GBP/USD Forecast Sep. 22-26

The British pound displayed some late-week volatility, as GBP/USD posted sharp gains, albeit temporarily, as the pair was almost unchanged at the end of the week. GBP/USD closed the week at 1.6284. There are only 4 events in the upcoming week, but volatility could certainly remain elevated. 

The pound took traders and investors on a rollercoaster ride late in the week, courtesy of the Scottish referendum, which ended with a decisive “no thanks” to independence from the United Kingdom. In the US, unemployment claims dropped sharply and the Fed hinted that once rates are raised, subsequent hikes could take place more quickly than expected. Both central banks are about to tighten, but which currency will have the upper hand?

Updates:

• Sep 22, 1:54: GBPAUD Prints Massive Reversal Signal at Weekly Resistance: The news about the Scottish independence has been ‘the’ hot topic amongst Forex traders this week causing heavily volatility on...

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

1. BBA Mortgage Approvals: Tuesday, 8:30. This housing indicator is an important gauge of the strength of the housing sector. The indicator has been fairly steady, and eased slightly to 42.8 thousand last month, short of the estimate of 44.2 thousand. More of the same is expected, with an estimate of 42.9 thousand.
2. Public Sector Net Borrowing: Tuesday, 8:30. The indicator posted a surplus in the most recent reading for the first time since January. The indicator came in at -1.1 billion pounds, missing the estimate of -1.9 billion (a negative number indicates a surplus). The markets are expecting a large deficit in the upcoming release, with the estimate standing at +10.3 billion pounds.
3. Nationwide HPI: Thursday, 25th-30th. This housing inflation indicator helps track the level of activity in the housing sector. The index jumped 0.8% last month, easily beating the estimate of 0.1%.
4. CBI Realized Sales: Thursday, 10:00. The indicator shot up 37 points last month, its best showing since January. This crushed the estimate of 27 points. Another strong reading is expected in the upcoming release, with an estimate of 34 points.

* All times are GMT

GBP/USD Technical Analysis

GBP/USD opened the week at 1.6258 and dropped to a low of 1.6162. The pair then rebounded and touched a high of 1.6542 on Friday. GBP/USD was unable to hold onto these gains and closed the week at 1.6284, as support held at 1.6250 (discussed last week).

Live chart of GBP/USD:

Technical lines from top to bottom

We start off with resistance at 1.6740. This line capped the pair on a recovery attempt in August and is currently high resistance.

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.

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

1.6310, the next resistance line, was a cushion during January. It is a weak line and could face pressure early in the week.

This is followed by support at 1.6250, the low seen in February. The line was breached but recovered and starts off the weak as an immediate support level.

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 was last tested in late October.

The final support line for now is 1.5746, which was important support in January.

I am bearish on GBP/USD.

With the Scottish referendum behind us, the markets can again focus on economic data, and the US dollar has the advantage as the US economy has been outperforming that of the UK. Traders should keep a close eye on this week’s unemployment claims and retail sales data. If the US numbers are strong, the dollar could continue to have its way with the pound.

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EUR/USD Forecast Sep. 22-26

Eur/Usd failed to recover, and eventually fell to a new 14 month low. Is this the pair set to continue declining? A speech by Mario Draghi, PMIs 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, now on lower ground.

The first installment of the ECB’s targeted loans (TLTROs) received a lukewarm reception, with a take up of only €82.6 billion. This was below all estimates and suggests that the ECB might have to implement a large ABS program or outright QE. The central bank can be marginally encouraged by an upwards revision in August’s headline inflation to 0.4%. However, business confidence dropped once again in Germany. In the US, the Fed kept its language regarding interest rates unchanged, but did lay out guidelines for exiting the stimulus and it now sees higher rates in 2015 on average. This gave a big boost to the dollar. Can this monetary policy convergence continue weighing on the euro?

