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Forex Forum Archive for 11/20/2016
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GVI Trading john bland 22:01 GMT November 20, 2016
GVI Trading john bland 19:33 GMT November 20, 2016
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GVI Trading Statistical Market BIAS Indicators--
The Fed Funds Market Sentiment Barometer reflects current sentiment about a future change in Fed policy. Odds for one rate hike by yearend are: +77% from +75% late Thursday.
GVI Trading john bland 13:34 GMT November 20, 2016
WEEKLY HIGH IMPACT NEWS:
No Major Data
13:30 CA- Retail Sales
15:00 US- Existing Homes Sales
00:00 flash Mkt & Service PMIs
13:30 US- Durable Goods
13:30 US- Weekly Jobless
15:00 US- New Home Sales
15:00 US- final University of Michigan Survey
15:30 US- EIA Crude
19:00 US- Fed Minutes
00:00 JP/US- Holiday
09:00 DE- IFO Survey
09:30 GB- GDP
14:45 US- flash Service PMI
16:00 US- Early Close
- The week ahead will be a short one with the U.S. virtually closing from Wednesday onwards for the Thanksgiving Holiday. With the economic calendar virtually empty on Monday, a significant amount of key data has been compressed into Tuesday and Wednesday. This includes flash global PMIs and the latest Fed policy Minutes on Wednesday.
- Testimony last Thursday by Fed Chair Yellen saw an apparent signal that the FOMC will be hiking its Fed Funds target by 25bps on December 14. Fed funds futures have priced the odds of a rate hike at that meeting at a near certainty.
- Markets also have adjusted their outlook for the future course of policy as they expect the Trump government to move aggressively and quickly to stimulate future growth. Accordingly, yields on fixed income instruments are being marked sharply higher. This has resulted in greater demand for the USD. Initially equity prices have been pushed higher, but at some point higher interest rates could become a headwind for additional gains.
- Another USD positive was the Bank of Japan announcement that it was conducting its first operation to cap JGB rising yields by buying bonds. It tries to cap the 10-yr JGB at 1.00%. Sovereign bond yields globally have been rising in the wake of the Trump victory.
- The Obama Administration is in a lame duck status, but might have to deal with a sharply rising USD. The Trump administration will not be installed for another two months. His inauguration is on January 20, 2017. At this point though we still know little about who will be in his cabinet.
John M. Bland, MBA
CURRENT CONDITIONS: Mild Risk Off
Amsterdam NordFX 12:24 GMT November 20, 2016
Forex Forecast for EURUSD, GBPUSD, USDJPY and USDCHF for November 21-25, 2016
First, a review of last weeks forecast:
It is clear that the dynamics of the dollar exchange rates are now largely determined by the actions of the US President-Elect Donald Trump, which have thus far been driving a continuing strengthening of the American currency. As a reminder, in the medium term forecast the vast majority of experts (70%) predicted a decline in the EUR/USD pair to the area of 1.0600-1.0750. However, the reality has surpassed all expectations as the pair had already managed to reach these values by last week, stopping at around 1.0588 on Friday night;
Regarding the forecast for GBP/USD, 50% of analysts with the support of graphical analysis thought that the pair had reached its local maximum at 1.2670. They therefore expected it to fall at the very least to the support level of 1.2380, or even lower. That was what happened: last week, the pair, having lost more than 300 points, reached its bottom at around 1.2300;
USD/JPY: citing the opinion of experts about a possible decline of the pair to the 104.00-104.50 area, we immediately qualified the statement by saying that, as with the previous cases, the trend direction here would depend on what the future US President would say and do. As a result, contrary to the forecasts of analysts, the dollar managed to significantly strengthen against the yen - by the end of the week the pair was ready to take the height of 111.00. However, it never actually managed to complete this ascent, ending the session at 110.90;
For several months, experts expected the return of USD/CHF to the 1.0000-1.0100 range. This opinion was almost unanimous: 90% to 100% of analysts agreed with this forecast, and it was finally realised this week: on Monday the pair reached the landmark 1.0000 level, turning it into a Pivot Point for three days before rushing upwards. It ended the week in the 1.0100 area.
Forecast for the upcoming week:
Summing up the opinions of several dozen analysts from world leading banks and brokerage companies as well as forecasts based on different methods of technical and graphical analysis, we can suggest the following:
It is clear that all indicators on H4 and D1 are looking southwards when predicting the future of EUR/USD. At the same time, however, more than half of the oscillators indicate the overselling of the pair, which could imply a possible correction. 40% of experts and graphical analysis on H4 agree with this. They believe that before it continues to fall, the pair may first rise to the 1.0700-1.0800 area. As for the local low point, the most commonly cited level is the 2015 low of 1.0450. However, about 15% of analysts remark that we cannot exclude the possibility of full parity within the next few months (i.e. that the pair would settle at the 1.0000 mark);
Similarly to the case of EUR/USD, the indicators predict a decline of the GBP/USD pair, with a quarter of them indicating an overselling. Experts also cannot agree in their forecasts: 40% of them maintain that the pair will fall, 40% think it will grow, and the remaining 20% foresee a sideways trend. If we add the indications of graphical analysis on H4 to the above, we can presume that the pair will potentially move laterally for a short while within the 1.2270-1.2440 channel, with the Pivot level being 1.2330. In the long-term, however, a majority of 60% of analysts predict that the pair will fall, naming 1.2100 and 1.1940 as support levels;
USD/JPY: Despite last week's steady growth, almost 60% of experts continue to expect a decline of the pair, naming 107.50 and 105.50 as target levels. The observation that the pair has been overbought, as almost a third of the oscillators suggest, makes it possible to talk about a trend reversal. However, graphical analysis tells us that the pair may spend some time moving sideways within the boundaries of 108.55-112.00, having a Pivot level of 110.00;
After USD/CHF reached its long-sought target of 1.0000-1.0100, the indicators started showing that this pair was overbought as well, suggesting, therefore, that it can be expected to fall to the level of 0.9900. The main resistance in this case is located at the level of 1.0135. 45% of experts and graphical analysis on H4 agree with this judgement. As for the remaining analysts, they hold the belief that the dollar's potential is far from exhausted: we should expect it to continue strengthening and striving to the heights of January 2016, which are located in the 1.0260 area.
Roman Butko, NordFX
Note: These materials should not be deemed as a recommendation for particular investments or as guidance for working on financial markets as they are for informative purposes only. Trading on financial markets is risky and can lead to loss of money deposited.
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GVI Trading. Potential Price Risk Scale
Mon 27 May 2019
AA: Major, A: High, B: Medium
Tue 28 May 2019
A 14:00 US- Consumer Confidence
C 13:00 US- Case-Shiller
Wed 29 May 2019
A 08:55 DE- Employment
AA 18:00 US- BOC Decision
A 18:30 US- EIA Crude
Thu 30 Mar 2019
A 12:30 US- Weekly Jobless
Fri 31 Mar 2019
AA 10:00 EZ- Flash HICP
A 12:30 US- Personal Income, Spending, Deflator
AA 14:00 US- Final Univ of Michigan
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