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Helenrush

CAD Has Chances to RecoverUSDCAD may resume the selloff this week. The pair has risen 9 trading days in a row until it reached 1.2752. It looks like it cannot go higher, and it means it’s the right time to focus on fundamentals which may trigger the pair slide. We have already noted Canadian economy is doing fine. The labor market show good growth. Retails sales arein creasing. GDP has showed average growth of 3.5% during the last 3 quarters. This week CPI numbers are scheduled for release, and if it exceeds expectations, it will inspire CAD to speed up the gains. There are all chances for such a scenario, as Ivey PMI price component increased sharply over the previous month. Besides, we need to pay attention to American data. The weaker the numbers, the larger the selloff of USD. US retail sales on Tuesday may become the needed trigger of US Dollar weakness, if we get another weaker than expected report. The next target for USDCAD is 1.2650 and 1.2600 is to follow.
by HelenRush
CPI Kills Dollar USDJPY reached 108.73, the level not seen since June, 14. That was the logical reaction to worse than expected US CPI release. July US consumer price index came out at 1.7% vs +1.8% yoy forecast, and the monthly growth was 0.1% vs 0.2% expected. This is the smallest increase since March, and 5th month of disappointment in a row. What does it mean? It means the chances of the Fed rate hike before the year end go lower. If there is no inflation, there is no rush to raise the rates. The probability of a hike by year-end is now 42.5%, from 47.3% a month earlier meaning that more than a market half doesn’t believe in more tightening this year. On the back of rising geopolitical tension with North Korea and lower odds of the Fed rate hike USDJPY has all the chances to go lower with initial target at 108,70 followed by 108.00.
by HelenRush
Euro May Rise on PPI EURUSD is still under pressure, and it’s all about geopolitics. Additional pressure comes from EURCHF moves, as traditional safe heaven swissy is very popular now. However, we still have hopes that the conflict between Washington and Pyohgyang will not reach the critical point, and the current speculations just give us good opportunity to buy euro at cheaper price. Today new wave of speculations on QE tapering revived - ECB poll sees announcement of change of stimulus program in September If it were not for geopolitics, EUR would jump higher on the news. But now we have to just wait and look for interesting opportunities to enter the market with longs. For example, today the USA release PPI data which is perceived as a leading indicator of CPI scheduled for publication on Friday. If the numbers come out below expectations, it may trigger EURUSD reversal with initial target at 1.1790.
by HelenRush
How to Profit on GeopoliticsThere is a new topic in the market – geopolitics. And I know how to take profit on that! In the moments like this the market is focused on such safe haven assets like CHF, JPY, USD and gold. At the same time risk assets like RUB, AUD, NZD come under selling pressure. And this understanding will help us to find interesting crosses. So, yesterday, Donald Trump promised to hit North Korea with fire and fury in case of any signs of danger to the USA. A couple of hours later we learnt that the KPA strategic force was now carefully examining the operational plan for making an enveloping fire at the areas around Guam with medium- to long-range strategic ballistic rocket Hwasong-12 in order to contain the US major military bases on Guam. If the speculations keep going and the escalation is rising, the crosses like AUD/JPY have all the potential to fall further. Forthepairtheinitialtargetmaybefoundat 86.00 followedby 85.60.
by HelenRush
Aussie Selloff Will be Unstoppable AUDUSD has neared strong technical support at 0.79, and the speed at which the pair breaks it through will determine the speed of further AUD depreciation. We need to remember that Australian economy is very sensitive to local currency appreciation, as it hurts trade and tourism activity due to more expensive goods and services. Given China is one of the key trade partners of Australia, we need to monitor the reports out of PRC, as they may be a leading indicator of future demand on Australian export. And today we saw Chinese trade data. Both export and import has slowed the growth hinting the possibility of weaker demand from Beijing. And this is the first signal AUD may come under pressure, if the trend is confirmed. And here is the second signal – Australian trade minister Ciobo had a moan about the strong Australian dollar. It won’t take long when other officials join the camp, and then the aussie selloff will be unstoppable. So, we are waiting for further depreciation of AUDUSD with nearest target at 0.79, giving the way to 0.7840 once it broken.
