Weekly Market Review — September 7-9

Weekly Market Review — September 7-9

Markets Will Be Experiencing A Correction in Anticipation of the Upcoming FOMC Meeting

Forex

EUR/USD, Daily

EURUSD

Almost all the major currencies fell against the US dollar last week. The only exception was the Japanese yen, which showed an increase by 2.24%. The Australian dollar fell most of all— by 3.58%, the New Zealand currency lost 2.70%, the British pound plunged by 1.42%. Smaller losses against the US currency were shown by the Swiss franc, the Canadian dollar and the euro, dropping by 1.04%, 0.6% and 0.31% respectively. The main event of the last week was, of course, the NFP report, which reflects the number of new jobs created in the US economy during the period. According to released data, the unemployment rate was 5.1%, below the forecasted at 5.2%. At the same time, the NFP came at 173K against the forecast of 220K. This mixed statistics reinforced the uncertainty regarding the further actions and decisions of the US Federal Reserve. From the upcoming important news of this week we point out the following. The final assessment of Japan’s GDP will be released on Monday at 23:50 (GMT). Wednesday will be marked by the meeting of two central banks: at 14:00 (GMT) the Bank of Canada will announce its decision on the basic interest rate, followed by the accompanying statement; at 21:00 (GMT) the Reserve Bank of New Zealand will announce the results of its meeting on changing monetary policy, followed by its statement and press conference of the head of the regulator. Australia will report on changes in the number of employees and the level of unemployment on Thursday at 01:30 (GMT). The same day, at 11:00 (GMT), the Bank of England will announce its decision on main interest rate and asset purchase program, followed by its statement.

Stock Market

United States

NASDAQ, Daily

NASDAQ

 

At the end of the last trading week all the major US stock indexes closed in the red. Stock markets showed the following dynamics: Dow –3,25%, S & P –3,40%, NASDAQ –2,99%. This situation was due primarily to the weak Chinese data which were published on Tuesday and showed that the activity in the manufacturing and service sectors is much lower than predicted. On the other hand mixed Friday’s government report on the US labor market has forced investors to wonder how fast, and most importantly, when the Fed will begin tightening monetary policy. Prospects for the American stock exchanges in the case of increase in interest rates look quite negative.

Europe

DAX, Daily

DAX

Major European stock indexes also closed in the red zone. The European stock markets pressured by situation on the stock markets of the Asia-Pacific region, as well as uncertainty about the decision of the US Federal Reserve on its key interest rates at the meeting on September 16-17. The exception was Thursday, when European stock markets received support from the ECB President Mario Draghi, who during his press conference focused on the fact that the program of quantitative easing will be continued as long as inflation does not reach the target levels. And with that, the ECB has lowered the forecast for GDP growth for 2015-2017. Further dynamics of stock indices in Europe will depend entirely on the dynamics of the Asian stock markets, and the economic statistics.

Commodities

Light Sweet Crude Oil Futures, Daily

CrudeOil

The oil prices ended last week at $45.63 per barrel, slightly higher the opening at $45.15 dollars per barrel. The range of fluctuations in oil prices at the same time was quite wide. On Monday quotes were supported by OPEC’s bulletin, which mentioned that the OPEC is ready to participate in negotiations on the stabilization of world oil prices and the market in general. On Tuesday, oil prices have declined significantly, losing all the gains amid another drop of the Chinese manufacturing index, which hasn’t met the expectations of analysts. Recall, China is the second largest oil consumer in the world. Demand from China has a significant impact on the dynamics of oil prices. Market participants are waiting for publication of weekly reports on crude oil inventories in the US, which is scheduled for Tuesday and Wednesday.

