AUD/USD: Australian GDP report (1 June 04:30 GMT +3)

Unexpectedly for many market participants, the representatives of Bank of Australia decided to cut the interest rate in the beginning of May for 25 basis points (from 2.00% to 1.75%) and it had a negative impact on Australian Dollar. Now traders are paying extra attention on any economic data coming from down under, and any weak data will have a massive negative effect on AUD.

Australian GDP report will be a key economic news of Pacific region this week:

It is expected that Year-over-Year GDP will decrease a little bit and most likely it will have a negative impact on Australian dollar.

Besides GDP report, Retail Sales and Trade Balance data will be published this week as well:

AUDUSD chart:

There is a downward rate movement on AUDUSD D1 chart, but the trend is slowing down (highlighted with the lines of resistance on the price chart) and also according to the indicator of technical analysis “Stochastic” the value got back to the neutral area. Now a short upward correction is expected and after that a further downward trend might continue.

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Trading signals

Trading Signals

16.00

 EUR/JPY                    Duration  1 h.

 GBP/USD                   Duration  1 h

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FREE TRADING SIGNALS

TRADING SIGNALS 2013-05-27

SELL

EUR/USD                         1,1177

EUR/JPY                          122,59

USD/JPY                          109,68

GBP/USD                         1,4637



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Report on changes in England's GDP

EUR/GBP. Key event – UK GDP Report (May 26th, 11:30 GMT +3)

Soon, on the 23rd of June, there will be a referendum in the UK regarding the possibility of United Kingdom quitting the Eurozone. Before this event institutional investors keep transferring their assets into the other markets in order to avoid political and economic risks.

Actual CPI data for April was much worse than expected last week:

..and also there is a risk that the overall political and economic situation will have a negative impact on GDP growth.
This week, on the 26th of May, 11:30 GMT +3 UK GDP Report for the first quarter of 2016 will be published and it is expected that the numbers will be quite high.

If GDP results are less than expectations, British Pound will be under pressure again.

EURGBP chart:

Despite all the political and economic difficulties in the United Kingdom, a downward correction (highlighted with blue lines on the chart above) has started after a long upward trend (highlighted with orange lines on the chart above) on EURGBP D1 chart. According to the indicator of technical analysis “ADX” a new trend is starting and a downward movement prevails.

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NZD/USD Key event – Trade Balance of New Zealand (May 25th, 01:45 GMT +3)

After the publication of Retail Sales and PPI reports of New Zealand which were less than expectations, traders will be waiting for the Trade Balance of New Zealand data.

Retail Sales data of New Zealand for the first quarter of 2016:

PPI of New Zealand for the first quarter of 2016:

Predicted Trade Balance of New Zealand for April 2016:

There is still quite complicated economic situation in Pacific region and experts believe that economic data might get worse for both New Zealand and Australia.

If actual results are worse than expected – it will have a negative impact on the value of NZD.

NZDUSD chart:

There is a trend change on NZDUSD D1 chart – the lower line of an upward trend was broken (highlighted with white color) and if the actual results are worse than expected the downward trend might strengthen.

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Australia’s Unemployment rate

AUDUSD Key event – Australia’s Unemployment rate (May 19th 04:30 GMT +3)

At one of the latest Bank of Australia meetings a decision has been made to cut the refinancing rate from 2.00% to 1.75%. This tells us that no other means of economic stimulation has been working and BoA’s leaders are forced to take drastic measures. From this point on any new piece of fundamental data will play a huge role, especially those pertaining to the labor market, inflation and changes to GDP.

Key event this week is Australia’s Unemployment rate:

..the unemployment rate remains close to the optimal level = 6%, but if the overall dynamics will keep getting worse it will have a negative impact on Australian Dollar.

Another important economic event is RBA Meeting Minutes, as it will show the current economic outlook of Australia:

It is expected that after the publication of this document there will be a massive volatility in the market.

AUDUSD chart:

The latest economic Australian statistics is quite weak and the AUDUSD D1 chart shows it all – the rate decreased by 546 points in the last three weeks. The rate keeps decreasing in the narrow trend range.

What is more, “Awesome Oscillator” it also pointing on a downward trend.

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Japan’s GDP Annualized report

USDJPY Key event – Japan’s GDP Annualized report (May 18th 02:50 GMT +3)

Last week several important economic reports came from Japan: BOJ’s Bank Lending report, the Index of Leading Economic Indicators and Average Cash Earnings (YoY). All of the findings point to the conclusion that the latest Japanese monetary policy changes are bringing good results and further strengthening of the economy is quite possible.

The biggest economic problem in Japan is low inflation. As soon as this issue is solved – GDP will start to increase as well. Latest economic data is showing a very good (especially CPI related) dynamic. For example, “Bank Lending” was more than 10% higher compared to the expectations:

..Average Cash Lending – actual results were twice higher than the forecast:

..another quite important economic report is “Lending Index” which shows the overall economic situation in the economy (the higher it is, the better):

..and a 10-Year JGB Auction was much better compared to the previous time:

So, it is expected that the preliminary GDP data will be much better as well:

..and if the actual data is as good as the expectations – it will have a positive impact on Japanese Yen.