by HelenRush
Euro is as Stable as Horse EURUSD turned out to be one of the strongest pairs in the currency market today. And by this we can conclude the market is not ready to sell euros even after stronger than expected US Non-Farm Payrolls report. The market is not ready to take profit on recent euro appreciation. And the market doesn’t believe in USD, and believes in euro. Consider this – the released today industrial production data out of Eurozone was worse than expected showing the decrease by 1.1% mom against the forecasted rise by 0.2%. The single currency was supposed to fall, or at least stop rising. But it never happened. The Friday’s fall of EURUSD was used as a perfect opportunity to upload the longs. And the thing is that the single positive report from the USA is not enough to convince the market the rate hikes are justified. Investors need to see sharp rise in inflation in order to really believe. Thus, the US CPI report is in focus this week. And up to its release euro may keep going up. The next target for EURUSD may stay at 1.1870.
by HelenRush
NZD Will Follow RBNZ The coming week will be exciting for NZDUSD. But for dollar moves, the Reserve Bank of New Zealand monetary meeting will have a significant effect on the pair. Therearehighchancestoseetheratesunchangedatcurrent 1.75%. Theeconomygrowthisslowing. Inflationisslowing. The CPI slid to 1.7% to 2.2% previously. The recent meeting we saw the RBNZ was quiet on the recent NZD appreciation. However, the local economy is dependent on the export activity, and on the recent rise of national currency may have negative effect on its state. Thus, we don’t rule out the central bank will be more cautious about NZD appreciation. It may put NZD under pressure and send it lower with initial target at 0.7330 followed by 0.7260.
by HelenRush
Yen Has More To Lose Two days ago USDJPY touched 1.5-month low at 109.92, and reversed the move right away, right now trading around 110.70. And all this happened despite rather dovish comments from Fed’s Bullard opposing to another rate hike before the year end. Now the market is focused on US data. Recently, we have seen some disappointments, and the Fed looked less hawkish than it was expected. And this was the reason the USD was falling. However, the labor data may help American currency. If number of new jobs exceeds 180K, it will be perceived positively. Andifwagesgrowthisabove 0.3%, itwilldriveUSDcrazy. Today we need to pay attention to Non-Manufacturing ISM, as it’s one of the best leading indicators of Non-Farm Payrolls results, given the fact that 70% of employed Americans work in service sector. If the numbers come up better than expected, USDJPY may target 111.00 followed by 111.70.
by HelenRush
Cable Have More Tests to PassCable becomes even stronger in the wake of better than expected PMI Manufacturing numbers. It reached 55.1 versus 54.4 in June mostly thanks to significant jobs creation. Isn't it an indicator of activity pickup and stronger economic growth? However, we need to pass some more tests, before we confirm the longer-term bullish trend. For example, Services PMI will be of more interest given the service-oriented nature of the British economy. But the most significance the market will pay to the looming BOE monetary meeting coupled with Quarterly Inflation report. If inflation forecasts revised up, and Monetary Policy Committee reveals even more hawks voting for a rate hike, it will push cable higher. GBP/USD has already broken strong psychological resistance at 1.32, and the next target may be at 1.3280.
