Crude Oil Settles Higher On Supply Worries

Trading 06 août 2018 Commentaire »

Crude oil prices moved higher on Monday, lifted by a report that showed crude production in Saudi Arabia unexpectedly dipped in July.

Saudi Arabia reportedly pumped 10.3 million barrels per day (bpd) of crude in July, down about 200,000 bpd from a month earlier.

Meanwhile, U.S. sanctions on Iran would take effect at 12:01 AM ET on Tuesday, following President Donald Trump signing an executive order to reimpose sanctions on Iran's energy sector. The move is expected to make a severe impact on global crude supply.

According to Bloomberg, Beijing has declined a request by U.S. envoys to stop importing crude oil from Iran.

Friday's report from Baker Hughes that said U.S. energy companies cut two oil rigs last week contributed as well to oil's rise.

Crude oil futures for September ended up $0.52, or 0.80%, at $69.01 a barrel.

On Friday, crude oil futures ended down $0.47, or 0.70%, at $68.49 a barrel, after data showed oil output in Russia to have increased sharply by 150,000 barrels per day in July, compared to a month earlier. Concerns about a likely drop in demand for crude amid escalating U.S.-China trade war weighed as well.


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Dollar Rising Despite Lack Of Data

Trading 06 août 2018 Commentaire »

The dollar is gaining ground against its major rivals Monday morning. However, the lack of U.S. economic data is keeping some traders on the sidelines at the start of the new week. Escalating trade tensions between the U.S. and China remain in focus, as well as some new Brexit concerns.

The dollar rose to an early high of $1.1529 against the Euro Monday, but has since eased back to around $1.1550.

Eurozone confidence among investors improved to a 3-month high in August as they see signs of relief in the EU's trade dispute with the US, survey data published by think tank Sentix showed Monday. The investor sentiment index climbed to 14.7 in August from 12.1 in July. This was the highest score since June. The expected reading was 13.4.

Germany's factory orders decreased the most in one-and-a-half years in June as both domestic and foreign demand deteriorated on trade tensions, figures from Destatis showed Monday.

Factory orders declined 4 percent month-on-month, reversing a 2.6 percent increase in May. This was the biggest fall since January 2017, when orders fell 4.8 percent. Economists had forecast orders to drop slightly by 0.1 percent.

Germany's total construction activity growth halted in July on a renewed downturn in civil engineering amid slower growth in commercial and housing activity, survey data from IHS Markit showed Monday. The construction Purchasing Managers' Index came in at 50.0 in July, down from 53.0 in June.

U.K. International Trade Secretary Liam Fox remarked that the possibility of Britain leaving the European Union without a deal has intensified due to the "intransigence" by EU officials.

In an interview with The Sunday Times, Fox said that the chances of a no-deal Brexit are "60-40."

"I think the intransigence of the commission is pushing us towards no deal," he said.

The buck has climbed to an 11-month high of $1.2940 against the pound sterling Monday afternoon, from an early low of $1.3008.

The greenback rose to a high of Y111.526 against the Japanese Yen Monday morning, but has since retreated to around Y111.390.


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Gold Settles Lower As Dollar Stays Firm Amid Trade War Jitters

Trading 06 août 2018 Commentaire »

Gold prices drifted lower on Monday, as the greenback held its gains against most major currencies.

Amid uncertainty about outlook for global economic growth due to U.S.-China trade war concerns, traders have turned to the dollar as a safe haven option, given the possibility of a couple of rate hikes by the Federal Reserve this calendar year.

Meanwhile, reacting to U.S. President Donald Trump's protectionist policy, Chinese state media unleashed a brutal and personal attack on him, saying Trump was "starring in his own carefully orchestrated street fighter-style deceitful drama" in which diplomacy had been reduced to a "trading game in which everything should follow the rule of America first".

Gold futures for December ended down $5.50, or 0.40%, at $1,217.70 an ounce.

