#FX Majors Market Update

EURUSD

The Euro returns to strength and regains levels above 1.35 handle, following yesterday’s pullback from 1.3559 to 1.3489, where 4-hour 55DMA contained dip. The price consolidates near session high at 1.3540, as near-term bulls are gaining traction after hourly indicators returned to positive territory. Immediate resistance lies at 1.3577, 20/11 recovery peak, with reak higher to resume recovery off 1.3294 and open 1.3600, round figure resistance and 1.3626, Fibonacci 61.8% of 1.3831/1.3294 descend. However, daily studies maintain neutral/negative tone and require caution in case of price’s failure to clear 1.3577. Increased downside risk would be seen on a slide below 1.3500/1.3489, with extension below 1.3460, 22/11 higher low / 61.8% retracement of 1.3398/1.3559, to signal double-top formation.

Res: 1.3577; 1.3600; 1.3626; 1.3645
Sup: 1.3510; 1.3489; 1.3461; 1.3444





GBPUSD

Cable’s near-term price action came under pressure after strong rally stalled on approach to critical barriers at 1.6254/59 and subsequent pullback to 1.6132 retraced 61.8% of 1.6071/1.6239 upleg. Formation of bearish reversal pattern increases downside risk, with extension and close below 1.61 handle, required to confirm. Hourly studies are negative, while larger picture remain bullish that keeps the upside targets in near-term focus, with regain of psychological 1.62 barrier, seen as a signal for renewed attempt higher. Otherwise, slide below 1.61 and more significant 1.6071, 21/11 higher low / daily cloud top, would shift near-term focus lower and confirm further range trading.

Res: 1.6200; 1.6215; 1.6239; 1.6259
Sup: 1.6144; 1.6132; 1.6107; 1.6071




USDJPY

The pair trades in near-term consolidative mode, after posting fresh high at101.90 yesterday. Initial support at 101.30, Fibonacci 23.6% of 99.56/101.90, so far contained, however, weak hourly and 4-hour indicators descending from overbought territory, suggest that correction lower may extend. Next strong support lay at 101.00, higher platform / Fibonacci 38.2%, ahead of 100.73, 50% and 100.60, previous peak, where stronger pullback should find support. Resumption of the uptrend through 102.00, opens 102.48/52, 28/29 / 05 peaks next, ahead of 103.10, Fibonacci 161.8% projection and key barrier at 103.72, 22/05 yearly high.

Res: 101.70; 102.00; 102.50; 103.00
Sup: 101.35; 101.00; 100.60; 100.42




AUDUSD

The pair enters near-term consolidative phase after posting fresh low at 0.9119, with initial 0.9200 resistance capping the upside for now. Improved hourly structure sees scope for further recovery, with additional support given from 4-hour indicators that emerge from oversold zone. Extension above 0.9200 opens 0.9244, Fibonacci 38.2% of 0.9446/0.9119, ahead of strong 0.9270/80 zone, previous lower platform and 50% retracement, where rallies should be limited. Only sustained break above 0.9300 barrier would sideline immediate bears. Overall bears, however, remain in play and are expected to resume larger downmove once corrective phase is completed, with 0.9100 seen as immediate support, ahead of key short-term support and breakpoint at 0.8891, 30/08 low.

Res: 0.9200; 0.9248; 0.9270; 0.9300
Sup: 0.9177; 0.9141; 0.9119; 0.9095

Oil supply, pricing and Outlook for this week..

Oil price (WTI) slipped again last week, while Brent oil rallied: WTI inched down by 0.80%; Brent oil sharply rose by 3.26%. As a result, the gap of Brent oil over WTI expanded: The premium ranged between $11.26 and $14.78 – the highest range since April 2013. Last week, the EIA’s weekly report showed a drop in oil’s stockpiles by 5.9 million barrels and the oil market tightened. The OPEC report showed no change in the OPEC production, but the frictions in Libya and the tension between Israel and Iran may have contributed to the rally of Brent oil.  Will oil rally next week? This week, several reports may affect oil prices. These items include: U.S retail sales, EU and China’s manufacturing PMI, Philly fed index, and EIA oil weekly report.

