Summary
The undoubted star of a uncover this week was a JPY with a Japanese banking being a strongest gainer via a week following a risk off sourroundings seen in a batch market, with a JPY usually holding a mangle on a allege after threats of involvement by a BOJ.
The EUR was a other volatile banking via a week as markets continue to cost in a aloft luck that a Fed will not lift rates this year, and as markets wait a ECB preference in March.
One splendid symbol we saw yet in a US mercantile numbers were a sell sales numbers expelled Friday. We cruise that if a sell sales numbers, salary and spending can continue to uncover healthy increases with US practice numbers holding, that a US economy could warn to a upside and be a stabilizing cause in a universe of turmoil.
Source: Bloomberg.com
Key mercantile information and events for a entrance week for a pairs we cover:
Sunday, 14 Feb. 2016
2350 GMT – Japanese GDP numbers (Q4)
Monday, 15 Feb. 2016:
*US Holiday – President’s day
0030 GMT – Australian New Motor Vehicle Sales (Jan.)
0255 GMT – Chinese Trade Balance Numbers (Jan.)
0430 GMT – Japanese Capacity Industrial Utilization (Dec.)
1000 GMT – Eurozone Trade Balance (Dec.)
Tuesday, 16 Feb. 2016:
1000 GMT – German ZEW Current Conditions
1000 GMT – German ZEW Economic Sentiment
1330 GMT – US NY Empire State Manufacturing Index (Feb.)
1330 GMT – Canadian Manufacturing Sales (Dec.)
1500 GMT – US NAHB Housing Market Index (Feb.)
2100 GMT – US Overall TIC Transactions and collateral upsurge (Dec.)
2350 GMT- Japanese Core Machinery Orders numbers (Dec.)
Wednesday, 17 Feb. 2016:
1330 GMT – US Building Permits (Jan.)
1330 GMT – US Core PPI PPI numbers (Jan.)
1330 GMT – US Housing Starts (Jan.)
1330 GMT – Canadian Foreign Securities Purchases (Dec.)
1355 GMT – US Redbook
1415 GMT – US Capacity Utilization Rate (Jan.)
1415 GMT – US Industrial Production (Jan.)
1415 GMT – US Manufacturing Production (Jan.)
2350 GMT – Japanese Trade Balance (Jan.)
2350 GMT – Foreign Investment in Japanese Bonds Stocks (Jan.)
Thursday, 18 Feb. 2016:
0030 GMT – Australian practice change (Jan.)
0130 GMT – Chinese CPI PPI numbers (Jan.)
0900 GMT – Eurozone Current Account Net Investment Flow (Dec.)
1330 GMT – US Jobless Claims Numbers
1330 GMT – US Philly Fed Manufacturing Numbers (Feb.)
1330 GMT – Canadian Wholesale Sales (Dec.)
1600 GMT – US Crude Oil Inventories numbers
2330 GMT – Japanese Reuters Tankan Index (Feb.)
Friday, 19 Feb. 2016:
0700 GMT – German PPI Numbers (Jan.)
1330 GMT – US Core CPI Numbers (Jan.)
Trading and Technical Strategy for a week ahead:
EUR/USD
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The EUR continued to sojourn volatile as US equity markets languished with some offering seen usually in a final day of a week as US sell sales numbers rebounded. Admittedly, a stream resilience in a EUR has undone us and each day a EUR stays resilient, reinforces a bullish scenario 3 personification out (Green Path) with a intensity exam of a 1.1775 level. Nonetheless, we do continue to wish for a red trail to play out in a entrance sessions with expectations of serve easing by a ECB being a pivotal matter for this. These dual pivotal factors during benefaction give us wish for a reduce EUR:
1. Bundesbank Chief Jens Weidmann has in new times malleable his fixed antithesis position for some-more QE, revelation a credit risk of undershooting a ECB’s acceleration aim for 3 true years warrants process movement of some sort.
2. The record CFTC shorts in a EUR have now been pared down subsequent 100k contracts in a many new COT news from prior record highs. If this gives some illustration of a broader positioning of a marketplace a good series of shorts have been squeezed out of a marketplace during benefaction that now make conditions some-more ideal for another decrease over a subsequent few weeks.
Medium- to long-term trade plan (1-6 months):
With a Fed in a rate travel cycle timing, now in some doubt given a temperate US information over a final few weeks, a luck is unequivocally genuine that we could be headed for a duration of USD debility in a entrance weeks and months unless other Central Banks like a ECB palliate further. Any beating on that front could lead to a most aloft EUR into March. However, notwithstanding a perspective being reduction confident for a USD in new weeks, we cruise that a risk-reward tilts some-more to a downside for a EUR during a benefaction moment, given a high odds of process movement of some arrange by a ECB.
With a technical design now clearer, we cruise shorts can now be determined in a EUR during 1.1320 and 1.1370, with a stop detriment above 1.1470. We would be looking for downside in a EUR to around a 1.10s or reduce in a entrance weeks.
Short-term trade plan (Intraday, 1-3 days):
Short-term traders can demeanour to play a EUR from a brief side by offering during 1.1320 and 1.1370 shopping a positions behind between 1.1150 and 1.1260. The stop detriment on a brief position would be 1.1405.
USD/JPY
Click to enlarge
“Given that a span is oversold in a brief tenure for now, we design some USDJPY shopping into subsequent week with a span presumably contrast a 118.30/118.80 level. From there, we design a USDJPY debility to continue as we cruise a BOJ is approaching finished for some time with regards to easing further.”
