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EUR at key 4h level ahead of GDP report EUR pulled back to 4h MA50. We are coming up on the Memorial Day holiday which will keep markets closed on Monday, May 31. That could bring some added volatility with traders readjusting positions ahead of the long weekend, as well as critical data coming up next week, including the May Employment Report. Fundamental analysis With 50% of the U.S. adult population now fully vaccinated and most states close to fully reopened, it seems reasonable to say we are entering the early stages of the post-pandemic era. One of the key themes that has driven bullish momentum in EUR during the pandemic is that we were headed toward a post-pandemic economic boom fueled by cheap and easy money, cheap energy costs, and a lot of available (aka cheap) labor that weakened USD. In reality, energy is kind of cheap-ish, but labor is not so readily available or cheap, and the "cheap and easy" money provided by the Federal Reserve may not last as long as some expected. In fact, money could get more expensive if inflation starts running even hotter and the Fed is forced to raise interest rates. The landscape is of course still evolving so the "trifecta" of cheap and easy energy, labor and money could still happen but investors are definitely reassessing, which is partially reflected in this long consolidation period that stock market has recently been stuck in. The labor market has been one of the biggest puzzlers and investors hope the May jobs report next Friday will provide more clarity. Many economists are dialing back their expectations for the labor market, including some Federal Reserve officials. St. Louis Fed president James Bullard said this week that +500,000 jobs a month is a realistic expectation versus the +1 million some had been hoping for. Dallas's Robert Kaplan warned that a rate closer to last months gain of +266,000 could be repeated in May. Typically, a weak labor market would mean an accommodative Federal Reserve. Instead, that weakness along with numerous supply chain issues and materials shortages has been contributing to inflation pressures that some fear could be long-lasting. It's hard to overstate the extreme level of uncertainty this has created for investors. Technical analysis The 4h MA50 is the consolidation zone now. If the current range holds, the bulls will target new higher highs between 1.231 and 1.235. A lot depends on today’s data. I will not be surprised to see increased volatility. And if current support fails, bears will target 4h MA200. Ahead of the GDP report it makes perfect sense to reduce your exposure and trade after the market digests the news.
CME:6E1!
by Inna-Rosputnia
What is happening with the economy and what does it mean for EURCovid has largely taken a back seat on markets expected to be fully open this summer. The situation is not as bright in some other parts of the world but for now, investors don’t seem overly concerned. Most Western countries are on a similarly positive track as the U.S., but as we are learning, bringing the global economy back online is a lot more complicated than shutting it down. Fundamental analysis Getting both products and workers where they are needed continues to be a massive challenge and one of the results has been a wave of higher prices. The Federal Reserve expects these disruptions to start easing later this year. However, there are a few supply shortages that can’t be solved quickly and will likely linger into 2022, such as computer chips and lumber. Meaning the higher prices and shortages in those items can and is spilling over into other channels. The mere “perception” of inflation may be driving price spikes as well. Some economists have been pointing to commodity prices which they believe are partially roaring higher because investors are putting money into them as an inflation hedge and creating somewhat a self-fulfilling prophecy. This is a pattern definitely seen in Treasuries this year with yields on the benchmark 10-year waxing and waning in step with inflation headlines. Likewise, the “perception” of a high inflationary environment along with a more hawkish Federal Reserve could also spur analysts to start slashing earnings expectations, in turn pushing more stock investors to the sidelines. Regional manufacturing indexes this week added to the inflation worries with the prices paid components in the Philadelphia survey hitting levels not seen since the 80s while New York’s hit all-time highs. At the same time, both surveys reflected a slowdown in manufacturing activity which is thought to be the result of supply chain bottlenecks. The declines were not due to a slowdown in demand as unfilled orders spiked in both regions. Data today includes Flash PMI for May and Existing Home Sales. Looking a little further out, key reports that inflation watchers have on their radar include April PCE Prices due out next Friday, which is considered the Federal Reserve’s favored inflation gauge. Also, the first week of June will bring ISM inflation gauges for both the manufacturing and services sectors, as well as the May Employment Report. Technical analysis MA50 on the 4h chart held. The price action is neutral now. If price finally breaks the 1.225 resistance, bulls will target 1.2310 and 1.234 in extension. On the other hand, if the ma100 on the 4h chart breaks, look for the ma200 on 4h and daily ma50. The range between mentioned levels is no man's land and difficult to trade.
