FOREX PRO WEEKLY July 27-31, 2015

[Sive Morten]

Fundamentals
Reuters reports U.S. dollar edged up against most other major currencies Friday on data pointing to sluggish overseas economic growth, while the Australian dollar sagged to a six-year low after a Chinese manufacturing gauge fell to its weakest in 15 months.
Recent U.S. economic figures have supported the notion that the Federal Reserve sees the economy as strong enough for it to end its near-zero interest rate policy as early as September, an action that dollar bulls have betting on since last year.
"Worries about global growth have been rekindled. That has sparked a play into the dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The flash Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) dropped to 48.2, the lowest since April last year, while Markit's euro zone PMI gauge fell from a four-year high to 53.7 in early July.
In late U.S. trading, the dollar index was up 0.2 percent at 97.274, reducing its weekly decline to 0.6 percent.
The greenback retreated from its earlier highs as U.S. stock prices turned lower for a fourth session.
The euro dipped 0.05 percent to $1.0977, while the greenback dipped 0.1 percent to 123.71 yen.
Fed policymakers may provide clues on a rate "lift-off" in a statement after they meet next week.
The U.S. central bank on Friday released its staff's projection which showed they expected a quarter-point increase in U.S. rates by year-end.
"Next week's meeting could be a signal meeting," said Mazen Issa, senior currency strategist at TD Securities in New York.
Some analysts said there were adequate risks to cause the Fed to not raise rates this year, including turmoil in the Chinese stock market, and a renewed drop in oil and other commodity prices.
Friday's news of a surprise 6.8 percent drop in new-home sales in June was a reminder that the U.S. economy, while faring better than many others, was far from robust.
Among other major currencies, the Aussie dollar, often used as a liquid proxy for China trades, fell more than 1 percent to $0.7280, a six-year low.
Other currencies linked to global commodities prices also were under pressure because of the weak Chinese PMI data. The New Zealand dollar was down 0.6 percent at $0.6568.
Worries about Chinese demand sent Brent crude prices in London to near a four-month low at $54.30 a barrel and copper prices to six-year low of $5,191.50 a tonne.

Since we also have CAD long-term trade in progress, here, guys, some analysts' opinions on perspectives. As you can see from text below 1.34-1.35 is nothing curious and achievable level, even by the end of summer:
The Canadian dollar finished little changed against its U.S. counterpart on Friday, but not before crashing to the lowest levels since 2004, hit by a confluence of factors including weak commodities and a dim global economic outlook. The move came as the price of oil, a major Canadian export, remained near $48 a barrel. Weaker-than-expected economic data from China, the world's biggest metals consumer, sent currencies linked to global commodity prices, such as the Canadian and Australian dollars, to multi-year lows. Momentum buying of USD/CAD and loonie selling also drove earlier moves.
David Bradley, director of foreign exchange trading at Bank of Nova Scotia, noted that the Canadian dollar crashed through its 2009 low Friday morning. "That triggered some stops, some short covering," he said, noting the quick move to C$1.31 before settling down. "Now that we're through some of the technical levels in USD/CAD, it definitely opens up the topside significantly. We could probably trade up toward C$1.34, C$1.35 by the end of the summer, or by back to school time."
The Canadian dollar finished at C$1.3035 to the greenback, or 76.72 U.S. cents, little changed from the Bank of
Canada's official close of C$1.3039, or 76.69 U.S. cents, on Thursday. The loonie cracked through the March 2009 low of C$1.3066 early in the North American session, retreating as far as C$1.3103, or 76.32 U.S. cents, a level not seen since Sept. 1, 2004.
Many strategists are eyeing around C$1.33, or 75 U.S. cents, as the next key levels, with upwards of C$1.39 and beyond marked as potential long-term possibilities. The Canadian dollar was at just above C$1.40 in May 2004.
By the end of the session, the currency was stronger against many of its peers. The divergence between U.S. and Canadian monetary policies, with the Federal Reserve expected to hike interest rates and the Bank of Canada having already cut rates twice this year, is expected to keep the Canadian dollar weaker against a stronger greenback. A rout in commodity prices, particularly over global supply and demand concerns is expected to add to the pressure. Canadian government bond prices were mixed across the maturity curve, with the two-year price down 1 Canadian cent to yield 0.430 percent and the benchmark 10-year rising 11 Canadian cents to yield 1.489 percent. The Canada-U.S. two-year bond spread narrowed to -25.2 basis points, while the 10-year spread narrowed to 77.2 basis points.


