Technical and Market Analysis by Vistabrokers

[Vistabrokers]

Vista Brokers: Market Is Full of Doubts

On Tuesday, the EUR / USD was trading within a wide price range. Vista Brokers analysts say that after the strong decline of the euro, following the prior agreement on the Greek financial bailout program, the market could not determine the direction amid the saturated fundamental background.

Will the Prime Minister Alexis Tsipras convince the Greek parliament to pass laws that are required to receive a tranche? In the first half of the day the euro was pressured with the fact that Greece will take four of required laws, including painful pension and tax reforms before the deadline on Wednesday. Amid this the EUR / USD has touched a week low at 1.0967.

During the US trading session in the USA were published important data, which were in general not so optimistic, as the market had expected. In June, retail sales in the US have fallen by 0.3% against the forecasted growth of 0.2%. The May data was revised down. Statistics on business inventories was in a line with forecast (+ 0.3%).

After such statistics market has returned to concerns about the US economic growth in the second quarter, and as a result, the Fed's interest rate hike. Today is the day, very saturated with the information, and the Fed's head Janet Yellen speech will draw the particularly strong attention. Her comments can zoom or delay the rate increase waiting times.

 

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Vista Brokers: Aussie Rose after Strong Statistics from China

During early trading in Forex the Australian dollar was losing positions after the release of the Westpac consumer sentiment index, which has fallen in July to 92.2, its lowest level since December last year. However, as Vista Brokers say, later Aussie has changed its direction and began to grow after the publication of statistics in China. Immediately after the strong data release, AUD / USD has added 0.12% to 0.7466.

All China's statistics published at 02:00 GMT were better than expected, which, of course, has added optimism to the Australian dollar and other "commodity" currencies. So, the real GDP (from the beginning of the year) has increased in Q2 by 7.0% against the expected 6.9%. Industrial production in June has increased by 6.8%, while the forecast predicted weaker value of 6.0%. The volume of retail sales during the first summer month has also risen more than expected ( by 11.4% instead of 11.2%).

From the news published during the Asian session, it is also worth noting that the Bank of Japan has voted 8 to 1 for leaving its monetary policy unchanged. It is worth noting that the Japanese central bank has revised its forecasts for GDP and inflation for the next three fiscal years, with a decrease.

 

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USD / CAD. Close to Final Frontier

An agreement on the Iranian nuclear program, as a result of which a serious participant of the hydrocarbons market (Iran) may return its power, casts doubt on the possibility of bears in USD / CAD to seize the initiative near six-year highs. Recall that Canada is one of the largest oil exporters, and the Canadian currency is often in phase with oil quotes. However, for this pair everything will be decided later today after the Bank of Canada will publish its decision on the interest rate. If the rate will be cut (it is the likely result, though not the basic one), the pair can "fly off into space."

It is recommended to wait for the BOC decision on the rate, being ready to enter on the 1.2334 level breakthrough.

Volatility: 67%
Trend: bullish
Fundamental background: strong

GBP / USD. Wind Is Turning

The British currency has shown its stuff yesterday. A spectacular growth during yesterday's trading was provided by the Bank of England Governor Mark Carney, who has proclaimed the approach of the rate hike. As a result it was a very strong growth in the pair, that was reinforced also with published yesterday weak data on the US retail sales. Thus, the market situation has changed dramatically, which requires a quick response to this context.

It is recommended to buy on corrections within the current short-term trend borders with the target in the area of ​​1.59, where is the next important resistance level.

Volatility: 36%
Trend: bullish
Fundamental background: moderate

 

[Vistabrokers]

Vista Brokers: Gold Treads Water, Copper Grows

On Wednesday, gold is traded without a direction prior to the Federal Reserve head Janet Yellen speech, while copper is increasing after positive statistics from China. Vista Brokers analysts note that the speech of the Fed's head ahead of Congress, that will be held later today, can significantly affect many financial instruments.

Based on Yellen's comments, market participants will draw conclusions about the timing of interest rate hike. Last Friday, the Fed's chief reiterated that the regulator will raise rates later this year, if on the labor market and the US economy as a whole is positive. Despite clear signs of the US economy recovery, the situation is still ambiguous, and a vivid example of this was yesterday's retail sales data, which has showed a decline of 0.3%.

So today, in early hours of the European trading session on the Comex, gold futures for August delivery have fallen by 0.02% to $ 1,153.70 per troy ounce. A day earlier, the metal has fallen to the lowest level since March at $ 1,144.40 before closing at $ 1,153.50 (-0.16%). Silver for September delivery today was traded on Comex at $ 15.28 per ounce (-0.23%). On Tuesday, the metal has fallen by 0.92% to close at $ 15.31.

