Eurozone Private Sector Logs Strongest Growth In 5 Months

Trading 05 fév 2020 Commentaire »

The euro area private sector expanded at the strongest pace in five months in January, final survey data from IHS Markit showed Wednesday.

The final composite output index rose to 51.3 in January from 50.9 in December. According to flash estimate, the index score was unchanged at 50.9.

The private sector expansion was again driven by the services economy during January, although growth moderated from December. Meanwhile, manufacturing output continued to fall, extending the current sequence of contraction to a full year.

The services Purchasing Managers' Index dropped to 52.5 from 52.8 in December. The flash estimate was 52.2.

The survey signaling a quarterly GDP growth rate of just under 0.2 percent, Chris Williamson, chief business economist at IHS Markit said. The Wuhan coronavirus meanwhile represents a new potential disruptor to business and trade.

"We consequently expect the eurozone to avoid recession in 2020 but to struggle to muster growth of 1.0 percent," Williamson added.

All nations covered by composite PMI data recorded an expansion in private sector output. Germany enjoyed its strongest performance for five months.

France and Spain recorded slower gains in output than in December, whilst Italy remained the weakest-performing despite recording its first expansion for three months.

Driven by strong growth in services and slower pace of decline in manufacturing, Germany's private sector expanded for the second straight month. The composite PMI climbed to 51.2 from 50.2 in December. The flash reading was 51.1.

The services PMI came in at 54.2 in January versus 52.9 in December. The latest reading was the highest since August and in line with preliminary score.

Meanwhile, France posted its slowest private sector growth in four months. The composite PMI dropped to 51.1 in January from 52.0 in December. This was below the flash 51.5.

The services PMI came in at 51.0 compared to 52.4 in December and the flash estimate of 51.7. The score signaled the softest growth since last April.

Italy's private sector logged a marginal growth, ending a two-month sequence of contraction. The composite output index rose to 50.4 in January from 49.3 in December.

The services PMI posted 51.4 versus 51.1 in December, signaling an eighth consecutive increase in services sector activity.

Spain's private sector growth softened to a three-month low in January. The composite PMI dropped to 51.5 from 52.7 a month ago.

The services sector continued to expand but the pace of expansion was the weakest since November 2013. The corresponding index came in at 52.3 versus 54.9 in the previous month.

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Oil Prices Rise Over 2% As Coronavirus Worries Ease

Trading 05 fév 2020 Commentaire »

Oil prices rallied on Wednesday after reports of breakthrough in coronavirus treatment.

A leading British scientist has made a significant breakthrough in the race for a coronavirus vaccine by reducing a part of the normal development time from "two to three years to just 14 days", Sky news reported.

The vaccine will be too late for this current outbreak but it will be crucial if there is another one, Sky said.

Separately, China's Changjiang daily reported that a research team at Zhejiang University had found two new drugs that can effectively "inhibit coronavirus".

Benchmark Brent crude jumped 2.2 percent to $55.16 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 2.1 percent at $50.67.

Investors also cheered media reports suggesting that OPEC and its producer allies are considering further output cuts to counter a potential squeeze on global oil demand resulting from China's fast-spreading deadly virus.

The economic slowdown resulting from the virus outbreak is expected to reduce 2020 global demand growth by 300,000-500,000 barrels per day (bpd), roughly 0.5 percent of global demand, according to BP's Chief Financial Officer Brian Gilvary.

Meanwhile, data from the American Petroleum Institute showed on Tuesday that U.S. crude oil stocks rose by 4.18 million barrels for the week ending January 31, well above analyst expectations for a 2.8-million-barrel build in inventory.

The U.S. Energy Information Administration (EIA) will release its weekly inventory report later in the day.

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February 5, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 05 fév 2020 Commentaire »


On December 13, the GBPUSD pair looked overpriced around the price levels of 1.3500 while exceeding the upper limit of the newly-established bullish channel.

On the period between December 18 - 23, bearish breakout below the depicted channel followed by initial bearish closure below 1.3000 were demonstrated on the H4 chart.

However, early signs of bullish recovery were manifested around 1.2900 denoting high probability of bullish pullback to be expected.

Thus, Intraday technical outlook turned into bullish after the GBP/USD has failed to maintain bearish persistence below the newly-established downtrend line.

That's why, bullish breakout above 1.3000 allowed the recent Intraday bullish pullback to pursue towards 1.3250 (the backside of the broken channel) where bearish rejection and a sideway consolidation range was established between (1.3200-1.2980).