Speculators raised bullish bets on the U.S. dollar to the highest in about six weeks, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position rose to $29.77 billion in the week ended July 21, up from $27.29 billion in the previous week.
CFTC data shows shy increase of open interest and corresponding growth of speculative short positions. As long as shorts have dropped significantly on Greece turmoil. Right now shorts take ~73% of total speculative positions. This is not critical level and EUR theoretically could move lower. At the same time changes in sentiment data was too small and this does let us to suggest that bear trend is accelerating and investors come to EUR selling again. So, CFTC data mostly stands flat on current week and does not favor any direction.

Open Interest:

Longs:

Shorts:

Technicals
Monthly
Trend is bearish on monthly chart, July action does not bring any additional information by far and does not clarify further direction. Based on character of recent activity on the market – recent 3-4 months are definitely a retracement, but it could develop differently. For example, market could return back to lows and then form DRPO Buy and trigger upside retracement or, say, it could move directly to 1.18 right now and form B&B “Sell”. Both scenarios are possible yet.
As we have estimated previously 1.05 is 1.27 extension of huge upside swing in 2005-2008 that also has created large & wide butterfly pattern. Recent action does not quite look like normal butterfly wing, but extension is valid and 1.05 is precisely 1.27 ratio. At the same time we have here another supportive targets, as most recent AB=CD, oversold and 1.27 of recent butterfly.
April has closed and confirmed nicely looking bullish engulfing pattern. We know that most probable target of this pattern is length of the bars counted upside. This will give us approximately 3/8 Fib resistance 1.1810 area. This retracement should be mostly tactical. We continue to expect downward continuation in long-term perspective.
Now about our recent talk on possible B&B or DRPO here. We’ve said that B&B seems more probable. We’ve got close above 3x3 DMA in June, but this barely has happened. July action stands flat and this is not sufficient to get B&B “Sell”. So chances on its appearing are melting as time is passing by. Still we will keep watching for DiNapoli directional patterns but probably they will appear not as fast as we have expected.
Despite whether upside retracement will happen or not our next long-term target stands the same – parity as 1.618 completion point of recent butterfly. Currently we should treat possible bounce up, even to 1.18 area, only as retracement within bear trend.

Weekly
Right now weekly chart is most important for us, since it has major patterns that could become driving factors medium-term perspective. Once we’ve said that if EUR will take 1.08 lows it will erase chance on upside butterfly, and this has happened. At the same time take a look at the picture – market has created nothing but “222” Buy pattern. Now recall puny W&R on daily chart two days ago. When I saw it I thought why it is so small. Now we understand – market just has completed downward AB=CD. As soon as it has done it – it has turned up.
Second issue is MPS1. Price has held above it. It means that bullish trend on weekly chart is still valid. And finally – last week we’ve got bullish grabber. Minimum target that market should reach based on this pattern is former highs around 1.1450 level. If we suggest possible upside AB=CD then our monthly scenario with B&B pattern @ 1.18 does not look as impossible as previously.
Don’t ask me how this should happen in current fundamental background – different rate policy Fed and EU, EU QE program, etc. I do not have answer on this question. But you can see everything by yourself – take a look at the chart.
Last week when we’ve said that CAD should reach 1.30 there also were a lot of doubts. But Bank of Canada surprisingly cut the rate and target has been achieved. May be we also will get some event that will make possible to reach the target.
Conversely, any setup could fail, and grabber is not an exception. Failure also will eliminate any concerns on “how EUR will reach 1.18” answer will be nohow. But as soon as setup is still valid we will work with it. It gives us important information that our invalidation point is last week lows. If market will break them – our setup will be destroyed.

