Forex Weekly Outlook January 2-6

US Manufacturing PMI, Crude Oil Inventories, FOMC Meeting Minutes, Non-Manufacturing PMI, and important employment figures from Canada and the US including the monthly job report. These are the main events on forex calendar. Join us as we explore the first week of 2017.

Let’s start,

  1.  US ISM Manufacturing PMI: Tuesday, 15:00. U.S. manufacturing activity expanded in November to 53.2, from 51.9 in October, showing the economy is gaining momentum. Economists expected a more moderate rise to 52.1. Production picked up as well as new orders, indicating factories will have to speed up production in the coming months to meet higher demand. The current revival in manufacturing activity is consistent with the economy growing at a roughly 3.2% annual pace. Economists expect growth to accelerate further under President- Donald Trump, who promised a big infrastructure-spending bill, deregulation, and revamping trade deals to boost the economy. Manufacturing activity is expected to strengthen further to 53.7 in December.
  2. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude stocks increased unexpectedly for the second consecutive week, gaining 614,000 barrels in the week ended December 23, missing analysts’ estimates for a contraction of 1.3 million barrels. Traded volumes were weak for the year-end holidays however, the market is in good shape this year, expected to continue the uptrend in early January.
  3. US FOMC Meeting Minutes: Wednesday, 19:00. The Federal Reserve meeting held in November showed the economy has strengthened sufficiently to warrant interest rate increases in the next policy meeting in December. The voting members saw equal risks the economy would meet their forecasts for continued growth and a tightening labor market. Some argued a hike should come at the Fed’s December meeting in order to preserve the central bank’s “credibility.” Fed Chair Janet Yellen noted that Trump’s election did nothing to change the Fed’s plans for a rate increase “relatively soon.”
  4. US ADP Non-Farm Employment Change: Thursday, 13:15. The ADP Employment Report showed that nonfarm payroll employment increased 216,000 during November following an 119,000 increase in October rise, revised from 147,000. This was the biggest gain since June. Payrolls rose an average 176,000 per month in 2016, down from 209,000 averaged during 2015 and 237,000 averaged in 2014. ADP non-farm payrolls is expected to reach 171,000 this time.
  5. US Unemployment Claims: Thursday, 13:30. US jobless claims declined for a third week out of the last four, down by 10,000, reaching 265,000. Claims remained below the 300,000  line for 95 straight weeks-the longest period since 1970 indicating a strong labor market. Analysts expected a higher figure of 277,000 new claims. The four-week average of claims declined to 263,000 from 263,750 the prior week. The number of new claims is forecasted to reach 262,000 this week.
  6. US ISM Non-Manufacturing PMI: Thursday, 15:00. U.S. services sector activity hit a one-year high in November, rising to 57.2 from 54.8 in October. Services industries reported a 4 percentage point surge in production with employment soaring 5.1% to a 13-month high. The services sector strong performance data suggested stronger consumer spending suggesting the economy maintained its momentum in the July-September quarter enabling the Fed to make the rate hike decision at their December meeting. US Service sector is expected to remain in expansion with 56.6 points in December.
  7. Canadian employment data: Friday, 13:30. Canada’s jobless rate dropped to 6.8% in November as the economy created 10,700 jobs. The employment market boosted its job growth in the last  three months, helping to lower the unemployment rate. However the work participation rate declined as fewer people searched for work.  The number of  part time workers increased by 214,000 compared to a year earlier, while full-time work declined by 30,000 jobs. Canadian job market is expected to shed 5,100 jobs in December while the unemployment rate is anticipated to rise to .6.9%
  8. US Non-Farm Employment Change and Unemployment Rate: Friday, 13:30. US employment market registered another strong job gain in November, reducing the unemployment rate to a nine-year low of 4.6%. The US economy created 178,000 backing the Fed’s decision to raise rates on its December meeting. Economists had expected a gob growth of 177,000 with unemployment unchanged at 4.9%. However, the decline in the unemployment rate was not related exclusively to the rise in employment but also because the labor force contracted to 62.7%. Wage growth registered a 0.1% drop but analysts partially blamed the drop in average hourly earnings on a miscalculation relating to the calendar. Some analysts believe Trump’s plan to increase infrastructure spending and cut taxes could boost hiring and spur faster economic growth over the coming years. December’s job gain is estimated at 175,000 and the unemployment rate is forecasted to rise to 4.7%.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.