Here is a weekly outlook and analysis for the oil market for November 18^th to November 22^nd:
Oil Prices – November Overview

During last week, crude oil price (WTI) slipped by 0.80% and reached by Friday $93.84/b; conversely, Brent oil sharply rose by 3.26% to $108.55/b;

In the chart below are the daily changes in WTI and Brent oil prices during the past several months (prices are normalized to January 31^st). As seen below, Brent oil price rallied in the past couple of weeks.
 
Premium of Brent over WTI – November

The gap between Brent and WTI oil widened last week as it ranged between $11.26 and $14.78 per barrel. During the week, the premium increased by $4.19 per barrel.
 
Oil Stockpiles, Demand and Supply

The oil stockpiles slipped by 5.9 MB and reached 1,806.9 million barrels. The linear correlation between the changes in stockpiles has remained stable at -0.198: this correlation implies that oil price, assuming all things equal, may rally next week. But in order to better understand the fundamentals let’s analyze the developments in supply and demand:

Supply: Oil imports slipped again by 0.5% last week. Conversely, oil production sharply rose by 1.8%; the total supply rose by 0.6%;

Demand: Refinery inputs rose again by 0.9% last week. In total the demand remained lower than the supply; the gap between supply and demand is still positive but the difference has slightly narrowed – this may eventually slightly pull up oil prices as the oil market in the U.S tightens.

The chart below shows the changes in the gap between supply and demand (below zero: Demand is above Supply; above zero: Supply is above Demand).
 
As seen above, the currently loose oil market in the U.S coincides with the drop of oil price. But if U.S oil market continues to tighten, as it did during the previous week, this could eventually lead to a rise in oil price.    
The next weekly report will be released on Wednesday, November 20^th and will refer to the week ending on November 15^th.

OPEC Monthly Report

According to the recent OPEC Report, OPEC’s oil production remained nearly flat at 29,894 thousand in October – nearly unchanged from the preceding month. This news suggests the oil supply hasn’t changed despite the tensions in Libya.

IEA Monthly Report

According to the recent monthly update, the global oil supply rose in October by 640 thousand bbl/d to reach 91.8 million bbl/d mainly due to rise in non-OPEC countries’ liquids. The estimate on global demand was slightly raised in 2013 due to stronger than expected oil demand in Europe during Q3. For 2014 the projection are for a 1.1 mb/d gain.

The rise in expected demand for oil in 2014 may have pulled up the price of oil. Global refinery runs for Q4 have been cut by 0.6 mb/d due to reduced European throughputs. These data provide a mixed signal regarding the progress of the oil market.

Middle East and Oil – update

The riots in Libya between rival militias in the outskirts of Tripoli have raised the uncertainty in the region and could eventually further reduce Libya’s oil production, which is currently one third of its normal output. But since Libya’s output currently accounts for only 1.3% of OPEC’s total output, it is likely to have little adverse effect on the oil market. The tensions between Israel and Iran over Iran’s nuclear program continue. The U.S continues to ease the situation but with little success. These tensions could also have some small effect on oil prices. But only if there were to be an escalation in the situation, this could have a significant effect on oil prices.

