Oil Settles Lower Again

Trading 10 sept 2018 Commentaire »

Despite moving up early on in the session amid speculation crude supply will fall once U.S. sanctions against Iran's crude exports kick in from November, oil prices dropped down a bit on Monday, extending losses to a fourth straight session.

Traders may also have weighed the possibility of a drop in demand for crude due to hurricane Florence, which is reportedly heading toward the coast of South Carolina and North Carolina.

The early uptick in oil prices was also due to a report from Baker Hughes last Friday that U.S. oil rigs count dropped by two to 860.

Crude oil futures for October delivery ended down $0.20, or 0.3%, at $67.55 a barrel. On Friday, crude oil futures settled lower by 2 cents, at $67.75 a barrel.

Data released by the Energy Information Administration last Thursday showed crude stockpiles in the U.S. to have declined by 4.3 million barrels in the week ended August 31. That was a much larger than expected drop.

According to reports, Iran's oil exports have been falling much faster than expected ahead of a November deadline for the implementation of new U.S. sanctions.

Meanwhile, U.S. Energy Secretary Rick Perry will reportedly meet his counterparts from Saudi Arabia and Russia starting today to discuss proposals for an oil output increase.


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Dollar Mixed As Investors Await Data

Trading 10 sept 2018 Commentaire »

The dollar is turning in a mixed performance against its major rivals Monday afternoon. The lack of U.S. economic data is keeping some investors on the sidelines at the start of the new trading week.

Things will begin to pick up on the economic front on Wednesday. The producer price index will be released Wednesday morning and the Beige Book is set to be released in the afternoon.

The dollar rose to an early high of $1.1526 against the Euro Monday, but has since retreated to around $1.16.

Eurozone investor confidence deteriorated unexpectedly in September, survey data from think tank Sentix showed Monday. The investor sentiment index fell to 12.0 in September from 14.7 in August. The score was forecast to rise to 15.0.

The buck reached a high of $1.2896 against the pound sterling Monday morning, but has since pulled back to around $1.3030.

The UK economy expanded at the fastest pace in almost a year in July as warm weather boosted retail sales amid a recovery in construction.

Gross domestic product grew 0.6 percent in three months to July, the fastest since August 2017, data from the Office for National Statistics revealed Monday. The rate was faster than the expected 0.5 percent and 0.4 percent posted in the second quarter.

UK industrial production logged a marginal less-than-expected growth in July, the Office for National Statistics reported Monday.

Industrial output climbed 0.1 percent in July from June due primarily to a rise in mining and quarrying of 3.3 percent. Economists had forecast industrial output to gain 0.2 percent in July.

The UK visible trade deficit narrowed in July, the Office for National Statistics said Monday. The deficit on trade in goods fell to GBP 9.97 billion from GBP 10.68 billion in June. At the same time, the surplus on services increased to GBP 9.8 billion from GBP 9.7 billion a month ago.

The greenback has climbed to around Y111.190 against the Japanese Yen this afternoon, from an early low of Y110.850.

Japan's gross domestic product climbed 3.0 percent on year in the second quarter of 2018, the Cabinet Office said on Monday. That beat forecasts for 2.6 percent and was up from the previous reading of 1.9 percent.

Japan had a current account surplus of 2,009.7 billion yen in July, the Ministry of Finance said on Monday. That beat forecasts for a surplus of 1,893.2 billion yen and was up from 1,175.6 billion yen in June.

Overall bank lending in Japan was up 2.2 percent on year in August, the Bank of Japan said on Monday - coming in at 526.912 trillion yen. That follows the 2.0 percent increase in July.

A measure of peoples' assessment of the Japanese economy improved more-than-expected in August, survey figures from the Cabinet Office showed Monday. The current index of Economy Watchers' survey rose to a 4-month high of 48.7 in August from a 22-month low of 46.6 in July. The index was forecast to increase to 47.0.


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Gold Edges Down Marginally, Settles Below $1,200

Trading 10 sept 2018 Commentaire »

Gold prices moved in a very tight range on Monday, amid mounting concerns about the ongoing trade war between the U.S. and its partners and its likely impact on the global economy.