Weekly Market Review — August 31–September 4

Weekly Market Review — August 31–September 4

The Main Event of the Week Is NFP

Forex

GBP/USD, Daily

GBPUSD

At the end of last trading week almost all major competitors of the US currency showed a decrease. More than any other the New Zealand dollar showed a decline, losing 3.26%. The Australian currency also declined by 1.96%. European currencies such as the British pound, the Swiss franc and the euro dropped 1.83%, 1.735 and 1.725 respectively while the Canadian currency showed a symbolic 0.25% drop. But the Japanese yen recorded a 0.53% rise, which was caused by viewing the yen as a safe-haven asset. The last trading week began with the collapse of the Chinese stock market and sell-off in the rest of the world stock markets. Investors were selling the US currency as well, as they began to shift their expectations of the first rates hike from September to December. Concerns over a slowdown in the global economy led investors to invest into currencies with low interest rates such as the Japanese yen and the euro as a funding currency. This week will be full of important economic news. Market participants should pay attention to the consumer price index in the Eurozone, scheduled for Monday at 09:00 (GMT). Tuesday will be a meeting of the Reserve Bank of Australia, whose decision will be announced at 04:30 (GMT). Also this day will be released a report on the labor market in Germany at 07:55 (GMT) and the GDP of Canada at 12:30 (GMT). On Wednesday will be published Australian GDP. On Thursday the European Central Bank will announce its decision on interest rates, followed by a press conference of the head of the regulator. Finally, Friday promises to be the most intense day of the week. Switzerland will report on changes in consumer prices, later will be released the data on the Eurozone GDP, as well as data on Canada’s labor market. At the same time, the main report of the week is, of course, the NFP.

Stock Market

United States

S&P500, Daily

SP500

According to the results of the last trading week, all major US stock indices showed positive change. The index of wide market S&P 500 showed an increase of 0.41%. The Dow Industrial also increased by 0.87%. High-tech NASDAQ index showed the biggest growth, recording an increase by 2.37%. The opening of the last week was marked by the “Black Monday”. Panic selling in global stock markets has also affected the US stock market. The Dow fell more than 1,000 points. It was the largest one-day drop in the history of the index, almost 119 years. On Tuesday, the market began to calm down, and investors began to react to other economic indicators. Recovery in the stock markets of the USA was supported by the positive data on the US economy. Durable goods orders were better than the average forecast of analysts. The final estimate of US GDP also exceeded the expectations. On Friday was published data on personal income and spending, which showed a slower pace of growth of the American economy. This week investors will expect a government report on the US labor market, which could clarify the situation around the timing of the first rate hike.

Europe

FTSE, Daily

FTSE

Major stock markets finished last week higher after falling on Monday and Wednesday. As a result, the German DAX rose by 1.72%, the British FTSE added 0.97% and the French CAC showed an increase by 0.95%. Despite the rise in European stock markets, investors fear to buy the stock assets amid uncertainty surrounding the Chinese economy. The European stock markets were supported by a recovery of commodity prices, as well as the positive statistics on the US economy. However, this optimism somewhat decreased since the beginning of the new trading week amid falling of Asian stock markets. Also, investors will be looking for clues on the timing of monetary policy tightening by the US Federal Reserve.

Commodities

GOLD, Daily

Gold

Last week trading was in a downward trend. The exception was only the “Black Monday”, when investors were buying gold as defensive asset against the backdrop of a panic sell-off in global financial markets. The sentiment wasn’t very long, and investors have switched to search for clues to the first rate hike by the US Federal Reserve. Recall, gold is a defensive asset that is better than others saves its value during the global financial crisis, and with it, the asset becomes unattractive at a time when interest rates rise, because it can’t compete with more high-yield assets. Statistics on the US economy, which was published last week, showed strong growth. Investors are closely monitoring the statements of the Fed members, as well as economic data in order to determine how likely the first rate hike will take place at the September meeting. This week, all the market participants expect a government report on US employment.

Weekly Market Review — August 24-28

Weekly Market Review — August 24-28

The Highlights Of the Weeks Are Stat Data on the US, UK, German, Swiss, Japanese and New Zealand Economies

