Oil Snaps 4-day Losing Streak, Ends Notably Higher

Trading 11 sept 2018 Commentaire »

Crude oil futures ended higher on Tuesday, snapping a four-session losing streak, with falling output in Iran tightening global crude supply.

Also, with U.S. sanctions against Iran set to come into effect in the first week of November, global crude oil supply may well see a significant drop as exports from Iran are expected to fall by nearly 40%.

U.S. President Donald Trump has been encouraging Russia and Saudi Arabia to increase crude output, but it remains to be seen if that would help make up for the shortfall in supply due to sanctions against Iranian oil.

According to a report from the U.S. Energy Department, U.S. Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih on Monday in Washington and discussed the state of world oil markets.

Perry will also meet with Russian Energy Minister Alexander Novak, on Thursday in Moscow, to discuss proposals for sharing technologies and boost output, the report said.

Meanwhile, there could be disruptions in supply due to hurricane Florence. It is feared that the hurricane may cause flooding and power interruptions and result in the shutting down of Colonial Pipeline.

Crude oil futures for October ended up $1.70, or 2.5%, at $69.25 a barrel, the highest settlement price in a week.

Crude oil futures for October delivery ended down $0.20, or 0.3%, at $67.55 a barrel.

Markets look forward to the weekly data from the American Petroleum Institute on U.S. stockpiles, due after market hours today.

The official data from Energy Information Administration on crude oil inventories will be out on Wednesday afternoon.


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Treasuries Show Notable Move To The Downside

Trading 11 sept 2018 Commentaire »

After ending the previous session roughly flat, treasuries showed a notable move to the downside during trading on Tuesday.

Bond prices moved steadily lower over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 2.977 percent.

The drop by treasuries came amid strength on Wall Street, with stocks regaining ground following recent weakness.

Trading activity remained somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.

In the coming days, trading may be impacted by reaction to reports on producer and consumer price inflation, retail sales and industrial production as well as the Federal Reserve's Beige Book.

Treasuries saw further downside following the release of the results of the Treasury Department's auction of $35 billion worth of three-year notes, which attracted below average demand.

The three-year note auction drew a high yield of 2.821 percent and a bid-to-cover ratio of 2.68, while the ten previous three-year note auctions had an average bid-to-cover ratio of 2.86.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Trading on Wednesday may be impacted by reaction to a report on producer price inflation as well as the Federal Reserve's Beige Book.


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Dollar Little Changed After Recovering From Early Weakness

Trading 11 sept 2018 Commentaire »

The dollar is little changed overall Tuesday afternoon, after bouncing back from some early weakness. Another light day on the U.S. economic front is keeping a number of investors on the sidelines.

Traders can look forward to the release of the producer price index Wednesday morning, as well as the Beige Book in the afternoon. The consumer price index and weekly jobless claims will follow on Thursday, while Friday will see the release of retail sales, industrial production, consumer sentiment and more.

The dollar dropped to an early low of $1.1643 against the Euro Tuesday, but has since rebounded to around $1.1585.

Eurozone employment increased at a steady pace in the second quarter, data from Eurostat showed Tuesday. Employment increased 0.4 percent sequentially in the second quarter, the same rate as seen in the first quarter. The annual growth also remained unchanged, at 1.5 percent.

German economic sentiment improved more-than-expected to a four-month high in September, despite trade war fears, survey data from the Centre for European Economic Research, or ZEW, showed Tuesday.

The economic sentiment indicator climbed to -10.6 from -13.7 in August, the Mannheim-based think tank said. Economists had expected a moderate improvement to -13.5. The score was the highest since May.

France's payroll employment increased slightly in the second quarter, data from the statistical office Insee showed Tuesday. Net payroll job creation rose 12,500 in the second quarter or zero percent, after rising 47,500 in the previous quarter.

Mark Carney is set to continue as the governor of the Bank of England until the end of January 2020 to support a smooth Brexit and transition, UK Chancellor Philip Hammond confirmed Tuesday.

Hammond made the announcement while speaking at the Parliament. The seven-month extension was agreed in an exchange of letters between the Governor and the Chancellor, the Treasury said in a statement.

The buck fell to a low of $1.3086 against the pound sterling Tuesday, but has since bounced back to around $1.3010.

The UK unemployment rate remained unchanged at the lowest since 1975 and wages growth exceeded expectations amid record vacancies, data from the Office for National Statistics showed Tuesday.