Daily
Daily analysis mostly coincides with weekly one. But it contains some important details for us. For somebody they could appear to be boring, but sometimes such moments make trader’s day. First is I would like to attract our attention to the “A” point in red circle of AB=CD. Why we’ve chosen this point but not the top. Because it was Monday. Market has open with shy gap down and started drop immediately. So, real downward action has started on Monday, but not on Friday. As a result – we have clear explanation why market has shown so shy W&R of 1.08 lows last week – it just has hit AB-CD target. Now imagine what could happen if we would use absolute top as “A” point – AB-CD pattern still stands as uncompleted and this could make significant impact on our analysis. For example we could expect grabber’s failure with greater probability rather than upside continuation, since market should hit AB-CD target before any reasonable upside action.
So, we have strong support area at 1.0850 – weekly and daily Agreement and MPS1. Market has returned back and closed inside long-ranged candle. Also market has closed above WPP. So, may be attempt to take bet on upside continuation is not as bad idea as it seems. At least it has superb risk/reward ratio and clear background of weekly and daily patterns, clear signs of failure either. Anyway, currently we could take only long position, because trends are bullish, and we have patterns. Until they are valid it is dangerous to go short.

1-Hour
Now we’re coming to most responsible stage – trade planning. Since market is not at overbought we do not need too deep Fib support levels. We think that 1.0925-1.0940 area is what we’re looking for. This is hourly K-support and Agreement with 0.618 AB-CD target, WPP and lower border of consolidation on daily chart. One moment we have to keep an eye on is a pace of downward action. This should not be miserable drop – just gradual action.
Stop will be better to place below 1.0880 Fib support. Although there are few chances but EUR could complete AB=CD instead minor one and gravitate to its favorite 50% Fib support around 1.0915 level.
Traders who trade on weekly chart could place stop below grabber’s lows. Bullish setup will fail as soon as grabber and “222” pattern will fail.

Conclusion:

Despite strong bearish background and fundamentals market shows signs of possible upside retracement, initially to 1.1450, potentially to 1.18 area. Still, this retracement will be mostly tactical and not break long-term bearish trend and our expectation of parity.
In short-term perspective our major pattern is weekly grabber. If it will fail – then upside action probably will not happen and market will continue move down but currently we just can’t ignore this setup.


The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.

 

[Sive Morten]

EUR/USD Daily Update Tue 28, July 2015

Good morning,


Reuters reports dollar firmed on Tuesday as cautious investors covered short positions ahead of the start of a two-day U.S. Federal Reserve meeting and as a continued slump in Chinese equity markets sapped appetite for riskier assets.

The safe-haven yen was below the previous session's highs hit after Shanghai stocks tumbled 8.5 percent, their biggest drop in eight years, which helped pull down European and U.S. share markets.

"The Chinese market dropped by about 8 percent yesterday, but the dollar/yen dropped by just around 1 percent, which means many people in the FX market think the Fed is likely to hike as early as September so they don't want to sell a lot of dollars," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

"The market is risk-off, and yet the yen is not so strong," he said.

Some investors believe the Fed's rate-setting Open Market Committee is laying the groundwork for hiking rates this autumn, which has underpinned the dollar in recent weeks.

"We think FOMC will surprise on the hawkish side, provided a highly conditional lean to a 2015 lift-off is viewed as hawkish," Steven Englander, global head of G10 FX strategy at CitiFX in New York, wrote in a note to clients.

"Continued Chinese equity market weakness that spills over into U.S. asset markets in a major way would deter them," he said, although he added that current U.S. share levels were not low enough to trouble the U.S. central bank.

"The international dimension for the Fed is whether they think the relevant central banks can deal with the shocks their economies and assets markets are facing. Contagion would have to be much sharper to really register as a proximate risk sufficient to affect U.S. policy," Englander said.

After this week's Fed meeting, the next main event for the dollar will be second-quarter U.S. gross domestic product, the first estimate of which will be published on Thursday.

The economy is seen returning to growth, expanding by 2.7 percent, after a contraction in a weather-hit first three months.

U.S. data on Monday showed non-defense capital goods orders excluding aircraft rose in June, but shipments of core capital goods used to calculate equipment spending in the government's gross domestic product measurement slipped 0.1 percent.