Gold futures for December ended up up $3.10, or nearly 0.2%, at $1,223.20 an ounce on Friday, but shed about 0.8% last week, recording losses for the fourth successive week.

Silver futures for September declined $0.117, or 0.76%, to $15.345 an ounce.

Copper futures for September declined $0.038, or 1.39%, at 2.725 per pound.

The dollar index was up 0.19, or 0.20%, at 95.22.


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Turkish Lira Slides To Fresh Record Low Against U.S. Dollar

Trading 06 août 2018 Commentaire »

The Turkish Lira slipped against the U.S. dollar in early New York deals on Monday, after the U.S. said it would review Turkey's duty-free access to U.S. markets after Turkey's retaliatory action on U.S. goods.

The U.S. Trade Department on Friday said that it was introducing a review of Turkey's duty-free access to US markets under the the Generalized System of Preferences, would could hurt $1.66 billion worth of Turkish imports into the U.S.

The review would focus on "the Turkish government's compliance with the GSP market access criterion and was prompted by the Turkish government's recent imposition of unfair and unwarranted tariffs on U.S. goods entering Turkey."

The Lira fell to a new record low of 5.1948 against the greenback, from last week's closing value of 5.0752.


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*Turkish Lira Falls To New Record Low Of 5.1948 Against U.S. Dollar

Trading 06 août 2018 Commentaire »

Turkish Lira Falls To New Record Low Of 5.1948 Against U.S. Dollar


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German Factory Orders Decline Fastest Since Early 2017

Trading 06 août 2018 Commentaire »

Germany's factory orders decreased the most in one-and-a-half years in June as both domestic and foreign demand deteriorated on trade tensions, figures from Destatis showed Monday.

Factory orders declined 4 percent month-on-month, reversing a 2.6 percent increase in May. This was the biggest fall since January 2017, when orders fell 4.8 percent. Economists had forecast orders to drop slightly by 0.1 percent.

Domestic and foreign orders slid 2.8 percent and 4.7 percent, respectively. Within foreign orders, demand from the euro area dropped 2.7 percent and that from other countries slid 5.9 percent.

Disappointing new orders data show tentative signs of trade tensions hitting the German economy, which doesn't bode well for the industrial outlook in the second half of the year, Carsten Brzeski, an economist at ING-DiBa, said.

The euro area economy expanded 0.3 percent in the second quarter. Destatis is set to issue GDP data for the largest euro area economy on August 14.

Excluding major orders, new orders decreased 3.2 percent in June, data showed Monday.

Manufacturers of intermediate goods logged a 2.3 percent fall in new orders. Likewise, orders for capital goods fell 4.7 percent and consumer goods orders decreased 4.5 percent on the previous month.

On a yearly basis, factory orders fell by 0.8 percent, in contrast to May's 4.7 percent increase and the expected rise of 3.5 percent.

At the same time, manufacturing turnover decreased 1 percent on month in June, versus a 0.9 percent rise in May.


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U.S. Dollar Rallies Amid Trade Concerns

Trading 06 août 2018 Commentaire »

The U.S. dollar climbed against its major opponents in the European session on Monday, as concerns over a trade war escalated after Chinese state media unleashed an unusually brutal and personal attack on U.S. President Donald Trump.

The overseas edition of the ruling Communist Party's People's Daily newspaper said that Trump was "starring in his own carefully orchestrated street fighter-style deceitful drama" in which diplomacy had been reduced to a "trading game in which everything should follow the rule of America first".

Last week, China proposed retaliatory tariffs on $US60 billion worth of goods, if the U.S. implements the threatened 25 percent tariffs on $200 billion of Chinese imports.

Further underpinning the currency were the hopes for a gradual tightening by the Federal Reserve after the U.S. jobs data for July.

The currency has been trading in a positive territory against its major rivals in the Asian session.

The greenback advanced to 111.53 against the yen, from a low of 111.15 seen at 5:00 pm ET. The greenback is poised to find resistance around the 113.00 level.