The dollar, despite losing some ground against some major currencies, especially against the pound sterling, is expected to remain steady, as markets expect the Federal Reserve will hike interest rates this month.

Gold futures for December ended down $0.60, or 0.05%, at $1,199.80 an ounce. On Friday, gold futures ended down $3.90, or 0.3%, at $1,200.40 an ounce.

Silver futures for December settled at $14.181 an ounce, gaining $0.011, while Copper futures ended up $0.055, at $2.6280 per pound.

Speculation about a rate hike has increased following last week's jobs report from the Labor Department that showed an addition of 201,000 jobs in August and a surprise rise in wages.

On the trade front, the U.S. President Donald Trump threatened on Friday that his administration would impose new tariffs on $267 billion of Chinese goods. Trump also called on Apple to move production from China to the United States to avoid suffering the consequences of his trade war with Beijing.

Trump reportedly told a columnist for The Wall Street Journal last week that he was "still bothered by the terms of U.S. trade with Japan."


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Ethereum analysis for 10/09/2018

Trading 10 sept 2018 Commentaire »

In April this year, the Central Bank of Russia launched a regulatory cell that controls all entities that develop or use innovative services whose implementation requires appropriate regulatory changes. In a document published in February this year, the Central Bank announced that it plans to transform the Russian cryptocurrency into financial services by developing new infrastructure, including a platform based on blockchain technology (DLT). The special representative of Vladimir Putin, Dmitry Peskov, in the last interview pointed to the tightening of the Russian position for the cryptocurrency market.

Vladimir Putin's representative for digital and technological development (RIA) notes that Russia does not yet have a right covering cryptographic assets, virtual coins, and ICO. According to the report, the RIA does not support the legalization of cryptocurrencies in Russia at this time. He notes that there is a big risk that his country may once again fall victim to a financial pyramid such as MLM: "The Central Bank of Russia has adopted a fairly liberal position in the field of cryptocurrency regulation. But the level of risk is so high that the position may soon be much stricter" - noted Dmitry Peskov.

According to Mr. Peskov, the most sensible approach would be to create regulatory institutions that would conduct research and analysis of cryptocurrencies. Despite the increasingly harsh position of the Bank of Russia in relation to the crypto market, the regulator is still open to blockchain technology.

Let's now take a look at the Ethereum technical picture at the H4 time frame. After the downside breakout from the triangle formation, the market has made a low at the level of $181.47. The bulls tried to rally, but were too weak and did not even violated the nearest technical resistance at the level of $206.54, so the price has moved back again and now is trading close to the recent lows. Please notice, there are some signs of a possible bullish divergence forming on this time frame.

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The pound got a break-point

Trading 10 sept 2018 Commentaire »

The conciliatory rhetoric of Michel Barnier and the strong statistics on Britain's GDP for May-July allowed the pound to seriously impede the US dollar gaining momentum. The fastest growth in the average wage in the US since 2009 has increased the likelihood of overclocking inflation and aggressive monetary restriction of the Fed, which inspired the "bears" for GBP / USD to attack. Their opponents could find answers. As a result, the sterling was not far from the psychologically important $ 1.3 mark.

The main negotiator from the EU noted that it was open to the idea of simplifying control at the border with Ireland and in general, in Theresa May's plan, there are many useful things. She did not say that the submitted document should be unequivocally rejected. Moreover, Bloomberg, referring to competent sources who wished to remain anonymous, said that Barnier had told the Austrian Chancellor that the Brexit agreement was ready for 90%. Markets are sensitive to the news about the conditions for the withdrawal of Britain from the European Union, after all, according to a poll of experts from Reuters, the GBP / USD pair will slip by 8% in the absence of a deal between Brussels and London and will grow by 6% if there is a compromise.