So, guys, as EUR suddenly has confirmed our thoughts on possible upside bounce by real action, situation becomes interesting...
On daily chart our analysis mostly stands the same. We have big "222" Buy pattern and Agreement at major 1.0850 Fib support as a part of it. Right now EUR has hit daily 50% resistance and we will watch for retracement down that we will try to use for long entry.
Week is promised to be informative, as Fed meeting starts today, on Thu we will get GDP Q2 release. Reuters analysts poll suggests 2.7% growth:

On 4-hour chart we see 2 important moments. Market has completed 1.618 AB-CD, so resistance o daily is also an Agreement. Second, EUR has moved above WPR1 and even has not tested WPP. This is bullish sign and it mights indicate that current upside action is not just retracement within bear trend, but new bull trend.
Currently our primary object is 1.10 K-support area that seems attractive for long entry:

 

[Sive Morten]

EUR/USD Daily Update Wed 16, July 2015

Good morning,


Reuters reports dollar eased versus the yen on Wednesday but held above a recent two-week low as investors awaited hints from the U.S. Federal Reserve on the timing and pace of future interest rate increases.

Ahead of the Fed's policy statement due at 1800 GMT, trading could be swayed by month-end related flows, with Wednesday being the last trading day for settlement before the month end, traders said.

"We expect the Fed to refrain from a clear indication on the timing of the Fed's rate hike. We still expect a hike in September," said Tohru Sasaki, the head of forex research at JPMorgan Chase Bank in Tokyo.

Sasaki also said the dollar/yen is unlikely to move much if the Fed does steer clear of dropping clear hints on its rate hikes, noting that dollar/yen has not shown any big reaction to the Fed' policy statement this year.

Worries about the Fed's draining of cheap funding have been weighing on commodities and emerging market assets that had benefited in recent years from the Fed's money-printing.

Many commodity currencies remained under pressure from worries about slowdown in the Chinese economy as well, though they bounced back from multi-year lows thanks in part to hopes Chinese shares are stabilising after their massive fall on Monday.

The New Zealand dollar, worst-performing of the major currencies so far this year, edged higher after comments from the Reserve Bank of New Zealand were perceived to contain no new surprises.

RBNZ Governor Graeme Wheeler said the economy needed further rate cuts and a lower exchange rate. He added that local forecasts of further large rate cuts "could only be consistent with the economy moving into recession".

The kiwi rose to as high as $0.6739, its two-week high, following Wheeler's comments. It last traded at $0.6704 , up 0.2 percent from late U.S. trade on Tuesday.

"The RBNZ is still clearly jawboning the currency lower, and thus we might expect a relatively limited further bounce in the NZD," Greg Gibbs, head of Asia Pacific markets strategy for RBS in Singapore, said in a research note.

Still, a further near-term bounce in the New Zealand dollar could not be ruled out, Gibbs said. The New Zealand dollar hit a six-year low of $0.6498 earlier this month, having fallen 16.7 percent from the end of last year.


Currently we're watching on many currencies that stands very close to thrilling setups. They are NZD, AUD, CAD - already in progress. But since they are not ready yet for trading, we will take a look at EUR again.
On daily chart we see that market indeed has turned to retracement down right around favorite 50% fib level and after completion of upside harmonic swing. So, on next step market should clarify whether this is just another one harmonic retracement up, or something bigger. We will understand this depending on how market will response on strong support levels. Chances on upside continuation exist since we've found some bullish patterns and discussed them in weekly research:

Yesterday market has not quite reached our predefined level. So, today we again will be watching whether this will happen or not. Just to remind you - we expect to see EUR around 1.10 K-support area where it will be attractive level to think about long entry.
Today we have more details. Take a look- we could get AB=CD retracement and again - it points on slightly lower area around major 50% Fib support. So, 1.0970-1.10 is potential range for long entry:

Since be aware of any strong moves - if EUR will show miserable plunge on Fed comments- don't be short. We need only gradual downward retracement.

 

[Sive Morten]

EUR/USD Daily Update Thu 30, July 2015

Good morning,


Reuters reports today - dollar firmed to a near one-week high on Thursday ahead of U.S. gross domestic product data that could reinforce expectations that the Federal Reserve is on track to raise interest rates as early as September.

"We're seeing some pretty good follow-through, in terms of U.S. dollar-buying, after the Fed statement (on Wednesday) which suggests that September still appears to be an option," said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong.

"So the outperformance is pretty consistent with what we're seeing in U.S. Treasuries, which have held their losses after that statement,"

"It's not a done deal, but we are still of the view that a September lift-off is in the cards, contingent on the view that the data out of the U.S. continues to be firm," she said.