Meanwhile, copper today has risen in price after the publication of strong data in China. The real GDP (from the beginning of the year) has increased in Q2 by 7.0% against the expected 6.9%. Industrial production in June has increased by 6.8%, while the forecast predicted weaker value of 6.0%. The volume of retail sales during the first summer month has also risen more than expected ( by 11.4% instead of 11.2%).

Positive statistics reduced concerns over a slowdown in China's economy and supported copper, as China is the world's largest importer of the metal (40%). Copper futures for September delivery have risen today on the Comex by 0.82% to $ 2.556 per pound.

 

[Vistabrokers]

Market Pulse 07/16

Today, the European Central Bank will announce a decision on the key interest rate, followed by a traditional Mario Draghi press conference, from which market participants can receive interesting information, as well as signals for further ECB actions. Vista Brokers analysts note that during the US session fresh data on the US labor market be published.

1:00 ** MI Inflation Expectations - July (Australia)
1:30 ** NAB Quarterly Business Confidence - Q2 (Australia)

Moderate impact on the market (AUD). Australian MI inflation expectations index is often higher than the official data, but it is a good indicator of the assessment of current households attitudes in relation to inflation. High values ​​can be a signal to tighten policy, supporting the currency.

5:00 ** Bank of Japan Monthly Report - July (Japan)

Moderate impact on the market (JPY). The BOJ monthly report consists a fairly concise description of main indicators and the global economy that is taken into account by the monetary committee when deciding on the rate. The report helps to understand further policy of the Bank of Japan. Words about readiness to act in order to support the economy may put pressure on the yen.

9:00 ** Final Consumer Price Index - June (euro zone)
9:00 ** Core CPI - June (euro zone)
11:45 *** ECB Interest Rate Decision - July (euro zone)
11:45 ** Deposit Facility Rate - July (euro zone)
11:45 ** Marginal lending facility - July (euro zone)
12:30 *** ECB Press Conference - July (euro zone)

Strong impact on the market (EUR). The market does not wait for changes in interest rates by the ECB, but in the course of the press conference can be interesting comments that could be interpreted as signals to changes in the strategy of the European Central Bank in the future. Therefore, investors will be attentive to the words of Draghi.

12:30 *** Unemployment Claims - July (USA)
12:30 ** Continuing Claims - July (USA)
14:00 *** Federal Reserve Chair Janet Yellen Testifies - July (USA)
14:00 *** Philly Fed Manufacturing Index - July (USA)
14:00 ** NAHB Housing Market Index - July (USA)

Strong impact on the market (USD). Another portion of statistics from the US market may tense markets. Special attention is necessary to listen to the Janet Yellen's speech. She speaks ahead of the Congress the second consecutive day. As for other data, forecasts are generally optimistic, in addition to the expected decline in the index of the Philadelphia Fed. While there is always the possibility that the statistics will present surprises.

18:00 *** BOE Governor Mark Carney Speaks - July (UK)

Strong impact on the market (GPB). Previous performance of the BOE head has caused the rally of the pound, as the signal was given that the interest rate can be increased. Fresh Carney comments can strengthen confidence in the fact that the Bank of England is next in line after the Fed.

 

[FX Brother]

Thank you!

 

[Vistabrokers]

Vista Brokers: Yellen Strengthened Confidence in Fed Rate Hike

The main event on Wednesday was the speech of the Fed's head Janet Yellen. Vista Brokers analysts say that Yellen's comments has strengthened the belief that the US central bank will raise its key interest rate until the end of the year.

Yellen said that the interest rate will be raised "before year end", although noted some negative aspects. In particular, risks for the US economy, created with a situation in Greece and the slowdown in China's economy. After the Fed's head speech the dollar grew up broadly, gold has fallen to a minimum of 2015. The EUR / USD has declined by 0.50% to 1.0953 (the weekly low), while the dollar index has risen by 0.37% to 97.17 (maximum since 7 July).

Additional support for the optimism of market participants in relation to the dollar gave a statistic that was published yesterday in the United States. Thus, the index of producer prices in June has risen by 0.4% vs. 0.2%, while the Empire Manufacturing industrial index in July has increased to 3.86 against the expected 3.4. Recall that the previous month the index has declined to -1.98. Today, the market is also waiting for a busy day with another Janet Yellen's speech and statistics on the US labor market.