Oil Related News for the Week

Here are several news items that could influence oil investors:
Wednesday –U.S. Retail Sales Report: This monthly report refers to October; in the previous report regarding September, retail sales inched down by 0.1% (month-over-month); core retail sales rose by 0.4%; this report could signal the developments in U.S’s gasoline demand and thus may affect U.S oil;

Thursday – Flash Chinese German, French and Euro Zone Manufacturing PMI: In the last monthly report regarding October 2013, the Germany’s PMI inched up to 51.5 i.e. the manufacturing conditions are growing but at a slightly faster pace. France’s PMI inched down to 49.4. This report serves signals to the developments in the Euro Area’s manufacturing conditions; this news, in turn, may affect the Euro/USD currency pair and consequently commodities prices;

Thursday – Philly Fed Manufacturing Index: This monthly survey estimates the growth of the US manufacturing sectors. In the last survey regarding October, the growth rate fell from +22.3 in September to +19.8 in October. If the index continues to fall, it may adversely affect not only U.S Dollar but also U.S equity markets and commodities (the recent Philly Fed review);

Oil Outlook and Breakdown

From the supply side, the ongoing drop in imports continued to partly offset the rise in oil production. From the demand side, refinery inputs rose again. In total, the gap between supply and demand has diminished due to the drop in imports; this could suggest the oil market has tightened. In any case, the gap is still high and the demand remains lower than the supply. Looking forward, the upcoming European, American and Chinese reports could offer some additional insight regarding the growth of these economies. The gap between Brent and WTI picked up to the $11-$14 range. This recent rise might be due to stronger than expected demand for oil in Europe, which suggests the oil market in Europe is tighter than estimated. The fundamentals suggest oil prices may rise in the coming weeks especially if the upcoming reports show growth and exceed expectations and if the oil market further tighten. Moreover, if the USD continues to fall, this could also pull up the price of oil.   
The bottom line, on a weekly scale, I guess oil price (WTI) may slightly rise. 

Market Update

AUD/USD Forecast Nov.11-15

2013-11-10 08:00:15-05

AUD/USD posted modest gains last week, as the pair dropped below the 0.94 line, closing at 0.9385. This week’s key event is NAB Business Confidence. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD. Australian employment numbers were weak and the RBA maintained rates.

EUR/USD: Bearish, Faces Further Downside Pressure

2013-11-10 08:44:58-05

EUR/USD: A follow through on its previous week decline has left EUR targeting further downside. Support lies at the 1.3300 level with a break turning focus to the 1.3250 level and possibly lower towards the 1.3200 level.

GBP/USD Outlook Nov. 11-15

2013-11-10 10:25:15-05

GBP/USD bounced back and crossed above the 1.60 level, gaining about one cent last week. The pair closed at 1.6018. This week’s key events include CPI, Claimant Count Change and Retail Sales.

USD/JPY Outlook Nov. 11-15

2013-11-10 11:35:28-05

The Japanese yen showed some strength last week but ended the week almost unchanged as USD/JPY closed the week just above the 99 line. There are nine events in the upcoming week.

Market Update, plenty of set ups!

MARKET COMMENTARY


Firstly see my video update here : Click Here

Global risk appetite fades after mixed data

Global risk appetite looks like it will have trouble continuing along the positive trajectory posted yesterday, with equities ending the Asian session mixed and the guarded price action escalating during the European session and ultimately driving S&P futures lower before the opening bell.

ISM Non-Manufacturing PMI rises to 55.4, strong employment component – USD follows

The US ISM Non-Manufacturing PMI for October surprised by rising to 55.4 points. It was expected to tick a bit lower to 54 from 54.4 points in September. The services sector (non-manufacturing) is the vast majority of the US economy. The employment component rose from 52.7 to 56.2 points.

UK economic figures demonstrate attraction of GBP

Economic data out today in the UK shows that the little island is recovering much stronger than expected and is now forecast to be among the fastest growing economies in the western world in 2014. Data due out earlier today showed that Britain’s services sector increased in October at the fastest rate since 1997.

 AUD/USD: Trading the Australian Employment Change

 Australian Employment Change, which is released monthly, provides a snapshot of the health of the Australian labor market. A reading which is higher than the market forecast is bullish for the Australian dollar. Here are the details and 5 possible outcomes for AUD/USD. Published on Thursday at 00:30 GMT.