Long
by HelenRush
Euro Has A Long Way To Go EURUSD has refreshed 2.5-year high touching 1.1845 level. And we saw it happened on the back of rather positive housing data out of the USA. We need to give a credit to euro zone data as well. The released core CPI number was above forecasts showing 1.2% rise instead of 1.1%. Moreover, German retail sales significantly exceeded the expectations printing 1.1% m/m rise vs 0.2% forecast. Besides, the traditional month-end flows into European currencies played its role. Today, the German labor market report and Manufacturing PMI are released. Anditmayspeedupthepairmovehigherincaseofpositivedata. The only barrier on the way of EURUSD to 1.20 is US Non-Farm Payrolls. However, we still have time before Friday comes, and euro can easily do another 100 pips in a couple of days. The next target for EURUSD is at 1.19 followed by 1.1970.
by HelenRush
Follow the AUD Reaction Last week AUDUSD reached 1.8065, not seen since May, 2015. But the very same day it started to fall. Is it the start of bearish trend, or just a correction before another jump higher? This week we have all the chances to understand the right direction. Till the last moment Australian dollar ignored any negative factors both from economy and the Reserve Bank of Australia. The inflation turned out to be weaker than expected, and the chairman of the central bank said there was no need to follow the peers in rate hiking. However, carry demand has kept supporting AUDUSD recently pushing it higher. And this time the AUD reaction is what matters. If the RBA during the monetary meeting talks about negative effect from local currency appreciation and low inflation, and AUD won’t be sold, it means there is no change of direction in the nearest future. However, we do believe AUDUSD will be sold with the nearest target at 0.7900 followed by 0.7840.
by HelenRush
Brent Is Bound To Rise After OPEC meeting in Saint Petersburg the hopes for meeting balance of supply and demand have grown significantly. Saudi Arabia is planning to reduce oil export in August. Nigeria may join the agreement on oil production cut. The US data also supports the further Brent rise, as API Weekly Crude Oil Stock fell 10.230 M, and EIA Crude Oil Stocks change reduced by 7.208 M barrels, significantly beating the expectations and confirming the rising demand on gas during the driving season. The nearest week may bring another confirmation of the evolving trend. If scheduled for tonight release of Baker Hughes data shows another slide of oil rigs count, it may speed up the Brent rise. The nearest target for Brent is at 52.60 followed by 55.00.
TVC:UKOIL
by HelenRush
Euro Gives A Chance To BuyEURUSD got another reason to rise after the FOMC meeting which market perceived as more dovish than expected. Today, the pair touched highs around 1.1776, not seen since the start of 2015. Well, the Fed disappointed the market with its moderate comments on inflation and its commitments to reduce the balance sheet. Investors took its passion for balance reduction as an alternative to rate hikes. That’s why the chances of the fed funds rate hike before the year end slid to 45%. It means the major part of the market doesn’t believe in further rise of borrowing cost. This is a good reason to sell USD. Meanwhile, everybody is waiting for more hawkish hints from the ECB, as QE stimulus removal is expected this Fall. And every strong European report may only confirm the expectations, driving EUR higher. The current euro retracement is triggered by profit taking after a huge rally, and it gives perfect opportunity to enter the market with longs. The next target for EURUSD may be at 1.1780 followed by 1.1820.
by HelenRush
Sounds like it’s time to sell AUD? AUDUSD got stuck around strong resistance 0.7980 failing to break it through during the last 5 days. This may signal the start of a bullish trend reversal. The only barrier on its way is USD weakness. Today, Australian Dollar came under pressure of two factors – weaker than expected CPI and dovish comments of the RBA’s Lowe. Wehavealreadytalkedaboutitrecently. When a local currency appreciates inflation slows down, and it means there is no need to rush with further rate hikes. Given the export and tourist activity of the country, Australia doesn’t need expensive currency. And this is what RBA chairman talked today. He said there is no sense to move in lock step with central banks that are hiking. Sounds like a hint on no tightening in the nearest future. Sounds like it’s time to sell AUD? If the Fed shows hawkish tone tonight, AUDUSD may gather the pace of its depreciation with the nearest target at 0.7840 followed by 0.7800.