 

[Vistabrokers]

Vista Brokers: Greece Weakened Precarious Position of Gold

During the Asian trading session on Thursday, price of gold futures continued to reduce. Vista Brokers analysts say that the already precarious position of gold was weakened with the fact that the Greek parliament has passed first needed bills required under terms of a three-year bailout program. On the Comex, gold futures for August delivery have fallen by 0.08% to $ 1,146.50 per troy ounce. Silver for September delivery has fallen in price by 0.27% to $ 15,008 per ounce. Copper continues to rise after yesterday's strong statistics from China - September futures have increased by 0.07% to $ 2.516 per pound.

Many doubted that Prime Minister Alexis Tsipras can persuade parliament to pass unpopular reforms, against which the Greek people had voted. However, necessary measures have been taken with 229 yes, 64 no and 6 present, and now probably Athens will receive the first tranche from creditors. Greece needs the foreign aid desperately to resume the work of banks and to implement overdue payments. It is noteworthy that the "native" left-wing forces did not support their leader that may indicate that the split in parliament is worsening. In his defense, Tsipras said that other than to accept the creditors' plan, he had only two choices - a chaotic default and the voluntary exit from the euro zone.

So, Greece is likely to receive assistance from the EU, the ECB and the IMF, at least the first part of it, which undermines the position of gold as a safe-haven asset to which market participants are turning in unstable times. In addition, the pressure on the metal has the US economic recovery and the high probability that the Fed will raise the interest rate before the end of the year.

So, after a speech of the Federal Reserve head Janet Yellen yesterday gold has collapsed to a minimum of 2015. The head of the US central bank has confirmed that the regulator intends to raise rates later this year, provided that the statistics continue to show improvement in the economic situation.

 

[Vistabrokers]

USD / CAD: Let it Roll!

As Vista Brokers analytics had expected, the pair flew into space, or to be more precise, to the new six-year highs, after the Bank of Canada cut the rate yesterday. This is the second reduction of this year, which reflects concerns about the state of the national export-oriented economy in connection with the fall in oil prices. Thus, quotes have left graphic borders of the rising channel, which can now be adjusted with account of momentum acceleration.

It is recommended to hold long positions, carried out after 1.2334 breakthrough, adding on corrective declines.

Volatility: 69%
Trend: bullish
Fundamental background: moderate

EUR / USD. What Will Draghi Say?

Yesterday's speech of Janet Yellen was rather aggressive, that has led to a significant strengthening of the US dollar. The Fed's head has marked the inevitability of this year rate hike, remained rather pleased with the state of the national economy, and mentioned the almost full employment. Today's meeting of the ECB may "finish" the euro if Mario Draghi, in turn, denotes the probability of the quantitative easing program expanding or the probability of its deadline extension.

It is recommended to wait for the market reaction to Draghi's speech before considering opening positions. The path of least resistance for the euro goes down, and in the case of quotes consolidation below the nearest support at 1.0915 we may consider short positions opening with the target in the area of 1.0820, where is the next important level.

Volatility: 56%
Trend: bearish
Fundamental background: strong

 

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Market Outlook According to the Method of Bill Williams: GOLD

The risk appetite rise in global financial markets has pushed gold prices to the lowest levels for the past few months. It gave a serious reason to expect a positive result on the existing short position from 1159.97. Among additional signals we have "saucer" on the AO, "zero-crossing" on the AC, as well as "red zone" signals. It is worth noting that there was also a signal "5 red bars in a row," which means on the one hand, the ability to move a stop order to the level of the last red bar high and on the other — we must stop to add volume in accordance with "red zone" signals.

Volatility: 26%
Trend: bearish
Fundamental background: moderate

Market Outlook According to the Method of Bill Williams: USD/JPY

The order to buy from 122.87 remains relevant because the pair continues to grow slowly but surely. The value of the Alligator's teeth, and the value of our conditional stop order as well, were moved to the level of 123.26. Among additional signals we see "saucer" on the AO, as well as "zero crossing" and "2 green bars above zero" on the AC. Also, we have the same directed fractal as another signal to add.

Volatility: 72%
Trend: bullish
Fundamental background: moderate

Market Outlook According to the Method of Bill Williams: EUR/USD

With the resumption of the downward trend the profit on the current short position has increased over the past day significantly and is already about a figure. Today we expect the press conference of the ECB head Mario Draghi after the meeting of the European CB on the monetary policy, so Vista Brokers analysts recommend to monitor all received System signals.

Volatility: 54%
Trend: sideways
Fundamental background: strong

Market Outlook According to the Method of Bill Williams: GBP/USD

The long position from 1.5589 will be closed soon, as the current bar has crossed the red Alligator's line. If it closes at current levels, the result of the transaction will need to be fixed quickly.

Volatility: 42%
Trend: bullish
Fundamental background: moderate