The U.S. central bank said after its regular policy meeting on Wednesday that the economy and job market continue to strengthen, leaving the door open for a possible interest rate increase at its next meeting.

The yield on benchmark 10-year U.S. Treasuries rose to 2.314 percent in Asian trading, compared to its U.S. close of 2.277 percent on Wednesday, when it ended off session highs touched in the wake of the central bank's announcement.

The Fed's statement underscored that the economy had overcome a first-quarter slowdown and was now "expanding modestly."

The first estimate of second-quarter U.S. GDP will be published later on Thursday. The economy is seen returning to growth after a contraction in the weather-battered first quarter.

Another weak GDP reading might "undermine the optimistic outlook held by the Fed and fuel near-term headwinds for the greenback as it raises the risk for a further delay in the normalization cycle," David Song, currency analyst at DailyFX, said in a note to clients.

In contrast, Japanese data on Thursday showed the country's factory output rose only modestly in June after a big drop in the previous month, heightening fears of a second-quarter economic slump.

Most economists forecast U.S. economic growth will pick up and that the Fed will begin tightening monetary policy in September, according to a Reuters poll published last week.

Investors also expect to get GDP numbers around 2.7%.

Scrutiny view on FED statement:

The U.S. economy and job market continue to strengthen, the Federal Reserve said on Wednesday, leaving the door open for a possible interest rate hike when central bank policymakers next meet in September.

Following their latest two-day policy meeting, Fed officials said they felt the economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas.

They nodded in particular to the "solid job gains" seen in recent months.

"On balance, a range of labor market indicators suggest that underutilization of labor resources has diminished since early this year," the Fed said in a policy statement that kept rates unchanged.

That language and other small changes in the statement mark an upgrade in the central bank's view of labor conditions since its last policy meeting in June, when it said labor slack had

"diminished somewhat."

The Fed also said it now only needs to see "some" more improvement in the labor market, a qualification that analysts said strongly suggested it believes the recent solid U.S. job gains will continue.

"They slightly lowered the hurdle for a rate hike by adding the word 'some' to their conditions required for further improvement in the labor market," said Shyam Rajan, head of U.S. interest rate strategy at Bank of America Merrill Lynch.

Although the Fed may have ramped up expectations of a rate hike in September, it didn't give a clear signal of its plans. Besides the additional improvement on the labor front, it said it also needed to be more confident that low inflation will rise to the 2 percent medium-term target.

U.S. Treasury prices were largely unchanged after the Fed statement. U.S. stocks rose and the dollar was stronger against a basket of currencies.


'BABY STEPS'

The Fed's policy statement also retained language saying that risks are "nearly balanced," suggesting it is still more concerned about a new economic downturn rather than of rapidly rising inflation.

Central bank officials and market analysts have been waiting to see if weak economic growth in the first part of the year signaled the beginning of the end of an expansion, or merely a pause.

The verdict now seems firm.

"The Fed is taking baby steps towards a rate hike. Enough improvements have been made in the labor market that the Fed only needs a little more confirming evidence to say it is time," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management.

Most economists forecast that U.S. economic growth will pick up after a lackluster first half and that the Fed will begin tightening monetary policy in September, according to a Reuters poll published last week.

And Wall Street's top banks still target September as the most likely time for an initial Fed rate hike, according to another Reuters poll published earlier this month.

With no meeting scheduled in August, the Fed will have two months of data to analyze before deciding whether to hike rates for the first time since 2006.

There were no dissents in the Fed statement on Wednesday.

Here is statements comparison:
https://s3.amazonaws.com/s3.documentcloud.org/documents/2186414/changes-july-29-fomc.pdf

So, today, guys, we again will take a look at EUR. Yesterday's volatility during Fed statement has changed a bit setup on daily chart, so it needs to be updated.
Trend on daily chart is bullish, but market shows deeper retracement that we have initially thought. Our K-support area on 4-hour chart was broken by long black candle. But it does not mean yet that upward action will not happen at all. Our major patterns as weekly bullish grabber as "222" Buy are still valid. We probably will have to forget about north direction only if market will break through 1.08 lows:

Meantime on 4-hour chart trend is bearish, but market approaches to final strong support area that potentially could become the one that puts foundation for possible upside action.
This is major 5/8 Fib support, WPP (it has not been tested yet) and 1.618 AB-CD target, i.e. Agreement.