The unemployment rate came in at 4 percent in three months to July, according to labor force survey. This was the lowest rate since February 1975 and in line with economists' expectations.

At the same time, the employment rate rose to 75.5 percent in the three months to July from 75.3 percent in the previous year.

Data showed that average earnings including bonuses grew 2.6 percent annually, faster than the expected 2.5 percent.

The greenback has climbed to around Y111.600 against the Japanese Yen Tuesday afternoon, from an early low of Y111.142.

The M2 money stock in Japan was up 2.9 percent on year in August, the Bank of Japan said on Tuesday, coming in at 1,006.1 trillion yen. That was unchanged from the July reading following a downward revision from 3.0 percent.

Japan's tertiary industry activity recovered in July, data from the Ministry of Economy, Trade and Industry showed Tuesday. The tertiary industry activity index edged up 0.1 percent on month in July, in line with expectations, after declining by revised 0.6 percent in June.


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Ichimoku cloud indicator analysis of Gold for September 12, 2018

Trading 11 sept 2018 Commentaire »

The Gold price remains in a bearish trend below the Daily Kumo (cloud) which is found at $1,225-27 area. Price is trapped between the tenkan- and the kijun-sen indicators confirming we are in a consolidation phase and not in a trend.

analytics5b981bc798135.png

The Gold price reached the kijun-sen (yellow line indicator) today and bounced back towards the tenkan-sen (red line indicator). There is no clear direction in the Gold price right now. The August low seems to be an exhaustion low but the upward bounce does not seem constructive for a larger bullish trend. Traders need to be cautious as there is no clear trend in Gold now.

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Technical analysis of EUR/USD for September 12, 2018

Trading 11 sept 2018 Commentaire »

EUR/USD remains inside the trading range of 1.1660 and 1.1540. Short-term trend is neutral. Market participants most probably wait for more info by the ECB announcements this Thursday in order to get a direction. In the chart below we show the key levels to watch out for.

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Green line - critical support

Red line - important resistance

Orange dots - medium strength resistance

Red dots - strong resistance and trend change level

EURUSD is trapped inside a possible triangle pattern and a Head and Shoulders pattern. Now probably at the right shoulder, we need to see a break below 1.1540 to validate the H&S pattern and push price towards 1.1350-1.14. On the other hand, if bulls take control and break above the red resistance trend line and the close above the red dots at 1.1670 we should expect more upside for the pair that will eventually bring price higher than 1.1730. Rejection at resistance would be a bearish sign.

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Gold Edges Higher, Settles Above $1,200

Trading 11 sept 2018 Commentaire »

Gold prices edged higher after early weakness on Tuesday, with traders looking for some bargain hunting after recent losses. The dollar's retreat from higher levels contributed as well to the yellow metal's recovery.

The dollar, which had been gaining in strength with the prospects of interest rate hikes in September and December rising on the back recent buoyant economic data, turned a bit sluggish against some major currencies today. After advancing to 95.34, the dollar index dropped down to 95.14 before edging up slightly.

According to reports, a WTO meeting agenda says China is planning to seek WTO permission to impose sanctions on the U.S., following Donald Trump's threat last week that his administration will impose tariffs on about $467 billion worth of Chinese imports.

Gold futures for December ended up $2.40, or 0.20%, at $1,202.20 an ounce. On Monday, gold futures ended down $0.60, or 0.05%, at $1,199.80 an ounce.

Silver futures for December settled at $14.153 an ounce, down $0.028 from previous close.

Copper futures for December ended down $0.0065, at $2.6215 per pound.

Traders are also looking ahead to the outcome of the trade talks between Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer. Markets expect that the two countries would reach a deal that would help save the North American Free Trade Agreement.


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Three-Year Note Auction Attracts Below Average Demand

Trading 11 sept 2018 Commentaire »

Kicking off this week's series of long-term securities auctions, the Treasury Department sold $35 billion worth of three-year notes on Tuesday, attracting below average demand.

The three-year note auction drew a high yield of 2.821 percent and a bid-to-cover ratio of 2.68.

Last month, the Treasury sold $34 billion worth of three-year notes, drawing a high yield of 2.765 percent and a bid-to-cover ratio of 2.65.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous three-year note auctions had an average bid-to-cover ratio of 2.86.

Looking ahead, the Treasury is due to sell $23 billion worth of ten-year notes on Wednesday and $15 billion worth of thirty-year bonds on Thursday.