Forex

EUR/USD, Daily

EURUSD

Last week most of the major currencies strengthened against the US dollar. The greatest increase showed the Swiss franc which rose by 3.19%. The euro gained 2.46%, the New Zealand dollar 2.23%, while the Japanese currency rose by 1.88%. The British currency also increased by 0.28%. But some currencies fell against the US dollar like the Canadian and Australian dollars by 0.64% and 0.87% respectively. The main event of last week was undoubtedly the publication of the Fed meeting minutes. After its publication the American currency began to fall against major competitors. The minutes noted that the labor market recovers and comes to a point where you need to raise rates. And with that, the growth rate of inflation raised concerns among the US Federal Reserve leadership. In addition, the economic situation in Greece and China could have negative consequences for the US economy. Therefore, market participants shifted their expectations on the first rate hike from to September to December, and even up to the beginning of 2016. It put a lot of pressure on the US currency. The main events of this week will be the final data on the change in Germany’s GDP in the second quarter, which is scheduled for Tuesday at 06:00 (GMT); durable goods orders in the US in July on Wednesday at 12:30 (GMT); the revised estimates of US GDP on Thursday at 12:30 (GMT); the inflation report as well as retail sales in Japan at 23:30 (GMT); release of data on GDP in Switzerland and the UK on Friday at 05:45 (GMT) and 08:30 (GMT), respectively; preliminary data on the Consumer Price Index in Germany on Friday at 12:00 (GMT); US personal income and spending in July on Friday at 12:30 (GMT).

 

Stock Market

United States

DOW, Daily

Dow

Last week the major US stock markets conducted trading in a downward trend. The negative dynamics of the indices was affected by weak corporate reports, waiting for the publication of the Fed meeting minutes, as well as the situation in the Chinese economy. Upon the publication of the minutes on Wednesday, market participants shifted their expectations of rate hikes from September to December. The forecasts of the US Federal Reserve were published on Thursday, which noted the negative impact of slowing down of the Chinese economy on the growth of the world economy. The Chinese stock markets fell again on Thursday and Friday, adding up concerns about the negative situation in the Chinese economy. Therefore, concerns about falling commodity prices, slowing down of the economies of developing countries triggered investors to get rid of the securities, which, in turn, put pressure on the major stock indexes. Last week major US stock indexes showed following dynamics: Dow –5.82%, S & P –5.77%, NASDAQ –6.78%.

 

Europe

DAX, Daily

DAX

European stock exchanges following the Asian and American markets spent the past week trading negatively. The stock markets were pressured by falling commodity prices, as well as a bad economic statistics from China. Also investors have watched the publication of the Fed meeting minutes. The downward movement in Chinese stock exchanges has spread to other stock markets. Panic sentiment caused by the slowdown in the world’s second largest economy pressure put downward pressure on major European stock exchanges.

 

Commodities

Light Sweet Crude Oil Futures, Daily

CrudeOil

The oil quotations opened last week at the level of $42.75 per barrel. It is worth noting that during the week oil prices updated multi-year lows on almost a daily basis. The week was closed at $40.18 per barrel. Throughout the week, the quotations have been under pressure by uncertainty surrounding the Chinese economy, which recently became obvious, as well as oversupply in the world oil market. It is also worth noting that the 6-month forecasts of oil prices were revised by few reputable organizations with a downward trend. Moreover, investors worried about the global slowdown in the world economy.

Weekly Market Review — August 10-14th

Weekly Market Review — August 10-14

The Highlights of the Week Are GDP Reports in Japan, Germany and the Eurozone

Forex

EUR/USD, Daily

EURUSD

Last week the major currencies showed a negative trend against the US dollar, except for the Australian and New Zealand dollars. The Australian and New Zealand dollars grew by 1.67% and 0.48% respectively. The euro fell 0.17%, the Japanese yen by 0.29%, the Canadian dollar by 0.37%, the British pound by 0.80% and the Swiss franc, which lost the most against the US currency, by 1.85%. Last week, the most important news was, of course, report on US employment. According to published data, the growth of new jobs in the US economy was slightly lower than forecast. The NFP came in at 215,000 versus an average forecast of 223,000. It is worth noting that the figures for previous periods have been revised upwards by 14K. The unemployment rate remained unchanged, while average hourly earnings rose in line with expectations by 0.2%. Also, similar reports were published by Australia and New Zealand. In Australia, unemployment rose unexpectedly to a level of 6.3% against an average forecast of 6.0%. But the indicator showed growth in the number of employees to the level of 38.5 against the forecast at the level of 10. As to New Zealand, the unemployment rate remained unchanged in the last quarter at around 5.9% and the number of employees dropped to the level of 0.3% against an average forecast of 0.5%. It should be added that last week was also published a decision on the basic interest rate in the UK and Japan. As predicted by most analysts, none of these banks change the settings of its monetary policy, leaving the rate unchanged at 0.5% and 0.1%, respectively. Among the most important reports scheduled this week are the data on unemployment by ILO, and the number of applications for unemployment benefits in the UK, which are scheduled for 08:30 (GMT) on Wednesday. Also, on Friday will be published data the preliminary GDP reports for the 2nd quarter of the year in Germany and the Eurozone at 06:00 (GMT) and 09:00 (GMT), respectively.

