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Main » 2015 » November » 16 » Fundamental analysis and forecast of the currency market Forex 16.11.2015 (Forex4you): USD, EUR, GBP, JPY
Fundamental analysis and forecast of the currency market Forex 16.11.2015 (Forex4you): USD, EUR, GBP, JPY

Last week, the currency market did not note the presence of directed activity. Exceptions were only the events in the pair GBP / USD, where the "buck" had to give up quite a decent portion of the previously captured positions. Other majors against the dollar traded sideways and finished the session mixed, near the opening price.


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Obviously, after a fairly large-scale purchases of "angered" in the first five days of November, investors took a time-out in mind as it seems, the technical factors provided strong levels of support / resistance and insignificant news background, publish statistics, which do not cause the explosion of emotions among the participants trading. The most interesting in the news the United States had data Friday showed that US households in October, almost increased their spending - retail sales rose by only 0.1% m / m as expected the growth by 0.3% m / m after a 0.1% m / m September. Not pleased with the "bull" to "buck" and the production of inflation indicator - in October producer price index (PPI) fell by 0.4% m / m against the forecast to see growth of 0.2% m / m. Basic index PPI, which excludes prices of food and energy, fell by 0.3% against the forecast of 0.1% m / m. This indicates weak prospects for inflation and, to some extent raises doubts about the implementation of the "hawkish" Fed plans in December. The positive charge carried a report of the University of Michigan preliminary index of consumer sentiment in November rose to 93.1, when expectations were associated with an increase to only 91.5 marks against the final value in October, who pointed to the level of 90.0. Fed Speeches top management, including D.Yellen not triggered on the market increase in voltage, as in fact it did not contain anything that could add confidence in the near future tightening of monetary policy in the United States. Package stats this week containing a large number of news increased the importance of not too different. The focus will be - the October consumer price index, which is expected to increase by 0.2% m / m after -0.2% m / m in September, and information about the situation in the housing sector, which is expected to see an increase of issued building permits in October 3.1% m / m after -5.0% m / m in September, and a reduction in new buildings at -3.9% m / m versus + 6.5% m / m previously. In political terms, the most interesting news background is seen Wednesday, when to publish the minutes of the October meeting of the Fed. As for the future, it seems, in the current situation, when the Fed is going to tighten policy, the ECB and the BoJ to soften, and the Bank of England puts the beginning of the cycle of rate increases at a fairly remote period, "buck", is likely to remain the market leader.


The euro / dollar held last week in the flat and completed trades very near opening prices, noting minimal advantage of the European currency. Obviously one of the reasons that the pressure on the euro is not possible to consider the existence of continued strong support, as Price dropped quite close to the annual lows. Another factor may be that all verbal intervention, the Fed already accounted for, and investors are going to wait for the real action, which, as evidenced by the situation will be taken shtatovskih Central Bank in December, so hurry with making decisions about the mass purchases "buck" is not necessary, ie, .to. all may be in the "kingdom of the Danish". The economic data from the Eurozone and the political component of news, nothing remarkable, able to become a "stimulus" and stir up activity, not noted, the market virtually ignored all messages. The economy of the euro area as a whole on the block in the 3rd quarter grew by 0.3% q / q, which indicates a slowdown compared with the previous quarter, when the 2nd it was + 0.4% q / q and 1-M + 0.5% / K. In Germany, a similar picture, GDP Q3 0.3% q / q vs. 0.4% q / q previously. Annual dynamics of the Eurozone industrial production also showed a deterioration - in the September issue fell by 0.3% m / m and up 1.7% y / y vs. -0.4% m / m, 2.2% y / y in August. Speeches of the ECB continued to broadcast its readiness for further easing, but a response to the actions of investors is not found. This week's calendar will show some interesting reports, which may slightly increase the volatility. This release of the German ZEW institute of business sentiment in Germany and the euro area as a whole, is scheduled for release on Tuesday. The index of economic expectations ZEW largest economy in the EU expect to see a growth in November to 6.0 from 1.9 in October, while the current conditions index to rise to the level of 55.5 to 55.2. The ZEW sentiment indicator whole unit is also predicted with the improvement, 35.2 after 30.1 in October. Dynamics of positive indicators and the euro may find support for small and short-lived if the fact converges with expectations. Another interesting report can be published today the latest assessment of the October consumer price index (CPI) - the changes are not waiting is likely to remain + 0.1 m / m, 0.0% y / y vs. 0.2% m / m, -0.1% y / y in September.The focus of attention is on today's session will focus on the first performance (this week) of the ECB M. Draghi.Regular application of the hardness of the course on the ECB's easing could hurt the single currency.


As a result of last week's session, the leader among major currencies turned British sterling. Obviously, the market is considered excessive and selling the pound, using the presence of strong support, which dropped the price, I decided to take profits, especially since the "cable" continues to be the most profitable currency among majors, making it the most interesting investment in a period of calm. News on the economy of the "Isles" published not many, but they do not interfere with a return to growth in the popularity of the British currency.Labour market data "islands" showed that unemployment fell to lows spring of 2008 - the level in September dropped to 5.3% from 5.4% when the changes are not expected. May support the pound on that side would be more solid, if not for an unexpected slowdown in wage growth - an indicator of weekly wages declined to 2.5% y / y vs. 2.8% y / y. At the beginning of the main theme of the week in the British news will be inflation. The statistics show the indicators of consumer and producer prices. Forecasts suggest that there are signs of deflation and the October consumer price index (CPI) expected unchanged at -0.1% y / y after -0.1% y / y in September, while the benchmark, without prices for food and fuel, stagnating at + 1.0% y / y. The index of selling prices of producers (PPI) is expected to see, as in September, with a minus -0.1% m / m, -1.4% y / y after -0.1% m / m, -1.8% y / y. Naturally, such an order can not be waiting for the support of "British" becauseadd validity of statements about the Bank of England reasonableness postpone the rate hike at a remote period.Obviously, "bullish" sentiment on the pound decline slightly and the "cable" will return to fall or, at best, will be traded against the dollar sideways.


Events in the pair dollar / yen is no exception. Strong resistance levels stopped rising dollar and most of the trading last week, the price consolidated in a relatively narrow side corridor. The most important news of the last period there have been reports on the results of the external economic relations of Japan - payments and trade balance showed a surplus availability, but it did not affect the course of trading. As a result, five-day US dollar recorded a slight loss against the yen. The most important statistics on the economy of Japan, scheduled for release this week, has already been published. The preliminary estimate of GDP of the 3rd quarter showed signs of a recession, the indicator fell a second consecutive quarter, -0.2% q / q after -0.3% q / q in the previous forecast of -0.1% seen q / q. This caused a small-scale multi-directional movement on the market today that have not yet turned in the direction of activity - the price is at the level of the opening week. It is possible that the pair will remain in a narrow range, as It expected another important event, now a political plan - a meeting of the Bank of Japan rate, the results of which will appear on Thursday. However, the general mood related to the polarity of the Fed's policy and the BoJ, give reason to keep waiting for the resumption of growth in the dollar.


Author: Arkady Nagiyev

Fundamental analysis of the currency market Forex4you



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