Further reading:

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/2G0IocUC7Gs/

from Online Forex Trading Resource
View thesource article here

EUR/USD Forecast Jan. 2-6 2017

EUR/USD[1] made a move to the upside in thin end-of-year trading, closing 2016 above 1.05. The first week of 2017 is already packed with events, with inflation and PMIs standing out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The euro enjoyed a “flash surge[2]” during the holiday week. Thin trading conditions and perhaps some algo activity sent it soaring before it came back down to earth. Spanish CPI for December jumped more than expected, giving us an early indication of rising inflation in 2017. In the US, consumer confidence jumped[3] while other measures weren’t that impressive.

Updates:

EUR/USD daily graph with support and resistance lines on it. Click to enlarge:

  1. Manufacturing PMIs: Monday morning: 8:15 for Spain, 8:45 for Italy, final figure for France at 8:50, final German number at 8:55 and the final euro-zone measure at 9:00. According to Markit, Spain saw OK growth in November, with a score of 54.5 points, above the 50 point threshold that separates growth from contraction. Italy, the third-largest economy, saw a slower rate with 52.2 points. The initial assessment for France showed a score of 53.5 points in December. Germany enjoyed 55.5 points, and the whole euro-zone saw 54.9 points. The last three numbers will probably be confirmed.
  2. French CPI: Tuesday, 7:45. In November, prices stalled in Europe’s second-largest economy. A small rise could be seen in December.
  3. German Unemployment Change: Tuesday, 8:55. The strength of the German economy is reflected in the job market. A drop of 5K was seen in October.
  4. German CPI: Tuesday, the German states release the data throughout the morning, with the final German release at 13:00. A small rise of 0.1% was seen in November. Germany’s figure has a wide impact on the euro-zone CPI.
  5. Spanish Unemployment Change: Wednesday, 8:00. Spain still suffers from a high, albeit improving, unemployment rate. A rise of 24.8K unemployed people was recorded in November. Employment is seasonal in Spain due to the economy’s reliance on tourism.
  6. Service PMIs: Wednesday, morning: 8:15 for Spain, 8:45 for Italy, final figure for France at 8:50, final German number at 8:55 and the final euro-zone measure at 9:00. Markit showed that Spain enjoyed a solid growth rate in its services sector in November with a score of 55.1 points. Italy had a lower score of 53.3 points. According to the preliminary figures for December, France had a score of 52.6. Germany saw 53.8 points and the euro-zone had 53.1 points.
  7. CPI (preliminary): Wednesday, 10:00. In November, the consumer price index rose by 0.6% year over year. This has accelerated due to the diminishing effect of falling oil prices. The stable oil prices are likely to push headline inflation higher. However, core inflation stood at 0.8%, for five consecutive months.
  8. Retail PMI: Thursday, 9:10. This measure of the retail sector has shown a score of 48.6 points, under the 50 point mark separating growth and contraction. Markit will probably show a similar number now.
  9. PPI: Thursday, 10:00. Producer prices have risen by 0.8% in October.
  10. ECB Meeting Minutes: Thursday, 12:30. These are minutes from the momentous meeting in which the ECB announced an extension of the QE program through 2017. The Governing Council also decided to remove a few limits, including buying of bonds with a yield under the deposit rate. On the other hand, the ECB will reduce the volume of its bond-buying scheme to 60 billion euros per month from April. The meeting minutes could reveal the need for more stimulus, hence the extension, or fewer worries about low inflation, hence the reduction of the scheme. The emphasis could have a significant impact on the common currency.
  11. German Factory Orders: Friday, 7:00. Germany, the continent’s locomotive, saw orders jump by 4.9% back in October. This volatile measure could slide in the read for November.
  12. German Retail Sales: Friday, 7:00. The volume of retail sales advanced by 2.4% in October. A more moderate could be seen now.
  13. French Trade Balance: Friday, 7:45. France suffers from chronic trade deficits. In October, this deficit widened to 5.2 billion euros, the highest since 2014.
  14. Retail Sales: Friday, 10:00. Despite being released after the German and French publications, the number is watched. A rise of 1.1% in October will probably be followed with a moderate rise.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar dipped towards the 1.0340 level (mentioned last week[4]) before bouncing back and trading under the 1.0460 level.

Technical lines from top to bottom:

1.0710 is the upper resistance line on the chart after temporarily capping the pair in April 2015. 1.0690 is the post-Trump high. 1.0570 is the bottom of the range seen afterward.

Further below, the early 2016 low of 1.0520 and the 2015 low of 1.0460 are seen. 1.0460 seems to carry more weight.