 

Stock Market

United States

NASDAQ100, Daily

NASDAQ

Last week, major US stock indices traded in a downward trend and showed a moderate decline. The DOW lost 1.79%, S&P fell by 1.25% and the high-tech NASDAQ fell by 1.65%. Last week the stock markets opened falling amid a backdrop of oil prices to the six-month lows, as well as moderately negative statistics of the US personal income and spending data. It should be noted that the dynamics of the major stock markets of the United States was influenced by concerns over a slowdown in Chinese economy, as well as the drop in shares of Apple. Moreover, labor market report from ADP showed that employment grew in a slower pace than analysts forecast. In addition, the dynamics of indices were pressured by negative quarterly corporate reports. And after the NFP and other data on labor market release on Friday, the index gained a new impetus to decline. Strong growth in new jobs opens the way for the Fed to the first rate hike in its September meeting.

 

Europe

DAX, Daily

DAX

Throughout the week European stock markets showed a positive trend, which is associated with the recovery of Chinese stock market. Also, the dynamics of trading was influenced by corporate reports and M&A activity in the region. In addition, the market was also influenced by the Bank of England decision to leave the UK base interest rate unchanged. The English central bank made it clear that the first increase should be expected no earlier than the first half of 2016. On Friday, the negative dynamics of stock markets was boosted by employment report in the US, which showed that the US Federal Reserve is on the way of normalization of monetary policy.

 

Commodities

Light Sweet Crude Oil, Daily

CrudeOil

Oil prices have spent the last week in a downtrend. Moreover, oil had updated its long-term lows almost every day. This was caused by concerns about the imbalance of supply and demand in the world market. The US Department of Energy reported last week that crude oil production in the country is at record levels in the past five years. In addition, OPEC is going to keep its market share by increasing production volumes. This situation is, of course, puts downward pressure on the price of oil.

Weekly Market Review — 3-7/08/2015

Weekly Market Review — 3-7/08/2015

Non-Farm Payrolls Report Is the King of the Week

Forex

GBP/USD, Daily

GBPUSD

The main event of last week was certainly the announcement of the results of the two-day FOMC meeting regarding the change in monetary policy. As predicted by most analysts, changes in monetary policy have not been made. The Fed left interest rates unchanged for the 54th time in a row. At the next meeting, scheduled for September 16-17, the committee will have to take a hard decision on the key interest rates, which are at the lowest level since 2008, when the global financial markets have been shaken by the global crisis. In an accompanying statement, the Fed noted that there is a sustained recovery of the labor market, while there is no clear indication of the stable inflation. In addition, the committee was positive about moderate growth in business activity in all sectors of the economy. Also, the markets got a clear signal that in case of positive statistics on the US economy the FOMC will probably think about the rate hike at a meeting in September. Against this background, all the major currency pairs showed high volatility, with a range trading at times exceeded 150 points. At the end of the trading week, the British pound recorded gains against the US dollar by 0.74%, the euro strengthened against the US dollar by 0.09%. New Zealand and Australian dollars also showed an increase against the US counterpart by 0.45% and 0.43% respectively. The decline experienced Swiss franc, Canadian dollar and Japanese yen, by 0.45%, 0.25% and 0.08% respectively. The most important news of the coming week will be the publication of a decision on the basic interest rate in Australia at 04:30 (GMT) on Tuesday. Also this day, New Zealand will release reports on the unemployment rate and the employment change, which are scheduled for 22:45 (GMT). The same reports will be released in Australia at 01:30 (GMT) on Thursday. They will be followed by publication of the Bank of England decision on UK interest rates at 11:00 (GMT). Friday will begin with the announcement of the decision of the Bank of Japan on the basic interest rate at 03:00 (GMT). After that Canada will release the unemployment rate and the employment change at 12:30 (GMT). Finally, the most awaited event of the current week is a publication of data on the US labor market, scheduled for 12:30 (GMT) on Friday.