Support for the pound was provided by the Office of National Statistics of Albion. In May-July, the economy accelerated from 0.4% in April-June to 0.6%, which is the strongest quarterly growth during the year and strengthens the position of the Bank of England. The fact is that the regulator previously claimed that the GDP slowdown at the beginning of the year is a temporary phenomenon, and in the future, the indicator will develop the previous speed. Theoretically, this means that the timing of the next increase in the REPO rate should have moved to an earlier period than the market expects. In fact, the unfavorable political landscape has moved the date of the continuation of the cycle of normalization of monetary policy from November 2019 to February 2020, which restrains the offensive fervor of the bulls in the GBP / USD.

Dynamics of GDP in Britain

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The situation may change for the better for the fans of sterling, if the statistics on the labor market of Foggy Albion will please, and the Bank of England will be marked by "hawkish" rhetoric at the meeting on September 13. According to the forecasts of Bloomberg experts, unemployment will remain at the previous level of 4%, the minimum for several decades, employment will increase by 27 thousand, and the average salary will be dispersed from 2.7% to 2.8% y / y. The gradual recovery of GDP after a sluggish start, a strong labor market and the potential acceleration of inflation create the prerequisites for the continuation of the cycle of normalization of the BoE monetary policy. If, of course, Brexit does not lay a pig.

At the same time, I do not think that an improvement in the political background and macrostatistics in Britain will allow the "bulls" in the GBP / USD to advance to 1.33-1.34 in September. This requires a loss of interest in the US dollar, which is still hard to believe. The most likely scenario is consolidation in the range of 1.27-1.32.

Technically, on the daily GBP / USD chart, the pattern "Splash and Regiment" is implemented. Breaking the top of the "shelf" near 1.3035 will increase the risks of continuing the rally in the direction of the target by 88.6% in the "Bat" pattern.

GBP / USD, the daily chart

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The Australian dollar was frightened by the escalation of the trade war

Trading 10 sept 2018 Commentaire »

The Australian dollar at the end of last week updated more than two-year price minimum. For the last time, the pair AUD / USD was at the base of the 71st figure in February 2016. Positive dynamics of growth of the Australian economy had a temporary support for the "Aussie" and on Friday, it completely crossed out all the achievements of the pair's bulls.

First of all, the Australian yielded to the dominance of the US currency, which rose in price throughout the market due to the strong enough Nonfarm. The probability of raising the rate to 2.5% at the December meeting rose to almost eighty percent, while full confidence in the September increase remained unshakable. This week (Thursday), the US consumer price index will be published. If traders see positive dynamics here, the chances of a December increase will increase even more, and, accordingly, the US dollar will get another reason for its further strengthening. It should be noted that preliminary forecasts are very optimistic. Experts expect minimally, but still growth relative to the previous period.

The successes of the American economy coincided with another fundamental factor, which also supports the demand for the greenback. This is a threat of an escalation of the US-China trade war. Trump on the last day of the last week again voiced threats to Beijing. This time, he said he intends to impose duties on almost all Chinese imports to the States, to the amount of $ 267 billion, in addition to 200 billion, which are also just under development.

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In other words, he threatened to impose tariffs on virtually all imports from the PRC, but his threats are only verbal in nature. Nevertheless, the belligerent rhetoric did its job. The yuan started to become cheaper again, and on Monday, it opened with the northern gap, like most commodity currencies. The Australian dollar is no exception. A weak attempt at corrective growth is currently undergoing a fiasco, the bears are aggressively pushing the pair to test the key level of 0.70.

The positive dynamics of Chinese inflation also did not help bulls AUD / USD. This indicator came out better than expected, being at the level of 2.3%. In other words, the indicator has been growing for the third month in a row. But the market actually ignored this fact. This is due to two factors.

First, the index of production prices (PPI) remains at low levels, which indicates a fall in domestic demand. Secondly, the growth of August inflation in China is temporary. According to experts, the increase is due to a jump in prices for vegetables and meat (in particular, pork). In turn, the cost of these goods has grown because of natural disasters in some Chinese provinces. Floods in these regions have affected food supplies, especially vegetables. Obviously, such factors are temporary and will not be able to support the growth of inflation on a stable basis. That is why analysts agree that in September the consumer price index may return to the region of 2-2.1%.