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Global macro overview for 11/09/2018

Trading 11 sept 2018 Commentaire »

On Monday, Wall Street kept in mind the threat of Donald Trump, who said on Friday that if China did not make concessions, US would impose the remaining 267 billion USD of Chinese imports on customs. Macro data were not published, so only the geopolitical impulses were important. The upside for the stock market was that Republicans are planning to present their next tax cuts this week. This is obviously a prelude to the elections to be held in the US 6.11.

The downside was Donald Trump's other tweet, where he wrote, "Apple's prices may rise due to the massive tariffs we can impose on China." But there's an easy solution where ZERO would be taxed. Make your products in the United States instead of China. "That reduced Apple's stock price.

Wall Street began the session with an increase in indices, which basically began to slide down. NASDAQ even turned red for a moment. The closer to the end of the session, the bolder the demand became. Lack of the president's decision regarding duties on imports from China supported the bull camp. The indexes ended the day with small increases, but relying on President Trump's decision is a very risky game.

Let's now take a look at the SP500 technical picture at the H4 time frame. The market has broken above the blue trend line and now is trading around the level of 289.37. The momentum remains positive, but not that strong and the market conditions are still far from being overbought, so another spike up is on the table. The next target for bulls is seen at the level of 289.90 and then 290.10.

analytics5b97f0011c109.jpg

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Fractal analysis of major currency pairs on September 10

Trading 11 sept 2018 Commentaire »

Dear colleagues.

For the EUR / USD pair, the price so far forms a local downward structure from September 6, the level of 1.1601 is the key support. For the GBP / USD pair, we follow the formation of the upward structure from September 5, we continue to wait for the continuation of the upward movement after the breakdown of 1.2983. For the USD / CHF, the price forms the potential for the top of September 7 in the correction of the downward structure, the level of 0.9718 is the key resistance. For the USD / JPY, the price is in deep correction and forms the structure for the top of September 7, level 111.25 is the key resistance. For the EUR / JPY, the subsequent goals for the bottom were determined from the local downward structure on September 5. For the GBP / JPY pair, the price is in the correction area from the downward structure on August 30.

Forecast for September 10:

Analytical review of currency pairs in the scale of H1:

analytics5b9636bdba5bc.png

For the EUR / USD pair, the key levels on the scale of H1 are: 1.1649, 1.1601, 1.1571, 1.1517, 1.1494, 1.1473 and 1.1426. Here we follow the formation of the local structure for the bottom of September 6. The continuation of the downward movement is expected after the breakdown of 1.1517. In this case, the target is 1.1494. Near this level is the consolidation of the price. Passing the price of the noise range 1.1494 - 1.1473 will lead to the development of a pronounced movement. In this case, the target is 1.1426, from this value we expect a rollback to the top.

Short-term upward movement is possible in the area of 1.1571-1.1601. The breakdown of the latter value will lead to the formation of an upward structure. Here, the potential target is 1.1649.

The main trend is the formation of local initial conditions for the bottom of September 6.

Trading recommendations:

Buy 1.1571 Take profit: 1.1600

Buy 1.1604 Take profit: 1.1649

Sell: 1.1516 Take profit: 1.1495

Sell: 1.1472 Take profit: 1.1430

analytics5b9637a616063.png

For the GBP / USD pair, the key levels on the H1 scale are 1.3161, 1.3110, 1.3040, 1.3014, 1.2983, 1.2880, 1.2855, 1.2820 and 1.2786. Here the price forms the potential for the top of September 5. Continuation of traffic on the upside is expected after the breakdown of 1.2983. In this case, the target is 1.3014. In the area of 1.3014 - 1.3040 is the consolidation of the price. Break of level 1.3040 should be accompanied by a pronounced movement towards the top. Here, the target is 1.3110. The potential value for the upstream structure is the level of 1.3161.

Short-term downward movement is possible in the area of 1.2880 - 1.2855. The breakdown of the last value will lead to in-depth correction. Here, the target is 1.2820. This level is the key support for the top. Its breakdown will lead to a downward movement. Here, the target is 1.2786.

The main trend is the formation of the potential for the top of September 5.

