The Week in Review

The mood in the city is currently mixed. Last week it seemed that stocks were in short supply and the buyers were plentiful. The S&P hit new highs and we saw good gains in the DAX and FTSE. There has however been conflicting data this week out of the US with house prices falling but new home sales up.  This has left ripples through the indices and the currency markets alike and now with the added tension of events in the Ukraine, the fundamental outlook suddenly does not look that great.

What does this look like on the technical charts?

FTSE simon 27FEBIf we take the FTSE we can see that after breaking the highs made in January (6885.30) that the market rejected further upward pressure and has dropped for 3 consecutive days.  The RSI is dipping nicely from the overbought territory at 52.77 indicating that we have further to fall. We have some key down side levels for the FTSE to test before buyers return into the market that is a daily BOB level (break or bounce) at 6667.80 (a key pivot also) and the 50% retracement of the current up move at 6637.24 (red line). My thinking is that if you are currently short the indices and the FTSE in particular, stay short.

We have Merkel in London today and the issue of the UK rejecting the Euro or leaving the EU will rear its ugly head once more I feel. This could lead to further down moves in the stocks. WE have key jobs data out the US next Friday with the NFP, this could be very instrumental on the direction of the markets over the next few weeks. Key downside target in the FTSE 6637.24/6550.50 over the next 7 days.

Steve Ruffley CEO Tradermaker.com

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Volatility picks up in the Euro and the Dollar as the day ahead promises further developments

The Euro was the main focus of yesterday’s session with the Single currency picking up momentum as it broke below the 1.3700 support. The European currency traded down to 1.3660 before pulling back up towards the 1.3700 barrier.

Political and economic reasons were behind this drop as tensions in Ukraine resumed with people protesting again as well as a radical decline in emerging markets’ currencies. Moreover, the surprise rise in US Home Sales benefited the US Dollar that gained against the European currency.

However, today’s unemployment and inflation figures expected from Germany have the potential to reverse this drop. Expectations are that the unemployment level will remain stable along with inflation printing in line with recent levels and this could provide significant lift to the Euro in order to climb back above 1.3700. On the other hand, any signs of weakness coming from Europe’s largest economy will spur a sell-off in the European currency driving it towards 1.3600.

Unlike the Euro, the Pound remained stable against the Dollar holding its 1.66-1.67 range. The GDP for the fourth quarter printed as expected but there were several components in the release that worried investors, with private consumption being one of them. That along with mixed policymakers’ comments on when to expect a rate hike from the Bank of England didn’t allow the Pound to move higher. However, as long as the British currency holds above 1.6600 its outlook remains bullish.

Regarding the US Dollar, the currency enjoyed significant demand yesterday against its peers and investors are buying Dollars ahead of today’s testimony from Janet Yellen on monetary policy. We’re very interested to hear what she’d have to say regarding the recent disappointing US data releases and whether this makes the possibility to temporarily postpone further tapering a working scenario. We believe that Yellen won’t reveal any thoughts she might have on the subject and will prefer to discuss this among the monetary policy committee when they meet again but her remarks could hint us on how confident she is on the tapering agenda.

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Important data expected from Germany along with Yellen’s testimony

The Economic Calendar today packs a number of significant events that have the potential to bring volatility back into the markets. Early in the morning, the German Unemployment data are expected and also the CPI inflation report is scheduled for release. These releases have the potential to lift the Euro back above 1.3700 but any surprises to the downside will further pressure the European currency.

Later in the day, the US Durable Goods orders are expected along with the Initial Jobless Claims figures. We believe that reaction to these data will be limited as investors will focus on Yellen’s remarks on her Senate testimony a couple of hours later.

Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

08.55

EUR

German Unemployment Rate

High

6.8%

6.8%

10.00

EUR

Euro-zone Consumer Confidence

Medium

-12.7

-12.7

13.00

EUR

German Consumer Price Index

High

1.3%

1.3%

13.30

USD

Durable Goods Orders

High

-1.7%

-4.2%

13.30

USD

Initial Jobless Claims

Medium

335K

336K

15.00

USD

Fed’s Yellen testifies to the Senate

High

 

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Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.

InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

 

 

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Majors consolidated ahead of important events, is a breakout imminent?

Any noteworthy volatility was absent during the first trading day of the week and the major currency pairs we discuss every day consolidated around the same levels they closed last week. With only Euro-related releases yesterday and with figures coming in as expected there was little to change the current outlook.