CME:6E1!
by Inna-Rosputnia
EUR Futures Are Pulling Back Ahead Of FOMC – What’s Next?Exploding consumer demand has helped usher in material and labor shortages that are not only driving up costs and fanning inflation worries, they are also reducing manufacturing output. Fundamental analysis That means fewer pieces, parts, and finished goods sold all the way through entire supply chains. Companies may be able to offset higher costs and lost sales through price hikes on some things, but bigger-ticket items like cars, appliances, and even houses will be more difficult to make up for in growth. Lost sales for the service industry really can’t be made up, so businesses like restaurants or hotels that are understaffed may not be able to fully capitalize on the reopening boom. The reopening is also bringing a shift in how consumers spend their money. Walmart, for instance, reported e-commerce sales growth of +37% for the first quarter, which was down from a +69% gain in the fourth quarter. Analysts are taking this and other reports of slower online sales as confirmation that the blistering growth witnessed during pandemic lockdowns is not sustainable. Investors have largely expected online shopping growth would moderate this year but are still trying to figure out what the “new normal” might be. Before the Covid-19 crisis, e-commerce sales were growing at about a +15% annual rate. Additionally, investors are unsure whether lower online sales will be offset by in-store sales growth. There is some expectation that more consumer spending will migrate to the services sector as travel, dining, and live entertainment all become options again. Hence, the still ongoing rotation out of some of the pandemic darlings and into sectors and companies that might have more growth potential as the economy reopens. FOMC “minutes” The economic highlight will be the “minutes” from the Federal Reserve’s April FOMC meeting. The bank last month left its extremely accommodative monetary policy unchanged, saying the U.S. economy still needed to make “substantial further progress” toward its goals. Keep in mind, one of those goals is “full employment” which the Fed has never really provided a hard number for. However, after March’s jobs report showed a surprisingly strong +916,000 gain, Fed Chair Jerome Powell did say he wanted to see a “string of months” showing the same strength. As we know, the April employment report only showed a gain of +266,000 new jobs. At the same time, there are growing concerns that the Fed is “behind the curve” in regard to inflation with higher prices now popping up all over the place. Analysts will be looking for hints in the minutes that Fed members may be shifting their stance a bit or perhaps getting more nervous about inflation. I should also note, there will likely be an unusually high level of scrutiny given to the Philadelphia Fed Manufacturing Index today. Technical analysis The EUR futures tested 1.2240 resistance which has been bulls’ swing target for some time. There is no surprise we see a pullback. It is advised to reduce exposure ahead of the FOMC meeting. The new direction will be clear once the market digests the FOMC statement. In general, failure to break the resistance mentioned above can bring the price down to ma50 and ma100 on the 4h chart. And if it finds support there, we can expect a new higher high near 1.23100
CME:6E1!
by Inna-Rosputnia
EURUSD - possible near end of wave 5Looking at the chart of the euro futures contracts we may spot a possible Elliott Wave Pattern labeled as 1 to 5. It is a potential impulse wave that may soon come to an end. The theoretical resistance for wave 5 is set by 161,8 Fibonacci expansion of wave 1 placed at the end of wave 4. If this area is defended the market may retrace back as potential wave A in a larger corrective movement. Then the first theoretical target may be located at the lower limit within the channel or even at the low of wave 4. ________ Daniel Kostecki, Chief Analyst Conotoxia Ltd. Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CME:6E1!
by Daniel_Kostecki
2
The Moment of Truth - US Dollar The Fed has the markets back - as seen in the equities market. Euro/Pound are screaming higher, because the news is better there - with that said Fed has been adding liquidity to the system but so has the ECB -$1.52 trillion in stimulus. Bond Market is saying hey equities no so fast - and to be clear the US Bond market is bigger! Interesting inflection point - this is the moment of truth, for US Dollar, equities, bonds and gold too. Grab you popcorn and enjoy the show. TVC:DXY
TVC:DXY
by Maximilianned
US Dollar (DXY) Breakdown - When does it happen? I have drawn this before on weekly basis - thought it would be a good idea to show it on more granular level using daily chart. This week the US Dollar (DXY) put in a double bottom matching the low of August 18th. This may be an inflection point. The Dollar Index absolutely could go lower to about 91.50 and still remain in this channel. This is where a 12 year tend line gets broken. Most retail buyers are short this market. __________________Long_________Short ______________Net Fund Managers_____270273 ______125396____________ 144877 Speculators _______43916________109948 ___________ -66032 Source Bloomberg 8-28-2020
TVC:DXY
by Maximilianned
Speculators’ net short U.S. dollar The move is in - easier to go long at this point than try to short the US Dollar or by proxy every other currency pair featuring the USD. At worse you know where to put your stops. After today's move away from the precipice the decades long trendline continues to hold. TVC:DXY The mainstream media in this case Reuters has been reporting this for months. This record short position is the fuel longs need to take the USD higher. If the US Dollar does move higher expect Silver and Gold to come off. For now if you're looking to go short - I would let the trendline break before entering. NEW YORK (Reuters) - Speculators’ net short U.S. dollar positioning soared to the highest since August 2011, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday. The value of the net short dollar position hit $24.27 billion in the week ended July 28, from net shorts of $18.81 billion the previous week. Reporting by Gertrude Chavez-Dreyfuss July 31, 2020 / 4:23 PM
TVC:DXYLong
by Maximilianned
Weekly EUR forecast. Explained. Potential entriesEUR Futures are still consolidating. Last week the Department of Labor gave instructions on how to implement the executive order that partially extends federal unemployment benefits signed by President Donald Trump. But it was not enough to get a dollar out of consolidation. Fundamentally, nothing changed for both currencies. EUR has clear support and resistance levels. To avoid higher risks, it makes perfect sense to trade breakout of the range: potential longs above 1.1920 potential shorts below 1.1690 We previously discussed EUR set up for a decline. Based on COT reports commercials are selling currency. It usually indicates the market is topping. Besides, seasonal indicator points move down. The evaluation model shows EUR is overvalued. With that in mind, we prefer to look for and take sell signals. But price action is “the king” and we will follow it whatever side it breaks. Just use proven entry techniques to open a trade and don’t rush.