Even lower, there are two significant barriers on the way to parity. The 1.0340 level was the low of 2003 before the pair advanced to higher ground. The 101.50 level was a peak seen in 2002, on the first attempt of the pair to break above parity.

And then, there is EUR/USD parity.

I turn from neutral to bearish on EUR/USD

The holidays are over and 2017 is here. The monetary and fiscal divergence seen in 2016 is likely to spill over into early 2017. The ECB continues printing money while the FED is set to hike also in the new year. Also on the fiscal side, high expectations for fiscal stimulus from Trump amid a sluggish growth rate in Europe also make a difference.

Our latest podcast is titled What will move markets in 2017[5]

Follow us on Sticher or iTunes[6][7]

Safe trading!

Get the 5 most predictable currency pairs[8]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/ya08yi3DezA/

from Online Forex Trading Resource
View thesource article here

Most Popular Forex Stories of 2016

Here is a list of the most read articles on Forex Crunch during 2016. I have excluded generic pages such as the news page[1], economic calendar page[2] or the weekly EUR/USD page[3], as well as weekly articles.

We will begin with the top stories written in 2016 and continue with stories that were popular in 2016 but were written beforehand: evergreen articles.

Top articles published in 2016

  1. How to trade the US elections with currencies[4]
  2. Get Used to President Donald Trump[5]
  3. Canadian dollar crashes on prospects of President Trump, oil plunge – levels to watch[6]
  4. US elections and forex – all the updates in one place[7]
  5. GBP/USD to 1.15, USD “smile pattern” – More Brexit reactions[8]
  6. Brexit – All the updates in one place[9]
  7. Trump wins. It’s official[10]
  8. Brexit-ready: updates on 41 forex brokers[11]
  9. Draghi Delivers all around – EUR/USD goes wild[12]l
  10. UK leaves the EU – it is official – expect more crashes[13]

Top 2016 articles written before 2016

  1. Binary Options vs Forex[14]
  2. Coding your first expert advisor – Writing the code[15]
  3. 20 Forex Sites to Thank and Recommend[16]
  4. 64 Top Forex Twitter Accounts[17]
  5. Top 10 Forex Blogs[18]
  6. 5 Reasons Why Social Forex Trade Copying is Not For You[19]
  7. 5 Reasons to Use VPS in Forex Trading[20]
  8. The Inside Bar Breakout Trading Strategy[21]
  9. A simple but effective strategy for trading the news.[22]
  10. Shortcuts to making trading easier for you[23]

Get the 5 most predictable currency pairs[24]

References

  1. ^ news page (www.forexcrunch.com)
  2. ^ economic calendar page (www.forexcrunch.com)
  3. ^ EUR/USD page (www.forexcrunch.com)
  4. ^ How to trade the US elections with currencies (www.forexcrunch.com)
  5. ^ Get Used to President Donald Trump (www.forexcrunch.com)
  6. ^ Canadian dollar crashes on prospects of President Trump, oil plunge – levels to watch (www.forexcrunch.com)
  7. ^ US elections and forex – all the updates in one place (www.forexcrunch.com)
  8. ^ GBP/USD to 1.15, USD “smile pattern” – More Brexit reactions (www.forexcrunch.com)
  9. ^ Brexit – All the updates in one place (www.forexcrunch.com)
  10. ^ Trump wins. It’s official (www.forexcrunch.com)
  11. ^ Brexit-ready: updates on 41 forex brokers (www.forexcrunch.com)
  12. ^ Draghi Delivers all around – EUR/USD goes wild (www.forexcrunch.com)
  13. ^ UK leaves the EU – it is official – expect more crashes (www.forexcrunch.com)
  14. ^ Binary Options vs Forex (www.forexcrunch.com)
  15. ^ Coding your first expert advisor – Writing the code (www.forexcrunch.com)
  16. ^ 20 Forex Sites to Thank and Recommend (www.forexcrunch.com)
  17. ^ 64 Top Forex Twitter Accounts (www.forexcrunch.com)
  18. ^ Top 10 Forex Blogs (www.forexcrunch.com)
  19. ^ 5 Reasons Why Social Forex Trade Copying is Not For You (www.forexcrunch.com)
  20. ^ 5 Reasons to Use VPS in Forex Trading (www.forexcrunch.com)
  21. ^ The Inside Bar Breakout Trading Strategy (www.forexcrunch.com)
  22. ^ A simple but effective strategy for trading the news. (www.forexcrunch.com)
  23. ^ Shortcuts to making trading easier for you (www.forexcrunch.com)
  24. ^ Get the 5 most predictable currency pairs (www.forexcrunch.com)

