Dollar Gains Against Other Major Currencies

Trading 08 août 2020 Commentaire »

The U.S. dollar exhibited strength against its peers on Friday after data showed a bigger than expected increase in U.S. employment in the month of July.

Data from the Labor Department showed that employment rose by 1.763 million jobs in July after climbing by a downwardly revised 4.791 million jobs in June. Economists had expected employment to rise by 1.6 million jobs compared to the 4.8 million job spike originally reported for the previous month.

The unemployment rate fell to 10.2% in July from 11.1% in June. The rate was expected to drop to 10.5%.

The failure of U.S. Democratic leaders and White House officials to make any meaningful progress on a new coronavirus aid bill contributed a bit to dollar paring some of its gains against peers.

The dollar index, which rose to 93.62 by mid-morning, gave up some gains subsequently, but was still holding firm at 93.41 in late afternoon trades, netting a gain of nearly 0.7%.

Against the Euro, the dollar firmed up to $1.1787, gaining nearly 0.8%

The Pound Sterling was weaker by about 0.7% with a unit of sterling fetching $1.3054, compared with $1.3143 on Thursday afternoon.

The Japanese Yen was weaker at 105.96 a dollar, easing from previous close of 105.55. Japan's leading index increased in June and labor cash earnings declined at a softer rate, data showed on Friday.

The leading index, which measures the future economic activity, rose to 85.0 in June from 78.3 in May, the Cabinet Office revealed. The coincident index increased to 76.4 in June from 72.9 in the previous month.

The dollar was stronger by more than 1% against the Aussie with the pair quoting at 0.7159.

The Swiss franc slipped more than 0.3 to 0.9127 a dollar, while the Canadian Loonie weakened to 1.3388 a dollar, drifting down from 1.3307.

In economic news from Canada, data released by Statistics Canada this morning showed the Canadian economy created 418,500 jobs in July of 2020, easing from a record 952,900 in the previous month. The unemployment rate in Canada dropped to 10.9% in July 2020, easing further from April's record high of 13.7%.

Meanwhile, the Ivey PMI for Canada rose to 68.5 in July 2020 from 58.2 in the previous month. The index had touched an all-time low of 22.8 in April. July reading is the highest for the index since April 2018.


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Oil Futures End Sharply Lower On Demand Worries

Trading 08 août 2020 Commentaire »

Crude oil prices drifted lower on Friday amid concerns about outlook for energy demand following reports showing spikes in coronavirus cases in several parts across the world.

Also, news that talks between White House officials and Democratic leaders over a new coronavirus relief bill fell apart as the parties remained divided on key issues, including the quantum of money to be spent.

West Texas Intermediate crude oil futures for September ended down $0.67 or about 1.6% at $41.28 a barrel. For the week, WTI crude oil futures gained 2.1%.

Brent crude futures slipped $0.78 or 1.7% to $44.31 a barrel. However, the contract gained about 2.3% in the week.

According to reports, there are signs of a second wave of coronavirus infections emerging in Europe after data showed an uptick in cases in some countries, including Spain, Belgium and Luxembourg.

Many other European states are seeing an increase in infections, based on a seven-day rolling average compared to the week prior.

Saudi Arabia's energy minister and Iraqi energy minister's comments that the two countries will stick to their commitments to OPEC+'s decision to curb oil production helped limit oil's decline.

Meanwhile, a report from Baker Hughes said the number of U.S. oil rigs fell by 4 this week to 176.


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Gold Futures Snap 5-day Winning Streak, Settle Sharply Lower

Trading 08 août 2020 Commentaire »

Gold futures snapped a five-session winning streak and settled sharply lower on Friday as the dollar firmed up against major peers after data showed a bigger than expected increase in U.S. jobs growth in July.

Gold declined today despite rising U.S.-China tensions and reports saying there are signs of a second wave of coronavirus infections emerging in Europe.

The failure of U.S. Democratic leaders and White House officials to make any meaningful progress on a new coronavirus aid bill contributed a bit to gold's decline.

The dollar index rallied to 93.62 around mid morning, and despite easing to 93.45 subsequently, was still firmly placed in positive territory with a gain of over 0.7%.