by UnknownUnicorn1156963
2
Coming sell in EUR. Explained Early this week the market can test 1.1630 and later bounce for a few days to form a signal for sellers. There is no need to hurry and pick up a trade now. Let the market do its thing and form some pattern to get clear entry with a good risk/reward ratio. The main reason for potential weakness is the bullish setup in DXY. I made a post about it. Below you can see a summary of DXY analysis We have discussed previously a potential rally in the American dollar. Now we are getting really close to the potential entry. However, accumulation is weak. That means it will take another week or two to get a signal. Accumulation builds momentum. That’s why it is so important. We have very strong fundamental setup for DXY rally: COT – commercials are heavily long Evaluation model – the dollar is undervalued COTSI Index – very high Intermarket forecast – upside. We need a technical signal to confirm the coming rally. It always takes some time to get one once we have a fundamental setup. So, likely we will see a bit more of a rally coming in a few sessions, followed by a pullback. It will give the dollar enough time to build momentum and form a signal to go long.
CME:6E1!Short
by UnknownUnicorn1156963
EURO WILL PROBABLY BREAK THE HISTORICAL RESISTANCESWe notice that the EURO on its monthly chart is bullish and is trying to break the historical resistances. The Bulls are determined as we can see a big green monthly candle approaching the intersection of the resistances. There is a high probability for the EURO to break the resistances, probably come back to make a pullback on it and go higher to reach the historical peaks. I recommend to buy EURO ONLY AFTER BREAKING THE RESISTANCES.
CME:6E1!Long
by AnyChart
EUR is setting for declineSome time ago we have talked about EUR COT reports. Swing traders should focus on taking sell signals. Commercials are short this market, while retailers are heavily buying. We saw almost the same in 2018 before a big decline in EUR. I believe the story repeats. However, we don’t have a good entry yet. I have a feeling price will make false breakup before the trend starts. But the market doesn’t have to follow my feelings )) Besides, the evaluation index shows EUR is overvalued. Short-term traders can continue to trade in the range with tight stop loss. But our main focus is on taking sell signals, like swing failure, etc. Many data will be released the coming week, including retail sales, Empire State, Philadelphia Fed, and June University of Michigan consumer sentiment reports scheduled along with the Federal Reserve’s Beige Book. Possibly it will be driving power to break out of the range. We have to monitor COVID cases in the USA and government response to it. At the moment it is one of the most important fundamental factors for the American dollar and it will have an impact on EUR.
CME:6E1!Short
by UnknownUnicorn1156963
EURO FUTURE TO ANALYSE EUR/USD FX- OPPORTUNITY LONG - 6E!-240MNFrom the history of the 6E! Euro Future which can be used to analyse also the EUR/USD (FX), we can see that there is a strong probability to see the market pushing up to break the lines as it is entering in a very high pressure zone. The horizontal blue line is a very strong support, very hard to break. We have seen several attempts to brake the blue line with very huge volumes. All Failed! However, there is a grey horizontal line which shows an hypothetical support under the horizontal blue line. Potential probable high profits for entry when the market will break the lines and exit this current pattern. Beware of possible pullback on the top red thick resistance line marked by the green arrow. ---------------------------------------------------------------------------------------------------------------------------------------- We see more and more people happy taking positions and decisions through our analysis.That's great! Please beware about this DISCLAIMER: this trading idea and all others published here or on any social network, editorial, media and press, can change at anytime without any notice. Trading is risky and losses or profits are the results of your own decisions and not the result of this analysis. Trading assets on financial markets is very risky and this analysis is to provide another point of view.
CME:6E1!Long
by Diallo_Charts_Ideas