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In other words, the growth of Chinese inflation could not support the Australian, while another indicator, the surplus of China's trade balance with the US, aroused serious concern among investors. This indicator jumped in August to a new record high. The surplus increased to $ 31.05 billion, which is significantly higher than the last record amount, in July, the surplus was $ 28 billion. Such a result presages a new round of the trade war between Washington and Beijing. Threats sounded by Trump confirm such a possibility.

Given the above factors, it is not surprising that the shares of mining giants (Rio Tinto and BHP Billiton) have fallen by more than one percent today. As soon as Trump's intentions acquire real features, the commodity market will again show negative dynamics, exerting a strong influence on the Australian dollar.

As you can see, the external fundamental background dominates the domestic success of the Australian economy. The country's GDP growth has provided temporary support to the pair, as well as inflationary dynamics. Therefore, do not expect to release data on the Australian labor market (scheduled for Thursday). Despite strong forecasts, it will not change the situation and break the trend. Only the de-escalation of the trade US-China trade war can unfold the price movement.

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From the technical point of view, the situation is as follows. At all timeframes, the pair AUD / USD is on the bottom line of the Bollinger Bands indicator under all lines of the indicator Ichimoku Kinko Hyo, which formed a strong bearish signal "Line Parade". This indicates the clear advantage of the southern movement. Bearish momentum is so strong that it is too early to speak about price correction: only if the data on the growth of American inflation will go far worse than expectations, the bulls of the pair can expect a minimal price retracement. Otherwise, the priority will remain for the south. The main goal of the southern movement is at the lows of 2016, that is, in the middle of the 69th figure. But the 0.7000 mark will become the main barrier for bears AUD / USD in the coming days.

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Weekly review of the foreign exchange market from September 10, 2018

Trading 10 sept 2018 Commentaire »

Last week, the dollar made serious attempts to strengthen. As a result, it managed to continue to strengthen with respect to the ruble, though not at such a pace. Also, the dollar was able to strengthen slightly against the single European currency, but it did not work with the pound. Although during the week, the pound was quite seriously cheaper but finished the week in the same place where it started. Almost the entire week, American statistics were completely multidirectional. Thus, the total sales of vehicles decreased from 16.8 million to 16.7 million. The index of business activity in the manufacturing sector fell from 55.3 to 54.7, while in the service sector, from 56.0 to 54.8. Naturally, this led to a decrease in the composite index of business activity from 55.7 to 54.7. Moreover, production orders decreased by 0.8%. So, there was no reason to be happy, but much more important data came out. This is the report of the US Department of Labor. Initially, the content of the report was somewhat disappointing, as the unemployment rate remained the same, and more importantly, the proportion of the workforce in the total population decreased from 62.9% to 62.7%. But with a closer look at the text of the report, investors were cheered up. The fact is that out of agriculture, 201 thousand new jobs were created, and the growth rate of the average hourly wage increased from 2.7% to 2.9%. It turns out that employment is growing in the face of rising incomes. This is an extremely positive signal, and, in theory, the dollar should be strengthened even more.

The fact that the dollar should have strengthened much more actively becomes doubly clear after a cursory glance at European statistics, as European GDP growth rates in the second quarter slowed from 2.5% to 2.1%. Earlier, it was assumed that economic growth rates slowed from 2.5% to 2.2%. Also, the growth rate of retail sales slowed from 1.5% to 1.1%. But in Europe, there was also positive news that could not change the general mood, but only a few smoothed the negative. The fact is that unlike the US, the European index of business activity in the services sector grew from 54.2 to 54.4, which allowed the composite index of business activity to grow from 54.3 to 54.5. Also, the growth rates of producer prices accelerated from 3.6% to 4.0%. But in any case, the slowdown in economic growth, paired with a slowdown in retail sales, should have given a much greater decline in the single European currency. And much more interesting with the pound, as only the index of business activity in the service sector, showed an increase from 53.5 to 54.3. While the index of business activity in the manufacturing sector fell from 53.8 to 52.8, and in the construction sector from 55.8 to 52.9. So, the question arises as to what constrained the growth of the dollar.