Moreover, new descending highs were also demonstrated around 1.3120 and 1.3085.

Intraday technical outlook was supposed to remain bearish as long as the pair maintained its movement below 1.3120 (recently established descending high).

That's why, conservative traders were advised to wait for bearish breakdown below 1.2980 as a signal for further bearish decline towards 1.2900, 1.2800 and 1.2780.

However, on Thursday, early signs of bullish recovery were manifested around 1.2980-1.3000 (Bullish hammer followed by a Bullish Engulfing H4 candlestick).

Today, signs of bullish rejection are currently being manifested around 1.2980-1.3000. However, upcoming bearish breakdown below 1.2980 is more probable to occur based on the recent price action.

In the Meanwhile, Intraday traders can wait for H4 candlestick closure below 1.2980 as a valid SELL signal with T/P level to be projected towards 1.2910 then 1.2830 if sufficient bearish momentum is maintained.

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February 5, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 05 fév 2020 Commentaire »


On December 30, a quick bullish spike towards 1.1235 (Previous Key-zone) was suggested to be watched for bearish rejection and a valid SELL entry.

A bearish ABC reversal pattern was demonstrated just before another bearish movement took place towards 1.1100 when the EURUSD pair has lost much of its bearish momentum.

That's why, another bullish pullback was executed towards 1.1175 where the depicted key-zone as well as the recently-broken uptrend were located.

Evident signs of bearish rejection were demonstrated around 1.1175. That's why, another bearish decline was executed towards 1.1100 then 1.1035 which failed to provide enough bullish SUPPORT for the EURUSD pair.

Further bearish decline took place towards 1.1000 where the pair looked quite oversold around the lower limit of the depicted bearish channel.

Hence, significant bullish rejection was able to push the pair back towards the nearest SUPPLY levels around 1.1080-1.1100 where a confluence of supply levels (including the upper limit of the channel) are located.

Since then, the pair has been trending within the depicted bearish channel.

Hence, further bearish decline should be expected towards 1.0995 and 1.0965 where Fibonacci Expansion levels and the lower limit of the channel are located.

Hence, intraday traders should be looking for signs of bullish recovery around these price levels (1.0960) as a valid intraday BUY signal.

Bearish closure below 1.1000 is needed first to enhance further bearish decline towards 1.0995 and 1.0960. Otherwise, the EURUSD pair remains trapped between 1.1000 and 1.1100.

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Trading plan for EUR/USD for February 05, 2020

Trading 05 fév 2020 Commentaire »


Technical outlook:

EUR/USD rallied last week up to 1.1095 only to face resistance at the back of the support trend line as seen here. The single currency pair has backed off since then and is trading close to 1.1010 levels at this point in writing. One can expect a pullback rally towards 1.1060 levels from here, before EUR/USD reverses lower towards 1.0950. The entire structure still remains bullish until prices stay above the 1.0879 lows/support formed in October 2019. The complex corrective structure seems to be into its last wave lower and might find support around 1.0950 levels. Please note that fibonacci 0.786 retracement of the entire previous rally is also seen at 1.0956. I expect EUR/USD to form the bottom around the 1.0940/50 zone before the rally could resume towards 1.15. The bottom line remains that prices should stay above 1.0879 levels, to keep the above bullish structure, intact.

Trading plan:

Remain long and buy more @ 1.0940/50, stop @ 1.0879, target is 1.15 and higher.

Good luck!

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Analysis of EUR/USD and GBP/USD for February 5. European business activity in the service sector did not impress the markets

Trading 05 fév 2020 Commentaire »



On February 4, the EUR/USD pair fell by 15 basis points and thus continues to build the expected wave b as part of a new upward trend, most likely also a three-wave section of the trend. If this assumption is correct, then today or tomorrow, I expect the instrument's quotes to resume rising within wave C. A successful attempt to break through the minimum of wave Y will show the market's readiness to sell euro currencies further, and will also complicate the downward section of the trend that begins on December 31.