The Euro remained well bid above 1.3700 as the IFO confidence survey was released in line with expectations and the inflation data printed as expected. Inflation in the Euro area remains low and in our view this should trouble investors, however it seems that they are more concerned with the discouraging signs of weakness coming from the US. As long as the Euro holds above the 1.3700 mark there’s increased potential for the currency to take a shot at 1.3800 and a lower US Consumer Confidence release today might do the trick.

The Pound arrested its recent downtrend yesterday and traded higher versus the US Dollar. There were no currency related news for the British coin and nothing new from the US to lift the Pound yesterday, however an equities-related development is offering significant support to the currency pair. The telecommunications giant Vodafone sold a major holding stake in the US-based Verizon Wireless company last Friday and the flows of Pounds coming into the domestic economy is helping the pair remain well above the 1.6600 barrier.

The US Dollar remained largely unchanged across the other currency pairs and with no significant releases yesterday the Greenback traded sideways. However, the US currency will come under risk further down this week as a number of releases are scheduled and the effect of the brutal weather conditions is expected to put pressure to the Consumer Confidence report today and the Q4 GDP release on Friday.

The FTSE 100 scored a new yearly high yesterday reaching as high as 6,880 points, however we could see a potential retracement from these levels as the momentum of the rise is gradually fading away.

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German GDP and US Consumer Confidence numbers expected

The Economic Calendar today only holds a couple of economic releases and no surprises are expected. Early in the morning the German Gross Domestic Product is scheduled for release and numbers are anticipated to show that Germany continues to grow at a steady pace, being the steam engine of the Euro area.

Later in the day, the US House Price Index will be released but our attention will mostly be focused on the Consumer Confidence report right after it. It is important to see how the severe weather conditions have affected the consumer index as another disappointing printing will take its toll on the weakened US Dollar.

Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

7.00

EUR

German GDP

Medium

1.4%

1.4%

14.00

USD

House Price Index

Medium

0.3%

0.1%

15.00

USD

Consumer Confidence

High

80

80.7

 

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Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.

InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

 

 

 

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London Investor Show FOREX draws a big crowd at Olympia

Last Friday saw a huge crowd of UK forex traders attend the London Investor Shopw FOREX at Olympia.  Sponsored by OANDA, the show had several conference theatres, with workshops and seminars ranging from Forex 101, Robotic Trading, the Fundamentals of Forex and more.  Eager traders were also treated to special live trading challenge between well known traders Tom Hougaard (Which Way Today) and Charlie Burton (EzeeTrader).  Charlie finished the challenge just ahead, prompting calls for a re-match at a future show! London Investor Show returns to Olympia on 24th October 2014.  Visit www.londoninvestorshow.com for details.

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Euro and Pound retreat versus the Dollar, will today’s reports offer something else?

It was a calm trading day yesterday with no major moves in the currency pairs we monitor in our report. Even though we had events that could spur bigger swings, especially the central banks’ minutes, the releases revealed nothing new and as such market participants didn’t react in any way.

The Euro dropped against the Dollar but the Single currency recovered almost all of its losses during the overnight Asian session and is now again trading around the 1.3750 level. Today’s PMI releases have the potential to bring some momentum back into the pair and expectations are mixed. Depending on how the figures print we could see the Euro climbing towards 1.3800 or dropping to 1.3700 again.

The Pound continued falling against the Dollar even though the minutes’ release from the Bank of England offered positive comments for the economic outlook in the UK. The Unemployment Rate ticked marginally higher in a surprise reading and this development didn’t allow for the British currency to reach for higher ground. The Retail Sales figures expected tomorrow will offer the last piece of data for the Pound for this week while the British coin has been retreating since last Friday.

The US Dollar strengthened against the Euro and the Pound yesterday even though the Housing data released were a disappointment. The central bank’s minutes’ release was full of positive comments for the economy and it seems that the policymakers are committed in continuing their tapering agenda even though recent data have been discouraging. The inflation level and the Initial Jobless Claims numbers expected today can help the Dollar gain even more ground against the other majors in a week that has been pretty calm for all currencies up to now.

European Flash PMIs and inflation/unemployment data from the US

The Economic Calendar today holds a couple of important economic releases. Early in the morning the Flash PMIs will offer insight in how the Manufacturing and Services sectors are fairing in Germany and the Euro-zone. The report is a measure of confidence and gauges the business sentiment in these critical sectors and offers important data to consider.

Later in the day, the US Consumer Price Index will be released and we’d like to closely monitor the inflation levels in the US as it is a key measure for the Fed to decide whether its tapering schedule is helping or hurting the economy. Finally, the Initial Jobless Claims is an important precursor to the unemployment rate for this month and we also need to note down the released figures.

