Author Archive for InvestMacro – Page 493

06 Oct

EURUSD: flat expected leading up to payrolls

By Gabriel Ojimadu, Alpari

Previous:

On Thursday, the 5th of October, trading on the euro/dollar pair closed down. The euro shed 0.68% (-80 pips), dropping from its session high of 1.1779 to 1.1699. First, the pound dragged the other majors down with it. The dollar was later propped up by the release of positive data in the US and some statements from Fed representatives.

America’s trade deficit has been reduced, the number of jobless claims has decreased, factory orders have risen, and Fed representatives Williams and Harker have increased expectations of a rate hike by the Federal Reserve before the end of the year.

Harker announced that he expected one more rate hike in December and another three in 2018. Williams is expecting a gradual increase in rates.

Fed Fund futures, which are tracked by CME Group, show that market participants put the probability of a rate hike in December at 86.7% against 77.5% for the 4th of October, and 71.4% for a week earlier.

US data:

  • Initial jobless claims (29 Sep): 260,000 (forecast: 265,000, previous: 272,000)
  • Trade balance (Aug): -42.4bn USD (forecast: -42.7bn USD, previous: -43.6bn USD)
  • Factory orders (Aug): 1.2% (forecast: 1.0%, previous: -3.3%).

Day’s news (GMT+3):

  • 09:00 Germany: factory orders (Aug);
  • 10:00 Switzerland: foreign currency reserves (Aug);
  • 10:30 UK: Halifax house prices (Sep);
  • 15:00 UK: MPC member Haldane’s speech;
  • 15:30 Canada: participation rate (Sep), unemployment rate (Sep);
  • 15:30 US: average hourly earnings (Sep), nonfarm payrolls (Sep), unemployment rate (Sep);
  • 17:00 Canada: Ivey PMI (Sep);
  • 17:00 US: wholesale inventories (Aug);
  • 19:15 US: Fed’s Dudley speech;
  • 19:45 US: Fed’s Kaplan speech;
  • 22:00 US: consumer credit change (Aug).

Fig 1. EURUSD rate on the hourly. Source: TradingView

My predictions for yesterday came off in full. The euro restored to the 67th degree (1.1778) at the beginning of the European session as a result of the dynamics on the euro/pound cross, before correcting to 1.1699. In Asia, the euro slid against the dollar to 1.1686.

Today’s chart doesn’t contain any predictions. I don’t make predictions on payrolls day. The NFP indicator is too unpredictable due to the constant revision of previous readings. So, we don’t know what kind of data to expect today and what the reaction to it will be.

The euro has dropped to 1.1686. I don’t think that it’ll stop here. If the payrolls data doesn’t disappoint markets, we could see the euro fall as far as 1.1520 if we get a correction on the cross. Looking downwards, there are two levels we should keep an eye on; 1.1677 and 1.1645. I reckon that the euro/dollar pair will trade flat up until the payrolls report is released.

Source: “EURUSD: flat expected leading up to payrolls“
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05 Oct

Bitcoin could reach 100,000 USD, but not a million

By Gabriel Ojimadu, Alpari

In order to better understand the current situation on cryptocurrency markets, let us recall a famous story. An analyst and a trader both go into a lift. The trader, before pressing any of the buttons, turns to the analyst and says; “Spare me your clever little tricks and just tell me; are we going up or down?” The analyst answers; “First of all, we need to be clear which floor we’re on. Secondly, in any case, we can’t go higher than the roof, and we can’t go lower than the basement. Still, we can’t rule out the possibility that the lift will get stuck or change direction owing to extreme circumstances”.

It’s not at all easy to predict the exact price of a certain asset at a specific time. The analyst may have an advantage in that they give a general indication of where the price may end up, which is enough to make a trading decision. As far as this relates to Bitcoin, I’ve got some good and bad news. The bad news is that there’s no point in expecting the bitcoin’s explosive growth to continue. The good news is that there is still the potential for phases of growth. I reckon that the bitcoin could hit the 10,000 USD mark at some point next year. In the future, I think that growth to 100,000 USD is possible, but not to a million. In other words, I can see the price growing from its current level by a factor of 20, but not by 200. I’ll now try to explain where I’m coming from.