by HelenRush
Euro Won’t Stop EURUSD hit the high not seen since August, 2015 at 1.1712, as any positive argument may trigger the euro rise right now. And this time USD weakness worked just well. Today Philadelphia Non-Manufacturing Index came out below the prior numbers at 23.4 vs. 33.6 in June. Moreover, the New Orders indicator fell below zero to -0.1 vs 19.7. It’s a second tier data, and usually market completely ignores the numbers. But not this time ahead of FOMC meeting scheduled on Wednesday, and amid fears that the Fed is not ready for another rate hike before the year end. In the environment, where the market doubts the Fed will go on tightening, and hopes the ECB will start removing the stimulus as soon as October, EURUSD has all the chances to appreciate further. In such an environment, EURUSD may keep going up without pauses with initial target at 1.1720, followed by 1.18. And current retracement offers a perfect opportunity to enter the market.
by HelenRush
Dollar: A Hope After FOMC USDJPY slid to 1-month low at 110.76. And it happened even though recent comments of the BOJ officials made it clear they would do their outmost to reach the inflation target of 2%. It means there is no talk of stimulus removal, and it should be bad for yen. The pair fell last week only due to USD weakness, driven mostly by political conflicts and economic disappointments. FOMC rate decision is scheduled for release this week. Yes, the market is really disappointed by the series of weak reports that raise some doubts about the chances of another rate hike before the year end. However, the FOMC may confirm the Fed commitment to announce another rate hike on December meeting. And that would be enough to trigger the reversal in USDJPY given its oversold nature, and the contrast of the BOJ position. A wave of short covering may only speed up the possible rise of the pair. The nearest target for USDJPY may become 111.70 and 112.40 to follow.
by HelenRush
It’s Time for Euro To See the SkyEURUSD hit the record 1.1676 level, not seen since August, 2015. And it was right after ECB chairman’s press conference. Draghi did his outmost to persuade the market there is no rush in QE tapering, and no talk about policy tightening. For now. And the market caught the words he was looking for. Draghi said they were not discussing stimulus removal, and the market heard that it might be in October. And this is enough for EUR to keep rising in the medium term. Moreover, today there came another splash of speculations – Reuters cite some sources "with direct knowledge of the discussion" saying that December is too late for changing the policy course. And it means that October is the right guess. In such an environment, EURUSD may keep going up without pauses with initial target at 1.1720, followed by 1.18.
by HelenRush
Why It May Be the Time to Buy PoundGBPUSD has lost almost 100 pips during the first half of the day even though retails sales data came out better than expected. Asusual, it’sallaboutmarketsentimentandexpectations. Retail sales has come significantly above expectations (0.6% mom, 2.9% yoy vs 0.4% mom, 2.5% forecast). But right before the data cable was hit hard by the news that Theresa May is possible to stay be in power for remainder of term. And positive effect from the retail numbers was very short-term. Why investors do not trust current PM? Just because she lost the Parliament elections and is perceived as a weak leader not ready to take the UK out of the EU smoothly. Yes, it’s all about politics again. However, we don’t rule out sell the rumors – buy the facts scenario. As soon as we got the expected final data on negotiations during this week, there will be a retracement. In this case, GBPUSD may come back to 1.3020 and target at 1.3090.
by HelenRush
Euro May Get Hit Ahead Draghi SpeechEURUSD got an unexpected support from the USA, and managed to rise to 14-month high at 1.1564. The thing is that the first reform that Trump was pushing through the Congress failed – two more senators came out against the bill, smashing the chances Obamacare would be reformed in the nearest future. What does it mean for the market? It means Trump would have hard time pushing any other reform in such an unfavorable environment. And if so, the long-term appreciation of USD backed by excessive optimism on huge infrastructural reforms had no any fundament under it. And if so, it’s time to sell American currency. However, in pair with euro we need to be cautious, as the ECB meeting is looming. Market has already priced-in the positive tone of Mr. Draghi coupled with hints on future stimulus removal. And this is the first step to rates increase. And this is a good argument to buy euro, except for one fact. The ECB is very conservative, and doesn’t like when market is overheat. That’s why there are good chances to see the chairman would try to cool down the markets. And it may trigger a huge selloff of EUR. Under this scenario, current levels of EURUSD look very attractive for entering the market with shorts, and the nearest target may stay at 1.1440.
