coming down and employment is going up in the euro zone, as seen in the monthly unemployment rate releases.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar began the week without a gap this time, but it certainly fell to lower ground and could not really recover, as 1.3150 (mentioned last week) capped the pair. It all went sour from there: the pair fell below 1.31, bounced after dipping below 1.30, but eventually free fell to a new low of 1.2920 before stabilizing, above long term uptrend support.

Live chart of EUR/USD:

Technical lines from top to bottom:

We start from lower ground this time. The 1.3415 level managed to cap the pair in August and serves as a barrier before 1.3450. Below, the next line of support is only at 1.3333, a level that worked as a cushion to the pair during August and just above 1.3325 that separated ranges back in September 2013.

1.3295 is the next line: it was the low level in November. 1.3220 is the pre-gap line and now serves as important resistance.

1.3175 worked in both direction during 2013 and served as the bottom line of the range in August 2014. 1.3150 is the fresh 2014 low and serves as a yearly low as well.

Below, the round number of 1.31 served as resistance several times, and the all important figure below is 1.30.

Even below 1.30, we find support at 1.2940 which had a role back in 2013. The new 2014 low of 1.2920 is immediate, yet not strong support.

1.2840 served as support in June 2013 and is the next line before the round number of 1.28, which also worked as support at around the same period of time.

1.2750 was the low where the pair traded last time it was around these levels: July 2013. This is followed by 1.2660 – a key line to the downside, which marks the beginning of long term uptrend support.

Long term uptrend support reached

After downtrend support was left behind, we are now reaching a much older line, which accompanied the pair since November 2012 and was touched twice in 2013 and since forgotten. It now returns to the scene, and the pair managed to bounce off this line, so far.

Here is the bigger picture graph:

I turn from bearish to neutral on EUR/USD

The long term trend is still down, and will probably remain so until the pair gets closer to 1.20. The fundamentals for a weaker euro are well in place, if to quote Draghi. The president of the ECB certainlyhit the pair hard and it is not over yet. Nevertheless, after the big fall, the disappointing US NFP and the aforementioned support line, we may some consolidation before a resumption of the downwards move.

The wild card remains the volatile situation in Ukraine: a flare up after the more positive talks of peacecould weigh on the euro.

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USD/JPY Forecast Sep. 8-12

USD/JPY continues to lose ground as we move away from summer, and closed above the 105 level. It’s a busy week, with 12 events on the schedule. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

As expected, the Bank of Japan left its monetary policy unchanged. The yen was unable to fight back against the strength of the US dollar, and even temporarily reached a new multi-year low. The voices of peace in Ukraine weighed on the yen. However, the weak Non-Farm Payrolls took some of the sting out of the greenback.

Updates:

USD/JPY graph with support and resistance lines on it.

Click to enlarge:

1. Current Account: Sunday, 23:50. Current Account measures the difference in value between imported and exported goods and services, and is closely linked to currency demand, as foreigners must purchase yen in order to by domestic goods and services. The indicator slipped to 0.13 trillion yen last month, but still beat the estimate of 0.11 trillion. The surplus is expected to rise to 0.18 trillion in the August release.
2. Final GDP: Sunday, 23:50. GDP is released every quarter, magnifying the impact of each release. The indicator posted an impressive gain of 1.6% in Q2, beating the estimate of 1.4%. The markets are bracing for a decline of 1.8% in Q3. Japan hasn’t seen a decline in GDP since 2012, so a weak reading could hurt the struggling yen.
3. Economy Watchers Sentiment: Monday, 5:00. This indicator is used to measure consumer spending. The indicator rose to 5.13 points last month, ahead of the estimate of 48.7. This marked the first time that the indicator was above the 50-point line since March.  A reading above 50 indicates expansion. The markets are expecting the upward trend to continue, with an estimate of 52.4 for the upcoming release.
4. BOJ Monetary Policy Meeting Minutes: Monday, 23:50. The minutes provide the details of last week’s policy meeting. With the BOJ stating that it was continuing its current monetary policy, the minutes are unlikely to provide any unexpected news which would shake up the markets.
5. Tertiary Industry Activity: Monday, 23:50. This indicator looks at the change in spending by businesses. The indicator posted a decline of -0.1% last month, short of the estimate of 0.2%. The markets are expecting better news in the upcoming release, with the estimate standing at 0.3%.
6. 30-year Bond Auction: Tuesday, 3:45. 30-year bond yields have been steady, with the past yield coming in at 1.68%. No major change is expected in the August auction.
7. Consumer Confidence: Tuesday, 5:00. Consumer Confidence has been moving higher, as the Japanese economy shows improvement. The indicator hit 41.5 points last month, shy of the estimate of 42.3. The estimate for the upcoming release remains unchanged.
8. Preliminary Machine Tool Orders: Tuesday, 6:00. This indicator has been rising in recent readings, coming in at 37.7% last month. As a minor release, it is unlikely to have much effect on the movement of USD/JPY.
9. Core Machinery Orders: Tuesday, 23:50. Core Machinery Orders is an important manufacturing indicator. It tends to show strong fluctuations, resulting in readings that are often well off the estimates. In July, the indicator posted a gain of 8.8%, compared to an estimate of 15.5%. The forecast for the upcoming release stands at 4.1%.
10. BSI Manufacturing Index: Wednesday, 23:50. The index slipped badly in July, posting a decline of 13.9 points, well off the estimate of a gain of 14.1 points. A reading below zero points to pessimism among the large manufacturers. The markets are expecting another weak reading, with an estimate of -10.3 points.
11. Revised Industrial Production: Friday, 4:30. The indicator has struggled and posted a decline of 3.4% in July. This was well shy of the estimate of 0.5%. The markets are expecting  better news from the August release, with an estimate of 0.2%.
12. BOJ Governor Haruhiko Kuroda Speaks: Friday, 6:05. Kuroda will speak at event in Tokyo. A speech which is more hawkish than expected is bullish for the Japanese yen.

