Ichimoku cloud indicator analysis on EUR/USD for August 3, 2018

Trading 02 août 2018 Commentaire »

EUR/USD has broken below the triangle support at 1.16. The price is already below that level following the rejection at the Kumo where we warned bulls for another try to challenge the 1.16 support area. Bulls were warned that as long as the price was below 1.1730-1.1760 trend would be controlled by bears.

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Red lines - triangle pattern

Blue line - important low

The EUR/USD got rejected at the Ichimoku cloud and at the upper triangle boundary. We have been saying that when the price reaches the upper triangle boundary and gets rejected or waits there, we should turn bearish. Only a break above 1.1730-1.1760 would change the trend to bullish. Support is now at 1.15 area. Resistance remains at 1.17-1.1730. Breaking this triangle to the downside is very bearish EUR/USD targeting 1.13-1.12.

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Crude Oil Rebounds To Settle Higher

Trading 02 août 2018 Commentaire »

Crude oil prices moved higher on Thursday, after suffering losses in the past two sessions amid concerns over excess supply in the market. Oil's rebound today was due largely to reports that crude stockpiles declined at Cushing, Okla.

Concerns about a likely drop in demand for crude amid escalating U.S.-China trade war did weigh on crude earlier in the day, but a report from Genscape said there was a drawdown in crude stocks at Cushing. The report said stocks declined 3.6% to about 24.6 million barrels on July 31.

Crude oil futures for September settled at $68.96 a barrel on the New York Mercantile Exchange, gaining $1.30 or 1.9% for the session.

On Wednesday, crude oil futures ended down $1.10, or 1.6%, at $67.66 a barrel, after having lost almost 2% a session earlier.

Crude oil's recent slide was due to possible excess supply in the market after data showed an unexpected jump in U.S. crude stockpiles. According to a report released by the U.S. Energy Information Administration, U.S. crude oil inventories rose by 3.8 barrels last week.

Earlier, on Tuesday, the American Petroleum Institute had released a report that showed U.S. crude stockpiles to have risen by 5.59 million barrels last week, compared to analyst expectations for a 2.8 million-barrel drawdown.

Although reports about disruptions in Libya and Venezuela suggested a drop in supply, news that Saudi Arabia and Russia have spoken about increasing crude production, helped limit crude oil's slide.

Last week, a report from Baker Hughes said, three rigs were added in the U.S, taking the total rig count in the country to 861.


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Treasuries Move Modestly Higher Following Yesterday's Weakness

Trading 02 août 2018 Commentaire »

Following the notable downward move seen in the previous session, treasuries regained some ground during trading on Thursday.

After seeing early strength, bond prices pulled back near the unchanged before moving back to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 2.986 percent.

Treasuries may have benefited from bargain hunting after the ten-year yield closed above 3 percent for the first time in well over two months on Wednesday.

Trading activity was somewhat subdued, however, as traders looked ahead to the release of the Labor Department's closely watched monthly employment report on Friday.

Employment is expected to increase by 190,000 jobs in July after jumping by 213,000 jobs in June, while the unemployment rate is expected to dip to 3.9 percent after rising to 4.0 percent in the previous month.

A day ahead of the release of the monthly report, the Labor Department released a report showing a modest increase in initial jobless claims in the week ended July 28th.

The report said initial jobless claims inched up to 218,000, an uptick of 1,000 from the previous week's unrevised level of 217,000. Economists had expected jobless claims to rise to 220,000.

A separate report from the Commerce Department showed factory orders climbed by 0.7 percent in June, matching economist estimates.

The Labor Department's monthly jobs report is likely to be in focus on Friday, overshadowing separate reports on the U.S. trade deficit and service sector activity.


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Treasuries Move Modestly Higher Following Yesterday's Weakness

Trading 02 août 2018 Commentaire »

Following the notable downward move seen in the previous session, treasuries regained some ground during trading on Thursday.

After seeing early strength, bond prices pulled back near the unchanged before moving back to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 2.986 percent.

Treasuries may have benefited from bargain hunting after the ten-year yield closed above 3 percent for the first time in well over two months on Wednesday.

Trading activity was somewhat subdued, however, as traders looked ahead to the release of the Labor Department's closely watched monthly employment report on Friday.

Employment is expected to increase by 190,000 jobs in July after jumping by 213,000 jobs in June, while the unemployment rate is expected to dip to 3.9 percent after rising to 4.0 percent in the previous month.

