Market reviews by FreshForex

[NatlieFr]

Hello,

 

In this thread we are going to post fundamental analysis made by the experts of FreshForex company.

 

Meanwhile, let me give you some tips for better understanding of the currency market:

 

Information service - market news, interest rates, schedule of trading sessions and economic calendar - http://freshforex.com/analitics/

 

Forex Encyclopedia “CleverFX": http://freshforex.com/encyclopedia-forex/

[NatlieFr]

FX: what is the dollar's outlook?

 

Review for the week 14.10 – 18.10.2013

 

The last week, US dollar suffered the most because of the default fear. Though the Congress managed to avoid default, relief rally for dollar took just a few minutes. It is secondary to the behaviour of stocks, which reached one more record High the last week, whereas yield of 1-month Treasurie dropped for more than 30 basic pips on Thursday. Dollar's weakness was caused by a number of factors:

 

 

• Fitch shifted the USA rating from AAA to a “rating watch negative”;
  
• 
  
• Sharp drop in yield of Treasuries destryoed advantage of the US currency;
  
• 
  
• Possibility of delay in FRS narrowing that probably won't take place until 2014.
  
• 
  

 

 

When FRS denied to narrow program of assets' purchase in September, dollar got to be under pressure. Expectations regarding growing of the interest rates were also shifted to 3rd quarter of 2015. It affected yield of 10 years' Treasuries, which dropped for 20 basic pips to 2.55% in the end of the last week.

 

As you can see, the last week all G10 currencies grew against dollar. AUD and NZD took leading positions as the currencies sensitive towards the risk. The last week, S & P 500 grew to the record-making High point, which accompanies amendmends in the FRS policy. In particular, over this year, Aussie was one of the weakest currencies against USD, which explains why delay in narrowing by FRS acted as a strong impetus for AUD. British pound grew a lot because of positive economic data of the last week. EUR was in the middle probably because it was close to a key resistance February High point 1,3710, which can draw attention of the European Central Bank; in February, 2013, the EuCB induced a sharp drop of EURUSD on this level. Thus, investors may feel nervous and make decisions to close profits instead of opening long positions on fresh High points.

 

Forecast for the week 21 – 25 October, 2013

 

Where the USD will go to at last?

 

After smash losses of the previous week, we can see that dollar is trying to compensate a part of them taking a special advantage from possible surprise news of economic data this week.

 

Nevertheless, it is probable that delay in narrowing made by the FRS is the strongest driving force for dollar in the nearest term. FRS representative Fisher (“hawk”) noted that he will not vote for narrowing this month because of the vague data and difficulties related to obtaining economic reports of the USA.

 

But December narrowing is also under threat after just a temporary raising of debt ceiling till January and February. If economic outlook is clear and economy demonstates stability, FRS can reject narrowing purchase of assets during the next round of negotiations. Though legislation on raising ceiling debt and financial provision of the Government was adopted, FRS will keep in mind that 144 Republicans voted against and in the future the deal may face a serious resistance.

 

At this moment, an overall picture can be weak for USD, but this week is crucial for the US currency and future FRS policy. This week we will start getting delayed economic report, and the crucial one is NFP September report. Though this information is a little out-of-date now, it is still important. The market expects for the growth from 180K to 152K in August, which can induce relief rally of USD, because it is assumed that the US economy was in a better state to sustain storm of recent finance and state shutdown. As per Moody's agency's estimation, this quarther economic growth may miss up to 0.6%.

 

So, until we evidence growth of economic data, it is hard to understand, how USD can behave in a medium term.

 

We will finally start getting economic data from the USA, because government officials will get back to work from vacancy. We will get some key releases the next week including NFP September report and the report on unemployment level (the 22th of October). Other main data will include retail sales (21st) and durable goods orders (25th). The full schedule of reports including delayed reports can be found through the link: http://freshforex.com/analitics/calendar/.

