Dollar Loses Ground Against Major Currencies

Trading 23 août 2019 Commentaire »

The U.S. dollar exhibited weakness against most major currencies on Friday after the Federal Reserve Chairman Jerome Powell reiterated that the central bank will "act appropriate" to support economic expansion.

The dollar index declined to a low of 97.59 a little past mid afternoon and was last seen hovering around 97.70, down nearly 0.5% from previous close.

Against the euro, the dollar was down 0.5% at 1.1140, off the session's low of 1.1155.

The Pound Sterling was up 0.18% at $1.2275, and against the Yen, it was down nearly 1% at 105.44.

Against the loonie, the dollar was down marginally at 1.3297. Against the Aussie, it shed about 0.12% at 0.6749.

The greenback's decline against Swiss franc was significantly pronounced with the pair trading at 0.9752, down as much as 0.85% from previous close.

U.S. President Donald Trump's tweet, criticizing the Fed and its Chief Powell raised fears the government could intervene in currency markets.

During his speech at the Jackson Hole Economic Policy Symposium today, Powell said the bank will "act as appropriate" to sustain the U.S. economic expansion.

Powell described the three weeks since the Fed decided to lower interest rates by 25 basis points at its July meeting as "eventful."

The Fed Chief cited President Donald Trump's announcement of new tariffs on Chinese imports as well as further signs of a global economic slowdown, notably in Germany and China.

Powell also pointed to several geopolitical events, including the growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government.

As a result of the subsequent uncertainty, Powell said the Fed is "carefully watching developments as we assess their implications for the U.S. outlook and the path of monetary policy."

Trump, seemingly unimpressed by Powell's remarks, tweeted whether the "biggest enemy" of America was Powell or Chinese President Xi Jinping.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly," Trump tweeted.

He added, "We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great."

Meanwhile, data released by the Commerce Department Friday said new home sales plunged by 12.8% to an annual rate of 635,000 in July after soaring by 20.9% to a sharply upwardly revised rate of 728,000 in June.

Economists had expected new home sales to come in virtually unchanged from the 646,000 originally reported for the previous month.


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Treasuries Move Sharply Higher Following Trump's Tweets About China

Trading 23 août 2019 Commentaire »

After initially showing a lack of direction, treasuries moved sharply higher over the course of the trading session on Friday.

Bond prices pulled back off their best levels in afternoon trading but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 8.2 basis points to 1.528 percent.

The rally by treasuries came amid renewed U.S.-China trade concerns after a series of threatening tweets from President Donald Trump.

Trump claimed the U.S. does not need China and would be "far better off without them" and subsequently ordered American companies to "immediately start looking for an alternative to China."

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted.

The tweets from Trump, which sparked a sell-off on Wall Street, came after the Chinese Finance Ministry announced plans to impose new tariffs on $75 billion worth of U.S. imports.

The new levies include 5 percent tariffs on U.S. soybeans and crude oil imports, which are scheduled to take effect on September 1st.

The move by China was in response to Trump's plan to impose a 10 percent tariff on $300 billion worth of Chinese imports.

Trump said in one his series of tweets attacking China that he would be responding to the new tariffs this afternoon.

The early volatility in the bond market came as traders reacted to the tariff news as well as Federal Reserve Chairman Jerome Powell's highly anticipated speech at the Jackson Hole Economic Policy Symposium.

Powell reiterated during his prepared remarks that the central bank will "act as appropriate" to sustain the U.S. economic expansion.

"We are carefully watching developments as we assess their implications for the U.S. outlook and the path of monetary policy," Powell added.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said Powell's comment sounds "analogous to the 'closely monitor' language the Fed last used in the May FOMC statement to indicate a rate cut was coming soon."

"In contrast, in the July statement the FOMC only pledged to 'continue to monitor' the incoming data which, coupled with Powell's post-meeting press conference, gave the impression that the Fed wasn't in a rush to cut rates again," Ashworth said.

Ashworth subsequently believes that Powell's closely watched speech appears to open the door to another rate cut at the Fed's September meeting.

Meanwhile, Trump seemed less impressed by the Fed Chairman's remarks, going so far as to question if Powell is a "bigger enemy" than Chinese President Xi Jinping.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly," Trump tweeted.

He added, "We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great."

While Powell is a Trump appointee, the president has repeatedly lashed out at the Fed for failing to heed his calls for dramatically lower interest rates.