A day ahead of the release of the monthly report, the Labor Department released a report showing a modest increase in initial jobless claims in the week ended July 28th.

The report said initial jobless claims inched up to 218,000, an uptick of 1,000 from the previous week's unrevised level of 217,000. Economists had expected jobless claims to rise to 220,000.

A separate report from the Commerce Department showed factory orders climbed by 0.7 percent in June, matching economist estimates.

The Labor Department's monthly jobs report is likely to be in focus on Friday, overshadowing separate reports on the U.S. trade deficit and service sector activity.


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Gold Settles Lower Again, As Dollar Strengthens

Trading 02 août 2018 Commentaire »

Gold prices edged lower on Thursday, extending previous session's slide, as the dollar gained in strength against most major currencies after the Fed said on Wednesday that recent strong U.S. economic data support gradual rate hikes.

The Fed left rates unchanged on Wednesday, but the accompanying statement to its monetary policy hints at two rate hikes this year, one in September and the other in December, and a couple of hikes in 2019.

Gold futures for December, the most actively traded contract, ended down $7.50, or 0.6%, at $1,220.10 an ounce.

Silver futures for September were down $0.057, or 0.27%, at $15.395 an ounce, while Copper futures shed $0.007, or 0.27%, at $2.740 per pound.

The dollar index is up 0.45 or 0.48% at 94.91, after a report from the U.S. Labor Department showed a modest increase in initial jobless claims in the week ended July 28. The data said initial jobless claims rose to 218,000, an uptick of 1,000 from the previous week's unrevised level of 217,000. However, the increase was smaller than expected as economists had forecast jobless claims to rise to 220,000.

The closely watched monthly jobs data will be released by the Labor Department on Friday.

Meanwhile, worries about U.S.-China trade war have increased following reports about the Trump administration's proposal to impose 25% tariffs on about $200 billion worth of Chinese goods into U.S., instead of levies of 10% proposed earlier, and comments from Chinese officials that China would retaliate in equal measure.


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Pound Weakens As BoE Carney Cautions Over Further Rate Hikes

Trading 02 août 2018 Commentaire »

The pound slipped against its major opponents in the European session on Thursday, after the Bank of England Governor Mark Carney cautioned over further rate hikes given Brexit uncertainty.

In his press conference, Carney said that further hikes would be gradual and limited, as domestic factors arising from Brexit uncertainty and fiscal drag will dissipate slowly.

Policy needs to walk, not run, to stand still, he told.

"If there is a major shift as a consequence of the Brexit negotiations, that is disinflationary, or creates a very extreme trade-off, such as the one we saw post-referendum, then that could have consequences for monetary policy."

"There's a wide range of Brexit outcomes, but in many of them, interest rates will be at least as high as they are today. So we don't need to keep our powder dry for that," he added.

Market participants are now pricing in another rate hike only in late 2019 or early 2020.

The currency erased its BoE-led gains following Carney's speech.

The pound declined to near a 2-week low of 1.3016 against the greenback, from a high of 1.3129 hit at 7:15 pm ET. The next likely support for the pound is seen around the 1.29 level.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits edged slightly higher in the week ended July 28.

The report said initial jobless claims inched up to 218,000, an uptick of 1,000 from the previous week's unrevised level of 217,000. Economists had expected jobless claims to rise to 220,000.

The pound hit a 5-month low of 1.2941 against the franc, reversing from a 3-day high of 1.3040 touched at 7:00 am ET. The pound is seen finding support around the 1.28 level.

Survey data from the State Secretariat for Economic Affairs showed that Switzerland's consumer confidence weakened to the lowest level in more than a year in July.

The consumer sentiment index plunged to -7 in July from +2 a quarter ago. The score was expected to remain unchanged at 2. This was the lowest reading since April 2017.

After rising to 146.66 against the yen at 5:30 pm ET, the pound reversed direction and declined to near a 5-week low of 145.01. On the downside, 144.00 is possibly seen as the next support level for the pound.

Data from the Bank of Japan showed that Japan's monetary base rose 7.0 percent on year in July, coming in at 497.639 trillion yen.

That follows the 7.4 percent jump in June.