 

Stock Market

United States

S&P500, Daily

SP500

The past week for the major US stock markets was quite worrying. This was the result of the largest in the last eight years fall of the Chinese stock exchanges, which was caused by the negative statistics on the profits of large industrial enterprises in China. Investors began to sell shares amid concerns over a slowdown in the second largest economy in the world. The dynamics of indices also influenced by the US Federal Reserve decision on interest rates, published on Wednesday. On Friday, the index reacted to the negative dynamics of the Employment Cost Index in the United States. This week the stock markets investors will be focused on Friday’s release of data on the US labor market.

 

Europe

DAX, Daily

DAX

The dynamics of the major European stock exchanges, just as the American markets, was influenced by news from China that caused European indices to fall. Many analysts believe that the European stock market is not yet fully put the drop of Chinese stock market in its prices. Recall, China is a major trading partner of the European Union, and a slowdown its economy have a negative impact on the European economy.

 

Commodities

GOLD, Daily

Gold

Regarding the gold prices, the precious metal continues to be under pressure. The reason for this is the slowdown of the largest consumer in the world, namely China. Also, it is worth noting that the majority of investors expect the US Federal Reserve will raise interest rates for the first time in nine years at its meeting in September. Market participants came to this conclusion after the Fed published its statement. Meanwhile, on Friday, investors’ confidence fell slightly after the release of the Employment Cost Index in the United States. Investors focused their attention on Friday’s report on US employment, which should show how confidently this area is recovering.

Weekly Market Review – 22-26/06/2015

Weekly Market Review – 22-26/06/2015

Stock Market

United States

Last week’s decision by the Federal Open Market Committee to leave interest rates unchanged corresponded with market expectations, but the FOMC Statement caused strong growth in the US stock market. The statement turned out to be much more “dovish” than expected.

This week players’ attention will be focused on the publication of Durable Goods Orders report on Tuesday at 12:30 GMT, revised GDP data for the first quarter on Wednesday at 12:30 GMT, Initial Jobless Claims on Thursday at 12:30 GMT and the Reuters/Michigan Consumer Sentiment Index on Friday at 14:00 GMT.

It seems a continuation of growth is quite possible in the short term; however, the overall trend is negative. Bearing in mind that the Fed is about to tighten its monetary policy in the near future, the market will turn to a downtrend in the medium term period.

S&P500 Daily

Weekly2206-2606SP500

Europe

There is no surprise that investor’s attention is focused on the situation around Greece. After the failure of talks between the Eurogroup and Greek government Thursday, President of the European Council Donald Tusk has called for an emergency EU summit in Brussels Monday. Greece has prepared a new proposal to its international creditors, but the situation remains extremely tense. Today’s decision at the summit will play a decisive role in the markets mood.

Forex

Any EUR currency pairs will react to the news around the Greek deadlock. On the one hand the failure of the Greek government to negotiate with its creditors put pressure on the single currency, but it is becoming more a popular opinion, that the EUR will grow in the case of a Greek default. As a reminder, Greece has to pay IMF €1.6 billion by June 30.

EUR/USD Daily

weekly_eurusd_22.06

The key resistance line is located in the area of 1.1500. Just above this level a number of stop-orders are located. The major support line is near the level of 10th candlestick. If the pair breaks through it, it could potentially cause the movement down to parity.

Commodities

Brent Oil Daily

weekly_brent_22.06

It appears that the most likely scenario in the oil market is return to downtrend in the medium term perspective on the background of oversupply. The immediate target is at 60.00.