Any further developments on the trade front may impact trading next week along with reports on durable goods orders, consumer confidence, and personal income and spending.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of two-year, five-year, and seven-year notes.


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Oil Settles Sharply Lower As Trade Jitters Spark Demand Concerns

Trading 23 août 2019 Commentaire »

Crude oil prices declined sharply on Friday as trade tensions between the U.S. and China escalated, raising concerns over outlook for energy demand.

After China's Commerce Ministry announced additional tariffs on about $75 billion dollar worth of U.S. goods and said it will hike tariffs on more products, the U.S. President Donald Trump responded with a strong message via Twitter.

West Texas Intermediate Crude oil futures for October ended down $1.18, or about 2.1%, at $54.17 a barrel. Crude oil futures dropped to a low of $53.26 a barrel before edging up a bit and recouping some of their losses.

Crude oil futures shed 1.2% in the week.

Brent crude futures were down $1.30, or about 2.2%, at $58.52 around mid afternoon.

Trump remarked that the U.S. does not need China and would be "far better off without them" and subsequently ordered American companies to "immediately start looking for an alternative to China."

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted and also indicated that he would respond to the newly announced Chinese tariffs on U.S. imports later in the day.

Meanwhile, data released by Baker Hughes said that the number of active U.S. rigs drilling for oil declined by 16 to 754 this week. Earlier in April, the Baker Hughes reported a weekly drop of 20 oil bags.


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Gold Futures Settle At Over 6-year High As Trade Tensions Escalate

Trading 23 août 2019 Commentaire »

Gold prices moved up sharply on Friday on safe-haven appeal following an escalation in U.S.-China trade tensions.

Stock prices saw a free fall after a positive start and the greenback drifted lower as traders rushed for the safe-haven asset.

The dollar index slipped to 97.67, losing more than 0.5%.

Gold futures for December ended up $29.10, or 1.9%, at $1,537.60 an ounce, the highest settlement since April 2013.

On Thursday, gold futures for December ended down $7.20, or about 0.5%, at $1,508.50 an ounce, the lowest settlement since August 9. For the week, gold futures gained about 0.9%, moving higher for a fourth straight week.

Silver futures for September ended up $0.373, at $17.413 an ounce, while Copper futures for September settled at $2.5300 per pound, down $0.0275 from previous close.

China announced tariff hikes on $75 billion of U.S. products and said that import duties on U.S.-made autos and auto parts will also be increased.

U.S. President Trump claimed the U.S. does not need China and would be "far better off without them" and subsequently ordered American companies to "immediately start looking for an alternative to China."

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted.

The president also indicated that he would respond to the newly announced Chinese tariffs on U.S. imports this afternoon.

The Federal Reserve Chairman Jerome Powell reiterated at the Jackson Hole Economic Policy Symposium that the central bank will act "as appropriate" to sustain economic expansion and said the global growth outlook has been deteriorating since the middle of last year.

President Trump, seemingly unimpressed by Powell's remarks, tweeted whether the "biggest enemy" of America was Powell or Chinese President Xi Jinping.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly," Trump tweeted.

He added, "We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great."

Meanwhile, data released by the Commerce Department Friday said new home sales plunged by 12.8% to an annual rate of 635,000 in July after soaring by 20.9% to a sharply upwardly revised rate of 728,000 in June.

Economists had expected new home sales to come in virtually unchanged from the 646,000 originally reported for the previous month.


The material has been provided by InstaForex Company - www.instaforex.com

Powell Pledges To « Act As Appropriate » But Continues To Draw Trump's Ire

Trading 23 août 2019 Commentaire »

Federal Reserve Chairman Jerome Powell delivered his highly anticipated speech at the Jackson Hole Economic Policy Symposium on Friday, reiterating the Fed will "act as appropriate" to sustain the U.S. economic expansion.

Powell described the three weeks since the Fed decided to lower interest rates by 25 basis points at its July meeting as "eventful."

The Fed Chief cited President Donald Trump's announcement of new tariffs on Chinese imports as well as further signs of a global economic slowdown, notably in Germany and China.

Powell also pointed to several geopolitical events, including the growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government.

As a result of the subsequent uncertainty, Powell said the Fed is "carefully watching developments as we assess their implications for the U.S. outlook and the path of monetary policy."

Paul Ashworth, Chief U.S. Economist at Capital Economics, said Powell's comment sounds "analogous to the 'closely monitor' language the Fed last used in the May FOMC statement to indicate a rate cut was coming soon."