Updates:

• Sep 22, 10:33: EUR/JPY Riding on a Monster Trend Line – At Major Turning Point: The Euro suffered a major setback against the US dollar this past week, but somehow managed to hold the ground...
• Sep 22, 10:22: EUR/USD Sep. 22 – Recovering from the blows ahead of Draghi’s testimony: EUR/USD is ticking higher in the wake of the new week, but it is only able to recover some of the losses...

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

1. Mario Draghi talks: Monday, 13:00. The president of the ECB goes to the European Parliament to testify. An updated assessment of the economy and inflation is likely to raise interest, as well as the ECB’s latest measures. Any optimism will lift the euro while pessimism is set to hurt it. Hints about further monetary stimulus will rock the markets, especially after the recent rate cuts and the ABS announcement.
2. Consumer Confidence: Monday, 14:00. This official survey of around 2300 consumers fell to -10 points, reflecting growing pessimism – the worst since the beginning of the year. Another fall to -11 points is expected now.
3. Flash PMIs: Tuesday: 7:00 in France, 7:30 in Germany and 8:00 for the whole euro-zone. The forward looking purchasing managers’ indices for September are expected to remain similar to last month’s numbers: contraction in French manufacturing (from 46.9 in August to 47.1 expected now), hardly growing French services (50.3 to 50.2), weak German manufacturing growth (51.4 to 51.3 points), solid German services (54.9 to 54.6), weak euro-zone manufacturing growth (50.7 to 50.6) and OK euro-zone services growth (53.1 points in August to 53.2 points now). The French and German figures have the strongest impact.
4. German Ifo Business Climate: Wednesday, 8:00. Like the ZEW indicator, also IFO, Germany’s No. 1 think-tank, is showing an erosion in business confidence. The 7000 strong survey is predicted to show a slide from 106.3 to 105.9 points now.
5. Belgian NBB Business Climate: Wednesday, 13:00. While coming from a small country, this is usually a good bellwether to the whole euro-zone. Business climate ticked up to -7.3 points in August and is expected to continue edging higher to -7.1 points now. The negative number means worsening economic conditions.
6. M3 Money Supply: Thursday, 8:00. The ECB monitors the amount of money in circulation as another measure of inflation. Growth has accelerated from the lows, and now stands at 1.8% y/y. Another move up to 1.9% is expected now.
7. Private Loans: Thursday, 8:00. While money in circulation is growing, private loans are squeezing, and this weighs on growth. After a slide of 1.6% y/y last month, a small improvement to -1.5% is expected now.
8. German GfK Consumer Climate: Friday, 6:00. This survey of 2000 German consumers disappointed with a drop to 8.6 points in August. Another slide to 8.5 is predicted now.
9. German Import Prices: Friday, 6:00. Prices of imported goods serve as yet another measure of inflation, or lack of. After a bigger than expected slide of 0.4% in July, a more moderate one of 0.2% is expected now.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar began the week trading between the 1.2920 and 1.2960 lines (mentioned last week) before going in different directions: the pair got close to the round 1.30 before falling, making another attempt to rise and eventually closing on lower ground: 1.2822.

Live chart of EUR/USD:

Technical lines from top to bottom:

1.3295 is the first line for now: 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 was a low during August and now serves as resistance.

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

Below 1.30, we find support at 1.2960 which capped the pair’s recovery attempts after it fell to lower ground. The 1.2920 level was the initial low and has now turned into a pivotal line.

1.2860 is the recent 2014 low and is now key support. Very close, 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.

Here is a closer look at the recent trading levels, using the hourly chart:

Long term uptrend line still fought over

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. The pair broke below the line, but managed to give another fight.

I remain bearish EUR/USD

Monetary policy convergence is the name of the game, and it just intensified: the ECB will probably have to do more after the slow start with expanding its balance sheet by 1 trillion euros and this could mean more direct forms of QE. This is especially true as the economy is still stumbling along and we’ll get fresh data now. In the US, the FOMC is gradually becoming more hawkish as QE is just one step from its final end and as data improves. Down to where can this divergence send the pair? The ECB will probably feel comfortable only around 1.20-1.25.