Weekly Trading Review – 17/05/2015

FMOC Meeting Minutes and Greek Debt Talks to Dominate Market Sentiment!

Weekly Trading Review – 17/05/2015

USD
The main event for the US dollar and perhaps the entire forex market in this trading week is the release of the FOMC minutes. This report should shed more light on what the Fed thinks of the recent slump in economic data, particularly in employment and inflation. Recall that the actual FOMC statement indicated that the slowdown was probably just transitory, although market watchers would be interested to find out if all the FOMC members share this view. Hawkish remarks or a reiteration of their plan to hike interest rates sometime this year could renew demand for the US dollar while a significant shift to a more cautious stance could lead to more losses. Also lined up from the US economy this week is the building permits and housing starts data, Philly Fed index, and CPI readings.

EUR
The euro drew support from optimism surrounding the Greek debt talks and the country’s loan repayments last week, but it remains to be seen whether the shared currency could continue its climb in the next few days. The region is set to print another batch of PMI readings which could indicate whether or not a sustained recovery is taking hold as ECB Governor Draghi has claimed. Also lined up this week are a few testimonies by Governor Draghi himself during which he might add reassuring remarks that the economy is seeing green shoots. The German ZEW economic sentiment index is due earlier on in the week while the German Ifo business climate reading is up for release towards the end.

GBP
The pound managed to sustain its post-election rallies in the previous week, despite downbeat remarks during the BOE Inflation Report. More economic reports are lined up from the UK this week, including the latest CPI readings and the BOE minutes. This should provide more clues on when the central bank might actually tighten monetary policy, although the tone of their latest Inflation Report suggested that they might wait until next year. More downbeat remarks could force the pound to return its recent gains while reassuring comments could allow it to climb further.

CHF
Even though Switzerland barely released any economic figures in the past week, the franc managed to advance against its forex rivals thanks to optimism surrounding the euro zone. This week, there are still no economic events lined up save for a speech by an SNB official and the release of the Swiss ZEW economic expectations report.

JPY
The yen has been taking its cue from risk flows and may continue to do so, although economic reports could give traders a better idea on what the central bank might do next. On Monday, data on core machinery orders and tertiary industry activity are lined up, with strong data likely to spur risk appetite and push traders away from the lower-yielding yen. The country’s preliminary GDP release is up for release on Wednesday and might cause more action among yen pairs, especially if the actual reading misses expectations. On Friday, the BOJ will make its monetary policy statement and possibly spur volatility for the yen as well.

Commodity Currencies (AUD, NZD, CAD)
The comdolls could also be in for a volatile week, as the RBA will release its monetary policy meetings on Monday and explain if they will continue to cut interest rates in their next statements. New Zealand is set to print its quarterly inflation expectations data then and probably lead to more Kiwi weakness if the forecasts are weaker. The country is also set to have a dairy auction mid-week and expectations are lower, following the Fonterra downgrade on volumes of whole milk powder last week. Canadian banks are closed for a holiday on Monday and the only top-tier report due from this economy is its CPI on Friday.

Fed and BOE Releases Set to Drive the Financial Markets in the Week Ahead

15.02.2015

Fed and BOE Releases Set to Drive the Financial Markets in the Week Ahead

Risk sentiment has mostly been responsible for the latest action in the forex market, as the pickup in commodity prices have supported higher-yielding currencies. Economic data also took center stage in the absence of major central bank events for the most part of the week.

The upcoming trading week should focus on more or less the same themes, especially since most of the central banks have already announced their policy decisions. Leading the pack are the Fed and the BOE, which have both maintained relatively hawkish biases in the midst of weak inflationary pressures. The RBA and BOC have cut interest rates a few days back, leading to a bit of dovishness, while the RBNZ has indicated a shift to a more cautious tone.

The BOJ has yet to make its policy statement this week, although no actual changes are expected for now. Data from Japan has come in mostly below expectations, particularly when it comes to inflation and spending, yet BOJ policymakers have maintained that additional easing isn’t necessary for now.