The pound slipped to a 2-day low of 0.8925 against the euro, off more than a 2-week high of 0.8855 hit at 7:05 am ET. If the pound drops further, 0.91 is likely seen as its next support level.

Figures from Eurostat showed that Eurozone producer prices climbed at a faster pace on energy prices in June.

Producer prices advanced 3.6 percent annually in June, faster than the 3 percent rise in May. This was also faster than the expected 3.5 percent.


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U.S. Factory Orders Growth Matches Estimates In June

Trading 02 août 2018 Commentaire »

A report released by the Commerce Department on Thursday showed new orders for U.S. manufactured goods increased in line with economist estimates in the month of June.

The report said factory orders climbed by 0.7 percent in June after rising by an unrevised 0.4 percent in May. The continued increase in orders matched expectations.

The Commerce Department said orders for durable goods rebounded after two consecutive monthly decreases, advancing by 0.8 percent in June after falling by 0.3 percent in May.

The increase in durable goods orders was downwardly revised from the previously reported 1.0 percent jump.

Orders for non-durable goods also increased by 0.5 percent in June after surging up by 1.1 percent in the previous month.

Excluding a rebound in orders for transportation equipment, the Commerce Department said factory orders rose by 0.4 percent in June after climbing by 0.8 percent in May.

The report also said shipments of manufactured goods jumped by 1.0 percent in June after climbing by 0.6 percent in May.

Inventories of manufactured goods inched up by 0.1 percent following a 0.2 percent uptick in the previous month.

With shipments rising faster than inventories, the inventories-to-shipments ratio came in at 1.33 in June, down from 1.35 in May.


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Wave analysis of EUR / USD for August 2. The pair remains inside the narrowing corridor. A breakthrough is approaching

Trading 02 août 2018 Commentaire »

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Analysis of wave counting:

During the trades on Wednesday, the currency pair EUR / USD fell by 30 percentage points, to the lower forming a tapering corridor of the line. Most likely, today, we are expected to test this line for strength and with a high probability of a breakthrough. If this assumption is true, then the pair will proceed to build the bearish wave 5 of the main trend. A failed attempt to break this line can throw the pair back to the top line. However, in any case, the moment of the pair's exit from the corridor is coming, after which we will learn the approximate trend for the coming days and weeks.

The objectives for the option with sales:

1.1507 - 100.0% of Fibonacci

1.1444 - 127.2% of Fibonacci

The objectives for the option with purchases:

1.1834 - 200.0% of Fibonacci

1.1957 - 161.8% of Fibonacci

General conclusions and trading recommendations:

The correction wave 4 still looks fully staffed, and there are no prerequisites for its complication now. Several attempts to break the top line of the corridor failed, so now I recommend to continue to form sales with the targets of 1.1507 and 1.1444, which is equivalent to 100.0% and 127.2% of Fibonacci, built on the size of wave 4. I recommend that you go back to shopping after the breakthrough of the maximum expected wave 4.

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*U.S. Factory Orders Climb 0.7% In June

Trading 02 août 2018 Commentaire »

U.S. Factory Orders Climb 0.7% In June


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The daily review of the GBP / USD as of August 2, 2018. Ichimoku Indicator

Trading 02 août 2018 Commentaire »

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GBP / USD

The pair is trying to get rid of the daily bullish advantage and continue the decline. But a slight decrease, within the limits of correction, can hardly help the bears now. They need to update the correction minimum (1.2957) and secure the fastening below. All the rest will contribute to consolidation, during which players on the rise can accumulate strength for breaking through the important resistance concentrated in the area of 1.3214-25 (week Tenkan + Senkou Span B + day Fibo Kijun + daytime Senkou Span A).

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Today, the target for the breakdown of the H1 cloud has been worked out. Among the downside reference points, there is now also a target for the breakdown of the H4 cloud (1.3054-36). But these are all intermediate benchmarks that are unlikely to bring victory to players on a slide, the main interest of which is concentrated in the area of 1.2957. Uncertainty and deceleration of the last days made the clouds of lower dimes the main center of attraction, here are now concentrated different levels of older time intervals. As a result, the most significant resistance today can be noted at 1.3112 - 1.3140 - 1.3180 - 1.3225.

Indicator parameters:

All time intervals 9 - 26 - 52

The color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chinkou is gray,

Clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

The color of additional lines:

Support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

Horizontal levels (not Ichimoku) - brown,

Trend lines - purple.

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