Gold futures for December ended down $41.40 or about 2% at $2,028.00 an ounce, after hitting a high of $2,071.00 an ounce intraday.

Gold futures posted a gain of about 2.2% in the week.

Silver futures for September closed lower by $0.860 at $27.540 an ounce, while Copper futures for September settled at $2.7925 per pound, down $0.1180 from previous close.

Data from the Labor Department showed that employment rose by 1.763 million jobs in July after climbing by a downwardly revised 4.791 million jobs in June. Economists had expected employment to rise by 1.6 million jobs compared to the 4.8 million job spike originally reported for the previous month.

The unemployment rate fell to 10.2% in July from 11.1% in June. The rate was expected to drop to 10.5%.


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Trend line analysis on EURUSD

Trading 07 août 2020 Commentaire »

EURUSD is showing signs of weakness. EURUSD justifies a pull back towards the medium-term upward sloping trend line support, specially if price breaks below the horizontal support at 1.1720-1.17.

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Blue rectangle- support

Green line - medium-term trend line support

Red rectangle -target if support fails to hold

I expect EURUSD to move towards the red rectangle on top of the green support trend line if and after price breaks below the blue rectangle support area at 1.17. The failure to make a higher high increases the chances of making a deeper pull back. That is why breaking below 1.17 would a be fast short-term sell signal with 1.16-1.1570 as target.

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Ichimoku cloud indicator analysis of Gold

Trading 07 août 2020 Commentaire »

Gold price ended the week higher making new weekly all time highs and closed above $2,030. Trend remains bullish. The precious metal was under pressure on Friday as most probably profit taking by bulls took place.

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Gold price today made a new higher high but price closed below yesterday's lows. This is a warning sign of a short-term top. I do not expect price to form a major top. My first pull back target is at $1,990 and my second target is at $1,922. As we said in previous analysis, Gold price justifies a pull back. Any pull back is seen as buying opportunity. We expect Gold price to continue higher over the coming months.The material has been provided by InstaForex Company - www.instaforex.com

Ichimoku cloud indicator analysis of EURUSD

Trading 07 août 2020 Commentaire »

For a consecutive week price managed to move above 1.19 but week closed below 1.18. Trend might still be bullish but the weakness of bulls to recapture 1.19 implies that a deeper pull back might be in store for us for next week.

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As can be seen in the weekly chart above this weekly candle has same long upper tail as last week's candlestick. This candlestick formation confirms the importance of resistance at 1.19-1.18 area.

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On a daily basis, Friday's candlestick has closed below the tenkan-sen (red line indicator). This is a weak sell signal or better a warning signal of more downside to come. Technically support is now found at 1.17. Staying below the tenkan-sen will push price towards the kijun-sen at 1.1565. So this is our next downside target if price breaks below 1.17.The material has been provided by InstaForex Company - www.instaforex.com

Solid U.S. Jobs Data Buoys Dollar

Trading 07 août 2020 Commentaire »

The U.S. dollar spiked higher against its major counterparts in the European session on Friday, as a data showed that U.S. jobs growth improved more than forecast in July, suggesting a continued recovery in the labor market despite the virus outbreak.

Data from the Labor Department showed that employment rose by 1.763 million jobs in July after climbing by a downwardly revised 4.791 million jobs in June.

Economists had expected employment to rise by 1.6 million jobs compared to the 4.8 million job spike originally reported for the previous month.

The unemployment rate fell to 10.2 percent in July from 11.1 percent in June. The rate was expected to drop to 10.5 percent.

Talks between White House officials and Democratic leaders on a new coronavirus-aid package stalled late Thursday, with President Donald Trump threatening to issue an executive order on some of the provisions of the deal.

The two sides are at odds over the $600/week unemployment benefits that expired last Friday.

The currency was trading higher against its key counterparts in the Asian session, as U.S. President Donald Trump's move to ban transactions with China's tech giant Tencent and ByteDance dampened the market mood.

The USD/CHF pair gained 0.6 percent, approaching a 3-day high of 0.9155. At yesterday's trading close, the pair was quoted at 0.9097. Immediate resistance for the dollar is likely seen around the 0.93 level.