The greenback spiked up to 0.9981 against the franc, its strongest since July 20. Continuation of the greenback's uptrend is likely to see it challenging resistance around the 1.01 region.

The greenback climbed to 1.3026 against the loonie, 0.7381 against the aussie and 0.6725 against the kiwi, from its early lows of 1.2987, 0.7405 and 0.6756, respectively. The next likely resistance for the greenback is seen around 1.32 against the loonie, 0.72 against the aussie and 0.66 against the kiwi.

The greenback firmed to a 1-1/2-month high of 1.1530 against the euro, from a low of 1.1571 touched at 5:00 pm ET. The greenback is seen finding resistance around the 1.13 area.

Survey data by think tank Sentix showed that Eurozone confidence among investors improved to a 3-month high in August as they see signs of relief in the EU's trade dispute with the US.

The investor sentiment index climbed to 14.7 in August from 12.1 in July. This was the highest score since June. The expected reading was 13.4.

Reversing from an early low of 1.3006 against the pound, the greenback appreciated to an 11-month high of 1.2923. On the upside, 1.27 is possibly seen as the next resistance level for the greenback.


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Fundamental Analysis of EUR/USD for August 6, 2018

Trading 06 août 2018 Commentaire »

EUR/USD has been quite impulsive with the bearish gains earlier which lead the price towards 1.15 support area from where certain bullish intervention is expected in the process. After the mixed NFP report, USD did get some space against the EURO but it does not define a strong trend to follow in the coming days.

Today EURO German Factory Orders report was published with a negative value of -4.0% from the previous value of 2.6% which was expected to be at -0.3% but Sentix Investor Confidence was increased to 14.7 from the previous figure of 12.1 which was expected to be at 12.8.

On the other hand, today there is no USD economic report or event to impact the USD gains in the process but this week on Thursday, PPI report is going to be published which is expected to decrease to 0.2% from the previous value of 0.3% and on Friday CPI report is going to be published which is expected to increase to 0.2% from the previous value of 0.1%.

As of the current scenario, EUR has been quite mixed with the recent economic reports which lead USD to continue its momentum even today despite any news. Though a certain number of economic reports are yet to be published on both currencies of the pair, EUR is looking quite weak against USD in the process.

Now let us look at the technical view. The price is currently heading towards 1.15 support area quite impulsively from where certain bullish intervention is expected in this pair. As the price bounces off the 1.15 support area, the bullish pressure is expected to push the price higher towards 1.17 again before continuing with the bearish trend in the future. As the price remains below 1.17 with a daily close, the bearish bias is expected to continue further.

SUPPORT: 1.15

RESISTANCE: 1.1750

BIAS: BEARISH

MOMENTUM: IMPULSIVE and NON-VOLATILE

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Demand for the US dollar will continue

Trading 06 août 2018 Commentaire »

The euro rose against the US dollar after the release of a weak report on the labor market and foreign trade, but then investors quickly recorded profits, which led to the continuation of a downward trend in risky assets amid expectations of an increase in interest rates in the US.

A good report on retail sales in the euro area did not support the euro on Friday in the morning. According to the data, retail sales in the euro area in June this year, compared with May, increased by 0.3%, compared with June, compared with June, the increase was 1.2%.

The increase in retail sales occurred despite the growth in energy prices, which indicates the recovery of the euro area economy in the second quarter of this year. Economists predicted that in comparison with May retail sales will grow by 0.4%.

A good report on retail sales was offset by weak data from the research company IHS Markit, which confirmed that the composite index of supply managers of the eurozone in July 2018 dropped to 54.3 points from 54.9 points in June.

All the market's attention in the second half of the day was focused on the report on the rate of hiring in the US, which disappointed investors, despite the drop in the unemployment rate, which indicates the growth of the labor market.