The USDJPY exceeded a expectations from last week (above) with a span descending most serve than approaching going true by a 114 bearish scenario target. Having pronounced that, a luck continues to lean toward one some-more downside pierce in a USDJPY toward a 110 level. We do cruise yet that it will be formidable for a span to go most subsequent 110 as a BOJ will step in to possibly meddle or announce another turn of easing to wand off a offering vigour in a pair. Our personal expectations are that a span will sojourn between 110-125 via a year with a intensity to strech 130 by year finish if estimable increases to a BOJ’s QQE module are announced, that we cruise is unequivocally approaching given how mercantile conditions have grown recently.
Medium- to long-term trade plan (1-6 months):
Given that a span has strike a 114 target, we will be looking to take a prolonged position in a span closer to a 110 turn on a subsequent sell-off in a span with a BOJ possibly inserted or announcing a new turn of easing to pull a span aloft as a approaching catalyst. Any prolonged positions we take will have a stop detriment during 109.50.
Short-term trade plan (Intraday, 1-3 days):
“If we were propitious adequate to be on a brief side, do cruise locking in increase early subsequent week as a pullback in a span is approaching in a opinion. The 118.80 would be a good turn to reinstate a brief positions with a stop during 120. We would be looking for a mangle of 116 a subsequent time turn a USDJPY comes off, with any spirit of dovishness from Yellen during subsequent week’s testimony approaching being a matter for a move.”
Our expectations for a reduce USDJPY final week (above) came to pass after all. However, a matter was a risk off sourroundings vs. dovishness from Yellen as primarily expected. Nonetheless, we cruise that a span is oversold during this point, and would demeanour as with a middle tenure plan for any pierce toward a 110 turn as an event to go prolonged to play BOJ involvement or a new turn of process easing. Any such trades should have a stop detriment during a 109.50 level.
AUD/USD
Click to enlarge
The AUD continues to connect around a 0.7100 figure, and we design that offering in a span should continue saying downside over a subsequent week with a 0.6900 turn approaching taken out again over a subsequent dual weeks.
Medium- to long-term trade plan (1-6 months):
The middle and prolonged tenure disposition stays to a downside for this pair. As such, we would use any pullback tighten to a 0.7200 turn for this span to enter a brief position. Our stop would be placed during 0.7400. Our downside aim in this unfolding would be a 0.66-0.68 turn as mentioned above. We cruise a dovish RBA administrator Stevens would approaching be a matter for a subsequent leg down in a AUD.
Short-term trade plan (Intraday, 1-3 days):
Short tenure traders can cruise a brief disposition into subsequent week offering around a 0.7100 turn and shopping behind in a 0.69s. The stop detriment for this trade would be a 0.7200 turn and higher.
USD/CAD
Click to enlarge
The USDCAD retraced as approaching this week, with a span anticipating insurgency during a pivotal 1.4000 level. We used this event to reinstate half a brief position we lonesome during 1.3710. We cruise a subsequent week should see some-more downside in a USDCAD, and if OPEC unequivocally does determine to a prolongation cut, a USDCAD should start to tumble aggressively in a subsequent few weeks that is a primary expectation.
Medium- to long-term trade plan (1-6 months):
We have re-established a longer tenure brief position from 1.4420 1.4586 that we partially lonesome during 1.3710, with a new brief being determined during 1.3995. Our stop detriment is now placed during 1.4120 for a whole brief position with a 1.30 and levels approaching to be seen in a entrance weeks or months. We cruise any retracement to a 1.4000 turn will continue to yield a good offering event for a span with a stop detriment during 1.4120.
Short-term trade plan (Intraday, 1-3 days):
Short tenure traders can demeanour this week to play a 1.3800-1.4000 operation with a disposition on a brief side. Any prolonged position taken should be stopped out if 1.4050 is broken.
WTI OIL (USO)
Click to enlarge
*Note on a cost chart:
Before we dive into a WTI technical analysis, we have motionless to use a WTI continual futures cost as a draft instead of a strange symbol cost posted in a article. This cost will compare a nearest antiquated WTI Crude futures agreement that will switch automatically once a agreement settles relocating on to lane a subsequent nearest antiquated futures contract. We will also be usually examining a technical aspect of a WTI price, given a elemental aspect of WTI oil is good lonesome by many theme matter experts in a appetite line section. At this time, a nearest antiquated futures agreement being tracked by a above cost draft is a Mar 2016 contract.
WTI Oil continues to onslaught and has unsuccessful to strike a expectancy for upside in a past week toward a $36.50-$38.30 zone. Nonetheless, we continue to reason expectations that this could be met in a entrance week or dual so prolonged as a prior pitch low in oil is not broken. One intensity nearby tenure matter on a setting of march would be if OPEC members finally blink and determine to a prolongation cut.
Medium- to long-term trade plan (1-6 months):
Our middle tenure plan would not have finished too good final week given a tumble in wanton prices. Nonetheless, we continue to be confident this entrance week for aloft prices with new positions taken during levels subsequent $30 with a stop detriment triggered by any mangle of a $28 level.
Short-term trade plan (Intraday, 1-3 days):
Our brief tenure plan is flattering most a same as a prolonged tenure one with a prolonged disposition for oil with positions around a $30 symbol or reduce with exits looked for around a $33 mark.
Thank we for your time, and we wish that we have enjoyed this weekly plan piece. We demeanour brazen to your constructive feedback.
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