Alpesh Patel's NEWSLETTERPRO - Dollar ticks higher on better than expected ADP figures but the FOMC release didn’t reveal that much

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Dollar ticks higher on better than expected ADP figures but the FOMC release didn’t reveal that much

© Alpesh Patel

MORNING BRIEF

Yesterday was a day of mixed performance for the major pairs we’re monitoring in our daily report. Euro printed a new low falling below the 1.3570 support but lacked the momentum to go much lower while the Pound gained against the US Dollar and reached 1.6470. The much awaited FOMC minutes’ release didn’t offer any significant hints on what to expect down the road as the committee’s members offered little insight. As a result and with the ADP employment data ticking higher the US Dollar gained against its peers except for the Pound but the rally we expected didn’t come. Now our attention turns to today’s central banks’ meetings as potential market moving events. ECB’s Mario Draghi is expected to be content with the current level of stimulus and the way the union is performing and if this happens it could send the Euro mildly higher. Any sign of concern from his part however could intensify yesterday’s drop. On the other hand, the BoE has every reason to be happy about the way the economy is performing and even though we don’t expect any changes in monetary policy the mere fact that everything is going well could send the Pound higher again today. Finally, regarding the US Dollar’s outlook everyone is now focused on tomorrow’s NFP release. All indications suggest that the figures could print higher than expected and this could provide enough lift to the Dollar and pressure the rest of the currencies but we’ll discuss this subject more in our report tomorrow.

Euro-zone Retail Sales and ADP Employment data ahead of the FOMC minutes’ release

The Economic Calendar for today holds a number of important events. The day begins with the Euro-zone’s Consumer Confidence report but all eyes will be focused on Mario Draghi’s comments a few hours later when the ECB will release its Rate Decision. The BoE will also be releasing its Rate Decision around the same time and even though we expect nothing new to come out of this release the fact that the domestic economy progresses well could provide enough demand to lift the Pound higher. Finally, the US Initial Jobless Claims report will offer more insight to the US job market but the event everyone is waiting for is tomorrow’s NFP report so reaction to today’s release is expected to be light.

Economic Calendar

Time

Currency

Event

Importance

Forecast

Previous

10.00

EUR

Euro-zone Consumer Confidence

Medium

-13.6

12.00

GBP

BoE Rate Decision

High

0.5%

0.5%

12.45

EUR

ECB Rate Decision

High

0.25%

0.25%

13.30

USD

Initial Jobless Claims

Medium

 

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TECHNICAL ANALYSIS & LEVELS

 

EUR/USD

Euro fell yesterday against the Dollar and our short entry has been triggered at the 1.3565 price. However, the lack of any significant information in the FOMC minutes’ release didn’t allow this drop to accelerate and overnight the pair pulled back a bit. We remain short on this one, today’s ECB event and Mario Draghi’s comments may cause a bit of volatility but the overall outlook for the Euro remains negative. Our targets remain the same, target #1 at 1.3520 and target #2 at 1.3435, stops at the 1.3665 mark.

GBP/USD

The Pound popped higher yesterday against the Dollar and our long entry got triggered and the first target at the 1.6465 mark was hit. However the slight pullback brought the Pound lower and our stops that had been moved at the breakeven price were hit. Now , for the day ahead we’d like to rejoin the trend higher if it prints a new high and as such our suggestion is: long entry at the 1.6475 price, targeting the 1.6520 mark with a stop placed at the 1.6415 level.

FTSE 100

The FTSE 100 continues to hold the same range for yet another day. It seems that the recent uptrend has stopped and now the index is looking for direction, we’re more inclined to short the FTSE at this time and our suggestion is a short trade below the 6,695 support. More specifically, we’d like to enter short at the 6,690 points, target the 6,650 and 6,685 price tags and place a stop at the 6,780 points level.

Gold

Gold offered us a small amount of profit yesterday after our short entry was triggered and our first target at the $1,220 mark was hit. However, the drop didn’t pick up any pace and the pullback hit our stops at the breakeven price. For the time being the technical outlook for the short-term future looks weird and we’re hesitant to suggest a trade at this time. It looks as Gold will test the 55-period EMA and possibly reach lower but this remains to be seen. We’ll stand aside for today and see whether this retracement will end in order to plan our next move.

 

The above charts have been created using FXCM’s Trading Station platform.

STOCK MARKET FOCUS

 

[Restricted Content] PLC.

The Alpesh Patel Momentum/Value 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 9 out 10 in our Value/Growth rating and gets an A Grade rating on our Bullish Momentum meter. The P/E ratio is medium suggesting that the stock might be  fairly priced, the ratio of the price earnings growth is low and Turnover is up year on year supporting the growth potential. From a technical standpoint, the MACD indicator is pointing upwards in the weekly chart above suggesting further incline. The suggested holding period for a stock of this type is 2-3 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.

 

 

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