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Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

8.30

EUR

German PMI Manufacturing

Medium

56.3

56.5

8.30

EUR

German PMI Services

Medium

53.4

53.1

9.00

EUR

Euro-zone PMI Manufacturing

Medium

54

54

9.00

EUR

Euro-zone PMI Services

Medium

51.9

51.6

13.30

USD

Consumer Price Index

High

1.6%

1.5%

13.30

USD

Initial Jobless Claims

Medium

334K

339K

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Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.

InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

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What will the central banks’ minutes reveal about the global economies?

Mixed performances from the major currencies yesterday in a day with a number of important events. Market participants were back in force after the slow start of the week on Monday and we saw volatility picking up after the various releases.The Euro was higher reaching 1.3770 even though the ZEW Survey came in less optimistic than expected. The European currency managed to hold on to previous gains when the survey was released and it was later lifted by the weak demand for Dollars when the Housing Index released in the afternoon showed another contraction in the sector.

The Pound on the other hand was hit by the miss in inflation figures that printed slightly lower than previously eyed and on the back of the profit taking action on Friday and Monday the British currency fell towards 1.6650. However, the Pound will have the chance to gain back the lost ground today as the Unemployment Rate is scheduled for release along with the minutes from the previous Bank of England meeting.

The Unemployment Rate is expected to remain stable at 7.1% and with Average Weekly Earnings projected to improve for another month we feel that the Pound could once again reach for 1.6800 or even above that. The minutes from the last BoE meeting will offer important hints on how optimistic British policymakers are over the domestic economy and their comment have the potential to re-ignite the recent uptrend.

The Dollar was in the backseat as there were no important releases from the US this week and the NAHB Housing Index released yesterday showed a contraction in the housing market. We will have the chance to learn more about the housing sector today with the Housing Permits and Building Starts numbers scheduled for release but the main focus is on the release of the minutes from the last Fed meeting.

The Dollar has been under pressure during the first month and a half of 2014 since the Fed decided to continue on schedule with their tapering agenda and there are voices that suggest that maybe the economy is not that strong to handle consecutive and uninterrupted $10bn cuts in the added stimulus. Rumors in the trading rooms make word for the possibility that the Fed could put the tapering schedule on hold for a month and today’s release of the Fed minutes will show us how confident the committee members are on their agenda.

Finally, the FTSE 100 was on the rise for a second day and the UK index reached the 6,800 points level. The next resistance is at the yearly high of 6,870 and if today’s Unemployment data print stable then we could be in for a new high in the coming sessions.

British unemployment and central banks’ minutes

The Economic Calendar today offers a number of important events. As we mentioned above, the UK Unemployment Rate and data are on focus this morning and with the Pound having retreated from its recent highs there’s room for new swings higher if the data print positive. Expectations are that the Unemployment Rate will remain stable at 7.1% but we could see an even better result bringing the rate down to 7%.

The other main theme of the day are the releases of the meeting minutes from both the Bank of England and the Fed. Investors will look into these minutes with increased interest and the key word will be ‘optimism’. Optimistic comments from the Bank of England will continue to propel the Pound higher while the confidence of Fed’s policymakers in their tapering agenda could provide the declining Dollar with some much needed support.

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Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

9.30

GBP

ILO Unemployment Rate

Medium

7.1%

7.1%

9.30

GBP

Bank of England minutes

Medium

13.30

USD

Housing Starts

Medium

-4.9%

-9.8%

19.00

USD

Fed releases FOMC meeting’s minutes

Medium

 

Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.

InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

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Euro area GDP data could send Euro above 1.37 as Dollar struggles with poor retail figures

The US Dollar was under pressure across the board yesterday as we suggested in our previous report as investors were expecting a soft US Retail Sales report. Indeed, Retail Sales in the US didn’t just stagnate as analysts were expecting but the figures actually fell pushing Dollar downwards.

The 0.4% decline in January is an important setback for the consumer market in the US and taking into consideration the downwards revision of December’s figures as well we can confirm the slowdown in recovery in the US during the end of last year as both the consumer and the jobs sector have disappointed the previous months. Now, many analysts are blaming the bad weather for this decline on the Retail Sales figures but again with job growth stagnating the explanation is much simpler and more fundamental, less people have jobs so less people go out and spend money on goods.

The Euro benefited from Dollar’s weakness and rose to 1.3700 and is now hovering around the 1.3680 area. This is the third attempt for the Euro to break above the 1.3700 barrier for this year and it seems that it might have more luck this time around than in the previous two attempts. With the European and German GDP numbers expected to print strong today Euro might actually make it above 1.3700 and we will need to wait until next week to see if it can hold these levels.