The BOE is set to print the minutes of its latest monetary policy meeting, but it seems that traders already got a good preview during last week’s Inflation Report hearings. During this event, Carney acknowledged the weakness in inflation and said that they could be open to cut rates if this persists. For now though, he reiterated that their next move is still likely to be a rate hike since the drop in price levels actually supported domestic growth. He even upgraded growth forecasts for 2016 and 2017.

The FOMC meeting minutes are also up for release this week and this could be crucial in setting the tone for dollar trends. Their latest announcement has been interpreted as a hawkish one since they completely dropped the phrase on keeping rates low for a “considerable time” and added that they “can be patient” in considering policy normalization. Analysts are pricing in a rate hike from the Fed in June, but the FOMC minutes might set a clearer time line for tightening.

Also due in the week are the RBA meeting minutes, which would shed more light on why the central bank cut rates in their latest statement. Governor Stevens already explained that this was partly spurred by weak hiring, as seen in the latest jobs release, but other policymakers might still weigh in on the weak spots in the Australian economy.

Consumer spending data is also set to drive forex pairs around, with New Zealand getting the ball rolling in the early Asian trading session on Monday. Quarterly headline retail sales might see another strong gain while the core figure could also post a decent increase, both of which might keep the New Zealand dollar supported.

Later on, the UK will also show its retail sales figures and possibly add evidence to Carney’s claims that domestic demand is robust. He has noted that the drop in consumer prices actually boosted real incomes and allowed households to stretch their budgets, citing that he hasn’t seen any reports that show the negative impact of weak inflation just yet.

Canada is also set to print its latest retail sales readings and might see a bit of a downturn in both headline and core figures. If so, talks of another BOC rate cut might weigh on the Loonie towards the end of the trading week.

Other main events include Japan’s GDP release on Monday, which could indicate if the economy has slumped deeper in recession or has managed to post positive growth. The New Zealand global dairy auction mid-week should also generate a lot of interest, as market watchers are keen to see if the rebound in dairy prices was sustained. Towards the end of the week, euro zone PMIs should add volatility to euro pairs.

Twitter Shares to Jump; AUDJPY Slump Ahead

08.02.2015

Twitter Shares to Jump; AUDJPY Slump Ahead

Forex

AUDJPY

AUDJPY Inverse Head and Shoulders | Short-Term Forex Reversal Formation

AUDJPY seems to be done with its recent downtrend, as an inverse head and shoulders pattern can be seen on its 1-hour forex time frame. Price is still testing the neckline resistance around the 92.00 major psychological level and may be due for an upside break soon.

However, stochastic is indicating that buying pressure is weakening since the technical indicator just reached the overbought zone and is turning lower. If the neckline holds as resistance, price could simply head back south and test its former lows near the 89.00 major psychological support.

An upside break, on the other hand, might lead to a move until the 95.00 major psychological resistance. After all, the inverse head and shoulders pattern is approximately 300 pips in height, which means that the resulting rally could be of the same size.

Earlier today, the RBA released its official monetary policy statement after cutting interest rates a few days back. As expected, the release showed that the central bank has been concerned about the impact of falling commodity prices on export revenues and growth. There are no economic reports lined up from Japan, indicating that any changes in risk sentiment for today might act as a catalyst for a breakout.

GBPUSD

GBPUSD Triple Bottom Breakout | Potential Resistance Pullback

GBPUSD finally broke out of its consolidation pattern on the 4-hour chart, as the pair headed beyond the neckline of the triple bottom formation. Price can climb as much as 200 pips from here, which is the same size as the chart pattern.

However, a pullback to the broken resistance level around the 1.5200 major psychological mark could still be possible. This depends on the outcome of the upcoming NFP release, which is slated to show a weaker gain in hiring of 236K compared to the previous 252K.

Stronger than expected US jobs data could renew demand for the US dollar and lead to a move back to 1.5200 or perhaps the bottom of the previous range at 1.5000. On the other hand, weak figures could lead to more gains for GBPUSD, possibly until 1.5500.

The BOE decided to keep monetary policy unchanged in their latest rate decision, indicating that the British central bank hasn’t joined the doves yet. Traders are still waiting for the minutes of their policy meeting to be released before deciding on a longer-term bias for the pair.