USDJPY chart:

It is much better to take the lines of support and resistance into the consideration at the moment, cause fundamental factors prevail, as Bank of Japan is using the current situation to take some unpopular decisions which will have a negative impact on JPY in a short-term, but on the other hand they make it possible to solve a lot of economic problems in a long-term.

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EURUSD Key event – US Inflation Report (May 17th 15:30 GMT +3)

Having received the disappointing data on the US labor market earlier this month, the traders are now fixated on the US Inflation Report. Should these results turn out to be underwhelming as well, no Interest rate hike should be expected, which in turn will depreciate the US dollar.

Despite the fact that a minor CPI increase is expected it is quite possible that this will not happen due to weak data from the labor market and some other economic statistics.

What is more, there are less and less market participants who believe that US Federal Reserve representatives will decide to hike the rate on the next meeting, which will be held in June. It was planned to hike the rate four times in 2016, but so far rate change is yet to happen.

EURUSD chart:

Lower line of an up-trend was broken on EURUSD D1 chart. But traders have to be accurate, as it might be a fake breakthrough as the indicator of technical analysis “Stochastic” is showing that the rate is getting closer to the oversold area and the rate turnaround movement might follow soon.

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2016-05-16

Trading Signals

12.00

 GBP/USD                           Duration      1 h.

 EUR/USD                           Duration      5 h.

 EUR/JPY                            Duration       5 h.

Eurozone GDP report

EUR/USD Key event – Eurozone GDP report (May 13th, 12:00 GMT +3)

There were several important economic events last week from the Unites States of America and Eurozone. First of all, these are unemployment rate of USA and NonFarm Payrolls (measures the change in the number of people employed during the previous month, excluding the farming industry). Actual data was much worse than the prediction and experts can hardly believe that there will be a rate hike in the US in June:

In 2016 four rate hikes were expected by market participants, but due to weak CPI numbers and due to specific issues in the labor market these decisions are constantly postponed to a later date.
Unfortunately, there are some specific issues in Eurozone economy as well. Retail Sales data (March) has declined significantly and many experts believe that the leaders of European Central Bank applied an incorrect monetary policy and their plan to cut the interest rate has crashed.

Retail Sales data has a massive impact on CPI and inflation is the key economic aspect of Eurozone economy at the moment.

This week Eurozone GDP (Q1) report will be a key economic event (May 13th, 2016 12:00 GMT +3):

Market participants believe that GDP growth will be doubled compared to the previous quarter and if the actual data are as good as the expectations it will have a positive impact on the value of European currency. In the opposite case, EUR will most likely decrease.

If to speak about the US then there will be a publication of several important economic reports on May 13th 2016 at 15:30 GMT +3. These are “Retail Sales” and “PPI”. Both numbers have a massive impact on the inflation.

EUR/USD chart:

There is still an upward trend on EURUSD D1 chart, but there is a short downward correction at the moment and the indicators of technical analysis “Awesome Oscillator” and “Parabolic SAR” prove it.

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US Crude Oil Inventories

BRENT OIL Key event – US Crude Oil Inventories (May 12, 2016, 17:30 GMT +3)

There is quite interesting situation in the oil market at moment. After a long downward oil price rally plenty of leading companies decided to postpone their investments into the exploration projects and it lead to specific problems of increasing the oil production.

Lately, oil price increased significantly due to several reasons:

• Fires in Canada which led to the 500,000 barrels a day production decrease;
• Military conflicts in Libya which led to 120,000 barrels a day production decrease;
• And one of the key factors – willingness of Iran to join OPEC possible decision to freeze the volumes of oil production on the specific level.

That is why a lot of traders pay a lot of attention to weekly “ US Crude Oil Inventories” statistics.

..if actual numbers are higher than the expectations it will have a negative impact on the oil price.

Crude Light Oil chart:

The rate is still moving inside the narrow trading range. It is expected, that it will remain inside the 44,2 – 46,1 range this week.

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BoE MPC vote

GBP/USD Key Event – BoE MPC vote (May 12, 14:00 GMT +3)

Soon, on the 23rd of June 2016, there will be a referendum in the UK about the possibility of quitting European Union (usually this referendum is called “Brexit”). That is why there are a lot of institutional investors who are still transferring their funds to other markets in order to avoid economic and political risks.

UK economic data is getting worser. Different PMI numbers are decreasing heavily and it has a negative impact on GDP growth.

..UK Construction PMI (April):

..UK Services PMI (April):

..what is more, 10-Year UK Treasuries were sold at 1.66%, which is 10% higher compared to the previous auction:

On May 12, 2016 representatives of Bank of England will held a meeting and a possibility of rate change will be discussed. It is expected that it will remain unchanged, but market participants will consider the amount of representatives who voted for the rate hike / cut or for the rate to remain unchanged. If there is someone who will vote for the rate cut – it is have a negative impact on the value of GBP and vice versa.

But before that UK Trade Balance data will be published (May 10th 2016 at 11:30 GMT +3):

..and Industrial Production data (May 11th 2016, 11:30 GMT +3):

Most likely these reports will have an impact on the decision of the representatives of Bank of England.

GBPUSD chart:

Unlike EURUSD, there is a downward trend on GBPUSD D1 chart at the moment regarding the “Commodity Channel Index” indicator at the moment. Due to political factors most likely this trend will be continued.

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