 

EUR/USD

Europe: issues with Greece budget will get back to focus of attention

 

The last week, Euro zone took a back seat, because its budget process grasped a much less attention that the American one. It does not mean that there are no problems through. The fight between Greece and IMF-ECB-EU trip took place. Upon that, EU is looking for extra austerity measures for Greece to provide 2 – 3 bln Euro and plug a budget hole for 2014. The issue for Greek government is that it does not promise austerity trying to retain support in the society and relief economic pressure. Economy of Greece marks 5-years' recession, but this year it showed certain positive signs of growth, and government does not stand for further toughening.

 

Thus, its destiny may be decided in Berlin, where Merkel still fights for coalition and negotiations around coalition may take one more month to last. It is unlikely that Merkel will be generous to Greece. Euro bonds are still far to be realized, and Germany hardly yeilds its rights to Greek debts. So, a togh contradiction between Greece and above-mentioned trip can be predicted for the nearest months.

 

Meanwhile, European Central Bank will watch as EURUSD approaches its February High 1.3710, at which ECB successfully seized Euro. The threat of abnormally strong Euro can make European Central Bank to be vigilant this week. We think, 1.40 is a too high level for Euro, and any sign of weakness in October PMI index released this week can make EUB interfere either limit EUR rate by declaring so. As surrender of EURUSD is not expected, we can see drop down to 1.3590 — as the nearest support zone.

 

Key releases of data from Euro zone the next week include: October PMI (on 24th ), which is expected to continue a steady uprise. German IFO (on 25th ) is expected to reach the highest level from the 1st quarter of 2012. Decision on Norwegian and Sweden rates (both are made on 24th ) also worth attention, it is expected that both states will keep rates on the same level for one more month.

[Jaso-trader]

I follow these reviews by FreshForex.com keenly 'cos I've discovered they are the most reliable around. Keep on the good work FreshForex team!

[NatlieFr]

Eurotrend is against Australian retracement

 

EUR/USD

Monthly chart: monthly bar is not closed yet and everything may happen. But all leads to breaking of the upper Bollinger envelope as ADX is growing. It is ten to one that the next middle-term objective of bulls will be 1.4260.*

Upon that, one more preliminary rollback to average's Bollinger band zone is probable (1.3057). If it happens, it can be a promising setup for entrance to purchases before 1.4260, which consists more than 1200 pips. It is obvious, that one scenario is unlikely to be placed into one bar (that is to say, traders will have to be patient), however, strategy can be already tried on.

Also, there is a threat of one more abrupt upwards passover, to 1.4934-1.50. We will give our estimations of it in the next review.

 

Learn more: http://freshforex.com/analitics/fresh-forecast/potencial/week_68.html

[NatlieFr]

“Europeans” can undergo downward correction

EUR/USD

 

 

Monthly chart: so, bulls have formed a pinbar, whereof they seemed to guarantee themselves mid-range outlook for growth to 1.4260. Nevertheless, our main review indicator ADX went down, which predetermines either monthly bounce down (or to 50% of pin in the area of 1.3440) or a deeper correction to the area of Bollinger medium band (1.3106). This plan is described by a red arrow.

 

 

Upon that, this ADX position can lead to even a more profitable bearish line: it is a touch of 1.3834 and an active move down, to continue accumulation of volumes in a giant triangle range.

 

Alternative option in this case is a dash upwards, for the 1.4285 point. This plan can only be considered in the position above 1.3834.

 

http://s2.ipicture.ru/uploads/20131202/rub1v7q2.jpg

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[NatlieFr]

No surprises should be expected from EuCB

Review of the past week

 

 

Quotes of major currency pairs continued its emergence in the past week as well. According to results of the week, USDX index lost 0,2% and the largest loss was received by US currency against British pound.

 

 

Euro zone provided mixed statistics. Negative data on German labor market and retails were changed by moderately positive inflation and unemployment reports in Euro zone. Weak report on US consumer confidence CB showed the lowest values for the last 7 months and along with decline in durable goods orders figure supported demand in European currency. Eur/Usd closed trading week near to 36. Upon overcoming strong resistance level 1.6260, British currency accelerated its growth. Investors were encouraged by growth of consumer spending index, which is a crucial part of the economy, as well as by the comments of Bank of England Governor Mark Carney told about withdrawal of support package for mortgage lending as from January, 2014. He also stated that improvements in Euro zone are required to continue growth of the UK economy and internal demand solely is not able to ensure a serious recovery, when spoke in the Parliament's hearings. Nevertheless, British pound managed to establish a fresh high of 2013 at the point of 1.6382.