Stocks

Consolidation Breakout on Twitter Shares | Possible Climb to $54/Share

Twitter shares seem to have bottomed out, as price broke to the upside of its consolidation pattern on the daily time frame. While the shorter-term 50 SMA is still moving below the 200 simple moving average for now and indicating a downtrend, price has also broken above these dynamic inflection points recently.

This could be an early signal that buyers are piling on their long orders for the stock since risk appetite has returned to the financial markets. This has been spurred by several easing efforts from most major central banks, suggesting that demand could pickup in the near term.

The event risk for future price action is the upcoming NFP release, which could show whether the US economy is still doing well or not. The previous report showed a few weak spots, particularly in labor force participation and wage growth, and the January reading could indicate a weaker pace of hiring growth.

Strong data could keep US equities afloat and allow Twitter shares to extend its climb in the coming weeks, possibly until the next major resistance around $54/share. However, weak data could lead to another move back to the support around $36/share and a continuation of the selloff.

Twitter Shares to Jump; AUDJPY Slump Ahead

08.02.2015

Twitter Shares to Jump; AUDJPY Slump Ahead

Forex

AUDJPY

AUDJPY Inverse Head and Shoulders | Short-Term Forex Reversal Formation

AUDJPY seems to be done with its recent downtrend, as an inverse head and shoulders pattern can be seen on its 1-hour forex time frame. Price is still testing the neckline resistance around the 92.00 major psychological level and may be due for an upside break soon.

However, stochastic is indicating that buying pressure is weakening since the technical indicator just reached the overbought zone and is turning lower. If the neckline holds as resistance, price could simply head back south and test its former lows near the 89.00 major psychological support.

An upside break, on the other hand, might lead to a move until the 95.00 major psychological resistance. After all, the inverse head and shoulders pattern is approximately 300 pips in height, which means that the resulting rally could be of the same size.

Earlier today, the RBA released its official monetary policy statement after cutting interest rates a few days back. As expected, the release showed that the central bank has been concerned about the impact of falling commodity prices on export revenues and growth. There are no economic reports lined up from Japan, indicating that any changes in risk sentiment for today might act as a catalyst for a breakout.

GBPUSD

GBPUSD Triple Bottom Breakout | Potential Resistance Pullback

GBPUSD finally broke out of its consolidation pattern on the 4-hour chart, as the pair headed beyond the neckline of the triple bottom formation. Price can climb as much as 200 pips from here, which is the same size as the chart pattern.

However, a pullback to the broken resistance level around the 1.5200 major psychological mark could still be possible. This depends on the outcome of the upcoming NFP release, which is slated to show a weaker gain in hiring of 236K compared to the previous 252K.

Stronger than expected US jobs data could renew demand for the US dollar and lead to a move back to 1.5200 or perhaps the bottom of the previous range at 1.5000. On the other hand, weak figures could lead to more gains for GBPUSD, possibly until 1.5500.

The BOE decided to keep monetary policy unchanged in their latest rate decision, indicating that the British central bank hasn’t joined the doves yet. Traders are still waiting for the minutes of their policy meeting to be released before deciding on a longer-term bias for the pair.

Stocks

Consolidation Breakout on Twitter Shares | Possible Climb to $54/Share

Twitter shares seem to have bottomed out, as price broke to the upside of its consolidation pattern on the daily time frame. While the shorter-term 50 SMA is still moving below the 200 simple moving average for now and indicating a downtrend, price has also broken above these dynamic inflection points recently.

This could be an early signal that buyers are piling on their long orders for the stock since risk appetite has returned to the financial markets. This has been spurred by several easing efforts from most major central banks, suggesting that demand could pickup in the near term.

The event risk for future price action is the upcoming NFP release, which could show whether the US economy is still doing well or not. The previous report showed a few weak spots, particularly in labor force participation and wage growth, and the January reading could indicate a weaker pace of hiring growth.

Strong data could keep US equities afloat and allow Twitter shares to extend its climb in the coming weeks, possibly until the next major resistance around $54/share. However, weak data could lead to another move back to the support around $36/share and a continuation of the selloff.