Trading recommendations:

Buy: 1.2983 Take profit: 1.3014

Buy: 1.3042 Take profit: 1.3110

Sell: 1.2880 Take profit: 1.2857

Sell: 1.2853 Take profit: 1.2820

analytics5b9636df8b303.png

For the USD / CHF, the key levels on the scale of H1 are: 0.9718, 0.9688, 0.9667, 0.9639, 0.9622, 0.9596 and 0.9581. Here we follow the development of the local downward structure from September 4. At the moment, the price is in correction and forms the potential for the top of September 7, the development of which is expected after the breakdown of 0.9718. Short-term downward movement is possible in the area of 0.9639 - 0.9622. The breakdown of the last value will lead to the development of a pronounced movement. Here, the target is 0.9596, the potential value for the bottom is the level of 0.9581, upon reaching which we expect consolidation in the area of 0.9581 - 0.9596, and also a rollback upward.

The main trend is the downward structure from September 4, the stage of deep correction.

Trading recommendations:

Buy: 0.9690 Take profit: 0.9717

Buy: 0.9720 Take profit: 0.9760

Sell: 0.9638 Take profit: 0.9624

Sell: 0.9620 Take profit: 0.9596

analytics5b9637b5d3892.png

For the USD / JPY, the key levels on a scale are: 111.80, 111.23, 110.98, 110.47, 110.28, 109.88, 109.62 and 109.18. Here the price is in deep correction from the downward structure and forms the potential for the top of September 7. The continuation of the downward movement is expected after passing the price of the noise range 110.47 - 110.28. In this case, the target is 109.88. In the area of 109.88 - 109.62 is the consolidation of the price. Potential value for the bottom is the level of 109.18, the movement towards which we expect after the breakdown of 109.60.

Short-term upward movement is possible in the area of 110.98 - 111.23. The breakdown of the latter value will lead to the development of the upward structure from September 7. In this case, the target is 111.80.

The main trend: the medium-term downward structure of August 28, the stage of deep correction.

Trading recommendations:

Buy: 111.00 Take profit: 111.23

Buy: 111.25 Take profit: 111.80

Sell: 110.47 Take profit: 110.30

Sell: 110.25 Take profit: 109.90

analytics5b96372271b9b.png

For the CAD / USD pair, the key levels on the H1 scale are: 1.3271, 1.3235, 1.3200, 1.3156, 1.3133 and 1.3097. Here, in order to continue the development of the upward trend, we expect the formulation of local initial conditions. Continuation of the main trend is expected after the breakdown of the level of 1.3200. In this case, the target is 1.3235, from this level the probability of leaving for correction is high. As a potential move for the top, consider the level of 1.3271, upon reaching which we expect a pullback downwards.

Short-term downward movement is possible in the area of 1.3156 - 1.3133. The breakdown of the last value will lead to in-depth correction. In this case, the target is 1.3097. This level is the key support for the upward structure.

The main tendency is to expect a local structure for the top.

Trading recommendations:

Buy: 1.3200 Take profit: 1.3233

Buy: 1.3237 Take profit: 1.3270

Sell: 1.3155 Take profit: 1.3135

Sell: 1.3130 Take profit: 1.3097

analytics5b963737d6cfa.png

For the AUD / USD pair, the key levels in the scale of H1 are: 0.7241, 0.7216, 0.7171, 0.7144, 0.7094 and 0.7062. Here we follow the downward structure of August 28. Short-term downward movement is expected in the range 0.7094 - 0.7062, from this area of there is a high probability of a turn upwards, we do not set further targets for the downward movement.

Short-term upward movement is possible in the area of 0.7144 - 0.7171. The breakdown of the latter value will lead to the formation of the potential for initial conditions for the top. In this case, the target is 0.7216, the range 0.7216 is 0.7241 noise.

The main trend is the downward structure from August 28, we expect a pullback upward.

Trading recommendations:

Buy: 0.7144 Take profit: 0.7170

Buy: 0.7173 Take profit: 0.7210

Sell: 0.7092 Take profit: 0.7062

Sell: Take profit:

analytics5b9637485a2f5.png

For the of EUR / JPY, the key levels on the scale of H1 are: 129.97, 129.55, 129.06, 128.63, 127.79, 127.47, 126.85, 126.34 and 125.72. Here, we determined the subsequent goals for the downward movement from the local structure on 5 September. The continuation of the downward movement is expected after passing the price of the noise range of 127.79 - 127.47. In this case, the target is 126.85. In the area of 126.85 - 126.34, short-term downward movement and is the consolidation of the price. The potential value for the bottom is the level of 125.72, from which we expect a rollback to the top.

Short-term upward movement is possible in the range 128.63 - 129.06. The breakdown of the last value will lead to an in-depth correction. Here, the target is 129.55. Up to the level of 129.97 we expect formalized initial conditions for the upward cycle.

