View: Blanks of the trader

Blanks of the trader

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Recap

EUR/USD setup posted last week got completed and is still valid at the moment. Having said that, the traders with shorter stops may have been taken out at this point as selling continued last week before seeing signs of reversal @1.367's level. Commitment Of Traders report revealed shift for EUR since a long time, net short positions outweighed long for non-commercials (hedge funds). Although fundamentally there is no reason for this shift, it is pointless to ignore it for whatever reason is behind it and perhaps longer term long EUR positions should be considered with more caution as probability of ECB action to tackle deflation increased significantly . Having my long position initiated @1.374's as it stands now it is about -20 pips on the balance, having very deep CD leg of Cypher pattern last week, first target should come about 1.378's at this point in my book. In terms of new setups there is nothing that caught my attention for the coming week, so number releases below could create some opportunities as the week will progress.

Risk events (UK time) Tuesday German PPI (April), 7am: German producer prices are forecast to drop by 0.9% year-on-year, the same as in the previous month. Market to watch: EUR/USDUK CPI (April), 9.30am: Price growth in the UK is expected to accelerate to 1.7% from 1.6%. Market to watch: GBP/USD Wednesday Bank of England minutes, 9.30am: no change was announced by the bank at its last meeting, but since then we have had the inflation report that was of a more dovish tone. Watch out for comments on slack in the economy and debate on how strong the economy really is. Market to watch: GBP/USDUK retail sales (April), 9.30am: Year-on-year sales growth (including cars) is expected to touch 5.1% from 4.2% last month, a significant move. Market to watch: GBP/USDFederal Reserve minutes, 7pm: Janet Yellen has been tight-lipped on the subject of interest rate increases. The focus will be on the weight of opinion on the committee about when an increase would be appropriate. Market to watch: everything, but especially US indices, USD/JPY, EUR/USD, GBP/USD Thursday China HSBC manufacturing PMI (May), 2.45am: Global PMI Day kicks off with China. The previous month’s figure was 48.1, and we expect this to improve to 48.4, although this is still in contraction territory. Market to watch: copper, FTSE 100, AUD/USDEurozone PMI data (May), 8am-9am: This slew of indicators from the eurozone is broadly expected to be slightly weaker. Market to watch: EUR/USD, EUR/GBP, DAXUK GDP (Q1, revision), 9.30am: No change is expected to the first revision, with quarter-on-quarter growth of 0.8% and year-on-year growth of 3.1% still forecast. Market to watch: GBP/USD, EUR/GBPWeekly jobless claims, 1.30pm: These hit a seven-year low last week, down 24,000 to 297,000. The drop below 300,000 is particularly encouraging. Market to watch: USD/JPY, US indicesMarkit manufacturing PMI (May), 2.45pm: A slight improvement is expected here, from 55.4 to 55.5. Market to watch: USD/JPY, US indicesExisting home sales (April), 3pm: The month-on-month rate is expected to increase rapidly to 2.2% from 0.2%, with 4.69 million being sold this month, up from 4.59 million last month. Market to watch: USD/JPY, GBP/USD, EUR/USD Friday German GDP (Q1 final), 7am: No revision is forecast for German economic growth, which should stay at 0.8% for the quarter-on-quarter figure and 2.3 for year-on-year. Market to watch: EUR/USD, DAXGerman IFO (May), 9am: These sentiment surveys can be useful in determining the current state of the German economy. The ‘current assessment’ index is forecast to go up a notch, to 115.4 from 115.3. Market to watch: EUR/USD, DAXUS new home sales (April), 2pm: A bounce back in month-on-month growth to 10% from -14.5% is expected, with 423,000 sales in the month from 384,000 in March. Market to watch: EUR/USD, GBP/USD, USD/JPY, US indices

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