 NZD/USD back to uptrend channel on excellent job figures

 The employment situation in New Zealand, no matter how you look at it, and the improvement also exceeded expectations. The great data could bring forward rate hikes by the RBNZ and has already pushed NZD/USD higher, back to the uptrend channel that it lost recently. Can it challenge the highs of 2013?

 EUR/USD Nov. 6 – Steady Despite Weak PMIs and Retail Sales

 EUR/USD has moved higher on Wednesday, as the pair trades above the 1.35 line in the European session. In economic news, Spanish and Eurozone Services PMIs beat their estimates but the Italian Services PMI lost ground and fell short of expectations. Eurozone Retail Sales declined 0.6%, its weakest reading in nine months.

Market update on majors

EURUSD

The Euro stabilizes around 1.38 handle, where the price closed for the week, after posting fresh high at 1.3831, Fibonacci resistance. Overall tone remains positive, however, descending indicators on 4-hour chart suggest further consolidation that was signaled by Friday’s Doji. Also overbought daily studies see risk of a pause in near-term rally. Initial support lies at 1.377, consolidation floor /Fibonacci 38.2% of 1.3664/1.3831 upleg, ahead of strong 1.37 zone, previous highs / 38.2% retracement and 1.3650 higher low / 50%, where stronger dips should find a footstep. On the upside, break above 1.3831 to focus 1.3900 initially.

Res: 1.3817; 1.3837; 1.3857; 1.3900
Sup: 1.3770; 1.3750; 1.3700; 1.3650





GBPUSD

Cable trades in prolonged consolidative phase, with price action being established within 1.6254/1.6114 range, following repeated failure at key 1.6254/59 barrier. Hourly technicals are weak, while 4-hour chart indicators are losing traction, as the price moves within hourly triangular consolidation. Increased downside risk would be seen on a break below 1.6114/00 support zone, as this would also signal double-top formation on 4-hour chart and keep the upside targets on hold. Conversely, sustained break above 1.6200 handle, would shift near-term focus towards key barriers and breakpoints at 1.6254/59, above which to signal resumption of larger uptrend and focus short-term targets at 1.6300/80.

Res: 1.6221; 1.6245; 1.6254; 1.6259
Sup: 1.6168; 1.6148; 1.6114; 1.6100




USDJPY

The pair regains strength and averts immediate downside risk, as bounce off 97.00 support zone that was cracked last Friday, retraces over 50% of 98.47/96.93 downleg, on a weekly gap-higher opening. Hourly studies turned positive, however, weak tone prevails on 4-hour chart, as the price remains in near-term downtrend from 98.99 and current rally being capped by 55DMA at 97.74. Regain of 98.00 and more significant 98.47 lower top, is required to shift focus higher, otherwise, fresh lower top and extension of larger downtrend, would be likely near-term scenario. Initial support lies at 97.43, session low / 20/55DMA’s bullish crossover, while, extension below 96.93 handle would open way for full retracement of 96.55/98.99 ascend.

Res: 97.74; 98.00; 98.18; 98.47
Sup: 97.43; 96.93; 96.55; 96.00





AUDUSD

Near-term price action remains under pressure, as extension from 0.9670, where the lower top was left, broke below initial 0.9600 support. Fresh extension lower retraced 38.2% of 0.9280/0.9755 rally on a dip to 0.9571 so far, with near-term indicators sliding into negative territory. Initial targets lay at 0.9526/18, previous peak / 50% retracement, along with psychological 0.9500 support, reinforced by daily 55DMA. Break here to neutralize near-term bulls and spark stronger correction of larger 0.9280/0.9755 rally, as the upside remains capped by descending 200DMA. Corrective attempts face initial resistance at 0.9622, with 0.9670 expected to cap.