The greenback added 0.4 percent to a 2-day high of 105.87 against the yen, after having dropped to 105.48 at 2:00 am ET. The pair had closed Thursday's deals at 105.54. The greenback may face resistance around the 107.5 region, if it gains again.

Data from the Cabinet Office showed that Japan's leading index increased in June and labor cash earnings declined at a softer rate.

The leading index, which measures the future economic activity, rose to 85.0 in June from 78.3 in May.

The greenback was up by 0.9 percent against the euro, at a 3-day high of 1.1768. The pair was worth 1.1876 when it closed deals yesterday. Next key resistance for the greenback is found around the 1.15 level.

Data from Destatis showed that German exports and imports grew at faster rates in June.

Exports advanced 14.9 percent on month, following May's 8.9 percent increase. Shipments were forecast to grow 13.3 percent in June.

The greenback registered a 0.8 percent rise against the pound to hit a 3-day high of 1.3031. The GBP/USD pair had ended yesterday's trading session at 1.3142. Further rally in the currency may challenge resistance around the 1.25 region.

Data from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house prices increased for the first time in five months in July driven by pent-up demand.

House prices grew 1.6 percent on a monthly basis in July after staying flat in the previous month. This was the first rise since February.

After falling to 1.3282 at 5:00 pm ET, the greenback turned higher against the loonie, touching a 3-day high of 1.3383. The greenback was trading at 1.3302 a loonie at yesterday's close. Continuation of the greenback's uptrend may lead it to a resistance around the 1.35 region.

The greenback firmed to a 2-day high of 0.7172 against the aussie, up by 1 percent from a 1-1/2-year low of 0.7243 seen at 8:30 pm ET. The greenback was worth 0.7235 per aussie at Thursday's New York session close. The greenback is likely to locate resistance around the 0.68 region.

In its quarterly Statement on Monetary Policy, the Reserve Bank of Australia said that Australia's economy is set to log a slow recovery given the ongoing spread of the coronavirus and the response to contain it.

According to baseline scenario of RBA, GDP is expected to contract by around 6 percent over the year to December 2020, but then grow by around 5 percent over 2021.

The greenback reached as high as 0.6611 against the kiwi, setting a 3-day high. This marked a 1.1 percent gain from yesterday's closing value of 0.6687. Should the currency rallies again, 0.64 is possibly seen as its next resistance level.


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U.S. Employment Jumps More Than Expected In July

Trading 07 août 2020 Commentaire »

Employment in the U.S. increased by more than expected in the month of July, according to a report released by the Labor Department on Friday.

The Labor Department said employment jumped by 1.8 million jobs in July after surging up by 4.8 million jobs in the previous month. Economists had expected employment to increase by 1.6 million jobs.

The bigger than expected spike in employment came amid a sharp increase in employment in the retail sector, which added 258,300 jobs

Notable job growth also occurred in the leisure and hospitality, government, professional and business services, other services, and health care sectors, the Labor Department said.

With the continued increase in employment, the unemployment rate dropped to 10.2 percent in July from 11.1 percent in June. The unemployment rate was expected to dip to 10.5 percent.


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*U.S. Wholesale Inventories Slump 1.4% In June

Trading 07 août 2020 Commentaire »

U.S. Wholesale Inventories Slump 1.4% In June


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Decline In Spain Industrial Production Slows In June

Trading 07 août 2020 Commentaire »

Spain industrial production continued to decline in June, but the pace of decrease slowed further as measures to contain the spread of the coronavirus were relaxed, data from the statistical office INE showed Friday.

Industrial output was down 14 percent annually, after declining 24.7 percent in May. Output was forecast to decline 15.4 percent.

On an unadjusted basis, industrial production declined 9.6 percent on year, following a 28.1 percent drop a month ago.

Among components, capital goods output fell the most, by 17.9 percent. Intermediate goods production dropped 14.5 percent and energy production slid 13.1 percent. Consumer goods output decreased 9.5 percent.

On a monthly basis, industrial production growth moderated to 14 percent from 14.3 percent in May.


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