Here guys, to avoid problems we could apply so-called "Minesweeper A" entry technique by DiNapoli, but use not 4-hour chart but hourly chart instead. It assumes reaching support and then we should wait when hourly trend will turn bullish i.e. when market will show upside action out from this support. Then we should enter on puny retracement from this small bounce. If market will not stop at our support - no entry.

 

[Sive Morten]

EUR/USD Daily Update Fri 31, July 2015

Good morning,


Reuters reports dollar backed off from a one-week high against a basket of currencies on Friday, but was still seen on firm footing after U.S. GDP data supported the case for the Federal Reserve to raise interest rates later this year.

U.S. gross domestic product growth in the second quarter was 2.3 percent, lower than the consensus 2.6 percent forecast.

First quarter growth was revised up to 0.6 percent from an initial reading of a 0.2 percent contraction.

The report also showed a pick-up in inflation and strong consumption during the second quarter.

"The U.S. GDP was mixed but on the whole it underpins the case for a rate hike. The market will continue to search for more hints on whether it will come in September or later," said Shin Kadota, chief FX strategist at Barclays in Tokyo.

The data followed the Federal Reserve's cautious but upbeat assessment on the economy on Wednesday, which some traders saw as bullish for the greenback.

U.S. interest rate futures priced in a higher chance of a September rate hike, with the price of Federal Fund rate futures contracts for September to December all hitting the lowest level in a month and a half.

Traders were cautious about pushing the Japanese currency to 125 yen, as Bank of Japan Governor Haruhiko Kuroda had said in June that he saw no reason for further currency weakness when the yen was around that level.

"The trend of dollar strength will probably continue heading into the U.S. jobs data next week," said Shinji Kureda, head of FX trading group for Sumitomo Mitsui Banking Corporation in Tokyo. The July U.S. nonfarm payrolls data is due on Aug. 7.

Market players, however, are likely to be wary of buying the dollar actively at levels above 124.50 yen, he said.

Politically-motivated moves to curb further dollar strength and yen weakness, such as comments from U.S. and Japanese officials, might emerge when the dollar is at levels above 124 yen and even more so at levels above 125 yen, he said.

"I think you need to watch out for checks along those lines, as possible noise," Kureda said.

The yen showed limited response to mixed Japanese inflation data, which showed nationwide core CPI rose 0.1 percent in June, more than economists' forecast of a flat reading.

But July core CPI in the Tokyo area, announced one month ahead of nationwide figures, showed core CPI declined 0.1 percent.


EUR finally has completed predefined conditions and soon we should get clarification concerning possibility of upward continuation. EUR should either hold and rally or will fail and upward scenario will be vanished:

On 4-hour chart market has completed AB-CD 1.618 target, and has reached Fib support and WPP. Trend is still bearish here. Theoretically may be we could get here DiNapoli pattern, say, DRPO "Buy", but I'm not sure yet:

On hourly chart market has formed setup that we've discussed yesterday - it stands with bounce up from our support and now is forming 3/8 retracement. Trend has turned bullish on hourly chart. Now we should control the trend around Fib supports. Market could show any retracement, but major condition - trend should remain bullish. If trend will be broken - this could be the sign that upside reversal will not happen. Let's see.

 

[RahmanSL]

I fully agree with your post "Friday's news of a surprise 6.8 percent drop in new-home sales in June was a reminder that the U.S. economy, while faring better than many others, was far from robust."

In fact, I still find it difficult to comprehend why so many top notch Analyst are so optimistic on the US economy with over USD18.5trillion in debt deficit and increasingly falling exports due to (in my opinion) over priced USD.
Falling oil prices should be a major concern to the US because the US produces 10.6m b/d (just a little below the Saudis) that makes the oil & gas sector a significant employer and contributor to the US economy.

If anything, the FED must be losing a lot of sleep over whether to hike rates or not to hike rates this year and that has turned into a very, very difficult dilemma.
Ideally, and as indicated, the FED would like a gradual rate hikes or two for 2015, but in so doing would add further strength to the USD which might released the genie from the bottle to further create complications and wreak havoc to the financial market.
But if the FED does not hike rates while they still can in a gradual manner, world economic & political situation & circumstances might conspire to take away that choice from the FED.