The questions are caused by the growth of the dollar against the ruble, as inflation in Russia accelerated from 2.5% to 3.1%, and Elvira Nabiullina said that the next meeting of the Bank of Russia's board will consider not the reduction of the key rate, but its increase. And all this should lead, if not to the growth of the ruble, then at least to its stability.

So the answers again have to be found in the bulletins of political news.

If we talk about the single European currency and the pound, then we need to remember about Brexit and all that is associated with it. More recently, representatives of the European Union have stated that they are ready to offer the UK such conditions of cooperation that no one has. In response, Theresa May said that the United Kingdom will not make any concessions, hinting that she knows about the details of these conditions, and they are not so good. But last week, there were reports that Britain and Germany agreed to give up a number of mutual demands in order to reach a common agreement at the talks. This development of events strongly inspired market participants. Simultaneously, along with this, a political scandal is gaining momentum in the United States caused by the publication of a book in which, referring to unnamed sources, the White House's plot against Donald Trump is described. A little later, in a number of mass media, correspondence appeared allegedly between the employees of the administration of Donald Trump, where the question of his removal from power is being discussed. Naturally, the US President was furious, and all prominent representatives of the White House began to give official comments one by one, that they did not take part in any conspiracies and did not know anything about it. Many have assured that they are ready to undergo an immediate check on the lie detector. And, finally, this does not add confidence in the future, so that even though the dollar had good reasons for growth, purely political factors hindered it.

As for the ruble, its weakening is connected exclusively with political factors, since purely economic factors have an extremely weak influence on it. And it's about the case of the Violins. The new information provided by Great Britain, although it causes a lot of questions and criticisms, still implies a certain intelligible answer that Russia does not give. And the situation in Syria is heating up. But on all these points Russia is limited to some kind of unintelligible excuses, which raises many questions about its ability to withstand pressure. So, it is not surprising that investors are trying to close their ruble positions in order to wait for at least some clarity.

If you look at what data should be released this week in the US, it is unclear how to grow the dollar. Of course, the increase in consumer lending from $ 10.2 billion to $ 13.0 billion is quite good, but not enough. Moreover, if commodity stocks in wholesale warehouses should increase by another 0.7%, producer price growth rates will slow from 3.3% to 3.2%, and inflation from 2.9% to 2.7%. And the growth rates of industrial production and retail sales may slow down. So, it's time to worry that the Fed can reconsider its plans on the rate of increase in the refinancing rate. Moreover, the scandal surrounding a certain conspiracy against Donald Trump will only gain momentum. So, the dollar can grow only if something extraordinary happens in the Old World.

True, the continental is not particularly pleased with a large amount of statistical data. The slowdown in industrial production is expected to slow from 2.5% to 2.4%. And that is all. However, all attention will be focused on the results of the meeting of the ECB Monetary Policy Board. Naturally, no changes are expected, but the ECB is waiting for further confirmation that after December, the program of quantitative easing will not be prolonged. And at the moment, such fears are justified, as inflation slows down, and with it consumer activity. However, it is unlikely that, against the background of preliminary data on inflation, the ECB will make hasty decisions. So, the ECB will once again announce plans to curtail the quantitative easing program, as well as the subsequent increase in the refinancing rate. So, by the end of the week, the single European currency should strengthen to 1.1675.

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Much more interesting will be in the UK, where data on industrial production has already emerged, whose growth rates have slowed from 1.1% to 0.9%. But this is the only negative that is expected by the pound. Data on the labor market can show the stability of the unemployment rate combined with the acceleration of the growth rate of the average wage both with and without bonuses. Well, the main event will be a meeting of the Bank of England's Monetary Policy Board. From the department of Mark Carney will wait for at least hints about further plans of the regulator. The market is now in the state of waiting for further growth in the refinancing rate in the US, as well as serious tightening of monetary policy in Europe. Against this background, the Bank of England should designate its medium-term position, and it should be aimed specifically at further raising the refinancing rate. If the results of the meeting of the Bank of England are different, then the pound will be extremely difficult. But while everything indicates that the English regulator will please market participants, and this will allow the pound to strengthen to 1.3050.