"In contrast, in the July statement the FOMC only pledged to 'continue to monitor' the incoming data which, coupled with Powell's post-meeting press conference, gave the impression that the Fed wasn't in a rush to cut rates again," Ashworth said.

Ashworth subsequently believes that Powell's closely watched speech appears to open the door to another rate cut at the Fed's September meeting.

Meanwhile, Trump seemed less impressed by the Fed Chairman's remarks, going so far as to question if Powell is a "bigger enemy" than Chinese President Xi Jinping.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly," Trump tweeted.

He added, "We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great."

While Powell is a Trump appointee, the president has repeatedly lashed out at the Fed for failing to heed his calls for dramatically lower interest rates.

Powell noted in his remarks that the trade policy uncertainty created by Trump has presented the Fed with a new challenge.

"In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy," Powell said. "There are, however, no recent precedents to guide any policy response to the current situation."

He added, "Moreover, while monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade."


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August 23, 2019 : EUR/USD bulls are confirming the triple-bottom reversal pattern.

Trading 23 août 2019 Commentaire »

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Back in June 24, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels which generated significant bearish pressure over the pair.

Shortly after, In the period between 8 - 22 July, a sideway consolidation-range was established between 1.1200 - 1.1275 until a triple-top reversal pattern was demonstrated around the upper limit.

Shortly after, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD below 1.1175.

This facilitated further bearish decline towards 1.1115 (Previous Weekly Low) then 1.1025 (the lower limit of the depicted recent bearish channel) where significant signs of bullish recovery were demonstrated.

Risky traders were advised to look for bullish breakout above 1.1050 as a bullish signal for Intraday BUY entry with bullish targets around (1.1115, 1.1175 and 1.1235). All of which were successfully reached.

For the past two weeks, the depicted Key-Zone around 1.1235 has been standing as a prominent Supply Area where THREE Bearish Engulfing H4 candlesticks were demonstrated.

Thus, the EUR/USD was trapped between 1.1235-1.1175 for a few trading sessions until bearish breakout below 1.1175 occurred on August 14.

Bearish breakout below 1.1175 promoted further bearish decline towards 1.1075 where the backside of the broken bearish channel has been providing significant bullish demand so far (A Bullish Triple-Bottom pattern is in progress).

Bullish persistence above 1.1115 (necklineof the reversal pattern) is needed to confirm the short-term trend reversal into bullish. This would enhance another bullish spike towards 1.1175.

Trade recommendations :

Conservative traders were advised to have a valid BUY entry anywhere around 1.1070 (where the backside of the broken bearish channel is roughly located).

Initial T/P levels should be located around 1.1130, 1.1175 and 1.1200.

S/L should be placed just below 1.1020.

The material has been provided by InstaForex Company - www.instaforex.com

U.S. New Home Sales Pull Back Sharply From Upwardly Revised Level

Trading 23 août 2019 Commentaire »

Following a much bigger than previously estimated spike in U.S. new home sales in the previous month, the Commerce Department released a report on Friday showing a steep drop in new home sales in the month of July.

The report said new home sales plunged by 12.8 percent to an annual rate of 635,000 in July after soaring by 20.9 percent to a sharply upwardly revised rate of 728,000 in June.

Economists had expected new home sales to come in virtually unchanged from the 646,000 originally reported for the previous month.

Despite the monthly decrease, the Commerce Department noted new home sales in July were up by 4.3 percent compared to a rate of 609,000 in the same month a year ago.

The upwardly revised rate of new home sales in June represented a nearly eleven-year high, with sales at their highest level since hitting 778,000 in July of 2008.

The pullback in new home sales came as sales plummeted by 16.1 percent in the South, 14.2 percent in the West and 11.1 percent in the Midwest.

On the other hand, the report said new home sales in the Northeast surged up by 50.0 percent to an annual rate of 39,000.

The Commerce Department also said the median sales price of new houses sold in July was $312,800, up 2.2 percent from $306,000 in June but down 4.5 percent from $327,500 in the July of 2018.

The estimate of new houses for sale at the end of July was 337,000, representing 6.4 months of supply at the current sales rate.

On Wednesday, the National Association of Realtors released a separate report showing a notable rebound in existing home sales in the month of July.

NAR said existing home sales jumped by 2.5 percent to an annual rate of 5.42 million in July after slumping by 1.3 percent to a revised rate of 5.29 million in June.