Assets grow most strongly during the earlier phases of their development. Its acceptance within the investment community provides for further growth, but not as strongly as before. As far as Bitcoin is concerned, it’s gone through several phases during its 10-year history. In the beginning, the bitcoin was simply a conventional unit, and transactions that took place among the “IT geeks” who founded the blockchain technology were executed at bitcoin prices of around 0.3 – 1 USD. The situation changed after Forbes published an article on Bitcoin on the 20th of April, 2011. This captured the interest of people close to the IT industry. From 2011 to 2013, the price of bitcoin rose from 1 to 300 USD (it even briefly hit 1,000 USD). For the next 2 years, the bitcoin was volatile and fluctuated within a range of 200 – 300 USD. A large number of private investors started to show an interest in the currency in 2016, and the price has risen tenfold in the last two years from 400 to 4,000 USD. Growth was exponential. This year, the growth continued and even outpaced the exponent, which is why the bitcoin currently looks slightly overbought (see fig 1).

Fig 1: bitcoin growth from 2015 to 2017.

The next phase is investment in bitcoin from major funds, which has already begun. According to data from Autonomous NEX, around 70 hedge funds have already invested in bitcoin. Some more traditional funds are taking a more cautious approach as they await approval from regulators to invest in cryptocurrencies. As soon as that happens, we’ll see a new wave of growth for cryptocurrencies. Still, this process is not likely to go smoothly, so we should see plenty of jumps and slides. Nevertheless, volatility will subside as time goes on.

Fig 2: bitcoin’s decline in volatility

At the time of writing, cryptocurrency’s market cap is around 130bn USD, this is around 0.5% of the market cap of the US stock market. Blockchain technology is continuously being developed, and once cryptocurrencies start to gain official recognition, they’ll start to carry more weight on financial markets. Still, it’s highly doubtful that the collective value of cryptocurrencies will ever be comparable to the total value of all US corporations and US GDP (18.5 trillion USD), so growth by a factor of 200 is unlikely. At the same time, growth by a factor of 20, taking into account that global money supplies increase every year, is perfectly possible. In my view, it’s still very much possible to get rich from cryptocurrencies. Should we see a rising star among the altcoins that lacks the deficiencies of its predecessors and provides new opportunities; should you be among the early adopters, you have the chance of making an enormous profit.

Source: “Bitcoin could reach 100,000 USD, but not a million“
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05 Oct

EUR/USD: Limited potential for further USD gains

By GrowthAces.com

Macroeconomic overview:

  • The pace of growth in the U.S. economy’s service sector accelerated in September to fastest in 12 years, led by stronger new orders and employment, according to an industry report released on Wednesday.
  • The Institute for Supply Management said its index of non-manufacturing activity rose to 59.8, which was the highest since the August 2005 reading of 61.3. The index was 55.3 the month before.
  • U.S. private employers added 135k jobs in September, topping market’ expectations even as Hurricane Harvey and Irma “significantly impacted smaller retailers,” a report by a payrolls processor showed on Wednesday. The September reading was smallest increase since October 2016.
  • Private payroll gains in the month earlier were revised down to 228k from an originally reported 237k increase.
  • The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment. The market is looking for U.S. private payroll employment to have grown by 83k jobs in September, down from a gain of 165k the month before. Total non-farm employment is expected to have increased by 90k. Our forecast assumes growth by 120k.
  • The unemployment rate is forecast to stay steady at the 4.4% recorded a month earlier.
  • The USD weakened on Wednesday as investors repositioned ahead of Friday’s highly anticipated jobs report, but pared losses on a strong non-manufacturing report. Improving U.S. data along with the prospect of U.S. tax cuts and the likelihood that the Federal Reserve will raise interest rates in December have boosted the U.S. currency in recent weeks. Traders have been cautious this week on the greenback, however, on concerns that recent hurricanes may hurt last month’s hiring report.
  • Interest rate futures traders are now pricing in an 83% likelihood of a December rate increase, up from 78% on Tuesday.  Investors are also adjusting for the likelihood that U.S. President Donald Trump will appoint a less hawkish head of the Federal Reserve than previously expected.
  • That is why we think that the potential for further USD appreciation is limited and think long EUR/USD could be a good trading idea.

Technical analysis: The technical situation has not changed a lot since yesterday. Investors remain cautious ahead of Friday’s U.S. non-farm payrolls. A breakout above short-term moving averages could signal a stronger upward move.