 

 

Japanese news background was also mixed. Inflation remained on October level at the point of 1.1%, which is undoubtedly positive for Japan coping with inflation. However, the data on unemployment and industry output was negative. In general, Jpy/Usd shows a steadily ascending tendency and 5th trading week in succession is closed above the previous one.

Read the Forecast

[Volkov Yuriy]

Week sketches for three pairs

EUR/USD

 

 

Monthly chart: the pair is approaching upper Bollinger Band (1.3860), which will be quite able to send the pair to get corrected the area 1.3354. If bulls show strength and will break 1.3860, then the point 1.4260 will become an alternative verdict (marked by red arrow).

 

Weekly chart: a local support by Bollinger medium band is seen (1.3421). Thus, we either will face rollback to this line from 1.3860 and further growth, or break through 1.3860 to 1.4260 without rollback.

 

http://pic4net.com/di-KPGZUQ.png

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[Volkov Yuriy]

USD/JPY: fresh high of 2013 is not far off

Review of the past week

 

 

The last week was the first trading week of the new month and thus had been very eventful. European currency managed to consolidate strongly against its US associate. EuCB meeting was conducted on December, 5th. As it was expected, European regulator remained discount and deposit rates without changes. Over the last days, there were rumors that negative rates would be introduced in Euro zone and the market received refutation of this information.

 

 

On this background, a confident growth of Eur/Usd quote has been witnessed, though provisional GDP for the 3rd quarter received good data. Friday's report on labor market sprang a surprise for market's participants, in particular, it was growth of Non-Farm payrolls index to the point of 203 000. Though European currency reacted this only in the form of technical correction, upon which growth of quotation continued. Also, a notable upsurge took place on leading stock exchanges of the world. To conclude, US positive data was not able to persuade investors that FRS would decide about cutting of QE3 on its nearest meeting on December, 17-18.

 

 

British currency had been descending during entire week. Positive data on construction and manufacture PMI did not encourage bulls to storm new hills. Whereas release of PMI for service sector disappointed investors having demonstrated its low for the last 5 months. Also, its rate was pressed by Eur/Gbp growth – this cross-rate consolidated a lot.

 

 

BoE meeting was held on Thursday, 5th, and it was decided to remain current monetary policy unchanged. Usd/Jpy had been experiencing correction over the most part of the week, after which it had reached a fresh 6-month's high. Positive data on the US labor market contributed to growth of the US currency. Usd/Jpy pair closed trading week on the point of 102.88. The futures on stock index Nikkei 225 also showed a confident growth further to three days of correction. Correlation between those two pairs is still very strong.

 

 

Forecast for the week 9 – 13 of December

[vic84]

AUDUSD on a downward trend, not good for investment at the moment...

[Volkov Yuriy]

Australian still stands off Euro and Pound

EUR/USD

 

 

Monthly chart: Area of 1.3859 will be repeatedly tested (upper Bollinger Band), further to which bulls either start attacking 1.4260 or will roll to the medium band (1.3121, marked by red arrow).

Weekly chart: here, 1.4260 level seems like a verdict. The question is only in the direction of movement – whether it will be direct or through rollback to the medium band. So far, a more located support – in this case 1.3442 – does not allow to rely upon a deep movement to 1.3121.

Daily chart: an even closer level of potential demand is 1.3601. Most likely that 1.3859 will be broken exactly after touching this very area.

http://pic4net.com/di-FWDGMI.png

Learn more

[Volkov Yuriy]

Spotlight on the Fed reserve meeting

Review of the past week

 

 

The past week on the Forex market was not very notable in terms of macroeconomic statistics. According to the week's results, united European currency managed to consolidate its positions a little, despite weak European stats. Industrial output decreased by 1.1% over the month, which is the lowest value from October, 2012 and indicates problems of the European manufacturing. On Thursday, 12th, in the US report on retails was published. The volume of retail grew by 0.7% which says about good paces of growth, because consumer expenses play a very important role in the US GDP. Though USD consolidation against its main competitor was moderate and trading week was closed by it on the point of 1.3741.