Economists had expected existing home sales to surge up by 2.3 percent to a rate of 5.39 million from the 5.27 million originally reported for the previous month.


The material has been provided by InstaForex Company - www.instaforex.com

U.S. Dollar Pulls Back As Powell Vows To Act As Appropriate

Trading 23 août 2019 Commentaire »

The U.S. dollar gave up its early gains against its key counterparts in the New York session on Friday, after Federal Reserve Chair Jerome Powell reiterated that the central bank would act as appropriate to sustain the economic expansion.

Speaking at annual Economic Policy Symposium in Jackson Hole, Powell said that the economy is close to Fed goals of maximum employment and price stability.

"Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent," he said.

"We are examining the monetary policy tools we have used both in calm times and in crisis, and we are asking whether we should expand our toolkit," he added.

The currency has been trading higher against its major counterparts in the previous session.

The greenback retreated to 0.9830 against the franc, from a 3-week high of 0.9877 it touched at 6:45 am ET. At yesterday's trading close, the pair was quoted at 0.9837. Next key support for the greenback is seen around the 0.96 area.

After rising to an 8-day high of 106.73 against the yen at 7:45 am ET, the greenback reversed direction and eased off to 106.34. The pair had closed Thursday's deals at 106.43. The greenback is seen finding support around the 104.00 level.

Data from the Ministry of Internal Affairs and Communications showed that Japan inflation rose 0.5 percent on year in July.

That was shy of forecasts for an annual increase of 0.6 percent and down from 0.7 percent in June.

The greenback, having risen to a new 3-week high of 1.1052 against the euro at 6:45 am ET, changed direction and was trading at 1.1074. The pair was worth 1.1079 when it closed deals on Thursday. The greenback is poised to find support around the 1.12 level.

The greenback was a tad weaker at 1.2234 versus the pound, down from yesterday's trading session close of 1.2250. Should the greenback drops further, it may face support around the 1.24 level.

The greenback declined to 1.3293 against the loonie, from a 3-day high of 1.3339 seen at 8:00 am ET. The greenback was trading at 1.3303 against the loonie at yesterday's close. Further downtrend is likely to take the greenback to a support around the 1.30 level.

The greenback pulled back to 0.6396 against the kiwi and 0.6761 against the aussie, from its early high of 0.6363 and a 9-day high of 0.6736, respectively. The greenback was worth 0.6757 per aussie and 0.6365 per kiwi at Thursday's New York session close. The currency is likely to find support around 0.66 against the kiwi and 0.69 against the aussie.


The material has been provided by InstaForex Company - www.instaforex.com

August 23, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 23 août 2019 Commentaire »

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Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550.

On July 5, a bearish range breakout was demonstrated below 1.2550 (the lower limit of the depicted consolidation range).

Hence, quick bearish decline was demonstrated towards the price zone of 1.2430-1.2385 (the lower limit of the movement channel) which failed to provide consistent bullish demand for the GBP/USD.

Moreover, Bearish breakdown below 1.2350 facilitated further bearish decline towards 1.2320, 1.2270 and 1.2100 which correspond to significant key-levels on the Weekly chart.

The previously-mentioned price levels were quite risky/low for having new SELL entries. That's why, Previous SELLERS were advised to have their profits gathered.

Two weeks ago, a temporary consolidation-range was demonstrated above 1.2100 before Friday when another bearish movement could be executed towards 1.2025.

Recent bullish recovery was demonstrated off the recent bottom (1.2025). This brought the GBP/USD pair back above 1.2100 (recently-established demand Level).

As expected, recent bullish movement was demonstrated towards 1.2230.

Further bullish advancement is expected to pursue towards 1.2320 if the current bullish momentum is maintained above 1.2160 (the recent consolidation range pivot point) on a daily basis.

On the other hand, any bearish breakout below 1.2160 invalidates the previous scenario allowing another bearish visit towards 1.2025.

Trade Recommendations:

Intraday traders are advised to look for a bullish entry anywhere around 1.2190-1.2170.

Initial T/P level to be placed around 1.2250 and 1.2340 while S/L should be placed below 1.2160.

The material has been provided by InstaForex Company - www.instaforex.com

*Dollar Slides To 0.9832 Versus Franc Amid Powell's Speech

Trading 23 août 2019 Commentaire »

Dollar Slides To 0.9832 Versus Franc Amid Powell's Speech


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