EURUSD Daily Forex Signals Chart

Short-term signal: Long for 1.2400 with stop-loss at 1.1585

Long-term outlook: Bullish

 

AUD/USD: Not all is doom and gloom in Australian retail sales data

Macroeconomic overview:

  • Thursday’s data from the Australian Bureau of Statistics showed retail sales dropped 0.6% in August, confounding expectations for a 0.3% increase. July was also revised down to show a 0.2% fall.
  • The 0.8% slump in July and August is the biggest back-to-back fall since October 2010. The AUD/USD fell from a one-week high of 0.7875 set on Wednesday.
  • Australia’s retail sector had shown some signs of life earlier in the year, but that recovery was short-lived as sluggish wages and household incomes sapped spending power. The data casts a shadow on the Reserve Bank of Australia’s forecasts for the economy to accelerate at 3% over the next two years.
  • The RBA has long feared ballooning debt in Australia’s red-hot property sector was limiting consumers’ ability to spend elsewhere in the economy, one reason it has held rates at an all-time low 1.50% since August 2016.
  • The ABS figures showed falls across every single state, a rare occurrence, with food, eating out and household goods leading the losses. Department stores did gain 0.7%, but that followed a sharp drop of 2.6% in July.
  • Not all is doom and gloom. The ABS’s experimental estimates of online retail turnover jumped 6.3% in August from the previous month and were rapidly catching up to last year’s Christmas sales.
  • The online numbers are not yet part of the headline retail series and are not seasonally adjusted. The ABS estimates the sector is worth around AUD 13 billion a year, compared to AUD 300 billion in traditional sales. Online activity is, however, expanding much more rapidly.
  • A separate ABS survey of household spending this week showed Australians are shelling out more money on holidays, health insurance and school fees – none of which are reflected in the retail sales numbers.
  • There was slightly better news on Australia’s trade surplus which widened to AUD 989 million in August, topping market forecasts of AUD 875 million. Yet the weakness in retail was mirrored in the numbers with imports of consumer goods dropping 4% in the month.

Technical analysis: The AUD/USD is testing 38.2% fibo of May-September rise again. A break below that level could open the way to 50% fibo of the above-mentioned move. In our opinion the likelihood of further fall below 0.7720 is low, and we are looking to buy this pair near that level.

AUDUSD Daily Forex Signals Chart

Short-term signal: Buy at 0.7730, target 0.8120, stop-loss 0.7550

Long-term outlook: Bullish

 

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By GrowthAces.com – Daily Forex Trading Strategies

 

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05 Oct

Murrey Math Lines 05.10.2017 (EUR/USD, USD/CHF)

Article By RoboForex.com

EUR USD, “Euro vs. US Dollar”

As we can see at the H4 chart, the EUR/USD pair has rebounded from the support at the 0/8 level at 1.1718 and, according to the forecast, must reach its first target at the 3/8 one at 1.1901. Unfortunately, the price is too weak to break the resistance at the 1/8level at 1.1779. However, if the price does break it, the pair will continue growing towards 1.1901. But if the price breaks the support at the 0/8 level, the instrument may continue falling towards the -2/8 one at 1.1596.

At the H1 chart, there are scenarios for more aggressive trading. One may consider opening positions in advance, before the pair breaks the 0/8 level. In this case, short positions may be opened when the price breaks the 1/8 level at 1.1749 and place the Stop Loss below it as the pair is getting closer to the 0/8 one. However, if the price breaks the 0/8 level at 1.1718, the instrument will continue falling towards 1.1596.

 

USD CHF, “US Dollar vs Swiss Franc”

At the H4 chart, the USD/CHF pair is trading close to the resistance at the 8/8 level at 0.9765. the price has already tested this level several times but failed to break it. Later, the instrument may rebound from this level and resume moving downwards to reach the 5/8 one at 0.9582.

As we can see at the H1 chart, the pair is also trading near the resistance at the 8/8 level (0.9765). the price is expected to test this level once again, rebound from it, and then continue falling towards 0.9582.

 

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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05 Oct

EURUSD: price attempting a breakout of the B-B channel

By Gabriel Ojimadu, Alpari

Previous:

On Wednesday the 4th of October, trading on the euro closed up against the US dollar. The day turned out to be rather volatile, but market participants failed to determine the future direction of the pair.

During the US session, the single currency dropped from 1.1788 to 1.1747 levels. The dollar was propped up by a strong services PMI from ISM in the US. This decline didn’t continue, however, as traders started preparing themselves for Federal Reserve chair Janet Yellen’s speech.

Yellen made no mention of interest rates or the US economy, so markets ignored her comments.

US data:

ISM services PMI (Sep): 59.8 (forecast: 55.4, previous: 55.3).

Day’s news (GMT+3):

  • 10:15 Switzerland: CPI (Sep);
  • 14:30 Eurozone: ECB monetary policy meeting accounts;
  • 15:30 Canada: trade balance (Aug);
  • 15:30 USA: initial jobless claims (29 Sep), trade balance (Aug);
  • 16:10 USA: FOMC member Powell’s speech;
  • 17:00 USA: FOMC member Harker’s speech, factory orders (Aug);
  • 20:30 UK: MPC member Haldane’s speech.