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/xU59YrsjW_g/

from Online Forex Trading Resource
View thesource article here

EURUSD , GBPUSD and XAUUSD TA – December 30 2016

EURUSD Intra-day Analysis

 

EURUSD (1.0540): EURUSD spiked higher in today’s early Asian trading rising to 1.0653, marking an 11-day high. With the initial target of 1.0533 breached, followed by the round number at 1.0600, EURUSD could remain range bound in the near term although the bias remains to the upside. Any declines could be limited to the inverse head and shoulders pattern’s neckline resistance which could turn to support. In this case, EURUSD could see further gains that could push the single currency towards 1.0700. To the downside, failure to stall near 1.0472 – 1.0463 could potentially signal further weakness towards 1.0400.

GBPUSD Intra-day Analysis

GBPUSD (1.2273): GBPUSD has formed an inside bar in yesterday’s trading session and could signal a near term continuation or a change in the trend. To the downside, price action is likely to be limited towards 1.2250 – 1.2224 support level which has been marked by strong consolidation over the past few days. A bounce off this support could signal near term gains towards 1.2400 while the longer term target remains towards 1.2571. In the event of price falling below 1.2224, the bullish bias could be invalidated for the near term.

XAUUSD Intra-day Analysis

XAUUSD (1160.66): Gold prices have advanced, rising above the 1150 handle and could signal further continuation towards 1200.00. In the near term, watch for a potential dip back to 1150 handle where support could be established. On the 4-hour chart the Stochastics point to a hidden bearish divergence in prices which could potentially keep gold prices subdued in the near term. However, the declines look to be completed for now as long as 1150 forms the new base in the short term. As an alternative, if gold prices fall below 1150, further declines could be seen coming potentially paving way for a test to 1100.

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/elqZ4k_vmcg/

from Online Forex Trading Resource
View thesource article here

EUR/USD flash surge: Lessons for forex traders

The holiday season is characterized by thin liquidity and thin trading volume as many traders are taking some time off. During most of the time, the outcome is boring markets that move in tight ranges.

However, thin liquidity means that any surprising order can trigger big moves. When months, quarters and years draw to an end, we occasionally see last-minute portfolio adjustments. Is that what happened to EUR/USD?

Here are some lessons we can draw for trading, relevant not only in the holiday season:

Flash surge

In the last Asian session of the year, it may have been some algorithms going rogue. Nearly three months after the pound flash crash[1], we got a euro flash surge.

EUR/USD was moving higher, pushing above the 1.0460 resistance line in the US session of December 29th. But what happened next was not really calm. EUR/USD surged all the way to 1.0653, a leap of around 150 pips, only to settle lower afterward. The pair fell back to 1.0483. At the time of writing, euro/dollar is once again on higher ground, around 1.055, still some 100 pips of the flash highs.

Beware of tight range trading

The lesson for forex traders is that no period is really quiet. While many retail traders are waiting for breakouts, some try to take advantage of the tight and usually expected range trade, scalping a few pips within the range.

Normally, if your broker provides low spreads, a range of merely 20 pips can provide opportunities to grab 10 pips in the middle of the range. All these moves can be wiped out unless the trade is carefully planned with stop-loss orders.

Taking profit may not be feasible

For those placing orders for a breakout, this could also prove perilous. If you went long EUR/USD upon a break  of 1.05, a round number, you could have enjoyed a and quick profit. However, this assumes you had your take-profit point below the high of 1.0653 seen at the peak.

But, this would have also required your broker to acknowledge that trades were really made at those high levels: if the flash move was flashy indeed, executing the TP could not have been realized.

A winning trade can be stopped out

And if you had your take-profit above that peak, the winning trade would have turned into a losing one quite quickly. Had you entered at 1.0530 with a stop-loss at 1.0495, the trade would have turned from a gain of 120 pips to a trade that was stopped out.

All in all, traders should beware the “twilight zone”: the time between the close in New York to the Asian open. And during the holiday season, perhaps enjoying the holidays and refraining from trading altogether is the best advice.