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USD/JPY Forecast Sep. 22-26

The yen continues to drop, as USD/JPY gained about 160 points last week. The pair closed the week just shy of the 109 level, marking a six-year high. The upcoming week is a quiet one, with only three events on the calendar. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.

The yen lost ground following weak economic forecasts out of Japan as well as the FOMC statement, as the Fed hinted that once rates are raised, subsequent hikes could take place more quickly than expected. The 110 level looks closer than beforehand.

Updates:

• Sep 22, 10:33: EUR/JPY Riding on a Monster Trend Line – At Major Turning Point: The Euro suffered a major setback against the US dollar this past week, but somehow managed to hold the ground...

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

1. Flash Manufacturing PMI: Wednesday, 1:35. This index is an important gauge of activity in the manufacturing sector. The indicator remains above the 50 point-level, indicative of expansion. The July reading improved to 52.4 points, beating the estimate of 51.7 points. More of the same is expected in the upcoming release, with an estimate of 52.5 points.
2. SPPI: Wednesday, 23:50. The Services Producer Price Index is used to track corporate inflation levels. The index has posted strong readings since April, and came in at 3.7% last month, matching the forecast. No change is expected in the August release.
3. Tokyo Core CPI: Thursday, 23:30. This index is the primary gauge of consumer inflation, and should be treated as a market-mover. Inflation levels have improved drastically in recent months, and the July release posted a strong gain of 2.7%, matching the forecast. The markets are expecting an identical reading in the upcoming release. National Core CPI is expected to post a sharp gain of 3.2%, very close to the previous release of 3.3%. 

* All times are GMT

USD/JPY Technical Analysis

Dollar/yen started the week at 107.33 and touched a low of 106.81. It was all uphill after that, as the pair broke above resistance at 108.58 (discussed  last week) and reached a high of 109.46. The pair closed at 108.98.

Live chart of USD/JPY:

Technical lines from top to bottom:

With USD/JPY continuing to move upwards, we start at higher levels:

114.65 has provided resistance since December 2007.

112.48 has remained intact since January 2008.

110.68 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 began last week as a weak resistance line and was easily breached by the pair. This line is currently providing strong support.

106.88 is next. This line switched to a support role earlier in September.

105.44 had held firm since December.

104.92 capped the pair around the turn of the year.

104.25 was an important resistance line back in August and continues to provide strong support.

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

The round number of 103  showed its strength in late July 2013. It is the final support level for now.

I am bullish on USD/JPY

The US economy continues to improve, as unemployment claims dropped sharply last week. The divergence in monetary policy is weighing on the  yen, as the BoJ considers additional stimulus while the Fed is on the verge of wrapping up QE.

• For a broad view of all the week’s major events worldwide, read the USD outlook.
• For EUR/USD, check out the Euro to Dollar forecast.
• For GBP/USD (cable), look into the British Pound forecast.
• For the Australian dollar (Aussie), check out the AUD to USD forecast.
• For USD/CAD (loonie), check out the Canadian dollar forecast.
• For the kiwi, see the NZDUSD forecast.

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Forex Weekly Outlook Sep. 22-26

The dollar had another positive week, advancing against most currencies on the background of the the FOMC meeting. The upcoming week features Mario Draghi’s speech, German Ifo Business Climate, US New Home Sales, US Durable Goods Orders, among other events. Here is an outlook on the major events coming our way.

The FOMC left its language regarding interest rates unchanged, but did present guidelines for an exit strategy and released forecasts showing higher rates in 2015. Thiseventually gave a boost to the dollar. Scotland voted NO on independence from the UK in the historic referendum. The NO campaign’s victory was more decisive than the opinion polls had suggested, leaving the 307-year union in place. The pound surged in the run up to the results but eventually sold the fact. In the euro-zone, the first installment of the targeted loans (TLTROs) had a poor reception. Does this imply more ECB action? The Japanese yen suffered from a downgrade in the economic assessment and the Aussie was unable to enjoy Chinese stimulus, and eventually lost ground.