So, how confident is FOMC outlook for interest rates?
Despite rhetoric and clear predictions from June forecasts, market remains skeptical the ability to deliver a rate hike this year – much less two.
Intriguing Fed’s "accidental" early release of a staff forecast produced for June policy gathering show disagreement with leadership on pace of tightening. 2015 forecast was for single 25 bp hike; while 2016 and 2017 year-end levels were also marked down.
Market volatility can be expected from official Central Bank forecast hawkish view with 50 bps vs "staff" group’s economists 25 bps, and market pricing 19.5 bps(denoting a 78 percent probability of a 25 bps hike).

So this Wednesday FOMC meeting will be of especial interest to see which probable direction the FED might be heading.....hopefully....once and for all.

I have basically given up on trading the EUR because of too many uncertainties and...yes....none logical market reactions to some key EU data.

The CAD, on the other hand, is much better to trade especially against the USD because...again personally....the USD is on a "false optimistic economic" bubble while the Canadian has already taken steps to cushion future volatility by further reduction in interest rates for the year and thus giving them options on whether to raise or to further cut rates accordingly. And, of course, we all know that oil is a none renewable & limited commodity we can't do without for the foreseeable future and somewhere down the road, there is only one direction the price can go which is "up".....and, also as a matter of course, all it take is for ISIL or some other Islamic Militants to put one or a few of the oil installations out of commission and we shall see oil shooting straight to Mars and beyond....and the BOC will probably be hard pressed to take further steps to lower the CAD.

The mining sector (including gold & silver mines) is also a major contributor to the US economy.....continuous depressed prices will or already has put pressure on the industry to cut both jobs and GDP figures.

Yes, the US really has not very much more to smile about with the rest of the pressurized world....and I would dare say that if the USD gets inflated further more due to interest rate hikes, it might set a change of events to further destabilize the world's economy and monetary values.

================
P/S Word of caution & reminder to those trading the Euro:
It's getting towards end of the month and the EU need money to make payroll and expenses. So, don't be surprise to see the Euro dancing merrily up even in the face of depressed economic news from EU member countries

 

[ochills]

Thanks as usual Commander in pips for your indept analysis.

On H4 there is possibility of 3-drive sell which coincide with upper trend line of wedge also confluence area & on daily possibility of 3-drive with combination of 2 butterfly small & big including uncompleted AB=CD and daily range you had mentioned in your analysis. Sir all this make me consent with you that the possibility of stop grabber failure is higher but who knows???????????

 

[Sive Morten]

Thanks as usual Commander in pips for your indept analysis.

On H4 there is possibility of 3-drive sell which coincide with upper trend line of wedge also confluence area & on daily possibility of 3-drive with combination of 2 butterfly small & big including uncompleted AB=CD and daily range you had mentioned in your analysis. Sir all this make me consent with you that the possibility of stop grabber failure is higher but who knows???????????

Hi Ochills,
4-hour 3-Drive could trigger just minor retracement that even could help us to take long positions. Big AB-CD on daily has been completed, we have mentioned in reserach, or you may be speaking on some other AB-CD?
Besides, all bullish patterns are higher scale, mostly weekly - MPS1, grabber, "222" Buy" pattern... Anyway, while we have grabber, we can't go short and need to get it's failure first.
At the same time this is good that you have your own opinion that is based on your own analysis. If it warn you against long entry, this is also decision, right? And may be it will be correct, who knows.

 

[ochills]

Hi Ochills,
4-hour 3-Drive could trigger just minor retracement that even could help us to take long positions. Big AB-CD on daily has been completed, we have mentioned in reserach, or you may be speaking on some other AB-CD?
Besides, all bullish patterns are higher scale, mostly weekly - MPS1, grabber, "222" Buy" pattern... Anyway, while we have grabber, we can't go short and need to get it's failure first.
At the same time this is good that you have your own opinion that is based on your own analysis. If it warn you against long entry, this is also decision, right? And may be it will be correct, who knows.

Ok sir Commander, we must wait to see failure first. point taken. Then will I be wright to say Stop grabber is a strong confidence builder signal or is it because it occur on weekly chart. As am typing price had penetrated H4 confluence & wedge upper trend line as if they do not exist.