The main trend is the local downward structure of September 5.

Trading recommendations:

Buy: 128.63 Take profit: 129.02

Buy: 129.10 Take profit: 129.55

Sell: 127.45 Take profit: 126.85

Sell: 126.82 Take profit: 126.35

analytics5b9637561ae37.png

For the GBP / JPY pair, the key levels on the scale of H1 are: 144.46, 143.70, 143.30, 142.39, 141.86, 141.38, 140.66 and 140.23. Here the price is in the correction area from the downward structure and forms a small potential for the top of September 7. The continuation of the downward movement is expected after the breakdown at 142.39. In this case, the target is 141.86. In the area of 141.86 - 141.38 is the consolidation of the price. The level breakdown at 141.38 should be accompanied by a pronounced downward movement. Here, the target is 140.66, the potential value for the bottom is the level of 140.23, after which we expect consolidation, and also a rollback to the top.

Consolidated traffic is possible in the area of 143.30 - 143.70. The breakdown of the last value will lead to in-depth correction. Here, the target is 144.46. This level is the key support for the bottom.

The main trend is the medium-term downward structure of August 30, the correction stage.

Trading recommendations:

Buy: 143.70 Take profit: 144.40

Buy: 144.50 Take profit: 145.65

Sell: 142.35 Take profit: 141.86

Sell: 141.80 Take profit: 141.40

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Markets doubt the strength of the dollar

Trading 11 sept 2018 Commentaire »

Eurozone

The indicator of Sentix investor confidence declined in September to 12p against 14.7p in August, which was significantly worse than the experts' expectations.

Europe is largely affected by the pressures on emerging markets, as it jeopardizes trade and production due to a decline in export capacity. There was also the worsening of the political situation and growing tension with the US, which require Europe to curtail a number of economically viable projects with Iran and Russia, as well as make unilateral concessions in bilateral relations.

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We should also pay attention to what usually remains beyond the scope of attention - the change of indices in other countries of the world, and they have the same tendency - a slowdown. In the US, the index fell from 25.6p to 23.6p, with a high level of assessment of the current state but the expectations went to the negative zone, down to -10p. In Japan, there's the decline from 13.2 to 12.3p while there was a strong decline for Latin America as well with the overall global investor confidence index falling from 15.2p to 10.7, which is a two-year low.

The trend indicates a probable increase in demand for defensive assets, in particular for the yen and the US dollar.

The main event of the week in the euro area is the ECB meeting on monetary policy on Thursday, September 13. Since the beginning of the week, the euro continues to try to grow, not paying attention to the strong data on the US labor market. The threat that Draghi will drop the euro exchange rate at a press conference after the meeting is growing. To do this, we do not need to do anything special, we just need to outline the real situation in the euro area, which is worsened by a number of regional crises and heavy trade negotiations with the United States.

Today, the EURUSD does not have an explicit direction. The short-term bullish momentum may end in the resistance area 1.1640, the euro below is limited by support 1.1550. The chances to go beyond the limits of the range are not large.

United Kingdom

The pound responded positively to the excess of GDP growth over forecasts, as the probability of recession has decreased.

For 6 consecutive quarters, GDP growth did not exceed 0.4%, but the latest data show that in May-August the growth was 0.6%. The same result was received by NIESR in assessing the growth in the last 3 months. Despite the fact that the markets do not expect to raise rates before the Brexit situation is resolved, the pound is growing, intending to exit the oversold zone.

At the same time, industrial production has no positive dynamics. The growth in July was only 0.1%, on an annualized basis, the slowdown in growth rates from 1.1% to 0.9%, that is, GDP recovery is primarily due to construction and services sector.

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Today, data on the labor market will be published. The forecasts are optimistic. It is expected that the average wage growth will be confirmed at 2.4%, the excess of the forecast can throw a pound significantly higher, as it will give May government additional trump cards in domestic battles.

On Thursday, the Bank of England will hold a regular meeting. Since it will not be accompanied by the publication of updated macroeconomic forecasts, the chances for a change in monetary policy are regarded as minimal.

The GBPUSD has overcome the maximum of August 1.3043, the chances of continued growth during the day are not bad. If the data on the labor market exceed expectations, the pound will make an attempt to rise to 1.32.

Oil

Brent is preparing to re-storm the level of 80 dollars per barrel. The situation on the oil market is clearly bullish, the growth in demand is much higher than the supply.

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