 

 

In the beginning of the past week, GBP/USD quatations have been moderately growing. On Monday 9, BoE Governor Mark Carney stated that British economy allows optimistic estimations and now it is difficult to find the reason of deteriorating of a potential upsurge in the economy. Such positive comments encouraged British currency to set a fresh year high at the point of 1.6464. However the fuel for growth expired at this point and bears entered the game. British economy provided a mixed news background: manufacture grew for 0.4%, whereas visible trade balance sheet was rather worse than the medium line of forecasts. Strong retails stats from the USA poured oil on the fire as well as the positive dynamics of Eur/Gbp.

 

 

Trading week was closed by Gbp/Usd pair below 63 figure, at the point of 1.6295. Japan provided negative macroeconomic stats. Total GDP estimation for the 3rd quarter showed reduce by 0.5%. Also it is necessary to underline weak data on business index for big manufacturers BSI, which demonstrated drop in 5.5 points against the previous quarter. In case of further deterioration, one can expect additional softening of monetary policy by Japan that will instigate one more wave of Usd/Jpy growth. Further to publication of a strong report on the US retail, USD/JPY quotes went up and established a fresh year high at the point of 103.91. After that, bulls decided to fix profit and trading week was closed by the pair at the point of 103.24.

 

 

Forecast for the week December 16 – 20

[Volkov Yuriy]

Currency market is off-side

Review of the past week

 

 

The past week on the Forex market was very interesting in terms of events. On Wednesday's evening, Fed Reserve declared about start of seizure of QE3 stimulative program. Chief of the US regulator Ben Bernanke stated on the press-conference that indices of the labor market and GDP are rather optimistic, whereas inflation is scarcely amendable to control, FRS will closely watch this figure. It was also stated that on its next meeting in Jan 2014 the Federal Open Money Committee will consider the issue about tapering of its buying program.

 

 

This step taken by FRS was reflected by major currency pairs by moving into both sides, further to which US currency consolidated. Leading stock exchanges responded to this statement by growth of their quotations. This rally encourages bulls a lot when it came to Usd/Jpy pair and a new year high was reached.

 

 

British stats continues to encourage investors. This time market participants received a positive report on unemployment level, which reduced by 0.2% down to the level of 7.4%. In contrast to euro, the pound finished the week with a slight growth.

 

 

On the last trading day of the past week, Japanese CB's meeting took place. As it was expected by market participants, the volume of bond buying remained as it used to be. Regulator declared that it is ready to adjust its monetary policy whenever necessary. And one can expect that this necessity can arise in 2014, which will lead to further weakening of the Japanese currency.

 

 

Forecast for the week December 23 – 27

[Volkov Yuriy]

Weekly sketches for 3 pairs

EUR/USD

 

 

Monthly chart: ADX is close to the point "30", wherein a main trend potential of price movement starts to be manifested. Thus, taking into account a new high reached by bulls, we assume that on completion of a descending swing, Euro uptrend will go on with the same target as earlier at 1.4260.

Weekly chart: closeness of two supportive points 1.3508 and 1.3298. One of them is supposed to provide a strong demand in European currency. Any break of uptrend can only be considered below 1.3107.

Daily chart: here we see a well-formed Over&Under, thus, a main plan would be a deep rollback to 1.3298. Entrance area into sales on this setup is 1.38.

http://s2.ipicture.ru/uploads/20140109/3C25vCS7.jpg

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[Volkov Yuriy]

Swings of the Forex market are still in motion!

Review of the past week

 

 

The past week on the currency market was very eventful. According to its results, US dollar lost the part of its positions as compared to its main rivals. The last meeting of EuCB did not bring surprises. Monetary policy remained on the same level, regulator stated that it is still concerned with low inflation, but will not take any measures as of now.