According to the US Department of Labor, the number of jobs outside agriculture increased by 157,000 in July this year, while the unemployment rate fell to 3.9% against 4.0% a month earlier.

Data for June were revised. According to the report, in June the number of jobs increased by 248,000. Economists projected job growth of 190,000 and unemployment at 3.9% in July. The growth of average hourly earnings by 2.7% compared with July 2017 will also have a positive impact on the pace of economic growth in the future.

A weak report on the growth of the US foreign trade deficit, despite all the measures taken by the administration of the White House, also did not appeal to investors. A sharp increase in imports and a decrease in exports adversely affected the main indicator.

According to the US Department of Commerce, the deficit in trade in goods and services in June this year increased by 7.3% compared to the previous month and amounted to 46.35 billion US dollars. Exports fell by 0.7%, while imports increased by 0.7%. Economists predicted that the deficit would increase to 46.6 billion dollars.

The index of supply managers PMI for the service sector in July 2018 decreased to 56.0 points, against 56.5 in June. Such data was provided by IHS Markit. Let me remind you that the value above 50 points indicates an increase in activity.

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The yen retreats under the onslaught of the S&P 500

Trading 06 août 2018 Commentaire »

The escalation of the trade conflict between the US and China has returned investors' interest to the question of why the asylum assets do not respond to the growth of geopolitical risks? Indeed, import duties lead to a slowdown in economic growth, and in such circumstances, investors prefer to reinsure and invest in reliable currencies. Nevertheless, neither the Japanese yen nor the Swiss franc received any special dividends because of Beijing's announcement that tariffs for supplies of American goods to China would increase by $ 110 billion, equivalent to 85% of imports.

Attempts to look for the weakness of the yen against the US dollar in the divergence in monetary policy of the Fed and the Bank of Japan have grounds but do not explain the low sensitivity of the currency of the rising sun to geopolitics. Moreover, after the meeting of the Board of Governors, the volatility of the yen fell due to the transparent policy of the Central Bank. He is still going to expand the monetary base by £ 80 trillion a year, prefers negative rates and does not intend to make adjustments to the management strategy of the yield curve. Allegedly, I do not intend to. In fact, BoJ came out with a proposal for unlimited purchase of securities, when the rates for 10-year bonds reached the level of 0.145%. Previously, the regulator did not allow them to exceed the 0.1% mark.

The dynamics of the monthly volatility of the yen

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It is possible that BoJ did not focus investors' attention on the important step because of concerns about the strengthening of the yen. The fact is that the increase in the yield of Japanese bonds will increase the risks of repatriation of capital to their homeland. Given the fact that investors from the Land of the Rising Sun have foreign debt obligations of $ 2.4 trillion, about 45% of which are issued in the US, the risks of the USD / JPY decline seem significant.

Personally, I'm not at all surprised at the Bank of Japan's hidden intentions to make adjustments to the process of targeting the yield curve. Over the past 5 years, he expanded the monetary base three-fold, increased the share of bonds in the portfolio from 12% to 48%, but never did the most important thing - the inflation rate to the target of 2%.

The main reason, because of which the yen can not benefit from trade wars, must be sought in the differentiation of markets. If the US stock indices show the longest week-long winning streak since December, the fall of the Shanghai Composite has moved China from the second line in the list of the largest equity markets in the world. It was first taken from Japan in 2014. Thus, the factor of overclocking of the US economy under the influence of the fiscal stimulus outweighs the risks of slowing global GDP and contributes to the growth of USD / JPY.

The speed of American inflation is important for predicting the future dynamics of the pair. The higher it is, the greater the chances of four acts of monetary restriction of the Federal Reserve in 2018. In this respect, investors should closely monitor the release of data on the US CPI on August 10.

Technically, USD / JPY continues to be in the dead zone. If the "bears" manage to return quotations to the limits of the long-term downward channel, the chances for the realization of the pattern "Shark" will increase.

USD / JPY, the daily chart

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