Fundamental component:

There was virtually no news background on Tuesday. At least for the euro/dollar instrument. There were only two or three completely uninteresting economic reports in the United States and the European Union, such as the producer price index or production orders. However, it is easy to guess that they did not cause changes in demand for a particular currency. The euro continues to lose positions, which still fits into the current wave markup. Today will be a more eventful day. Several economic reports in the eurozone have already been released, which allow us to draw certain conclusions. First, the indices of business activity in the services sector in Germany, France, Spain, Italy, and the entire EU became known. In Germany, the index remained unchanged at 54.2, in France - it fell to 51.1, in Italy - it rose to 51.4, in Spain - it fell to 52.3, and in the European Union as a whole - it rose to 52.5. Given all the data, we can call them neutral, since some indices have increased, and some have declined. Then came the report on retail sales in the European Union for December, which showed a slowdown to 1.3% y/y and a drop of 1.6% m/m. Market expectations were much higher, and it was because of this report that demand for the European currency fell even more in the first half of the day. If the nature of the reports coming out in Europe does not change, then instead of an upward trend, we may see a complication of the downward trend. As of today, the news calendar also contains a report on the change in the number of ADP employees in the US, and the business activity indices in the US service sector ISM and Markit. All three indicators have very high forecasts, that is, the market does not expect any deterioration in these indicators. However, it is their deterioration that can lead to the construction of an upward wave with the instrument.

General conclusions and recommendations:

The euro-dollar pair has presumably started building an upward set of waves. Thus, before a successful attempt to break the minimum of the wave y, I recommend buying euros using the MACD "up" signals with targets located near the calculated marks of 1.1115 and 1.1144, which is equal to 50.0% and 61.8% for Fibonacci.



On February 4, the GBP/USD pair gained about 30 basis points and made an unsuccessful attempt to break the 38.2% Fibonacci level, which led to the quotes moving away from the reached lows. However, the current wave markup has not changed due to the increase in the pound-dollar instrument. Wave 2 or b, although it looks very complicated, is considered completed at this time, so the tool remains within the framework of building wave 3 or C, which can also turn out to be very long.

Fundamental component:

The news background for the GBP/USD instrument on Tuesday was the same as for the EUR/USD instrument. All the last movements of the instrument were related to global events. First with the monetary policy of the Bank of England, then with Boris Johnson's speeches on the negotiation process with the European Union. Now there are no such messages or news, and the tool has calmed down a bit. The index of business activity in the UK services sector, released today, was higher than market expectations and caused additional demand for the pound. However, American reports will be more important today, and they may lead to a drop in demand for the British or to its strengthening. Anyway, the wave markup implies the construction of a downward wave, so the news background should be in favor of the dollar, that is, I expect reports from America to exceed forecasts.

General conclusions and recommendations:

The pound-dollar instrument has presumably moved to build a downward wave 3 or C. Thus, I now recommend selling the pound with targets located around the mark of 1.2764, which is equal to 50.0% for Fibonacci, and below. At the moment, I recommend selling the instrument after a successful attempt to break the mark of 1.2939, which corresponds to 38.2% for Fibonacci, or the MACD signal "down".

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Eurozone Retail Sales Fall More Than Expected

Trading 05 fév 2020 Commentaire »

Eurozone retail sales declined more than expected in December on weak food and non-food product sales, data from Eurostat revealed Wednesday.

Retail turnover declined 1.6 percent in December from November, when it was up 0.8 percent. Economists had forecast a 1.1 percent drop.

Sales of food, drinks and tobacco fell 1.4 percent and that of non-food products decreased 1.6 percent in December. Automotive fuel sales were down 1.4 percent.

On a yearly basis, retail sales growth eased to 1.3 percent from 2.3 percent in November. This was also slower than the forecast of 2.3 percent.

In the EU27, retail sales decreased 1.3 percent on month but grew 1.9 percent from last year.

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Euro Little Changed After Eurozone Retail Sales

Trading 05 fév 2020 Commentaire »

Following the release of euro area retail sales for December at 5.00 am ET Wednesday, the euro changed little against its major rivals.

The euro was trading at 1.1025 against the greenback, 120.91 against the yen, 1.0719 against the franc and 0.8442 against the pound around 5:03 am ET.

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*Eurozone Dec Retail Sales Fall 1.6% On Month, Consensus -1.1%

Trading 05 fév 2020 Commentaire »

Eurozone Dec Retail Sales Fall 1.6% On Month, Consensus -1.1%

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*Eurozone Dec Retail Sales Up 1.3% On Year Vs. 2.3% In Nov, Consensus +2.3%

Trading 05 fév 2020 Commentaire »

Eurozone Dec Retail Sales Up 1.3% On Year Vs. 2.3% In Nov, Consensus +2.3%

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