 

 

On Friday the report on US labor market was released. Non-Farm payroll release is very controversial. Despite strong figures from ADP as well as the service index of employment from ISM, final Non-Farm was released on the point of 74 000 having demonstrated the least value for the last 2,5 years. Nevertheless, totalunemployment level is reduced by 0.3 down to the level of 6.7%. Trade week was finished by Usd/Eur by growth up to the point of 1.3668.

 

 

Great Britain reported negative macroeconomic stats. Service PMI frustrated investors having shows the least values for the last 6 years. Also, trade balance and manufacture data was negative. Further to releases, GBP/USD quotations went down, but investors promptly re-bought this decline which says about strength of ascending trend. In general, a steady growth of GBP/USD pair had been witnessed over the week.

 

 

Full attention of investors was focused on the US data. Recordings of the last FRS meeting did not bring serious changes in “bulls” and “bears” alignment. American regulator stated that it expects a gradual tapering of stimulative measures and decisions will be made based in the view of situation with the labor market and inflation. On the last trading day labor market release was published n the USA. Unemployment level got down, but Non-Farm Payrolls data poured oil into the fire. Quotations managed to grow up to the point of 105.32 and fell by 150 points then. So, trading week was closed by USD/JPY just above 104.

 

 

Forecast for the week January 13 – 17

[Volkov Yuriy]

USD/JPY: meeting of Bank of Japan is in the focus

Review of the past week

 

The last week on the currency market showed consolidation of the US currency against its major competitors. As German GDP data for 2013 was weak and the US inflation report was moderately positive, united European currency got under pressure. Economic growth in one of the leading European economy – Germany – demonstrates decline 3 years in succession, which one more time confirms accuracy of Mario Drahgi's expectations about a weak growth of European economy within nearest few years. A moderate growth of the US CPI and PPI increased the number of supporters of tapering of stimulative measures which will be demonstrated at the FOMC meeting on January 29. All these facts worked in favor of bears and having lost 139 points for the week Eur/Usd pair finished week's trades at the point of 1.3539.

 

GBP/USD quotations had been declining from Monday to Thursday on the background of week inflation data in Great Britain. But strong Friday's report on retails allowed “cable” to cut the distance between this currency and USD. Growth of retails in 2013 was the most significant over the last 9 years. Positive news background on the last trading day allowed British currency to close the week with minor damages on the level of 1.6423.

 

For the last week, USD/JPY currency pair added 0.3%. Japan did not publish any important macroeconomic stats. Negative background for the Japanese currency is formed by investors' s expectations regarding further tapering of stimulative measures in the USA and enhancement of quantitative softening in Japan. Any strong correction of USD/JPY pair is followed by growth of quotations which speaks for a strength of ascending trend.

 

Forecast for the week January 20 – 24

[Volkov Yuriy]

Weekly review of three pairs

EUR/USD

 

Monthly chart: the pair had pushed off upper Bollinger band (1.3914) and is apparently moving in the area of medium (1.3105). Nevertheless, we will make a note of an ascending configuration of an upper band, therefore, there is a probability of buyers' attack by breaking of resistance 1.3914 and of a further growth above 41.

 

Weekly chart: growth had slowed down within the the frames of upper envelope, ADX had turned, so, possible reconfiguration within the range 1.3576-1.3907 is possible.

 

Day chart: horizontal corridor described by Bollinger bands as ADX is inactive is also an argument for a flat game inside envelopes (blue arrow is the support 1.35, 1.3824 is the resistance).

 

Conclusion: main scenario is a flat movement 1.35-1.3824. Alternatively, there can be a well-formed bullish flat corridor with support at 1.3576 and resistance at 1.3907.

http://gifok.net/images/2014/01/27/0YuqV.png

[Volkov Yuriy]

Weekly review of three pairs

EUR/USD

 

 

Monthly chart: here is an active rolldown while ADX is calm. It increases strength of a possible support for 1.3106 (Bollinger's medium band) and the probability of bullish scenario.

Weekly chart: test level is 1.3267 (bottom band). If buyers do not take active steps from there (and will get the price below specified price), their mid-range strategies will lose.