* All times are GMT

USD/JPY Technical Analysis

Dollar/yen started the week at 104.17 and dipped to a low of 104.10. The pair then climbed to a high of 105.71, breaking above resistance at 105.44 (discussed last week), but was unable to sustain these gains and closed the week at 105.08.

Live chart of USD/JPY:

Technical lines from top to bottom:

With the dollar posting strong gains against the yen, we are encountering resistance levels which have not been tested in over six years.

There is resistance at 110.68. This line represented a high point of a strong dollar rally in August 2008, which started around the key 100 level.

108.58 was last tested in June 2008.

107.68 was a key resistance line back in May 2005 and again in July 2008.

105.44 had held firm since December but was briefly breached this week is under pressure as the pair trades above the 105 line. Will the pair break through this barrier this week?

104.92 is an immediate support line, which capped the pair around the turn of the year.

104.25 was an important resistance line in August, but has reverted to a support role as the yen continues to lose ground.

It is followed by 1.0350, which was the bottom of the range after the big leap.

The round number of 103 has shown its strength in late July 2013.

In the narrower range, 102.30 is weak resistance.

102.00 is a round number that supported the pair several times and remains and important line that the pair seemed to like very much – the “magnet”.

101.60 is the final support line for now. It is a weak support in the narrower range.

I am bullish on USD/JPY

Japanese numbers remain weak while US conditions are improving, with a growing yield gap. The pair’s momentum is upward and we could see the yen continue to lose ground.

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Forex Weekly Outlook September 8-12MAJORS, US DOLLAR FORECAST

The US dollar had another strong week in currency markets, bowing only to the Aussie, as the euro and the pound were hit hard. Can we expect a correction or continuation now? US retail sales and consumer sentiment, Australian employment data and a rate decision in New Zealand are among the major events on our calendar for this week. Here is an outlook on the main market-movers coming our way.

The star of the week was Mario Draghi: the ECB surprised with further rate cuts and also announced a significant ABS program. This sent EUR/USD down over 200 pips to long uptrend support, a move unseen in a long time. In the US, Non-Farm Payrolls disappointed with a gain of only 142K, breaking a winning streak, but this was shrugged off by the mighty dollar. The US economy has seen strong signs of late. In the UK, fears of a Yes vote in the Scottish referendum joined the greenback’s strength to send cable down. Strong Australian GDP, among other events kept the Aussie resilient once again. Some hopes for peace in Ukraine were unhelpful for the yen, that reached a multi-year low against the dollar. Will the action continue?