Short
by HelenRush
AUDUSD Touched 1.3-Month High – Time To Sell?AUDUSD broke above the roof of the annual range 0.7166 – 0.7740, and touched the levels last seen on April 17, 2016. But back that time the pair showed the correction lower right after it touched the mentioned levels. Will it be the same this time? At first we need to look at the triggers behind the recent moves. Last week stronger than expected consumer inflation expectations coupled with broad based USD weakness helped Australian Dollar to gain. However, today USD keeps falling against major colleagues, except for AUD. We need to go to fundamentals. Australian economy is very dependent on export with key trading partners. That’s why sharp appreciation of AUD may hurt the economy, as the produced goods and services may become less competitive in the world market. And usually the Reserve Bank of Australia doesn’t like it. And usually it takes every opportunity to slow down the appreciation. And probably that’s the time to see all that, given 3 Australian policymakers are scheduled to speak during the week ahead. If we see any dovish bias in their comments, it’s time to see AUD/USD, and the nearest target is at 0.7740.
Short
by HelenRush
Yen May Reach 115.00 Soon USD/JPY keeps going up targeting 115.00 which may be reached in the nearest future. Market believes in USD again, and is disappointed about JPY. Friday’s Non-Farm Payrolls only reassured the market that recent hawkish tone of the Fed was justified. This week we are going to see Janet Yellen’s semi-annual testimony in front of Congress. And the market is pricing in her even more hawkish tone, pushing USD higher. If Fed’s chairwoman is optimistic enough, USD may go further, and the largest potential it has in pair with Yen, because of the BOJ position. The Bank of Japan has recently sent a clear message that it wouldn’t remove stimulus until inflation reached the target level of 2 per cent. And as the recent official data showed, now it’s only 0.4%. And it means the chances of BOJ tightening are really low, meaning yen has no fundamental reasons for appreciation. For USD/JPY we have only one major barrier at 115.00. The pair may reach this level in a couple of hours, but the breach of it from the first time is doubtful. We need to hear a really hawkish tone of Yellen to see the breakthrough which open the way for a long-term pair rally.
Long
by HelenRush
Silver Crash Resembles Something – GBP Last OctoberNothing said there would be any surprises Asia morning. Especially with silver. But if something can go wrong, it will. Spot silver markets suffered a flash crash in Asian morning. And here is daily chart on pound from October 7, 2016 What’s more – crashes on both assets happened at the same time, early in Asia, when American traders left home, and Asian ones just starting to wake up. The perfect time for an ideal storm. We can argue whether it was a fat finger, low liquidity or algotraders, but the key question now – what’s gonna be next? Having hit a session high of $16.16 an ounce in early trade, silver fell to as low as $14.16 in less than a minute, a decline of over 12%. It came back to 15.81 at the moment of writing. However, we still see some potential to go down. Given the case with GBP/USD that fell in the same manner and in the same time last year, we can say that silver may easily go back to 15.42 in the nearest week, with further target at 15.00.
TVC:SILVERShort
by HelenRush
Pound is bound to riseWhat do we know about GBP/USD? During the last week it survived three disappointments – services, construction and manufacturing PMIs came out below expectations. However, it’s important to know – the pair lost only about 100 pips during that period. And we need to take into consideration that USD was quite strong for the whole week. So, the pair moves say that investors are in no rush to get rid of the pound, as they trust hawkish Carny. And it means that the very first argument in favor of GBP will trigger a broad based rally. Non-Farm Payrolls scheduled for release on Friday may become such a driver. We already know the markets are overheated by the recent Trump’s tweets. Better than expected numbers are priced in. Besides, average hourly earnings will stay in focus, as the recent FOMC minutes showed some members were in doubt about the further progress on inflation. If the number of new jobs and average hourly earnings in Non-Farm Payrolls come out below expectations, it may become a trigger to sell USD. In this case, GBP/USD may reach 1.3030 and target 1.31.
Long
by HelenRush