Day chart: bearish wave is developing here. Bounce from 1.3267 is a more important task for bulls than enhancement of descending front down to 1.3105.

Conclusion: main plan is to touch 1.3267 and start of euro growth in the direction of 1.3850.

 

Another option is to break support 1.3267 and even a deeper descend to 1.3105.

http://freshforex.ru/netcat_files/Image/eurusd,%20m(5).png

Learn more at freshforex.com

[Volkov Yuriy]

Time is ripe to sell EUR/USD

Review of the past week

 

 

Since the last week was the first week of the month, it was traditionally eventful. According to its results, EUR/USD pair consolidated for 1.1% as ECB governor was positive in his comments and labor market report in the USA was weak. Mario Drahgi continues to surprise market with his optimism. On Thursday 6, while speaking in the ECB meeting, he stated that deflation does not threat Europe now and there is no sense to apply measures to cope with it now. Investors were encouraged by this statement and EUR/USD went above 36.

 

 

On the last trading day of the week, release on the US labor market was published. January growth of Non-Farm payrolls was 113 000, which is rather below the figure of consensus-forecast. For the second month in a row, US employers are at an easy pace when it comes to hiring. This is an alarm bell for the US economy and served a background for growth of the European currency. Week's trades were closed at the point of 1.3634. In the fight of bulls and bears on GBP/USD pair there is no winner. Over the past week, Markit Economics research center had been releasing PMI for manufacture and construction as well as for the service sector. Amongst all, only construction report was a good surprise for investors wherease two other were below expectations. This negative background encouraged bears who forced quotations down to 1.6251.

 

 

Bulls also paid back in their own coin and got out the most of the weak US Non-Farm payrolls report by raising quotations above 64. Nevertheless, in the end of the week GBP/USD lost its symbolical 0.1% and finished at 1.6407.

 

 

Japanese Yen followed its upsurge in January and early February by retreat. Only the first trading day of the week was marked by its consolidation against its US rival as sales on leading global stock exchanges was going on. On Wednesday 5, the report on change in salary for December was published. The figure was above consensus-forecast which supported demand in Japanese currency in the first half of a day. Salary growth will provoke increase of expenses in the future and thus enhancement of inflation. On this background, USD/JPY dropped down to 100.77, but bears were not strong enough to get more. Then bulls joined the game who were not discouraged by weak report on the US Non-Farm payrolls in January. Having added 0.3% for the weak, trades were closed at the point of 102.35.

 

 

Forecast for the week February 10 – 14

[Volkov Yuriy]

Weekly review of three major pairs

EUR/USD

 

 

Monthly chart: the pair is on the way to Bollinger's upper band (1.3931) and bulls do not have any potential for a further break, because ADX did not exceed "30".

 

Thus, a main strategic scenario is a bounce down from 1.3931 and movement to the area of Bollinger's medium band (1.3139).

Weekly chart: a long consolidation inside of the ascending triangle is coming to an end. In all likelihood, this accumulation will be continued this week as well, because ADX did not turn its full potential on. Support is on the middle (1.3605), resistance is on the upper band (1.38).

Conclusion: a main scenario is the flat within 1.36-1.38. Another option is the break above 1.38, movement to 1.3931 and a bounce down in the direction of 1.36.

http://freshforex.ru/netcat_files/Image/eurusd,%20m(6).png

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[orni308]

it seems EURUSD is going to have further corrections in this week.....

[Volkov Yuriy]

The dollar falls in the light of rising oil prices

The weather can distract players from Ukraine and China. The weather peak is expected on Tuesday, when the first of the four central banks is planning to organize the meeting - the Reserve Bank of Australia will announce changes in its monetary policy. The Bank of Canada will hold a meeting on Wednesday, the Bank of England and the European Central Bank will meet on Thursday. Carl Weinberg, the chief international economist of High Frequency Economics in New York, suspects that all four central banks are "largely paralyzed and will not change its monetary policy."