The Pound continued strong yesterday and printed new yearly highs on the back of the weak Dollar performance. There were no UK-related news yesterday but with the Bank of England raising its growth forecast on Wednesday and the Dollar on the decline the British currency found the chance to climb further. Now if the Pound can hold on to these levels the next resistance comes at 1.6750.

The FTSE 100 had a bad day yesterday and gave up some of its recent gains after having reached the 6,700 points level but in late hours trading pulled back to close around the opening price. In our view however the recent uptrend has been concluded and further losses below 6,600 could be expected.

European GDP figures and US Production data

In our Economic Calendar for the day ahead, we have some important economic news scheduled for release today. Early in the day the German and the Euro-zone’s Gross Domestic Product figures are expected to rise and this could offer the Euro the opportunity to break above the 1.3700 barrier.

Later in the day, the latest Industrial and Manufacturing Production data are expected to show a mild slowdown in the month of January and this combined with yesterday’s soft Retail Sales data can put the pressure back on the Dollar and lift the high-beta currencies like the Euro and the Pound.

Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

7.00

EUR

German GDP

High

1.3%

0.6%

10.00

EUR

Euro-zone GDP

High

0.4%

-0.4%

14.15

USD

Industrial Production

Medium

0.2%

0.3%

14.15

USD

Manufacturing Production

Medium

0.1%

0.4%

14.55

USD

U.of Michigan Confidence

High

80.2

81.2

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US Retail Sales to disappoint Dollar traders today while Pound headed higher after the Inflation Report

From Alpesh Patel´s Morning Brief:

As expected the Pound was the key theme of yesterday’s session as the Bank of England released its Inflation Report. The report contained significant changes in what we knew so far and as such the volatility in the British currency was substantial.

In their Inflation Report the Bank of England decided to drop their unemployment threshold to raising interest rates altogether and this signals a change in their policy. Unemployment was falling faster than anticipated and was near BoE’s target but the economy is still too fragile to handle increased interest rates.

At the same time however, the Bank of England updated their growth forecasts, making word for more than 3% growth this year which is a significant upgrade. The Pound received  the news with increased volatility as it made its way towards 1.6620. Now at that levels important resistances can be found so we could see a retracement today that will allow us to join the trend upwards.

The Euro on the other hand was quite weak over yesterday’s session, the European currency gave up some of its recent gains trading down to 1.3560 as Industrial Production for the Euro area disappointed. The figures came in even lower than expected and that along with the demand for Pounds on the EUR/GBP cross led the currency lower. The Euro pulled back higher over the late American and Asian session and is now trading around the same levels as yesterday but the former uptrend has been concluded and we expect further losses for the currency at this time.

The Dollar was not that consistent in its performance yesterday as it gained ground against the Euro but it was lower against the Pound. There were no Dollar-related news yesterday hence Dollar’s inconsistency but today we have 2 important events: Yellen’s speech to the Senate and the Retails Sales release. We don’t expect anything new from Yellen’s speech as we believe she will repeat the same views that she shared with the House’s committee on Tuesday.

However, the Retail Sales report could be significant as expectations are set low for the figures. Analysts expect Retail Sales to remain unchanged for the past month which is not encouraging for the Dollar but with job growth still week we see room for a surprise even lower.

Advance Retail Sales and Initial Jobless Claims

As the title above suggests, the main events for today will be the two releases from the US, along with Janet Yellen’s speech to the Senate. We don’t expect anything new coming out from Yellen’s speech as she will most likely repeat what she said on Tuesday to the House committee but the Retail Sales and Jobless Claims reports will provide us with new data.

Especially the first one could put Dollar under pressure as figures are expected to remain unchanged for the past month and we believe that there’s potential for even a decline which will send the US currency lower. The Initial Jobless Claims are expected to remain at the same levels but we already know that the job market in the US is currently stagnating so now surprises here.

Economic Calendar 

Time

Currency

Event

Importance

Forecast

Previous

7.00

EUR

German Consumer Price Index

Medium

1.3%

1.3%

13.30

USD

Advance Retail Sales

High

0.0%

0.2%

13.30

USD

Initial Jobless Claims

Medium

330K

331K

15.30

USD

Fed’s Yellen speaking to the Senate

Medium

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Steve Ruffley to speak at IX Investor

Steve Ruffley 3We are delighted to announce that Steve Ruffley will be making live appearances at IX Investor at the Barbican on 27th June 2014.  Having spent nearly a decade in the markets and not only traded but risk managed and coached some of the biggest traders in the city, there is no aspect of trading he can’t help with. Having worked with PricewaterhouseCoopers, Marex, Refco and Schnieders he has built up a wealth of experience and helped thousands of traders achieve better results.

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