Fig 1. EURUSD rate on the hourly. Source: TradingView

We’ve got two price channels on the hourly timeframe. The B-B channel is embedded in the A-A channel. On Thursday, the A-A channel ranges from 1.1684 to 1.1812. On the B-B channel, the part that interests us is the lower boundary at 1.1754, since the price has been trading around this level for several hours.

Given that the Stochastic oscillator is pointing upwards, I was expecting that the price would rise to the trend line (taken from the 1.1833 top reached on 29/09/17).

The lower boundary of the B-B channel is bolstered by the LB balance line. I’m waiting for this support zone to be broken and for the euro to recommence its decline to reach 1.1734, and then 1.1707.

Catalonia is set to declare independence on Monday, regardless of whether or not the rest of the world recognises it. Political tensions in Europe are rising. If pressure on the euro increases through the crosses, we could see it drop as far 1.1678 by Friday’s close.

Source: “EURUSD: price attempting a breakout of the B-B channel“
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05 Oct

Ichimoku Cloud Analysis 05.10.2017 (AUD/USD, NZD/USD, USD/CAD)

Article By RoboForex.com

AUD USD, “Australian Dollar vs US Dollar”

The AUD/USD pair is trading at 0.7823; the instrument is still moving below Ichimoku Cloud, which means that it may continue falling. We should expect the price to test the downside border of the cloud at 0.7855 and continue moving downwards to reach 0.7710. However, this scenario may be cancelled if the price breaks the upside border of the cloud and fixes above 0.7905. In this case, the pair may continue growing towards 0.8050.

 

NZD USD, “New Zealand Dollar vs US Dollar”

The NZD/USD pair is trading at 0.7155; the instrument is still moving below Ichimoku Cloud, which means that it may continue falling. We should expect the price to test the downside border of the cloud at 0.7200 and then continue moving downwards to reach 0.7070. However, the scenario that implies further decline may be cancelled if the price breaks the upside border of the cloud and fixes above 0.7255. In this case, the pair may continue growing towards 0.7385.

 

USD CAD, “US Dollar vs Canadian Dollar”

The USD/CAD pair is trading at 1.2481; the instrument is still moving above Ichimoku Cloud, which means that it may continue growing. We should expect the price to test the upside border of the cloud at 1.2450 and then continue moving upwards to reach 1.2620. However, this scenario may be cancelled if the price breaks the downside border of the cloud and fixes below 1.2380. In this case, the pair may continue falling towards 1.2290.

 

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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04 Oct

Here’s Why the Time to Worry About the “Fear Index” is NOW, Not Later

By Elliott Wave International


 

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This article was syndicated by Elliott Wave International and was originally published under the headline Here’s Why the Time to Worry About the “Fear Index” is NOW, Not Later. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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04 Oct

Fibonacci Retracements Analysis 04.10.2017 (EUR/USD, USD/JPY)

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

At the H4 chart, the EUR/USD pair is trading to the downside to reach the retracement of 38.2% at 1.1510. However, the convergence that is being formed at the moment may indicate a possible correction with the target at the retracement of 50.0% at 1.1868.

As we can see at the H1 chart, after being corrected to the upside by 38.2%, the pair formed another descending impulse and reached new local lows. At the same time, the price is forming the convergence with possible targets in the area between the retracements of 23.6% and 50.0%.

 

USD JPY, “US Dollar vs. Japanese Yen”

At the H4 chart, the USD/JPY pair is forming the descending correction in the form of the Flag pattern. The main targets of the correction may be the retracements of 23.6%, 38.2%, and 50.0% at 111.847, 110.990, and 110.290 respectively. However, the price may yet resume moving upwards. After breaking the current high at 113.255, the instrument may move towards the post-correctional extension area between the retracements of 138.2% and 161.8% at 113.630 and 113.875 respectively.

At the H1 chart, the pair is expected to form another correction to the downside to reach the retracements of 50.0% and 61.8% at 112.350 and 112.150 respectively.

 

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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04 Oct

EURUSD: the price has corrected to the 67th degree

By Gabriel Ojimadu, Alpari

Previous:

On Tuesday the 3rd of October, the euro/dollar rate closed slightly up. Buyers managed to induce a rebound from 1.1696 on the back of some positive data from the Eurozone coupled with negative UK statistics. On the back of a jump on the euro/pound cross from 0.8822 to 0.8881, the euro/dollar bulls managed to bring the price up to 1.1737. I’ll outline the current market situation below.