 

 

The ECB as the Central Bank " may surprise us as the ECB is in uncharted waters now. While "no one can predict how ECB will react ", HFE expects that the bank's policy is likely to remain unchanged.

 

 

We expect a number of important news from the USA this week. The market's attention will be riveted on Monday to ISM manufacturing index for February release, the ISM index for the services sector and the February employment report publication on Friday.

 

 

The euro closed Friday at the 1.3807 that is at the upper range of the last week from the 1.3643 (Thursday) to the 1.3824 (Friday). The pair shot upwards after Friday’s preliminary data on inflation in the euro-zone, which raised questions about the prospect of the ECB monetary policy easing this week.

[Volkov Yuriy]

The market holds its positions

Euro

http://gifok.net/images/2014/03/18/DZUa.png

The Eurozone will publish the final consumer price index data for February. There are no prerequisites for the revision indicator upward, therefore, the release of data on the level of consensus- forecast is expected. Everyone expects full-scale geopolitical crisis between Russia and Ukraine which can put pressure on a risky assets.

The support levels: 1.3910-1.3860, and the resistance levels: 1.3914-1.3980.

MACD is turned up, indicating on the current uptrend, if the indicator is developed downward, it can start a downward movement turn.

Trading Recommendations

Generally, the situation remains positive. Nevertheless, fundamentally, it is difficult to find a good reason for buying the single currency. That’s why it’s not the fact that the pair will move above 1.3937-1.3966.

The loss of the support in the 1.3845-1.3833 will lead to a fall down to 1.3740.

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[Volkov Yuriy]

Will Federal Reserve cut the Q3 again?

Euro

http://gifok.net/images/2014/04/07/svXZ7.png

As we remember last trading week Draghi said that if the inflation in the EU stays for a long period the European regulator may start the program of quantitative softening.

 

 

The ECB left interest rates at the lowest level of 0.25 % and it does not plan to raise it in the near future. At the same time we highlight the employment data in the U.S., which showed an increase of 192 thousand in March. Taking into the consideration this data for the previous months we conclude that the decrease in the number of unemployed rate in the beginning of this year was only temporary.

If the pair goes down its primary goal will be the mark 1.3560. The level 1.3640 breakthrough is the single condition for this step.

[Volkov Yuriy]

Weekly review of three pairs

EUR/USD

http://imgdisk.ru/images/uadZC.png

 

Monthly chart: An ill-defined reaction of April to March pin makes us doubt it has a good outlook. Besides, we see a strong trend activity of ADX, therefore, there is a great probability of attacking 1.4034 with a further movement to a middle-term space to 1.4964. Support by the middle Bollinger band (1.3249) must be pointed out. Any movement down to this point won't break ascending structure.

 

Weekly chart: the last week was finished by a very narrow inside bar. Support is located at 1.3715, from this point bulls can develop an attack to 1.4034. Decline below 1.3715 makes plan with movement to 1.3249 real.

 

Day chart: the pair had been under sales within the last 2 weeks, which is seen due to 2 bearish pins coming one after one. Bollinger enevlopes are getting narrow speaking about coming impulse movement. Support 1.3715 also seems confirmed and important from a diagnostic point of view.

 

Conclusion: so, main plan is growth to 1.4034, following to a possible touch of 1.3715. Another option is the break of 1.3715 and decline to 1.3249.

[Volkov Yuriy]

The EUR/USD keeps trading in a narrow channel

 

http://imgdisk.ru/images/iohFY.png

Euro

 

The EUR/USD plans to continue a downward trend.

At this point, the trading continues between two strong levels: 1.3840 - 1.3760. The price is located almost in the middle of those levels while initially it strayed from the resistance 1.3840, above which it failed to consolidate after a short break.

The support levels are 1.3720 - 1.3740, and the resistance levels are 1.3810 -1.3830.

MACD is a zero area, which indicates the current corrective movement.

 

Trading Recommendations

The EUR/USD continues the consolidation after the channel breakdown. This scenario assumes the market continuation to decrease to the level 1.3750 break.

Alternative Trading

The resistance 1.3840 break will lead up to a reversal downward trend. The potential target for the growth should be the level 1.3900.