Updates:

1. Mark Carney speaks: Tuesday, 8:30. BOE Governor Mark Carney will speak in Liverpool and may speak about his intentions to raise rates before wages increase. The International Monetary Fund expects U.K. growth to soar this year. However wage growth is not expanding according to projections. Carney stated that the banks have made “substantial progress” in returning to normal and the expansion trend is gathering momentum.
2. US JOLTS Job Openings:  Wednesday, 14:00. The measure of job openings is watched closely by the Federal Reserve for longer term employment trends, despite the fact that it is lagging: we now get the figure for July, not for August like the NFP. A rise from 4.67 seen in June to 4.72 is expected now.
3. New Zealand Rate decision: Wednesday, 21:00. The Reserve Bank of New Zealand raised its official Cash Rate to 3.5% in July from 3.25% in the previous month. This was the fourth hike in five months amid a growth trend in the economy. The rise was in line with market forecast but economists believe this was the last rise in this hike series, after which the Bank will assess the tightening measures impact on the economy. The Reserve Bank has previously announced another rate hike of 1.25% by the end of 2014 and 2015 reaching a ‘neutral’ level of 4.5%. The bank said the economy was expected to expand at an annual pace of 3.7% in 2014. No changes are forecasted this time.
4. Australian employment data: Thursday, 1:30. Australia’s unemployment rate soared to a 12-year high of 6.4% in July from 6.0% in the previous month while economists expected the rate to remain at 6.0%. The economy contracted 300 jobs following a 15,900 job addition in June. Full-time positions increased by 14,500 while part-time roles declined 14,800. The participation rate, increased by 0.1% to 64.8%. Economists believe this decline is only a temporary glitch reflecting the volatility of month-to-month data. Australia’s job market is expected to gain 15,200 jobs while the Unemployment rate is expected to decline to 6.3%.
5. US Unemployment Claims: Thursday, 12:30. The number of jobless claims increased by 4,000 last week to 302,000, a bit higher than the 300,000 expected by analysts. The four-week moving average of initial claims edged up 3,000 last week to 302,750. The level of continuing claims declined by 64,000 from the previous week and the level of unadjusted continuing claims fell by 95,339 to 2,306,286. Overall, the level of claims last week was well below the 4,388,758 posted a year ago. Jobless claims are expected to increase by 306,000.
6. Haruhiko Kuroda speaks: Friday, 6:05. BOJ Governor Haruhiko Kuroda will speak at the National Graduate Institute for Policy Studies in Tokyo. He may talk about the central bank’s intentions to raise the sales tax again in order to narrow government deficit. Kuroda remained optimistic about pulling out of deflation and reaching the 2% inflation target. BOJ Governor is also positive that Japan’s economy will continue to expand in the months ahead.
7. US Retail sales: Friday, 12:30. U.S. retail sales unexpectedly halted in July, remained unchanged from June, suggesting some loss of momentum in the economy at the beginning of the third quarter. However gob growth continued to be positive, indicating sales activity is bound to strengthen in the coming months. The main fall occurred in the automobile sector declining 0.2% after a 0.3% fall. Meanwhile, core retail sales, excluding automobiles, gasoline, building materials and food services inched up 0.1% in July. Retail sales are predicted to increase 0.3% while core sales are expected to gain 0.2%.
8. US UoM Consumer Sentiment: Friday, 13:55. According to the first read, American consumer confidence unexpectedly dropped in August to a nine-month low of 79.2 points from 81.8 points in July, missing predictions for a reading of 82.7. However, this was later revised to the upside, with the final figure set at 82.5 points, more in line with the strong CB Consumer Confidence. American consumer confidence  is expected to pick-up to 83.2 this time.

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Forex Signal for 8th September 2014

                                                                                


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

Entry Point:  1.29530

Take Profit:  1.29030

Stop Loss:   1.29730

  

GBP/USD

Up Trend:  

(1)BUY

Entry Point:  1.63150

Take Profit:  1.63650

Stop Loss:   1.62950

NOTE: The above posted Signals are  Generated 23hrs GMT 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 5th September 2014

                                                                                


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

Entry Point: 1.30000

Take Profit: 1.29500

Stop Loss:   1.30200

  

GBP/USD

Down Trend:  

(1)Sell

Entry Point:  1.63750

Take Profit:  1.63250

Stop Loss:   1.63950

NOTE: The above posted Signals are  Generated 23hrs GMT 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 4th September 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: 1.31430

Take Profit: 1.31930

Stop Loss:   1.312230

  

GBP/USD

Down Trend:  

(1)Sell

Entry Point: 1.64650

Take Profit: 1.64150

Stop Loss:   1.64850

NOTE: The above posted Signals are  Generated 23hrs GMT 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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