Euro \ dollar: Results of last week and the forecast for the coming period.
Price dynamics of the euro / dollar in the last week almost entirely consistent with our expectations and our forecast. The forecast assumed - corrective pullback euro exchange rate in the price zone 1.0885 ÷ 1.0910, and then - reduction pair to set target levels.
In fact, what happened! After opening the trading week the pair actually resumed growth, passing on the rise 120 points and implementing targets forecast for the euro area published in the background of positive macroeconomic data on business activity in the industrial sector of the region. However, as expected for a long time the momentum was not enough. Statements by representatives of the US Federal Reserve that in 2016 we should expect increased growth in terms of GDP and from 3 to 5 higher interest rates (despite the fact that the market is convinced only a 2-rises), returned to the investors' interest to the US dollar. The pair against this background halted and begun to decline. Another negative factor for the euro began released lower than expected inflation data in Germany, which again increased the likelihood of new stimulus measures from the ECB. All this dramatically increased the "bearish" pressure for a couple of quotes that just collapsed, and slump by going to the middle of the week on the achieved maximum (1.0946) - 240 points, reached minimum levels at around 1.0707, realizing along the way all the objectives of our forecast on the decline . Further, a pair of price dynamics changed significantly. The new unit of economic statistics from the euro area was quite positive.Overall business activity in the region (in the industry and services sector) has shown impressive growth in all 19 countries in the region. In addition, once again lowered the rate of unemployment and consumer confidence index of the economic and business environment have surpassed all expectations. Rose also the volume of retail trade. In addition, the European Commission unveiled an improved outlook for the Eurozone economy in the coming years. All this gave a powerful impetus to the price dynamics of couples, the rate of which in the remaining days of the full back all the losses by fixing closing the week at a price level 1.0926
As for next week: Technical factors - for the most part maintained the upward movement of the single European currency after the end of its current downward correction. Although, the technical indicators in all major time periods show yet mixed performance, but in support of the upcoming growth of the pair may be noted that: 1. The week ended with the formation of typical candlestick patterns "Hammer", warning of the imminent resumption of the upward movement of the pair; 2. closure of the pair on the basis of past trade was above the weekly and daily pivot points, which is also indicative of the continuing impact of the rising pulse; 3. The wave structure of the pair, in turn, also informed us about the imminent end of the current downward correction and renewal of lifting the euro to a new cycle of its upward movement against the US currency.
Similar signals we have received a report from Commodity Futures Trading Commission last week. According to this report the total "net" position on the sale of the single currency started to decline (though as yet negligible), which indicates a strengthening of the market, "bullish" sentiment. In addition, the light trading volume (OBV) on the daily timeframe turned from oversold on the rise, saying thus to increase the volume of transactions for the purchase of the single currency.
The euro dollar for the week of 11-15 January 2016 - correctional decline of the euro \ dollar to the target levels: 1.0887; 1.0860; 1.0816 and 1.08. Here in the price zone 1.08 ÷ 1.0764 expect the turn of the pair and the rise of the single European currency to the previous local maximum of 1.0940 and above the key resistance levels 1.10 and 1.1
Pound \ Dollar: Results of last week and the forecast for the coming period.
Our previous forecast assumed - a short-term decrease in pair, price zone 1.4710 ÷ 1.4690, and then, turn and lift the British currency to the established target levels. After opening the trading week the pair really went the previous decline by implementing both the target level of our expectations. However, further dynamics of the pair has significantly changed our expectations. The pound / dollar has not resumed the upward movement, and continued to decline moderately in the limit of the downward channel. The pair was still under the "bearish" pressure as more and more players' attention switched to the upcoming June referendum on the UK exit from the EU. Recent polls have shown that the number of supporters of such solutions is constantly growing. And if that happens, the negative effects of such events may lead to the disintegration of the European Union and of the United Kingdom, referring to the separatists in Scotland, Catalonia and other regions of Europe dissatisfied.In this rather gloomy background of weak economic statistics from the UK on business activity in the service sector further intensified the negative market sentiment against the pound and caused a further decline in the pair, whose rate at the end of trading tested the key support level of 1.45 and recorded a new 5-year low at around 1.4506
As for next week: The mood of the market against the British currency - rather contradictory, but are mainly determined by expectations of tightening by the Bank of England of its monetary policy and timing of the process of raising interest rates on the national currency, as well as the upcoming June referendum on the output of the UK from the EU.
The technical picture also does not give a clear interpretation. Last week, the closing price of the pair was below weekly and daily pivot points, reflecting the continuing effect of a strong downward momentum in the price movement of the pair. Report Commodity Futures Trading Commission last week confirmed that, as showed another increase total "clean" position on the sale of the British currency. In addition, the light trading volume (OBV) on the weekly and daily time frames are still a sell signal, which, in our opinion, are fairly limited, due to the fact that almost all timeframes indicator «Stochastic» is already deep in the zone oversold.Besides, the pound \ USD is currently traded near the strongest level of support 1.4505, passing through the lower boundary of the channel long-term correction in the area which is very likely to rebound the pair and the resumption of the upward movement. Several earlier attempts to break through this level on the decline also failed.
The wave structure of the pair, in turn, also warns us of the imminent completion of the reduction and the subsequent reversal of the British currency on the rise. In addition, the British currency is right now in a time zone Fibonacci, warning of a material change in the direction of the price movement of the pair. Well, finally, among the signals of the upcoming reversal of price movement can be noted - "bullish" divergence on the weekly chart.
Thus, technical factors still speak of the imminent completion of the reduction and reversal of the price movement of the pair on the rise.
The pound dollar for the week of 11-15 January suppose - the continuation of decrease in pair to the key support level of 1.44. Next, look for a turn and rise of the British currency to the target levels: 1.4552; 1.46;1.4633; 1.4670; 1.47; 1.4725 and possibly above a key resistance level of 1.48