Res: 0.9622; 0.9670; 0.9700; 0.9755
Sup: 0.9571; 0.9526; 0.9500; 0.9461

Technical Analysis for Majors

EURUSD

The Euro remains at the back foot, as break below initial 1.3540 support, triggered fresh acceleration that fully retraced 1.3500/1.3645 upleg. Break below 1.3500 support, focuses strong support zone at 1.3460/40, higher platform / previous peak of 20/08 and Fibonacci 38.2% retracement of 1.3103/1.3645 rally. Negative near-term technicals favor the scenario, with consolidative action on oversold hourly studies, expected to precede fresh weakness. Any stronger rally should stay capped under 1.3545/65, Fibonacci 38.2% and 50% of 1.3645/1.3484 downleg, to keep freshly established bears in play.

Res: 1.3525; 1.3545; 1.3565; 1.3583
Sup: 1.3484; 1.3460; 1.3440; 1.3400




GBPUSD

Cable came under increased pressure yesterday, with fresh bearish acceleration extending reversal from 1.6259 peak below 1.6000 handle and approaching the next support at 1.5900. The third wave that commenced from 1.6123 lower top, could travel to 1.5871/57, main bull trendline off 1.4812 and 100% Fibonacci expansion, with negative near-term studies supporting the notion. Bears may be interrupted by consolidative action, as hourly and 4-hour studies are oversold, with 1.6000, previous support, now offering solid resistance.

Res 1.5965; 1.6000; 1.6041; 1.6081
Sup: 1.5912; 1.5900; 1.5871; 1.5857




USDJPY

The pair extends near-term correction through initial barrier at 97.47 and Fibonacci 38.2% of 99.65/96.55 descend, approaching initial barriers at 98.00/10, psychological resistance / 50% retracement. Positively aligned near-term studies support further advance, however, overbought hourlies may delay rally. Clear break above 98.00 resistance zone is required to confirm freshly established uptrend and near-term base at 96.55, for stronger recovery towards next significant barrier at 99.00. Corrective dips should be contained above higher low at 97.11, to maintain bulls.

Res: 97.81; 98.00; 98.10; 98.28
Sup: 97.45; 97.11; 96.81; 96.55





AUDUSD

The pair came under pressure, as recovery attempt off 0.9280 failed to sustain break above 0.9455 barrier, with extension higher stalling at 0.9483 and subsequent pullback probing levels below 0.9400 support. Hourly studies turned negative, while 4-hour indicators are heading south that keeps the downside at risk, as the pullback retraced nearly 50% of 0.9280/0.9483 rally. Further easing would signal prolonged consolidation under 0.9526 high, as the price holds within 0.9280/0.9500 range. However, positive daily studies keep the upside in focus, with price action required to hold above key near-term support at 0.9280.

Res: 0.9422; 0.9471; 0.9483; 0.9500
Sup: 0.9388; 0.9358; 0.9332; 0.9300

Market Update, look out for the Yens!

Analysis for October 3rd, 2013

AUD/USD

Australian Dollar rebounded from the H4 Super Trend again; earlier the price rebounded from the 4/8 level. Most likely, during the next several days the pair will start a new ascending movement. The target for the bulls is at the 8/8 level.

At the H1 chart, the Super Trends are still under pressure “bullish cross”. If the market is able to keep the price above the 5/8 level, the pair will continue growing up. In this case, the target will be at the 8/8 level.

NZD/JPY

The pair rebounded from the 3/8 level and is trying to start a new ascending movement. If the bulls are able to break the daily Super Trend, they will become more dominant. I’ll increase my long positions as soon they break it.

At the H1 chart, the market could leave an “oversold zone”; the Super Trends formed “bullish cross”. The closest target for the bulls is at the 2/8 level.

SILVER

Silver broke the H4 Super Trend, thus ruining all bearish plans and expectations. During a local correction I opened a buy order. Later the market is expected to move upwards and reach the daily Super Trend. If the market breaks it, the instrument will continue growing up.

At the H1 chart we can see, that the bulls’ first attempt to enter an “overbought zone” failed; the Super Trends formed “bullish cross” and right now are supporting the current correction. We can’t exclude a possibility that the price may break the -2/8 level during the next several days. In this case, the lines at the chart will be redrawn.