Day’s news (GMT+3):

  • 10:55 Germany: Markit services PMI (Sep);
  • 11:00 Eurozone: Markit services PMI (Sep);
  • 11:30 UK: Markit services PMI (Sep);
  • 12:00 Eurozone: retail sales (Aug);
  • 15:15 USA: ADP employment change;
  • 16:45 USA: Markit services PMI (Sep);
  • 17:00 USA: ISM non-manufacturing PMI (Sep);
  • 17:30 USA: EIA crude oil stocks change (29 Sep);
  • 20:15 Eurozone: ECB President Draghi’s speech;
  • 22:15 USA: Fed’s Yellen speech.

EURUSD rate on the hourly. Source: TradingView

Yesterday’s session didn’t go as I expected. The British and European statistics changed the landscape. Firstly, the price restored from the D2 line or 112th degree to the balance line at 1.1763 (simple average line with a period of 55), then, following a pullback during the Asian session, growth continued to reach 1.1780.

A new daily high has been hit. This correction from the low of 1.1696 marks a 61.8% retracement of the downwards wave from 1.1832 to 1.1696. Given that the 61.8% Fibo level runs close to the 67th degree, this makes 1.1777 levels an important resistance.

The Stochastic has reversed downwards. The CCI is starting to reverse downwards and needs to close below +100. It seems that all the conditions for continuing the downwards trend on the pair have been fulfilled, but there are still some internal doubts.

One thing bothering me is that the rebound from the 67th degree was weak. Because of this, we need to keep an eye on the dynamics of the euro/pound cross and on US bond yields. Another thing is that in the US today, employment data from the ADP is set to be released as well as a non-manufacturing PMI from ISM. There are also going to be speeches from ECB head Mario Draghi and Fed chair Janet Yellen. They could be game changers.

In my forecast, I expect a jump to 1.1791 followed by a continuation of the downtrend. I’m playing it safe because in Asia, the dollar fell while the euro/pound cross didn’t. If, during the European session, the euro bears manage to close the hour below 1.1755, we can expect a further slide to 1.1725. The trend line taken from 1.1696 should be broken through. If a new high is reached, the 45th degree will shift upwards.

Source: https://alpari.com/en/analytics/reviews/market_sessions/22147_04102017/

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04 Oct

Forex Technical Analysis & Forecast 04.10.2017 (EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD, BRENT)

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

The EUR/USD pair has completed the ascending impulse and right now is trading to break it to the upside. Possibly, the price may continue the correction. An alternative scenario implies that the market may break 1.1780, reach 1.1800, and then continue growing towards 1.1845. However, according to the main scenario the instrument may move to the downside to reach 1.1733, break it, and then continue falling towards the local target of the third wave at 1.1660.

 

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is still consolidating near the lows of the third descending wave. Possibly, today the price may be corrected to the upside to reach 1.3355. However, if the instrument breaks the range to the downside, it may fall with the target at 1.3170.

 

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair has broken 0.9740 and right now is still being corrected. We think, today the price may grow to test the above-mentioned level from below. After that, the instrument may form the fifth wave to reach 0.9695 and complete the correction. Later, in our opinion, the market may move to the upside with the local target at 0.9800.

 

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is forming another descending structure. Possibly, today the price may reach 112.27 and then grow towards 112.72. In fact, the instrument continues consolidating at the top of the ascending wave. The main scenario implies that the market may break this consolidation range to the downside and reach the first target at 111.50.

 

AUD USD, “Australian Dollar vs US Dollar”

The AUD/USD pair has returned to 0.7868. According to the main scenario, the instrument may fall to reach 0.7755 and then start another correction towards 0.7930.

 

USD RUB, “US Dollar vs Russian Ruble”

The USD/RUB pair has reached the correctional target. We think, today the price may fall towards 57.50, break it, and then reach the local target at 57.00.

 

XAU USD, “Gold vs US Dollar”

Gold is still consolidating near the lows of the descending wave. Possibly, today the price may test 1278.00 from below and fall towards 1265.50 to complete the descending wave.  Later, in our opinion, the market may start growing with the first target at 1290.00.

 

BRENT

Brent is consolidation near the lows of the correction. We think, today the price may grow towards 56.33, break it, and then continue moving upwards to reach the first target at 57.20. After that, the instrument may fall to return to 56.33. The main scenario implies that the market may start another ascending wave with the first target at 59.85.

 

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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