Here is how the euro flash surge of December 30 2016 looked on the 15-minute chart:

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/GDBjCDztuno/

from Online Forex Trading Resource
View thesource article here

2017: when politics overshadows central banks [Video]

2016 was a year of transition, when banks stopped being the only game in town and politics had a stronger impact. In 2017, geopolitics and fiscal stimulus could lead, with central banks lagging. In our 2017 preview, we cover the main countries and regions: the US with Trump’s uncertainty, Europe’s election year, the UK, when Brexit becomes more real and more. The Canadian dollar could be on the back foot while the antipodeans could enjoy relative stability. Despite all these predictions, expect the unexpected in 2017: a lot of unknown unknowns could surface.

Video preview of 2017:

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/v6yzTyxnqpc/

from Online Forex Trading Resource
View thesource article here

USD/CAD – Trading the US Crude Oil Inventories

US Crude Oil Inventories measures the change in the number of barrels held in inventory. The report is published each week. A reading which is higher than the market forecast is bullish for USD/CAD.

Here are all the details, and 5 possible outcomes for USD/CAD.[1]

Published on Thursday at 16:00 GMT.

Indicator Background

As Canada is a major oil producer, the Canadian dollar often mimics the movement of oil prices and is sensitive to US Crude Inventories. Traders should pay close attention to this indicator, as an unexpected reading can have a strong impact on the movement of USD/CAD.

Crude Inventories surprised with a surplus of 2.3 million, compared to the estimate of a decline of 2.4 million. Previously, the indicator had posted four straight declines. Will we see another surplus in the upcoming release?

Sentiments and levels

The Canadian dollar has sagged badly since mid-December and the currency remains under pressure. Sentiment towards the USD/CAD remains solid, buoyed by a strong US economy. So, the overall sentiment is bearish on USD/CAD towards this release.

Technical levels, from top to bottom: 1.3911, 1.3813, 1.3648, 1.3551, 1.3452 and 1.3351

5 Scenarios

  1. Within expectations: 1.7M to 2.3M. In such a scenario, USD/CAD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 2.5M to 2.9M: An unexpected higher reading can send the pair below above one resistance line.
  3. Well above expectations: Above 2.9M: A much higher surplus than expected would likely push USD/CAD higher, and a second resistance line might be broken as a result.
  4. Below expectations: 1.2M to 1.6M: A weaker reading than expected could cause the pair to break below one support level.
  5. Well below expectations: Below 1.2M. In this scenario, USD/CAD could break below a second support level.

For more on the loonie, see the USD/CAD forecast[2].

Get the 5 most predictable currency pairs[3]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/9-vj00LK7zA/

from Online Forex Trading Resource
View thesource article here

Technical levels for majors and crosses – last week of 2016 [Video]

Trading is relatively slow in the last week of 2016, the holiday week between Christmas and New Year’s Eve. Nevertheless, the USD is on the move once again.

Here are videos for technical levels to watch on majors, minors and crosses:

Lines of support and resistance for the major pairs: EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, NZD/USD and USD/CHF.

Lines of resistance and support for the following crosses: EUR/CHF, EUR/GBP, EUR/JPY, GBP/JPY and we also top it off with WTI Oil.

Safe trading!

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/Az3QTR1w2BM/

from Online Forex Trading Resource
View thesource article here

Looking toward 2017 – Live Market Open from 8:00 GMT

During this holiday week, we focus on the next year. What can we expect from markets in 2017?

Join me for a live market open, hosted by FXStreet: walking through recent developments and their impact on currencies, going through charts of majors, minors, and crosses, previewing the upcoming events and of course answering your questions.

You can watch the live broadcast here, from 8:00 GMT. The chat box is below and we certainly welcome questions.

(If you can not see or type in the chat box please go here[1])

Get the 5 most predictable currency pairs[2]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/J15EpWe9Z2c/

from Online Forex Trading Resource
View thesource article here

US CB Consumer Confidence leaps to 113.7

Americans are very confident in December: the CB measure shows a surge to 113.7 points. In addition, November’s number was upgraded from 107.1 to 109.4 points.

The Conference Board’s Consumer Confidence measure was expected to rise to 108.9 points in December after 107.1 in November. Separately, the Richmond Manufacturing Index was expected to rise from 4 to 5 points.

Trading was moving in a slow manner in the holiday week between Christmas and New Year’s Eve. Te lack of liquidity and trading volume has not resulted in any wild jumps. There is no significant news to move markets.

Earlier, the S&P Case-Shiller Composite 20 House Price Index showed an annual rise of 5.1%, marginally above 5% expected.

EUR/USD was trading under the 1.0460 level and traded in a range of around 25 pips.

Get the 5 most predictable currency pairs[1]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/tsqczqVBeRY/

from Online Forex Trading Resource
View thesource article here