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But the ruble has a completely different story. And it does not matter whether the Bank of Russia will raise the key rate or not. Even if Elvira Nabiullina goes to such an impractical step, this will not significantly affect the ruble. While everyone thinks only about new sanctions, since no one doubts that they will be entered. Considering that all previous sanctions did not have the same effect as the US expected, so that everyone is waiting for new, really harsh sanctions. It is this fear, and most importantly the lack of understanding what exactly will be, and scares. Fear is the most important enemy, as it is irrational, and nothing will prevent market participants from further getting rid of their ruble assets. So, it is worth waiting for the growth of the dollar to 71.00 rubles. True, the dollar is so heavily overbought that at least some kind of relaxation or calm will lead to a weakening of the dollar to 69.00 rubles. But while it is most likely that the ruble will continue to weaken.

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BITCOIN Analysis for September 10, 2018

Trading 10 sept 2018 Commentaire »

Bitcoin has been quite impulsive with the bearish momentum recently which led the price below $6,500 with a daily close resulting in certain correction and indecision at the current market scenario. The price has been trying hard to push higher while residing inside the support area of $6,000-6,500, but the bullish momentum cannot be yet confirmed until the price breaks above $6,500 area with a daily close. The dynamic level of 20 EMA is also indicating a downward movement but having the price residing above $6,000 area with a daily close does indicate the bullish bias is still on and certain bullish comebacks can take place in the process. If the price breaks above $6,500 with a daily close, the bullish run is expected to continue with a target towards $8,000 area.

SUPPORT: 6000

RESISTANCE: 6500, 7500, 8000, 10000

BIAS: BEARISH

MOMENTUM: VOLATILE

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UK GDP Growth Near 1-Year High

Trading 10 sept 2018 Commentaire »

The UK economy expanded at the fastest pace in almost a year in July as warm weather boosted retail sales amid a recovery in construction.

Gross domestic product grew 0.6 percent in three months to July, the fastest since August 2017, data from the Office for National Statistics revealed Monday. The rate was faster than the expected 0.5 percent and 0.4 percent posted in the second quarter.

"Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup," Head of GDP Rob Kent-Smith, said. "The construction sector also bounced back after a weak start to the year."

Kent-Smith said the dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level.

In July, GDP advanced 0.3 percent month-on-month, faster than the 0.1 percent rise in June.

ONS said industrial output climbed by less-than-expected 0.1 percent in July from June due primarily to a rise in mining and quarrying of 3.3 percent. Oil and gas extraction returned to production, following planned maintenance in June.

Meanwhile, manufacturing output contracted 0.2 percent, reversing a 0.4 percent rise in June. Economists had forecast both industrial and manufacturing output to gain 0.2 percent each in July.

On a yearly basis, growth in industrial production eased to 0.9 percent from 1.1 percent in June. Likewise, manufacturing output growth slowed to 1.1 percent from 1.5 percent.

In three months to July, services output grew 0.6 percent compared to three months to April, the largest growth since three months to January 2017.

In a separate communiqu?, the ONS said construction output continued to recover following a relatively weak start to the year, increasing by 3.3 percent in the three months to July.

The UK visible trade deficit narrowed to a 5-month low in July, ONS data showed. The deficit on trade in goods fell to GBP 9.97 billion from GBP 10.68 billion in June. At the same time, the surplus on services increased to GBP 9.8 billion from GBP 9.7 billion a month ago. As a result, the total trade showed a negative balance of GBP 111 million compared to -GBP 942 million in June.

The total UK trade deficit narrowed GBP 1.4 billion to GBP 3.4 billion in the three months to July.


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USD/JPY analysis for September 10, 2018

Trading 10 sept 2018 Commentaire »

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Recently, the USD/JPY has been trading sideways at the price of 111.10. Anyway, according to the M30 time frame, I found that price is trading near the resistance level (Friday's high) at the price of 111.24, which is a sign that buying looks risky. I also found strong supply in the background and overbought condition on the stochastic oscillator, which is another sign of weakness. Watch the breakout of the support trendline to confirm further downward movement. The downward target is set at the price of 111.52.

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