Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
High-beta FX pairs gained versus the Dollar yesterday as a host of economic reports is expected today challenging recent trends
MORNING BRIEF
Major currency pairs had the chance to correct higher against the US Dollar yesterday taking advantage of the lack of any significant news. Euro climbed back up to retest the 1.3615 high and Cable followed it to re-hit 1.6440. Attention now turns to the more important news releases that are expected this week with the Euro-zone’s GDP and Retail Sales, the British Services’ PMI and the US ADP Employment figures demanding our focus. These figures could literally make or break the recent uptrends we’ve seen on the Euro and the Cable and it’s obvious that investors have been adjusting their portfolios these past couple of days to avoid being caught off guard. A strong printing of the European figures could drive the Euro above 1.3650 but caution needs to be applied as equally strong ADP and ISM Non-Manufacturing reports could stop this move on its tracks and cause confusion to investors. The Pound also faces an interesting day ahead as we expect the Services PMI to come out strong but again any moves could be nullified by equally strong Dollar demand. Nonetheless, we believe that today we will be presented with quite a few opportunities to trade and prepare for the very important NFP report on Friday, a report that will more or less set the tone for the rest of the month.
A host of economic reports expected today putting recent uptrends to the test
Today’s Economic Calendar is filled with a number of important economic reports that will provide direction to the currency markets. The day begins with a significant amount of data expected from the Euro-zone with the German and EZ’s Services’ PMIs. Half an hour later the British Services’ PMI will also be released and a positive figure here is bound to send the Pound to test recent highs and probably surpass them. Euro-zone’s GDP and Retail Sales figures will come next and combined with the earlier reports these numbers could spur a rally higher or lower in the Euro depending on how the numbers print. However, that’s not the end of economic reports for the day and we’d like to be very cautious with any trends that will formulate early in the day as the reports expected from the US could turn the tide. ADP Employment numbers, the ISM Non-Composite reports and New Home Sales could all surprise higher and should this happen the demand for Dollars could send the high-beta FX pairs like the Euro and the Cable tumbling lower. To sum up, it’s an interesting and challenging day ahead that will provide us with much useful insight on the domestic economies we focus on.
Economic Calendar
|
Time |
Currency |
Event |
Importance |
Forecast |
Previous |
|
8.55 |
EUR |
German PMI Services |
Medium |
54.5 |
54.5 |
|
9.00 |
EUR |
Euro-zone PMI Services |
Medium |
50.9 |
50.9 |
|
9.30 |
GBP |
British PMI Services |
Medium |
62.0 |
62.5 |
|
10.00 |
EUR |
Euro-zone GDP (YoY) |
High |
-0.4% |
-0.4% |
|
10.00 |
EUR |
Euro-zone Retail Sales |
Medium |
1.0% |
0.3% |
|
13.15 |
USD |
ADP Employment Change |
Medium |
170K |
130K |
|
15.00 |
USD |
ISM Non-Manufacturing |
Medium |
55 |
55.4 |
|
15.00 |
USD |
New Home Sales |
Medium |
This is the free, time-delayed version of NewsletterPro, a subscription-based product.
If you would like to receive it before 7:30am, please subscribe by clicking here.
TECHNICAL ANALYSIS & LEVELS
EUR/USD
The Euro climbed higher yesterday clearing above the 1.3560 mark to trigger our long entry there and went ahead to hit both our targets to the pip as it literally hit 1.3615 before settling down a bit lower. The currency has now formed a double top formation signaling that investors are done repositioning and are now on the sidelines waiting for the next spark to reenter the market. We believe that today’s events will be this spark and we’d like to offer our insight on what’s to come. We think that the exit from this double top formation will show us the way and we will move accordingly. Thus we like a long entry just above the 1.3620 mark with targets at the 1.3670 and 1.3760 price tags, protected by a stop just below the recent 1.3520 low. On the other hand, should today’s events send the Euro tumbling then our trigger for a short trade will be just below the 1.3520 low, with targets set at the 1.3470 and 1.3380 marks and a stop placed just above the 1.3620 area. Today’s events could cause havoc to the markets so please be prepared to take 50% profits at the #1 targets as soon as they are hit and to move stops at the breakeven price to avoid being whipsawed.
GBP/USD
Similar to the Euro, the Pound gained back lost ground yesterday to test the 1.6440 high before retreating a bit lower to close the day. Now, for the day ahead the Pound faces important risks as the Services PMI could send it either way but any scenario could be stopped half way if the US-related news print to the opposite direction. Nonetheless, we are technical analysts and we need to follow what the charts tell us. So we need to be prepared to go long on the Cable if it clears above the 1.6445 mark with targets set at the 1.6500 and 1.6600 price tags and a stop just below the 1.6340 area. In the opposite scenario, a downwards break of the 1.6340 support will lead us towards the 1.6280 and 1.6180 marks and a stop needs to be placed just above the 1.6445 high. Caution and patience is advised particularly today.
FTSE 100
The FTSE 100 surprised us yesterday and continued falling lower. We would like to rejoin the downtrend but the index is so much oversold at this point that it would be like trying to catch a falling knife. So we need to stand aside for now as a retracement higher is required for us to consider entering a trade again.
Gold
Gold remained silent on a day that Dollar was giving back its gains and this could mean that Gold traders are set on driving Gold even lower. We’d like this to happen as we’re in the short trade we’ve entered on Monday and to protect our hard-gained profits we’d like to further adjust our stops. We’d like to move our stops down to the $1,228 area and lock in these extra profits as the yellow metal has formed a small-range sideways formation around the $1,225 mark. We expect today’s events to be reflected on Gold and possibly lead us towards more profits.
The above charts have been created using FXCM’s Trading Station platform.
STOCK MARKET FOCUS
[Restricted Content] Plc.
The Alpesh Patel Value/Growth filter has indicated [Restricted Content] Plc as our stock of the day.
Company Information: [Restricted Content]
Created using Sharescope Pro
[Restricted Content] Plc has been rated an 8 out 10 in our Value/Growth rating and gets an A Grade rating on our Bullish Momentum meter. The P/E ratio is relatively low suggesting that the stock might be underpriced, Turnover is up year on year suggesting good growth but Earnings are down year on year challenging the growth potential. From a technical standpoint, the MACD indicator has been pointing upwards on the weekly chart above pointing towards higher levels. The recommended holding period for a stock of this type is 6-12 months.
Important Information
The filters and settings in the Special Edition of the Sharescope software use Alpesh Patel’s proprietary criteria to generate suggestions of securities worthy of further investigation. They DO NOT CONSTITUTE INVESTMENT ADVICE.
This is the free, time-delayed version of NewsletterPro, a subscription-based product.
If you would like to receive it before 7:30am, please subscribe by clicking here.
Disclaimer Notice
Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.
InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