Updates:

• Sep 22, 7:57: Why You Need To Change How You Think About Forex Trading: Why You Need To Change How You Think About Trading Improve Your Trading by Knowing this One Fact I get...

1. G20 Meetings: Sat-Sun. Finance ministers from the G20 countries gathered in Australia to discuss measures to improve economic growth in the Eurozone by an additional two per cent by 2018. Measures to fight black money and tax avoidance were also discussed in this forum. Last week’s meeting resolutions will initiate the next meeting at Brisbane in November.
2. Mario Draghi speaks: Monday, 13:00. ECB President Mario Draghi is scheduled to testify before the European Parliament’s Economic and Monetary Committee, in Brussels. Draghi may talk about the need for investments alongside governmental aid. Volatility is expected, especially if he touches the hot topics such as ABS and QE, which now seems more probable after the poor first TLTRO.
3. Chinese HSBC Flash Manufacturing PMI: Tuesday, 1:45. The world’s No. 2 is in the spotlight afterdisappointing industrial output data. This independent forward looking measure stood on 50.2 points in August, reflecting negligible growth. The preliminary figure for September is predicted to stand at 50 – the line separating growth from contraction.
4. German Ifo Business Climate: Wednesday, 8:00. German business sentiment declined for a fourth straight month in August down to 106.3 from 108 in July, amid concerns about the Ukraine crisis and the impact of sanctions imposed by the Eurozone against Russia. The value of German shipments to Russia plunged 15.5% to 15.3 billion euros in the first six months of the year, with major declines in car and machinery shipments. Exports also fell due to smaller orders from Russia. Economists expected a higher reading of 107.1. The lukewarm growth in the Euro area also contributed to the decline in German business sentiment. Another drop to 105.9 is expected now.
5. US New Home Sales: Wednesday, 14:00. Sales of new single-family homes declined for a second straight month in July to a seasonally adjusted annual rate of 412,000, from 422,000 posted in the previous month. Nevertheless, the housing market is on a growth trend. Larger stock of properties and tame prices will help boost demand in the coming months. New homes sales data is considered volatile, despite the decline new home sales were up 12.3 from July last year. Sales of new single-family homes is expected to rise to 432,000.
6. US Durable Goods Orders: Thursday, 12:30. U.S. durable goods orders surged in July by a seasonally adjusted 22.6%, after a revised gain of 2.7% in the previous month while core orders declined unexpectedly by 0.7% following a 1.9% increase in June. The mixed data confused markets. Commercial aircraft orders hit the roof with a 318% increase, after Boeing signed a record number of contracts for new jetliners in July. Cars and trucks sales went up 10.2%. However, core durable goods orders, excluding volatile transportation items, missing forecasts for a 0.5% gain. Core durable goods orders rose by 3% in June. U.S. durable goods orders is expected to plunge 17.7% while Core orders are predicted to rise 0.7%.
7. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits plunged unexpectedly last week to 280,000 from 316,000 in the prior week, indicating the lukewarm figures in August were a temporary relapse.  Economists expected a small decline to 312,000. US economy has broad-based growth including the housing sector. The number of layoffs continue to fall. The four-week moving average declined by 4,750 to 299,500.  The number of jobless claims is expected to reach 294,000 this week.
8. Final US GDP: Friday, 12:30. According to the second release, the US economy grew at a fast clip of 4.2% (annualized) in Q2. This number now carries expectations for another upward revision to 4.6%. This more than compensates for a contraction of 2.1% in Q1.

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

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Forex Signal for 22nd 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:  1.28610

Take Profit:  1.28110

Stop Loss:   1.28810

  
      

GBP/USD

Down Trend:  

(1)SELL

Entry Point:  1.63640

Take Profit:  1.63140

Stop Loss:   1.63940

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 19th 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:  1.28950

Take Profit:  1.30450

Stop Loss:   1.28750

  
      

GBP/USD

Up Trend:  

(1)BUY

Entry Point:  1.63500

Take Profit:  1.64000

Stop Loss:   1.63300

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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