Oil Futures Recover After Sharp Setback, End Flat

Trading 08 oct 2018 Commentaire »

After declining sharply early on in the session, crude oil futures regained lost ground and ended flat on Monday.

Oil prices declined after the United States said it is considering waivers on sanctions against Iran that will take effect on November 4.

However. prices came off lower levels amid reports about disruptions in oil production in the Gulf of Mexico due to hurricane Michael and news about explosion at a key oil refinery in Canada.

Crude oil futures for November declined to a low of $73.08 a barrel before recovering to close at $74.29 a barrel, down 5 cents from previous close.

On Friday, crude oil futures for November ended at $74.34 a barrel, gaining a penny.

According to reports, the U.S. administration is "in the midst of an internal process" of considering waivers for countries that are reducing imports of Iranian crude.

It is widely expected that Saudi Arabia will steadily increase production to compensate for the loss of Iranian oil from early November.

Traders were looking ahead to crude inventories data from American Petroleum Institute and Energy Information Administration.


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Dollar Paring Early Gains In Holiday Trade

Trading 08 oct 2018 Commentaire »

The dollar got off to a positive start against its major rivals Monday, but has since pared its early gains. While markets remain open on Columbus day, the holiday is keeping some investors away from their desks.

The lack of U.S. economic data is also keeping some investors on the sidelines. Things will remain quiet on the economic front on Tuesday as well, but will begin to pick up on Wednesday, with the release of the producer price index and wholesale trade data.

The dollar climbed to a high of $1.1459 against the Euro Monday, but has since retreated to around $1.1490.

Eurozone investor confidence weakened in October largely due to uncertainties about the fiscal policy stance in Italy and the automobile industry in Germany, survey data from think tank Sentix showed Monday.

The investor sentiment index fell more-than-expected to 11.4 in October from 12.0 in September. The expected reading was 11.8.

Germany's industrial production declined unexpectedly in August on a notable weakness in construction, suggesting that the economy lost some momentum in the third quarter.

Data from Destatis showed that industrial output slid 0.3 percent from July, confounding expectations for an increase of 0.5 percent. This was the third consecutive decline in output. Production had decreased 1.3 percent in July. The buck rose to an early high of $1.3028 against the pound sterling Monday, but has since eased back to around $1.3090.

The greenback reached a high of Y113.943 against the Japanese Yen Monday morning, but has since dropped to around Y112.975.


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Gold Settles At 1-week Low, As Dollar Climbs Higher

Trading 08 oct 2018 Commentaire »

Gold prices tumbled on Monday, as the dollar surged higher amid speculation about a rate hike in December and on slowing Chinese economy.

Mounting worries about Italy - European Union spat too contributed to gold's plunge.

China's Finance Minister Liu Kun said that although some regions and companies have been affected, the country is capable of minimizing the impact of the ongoing trade war.

On Sunday, the People's Bank of China said that it will reduce the ratio of cash that banks should retain as reserves by 100 basis points, with effect from October 15. The reduction is set to release $175 billion.

Gold futures for December ended down $17.00, or 1.4%, at $1,188.60 an ounce, the lowest settlement since September 27.

On Friday, gold futures ended up $4.00, or 0.3%, at $1,205.60 an ounce.

Silver futures for December settled at $14.329 an ounce, losing $0.320 for the session.

Copper futures for December ended up $0.0040, at $2.7670 per pound.

The dollar index, which rose to 95.70, gave up some gains subsequently and was hovering around 95.45 later in the session.

The Federal Reserve, which has increased interest rates three times so far this summer, is widely expected to hike rate once again in December. With another three rate increases in 2019 likely, the dollar may continue to sustain at higher levels against most major currencies.


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BITCOIN Analysis for October 8, 2018

Trading 08 oct 2018 Commentaire »

Bitcoin has been quite corrective and volatile recently while residing at the edge of $6,500 area with a daily close. The price has managed to move higher quite impulsively today which provided a significant advantage of the bulls over bears This price move is expected to lead to further upward pressure in the coming days. The price is still being held and supported by the dynamic levels like 20 EMA, Tenkan, and Kijun line while breaking above the Kumo Cloud with certain retests along the way. As the price remains above $6,500 area, with certain corrections and retracements, the price is likely to push higher with a target towards $7,500 and later towards $8,000 in the future.

SUPPORT: 6,000, 6,500

RESISTANCE: 7,500, 8,000

BIAS: BULLISH

MOMENTUM: VOLATILE

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U.S. Dollar Higher On Fed Rate Hike Prospectus

Trading 08 oct 2018 Commentaire »

The U.S. dollar firmed against its most major rivals in the European session on Monday, as the U.S. 10-year treasury yield remained near 7-year highs following a recent run of strong U.S. economic data that bolstered prospect of further rate hikes by the Federal Reserve.

Yields on U.S. 10-year treasury bonds hit a seven-year peak on Friday as recent data showed that the U.S. unemployment rate fell to its lowest since 1969.

The data cemented hopes for a fourth rate hike in December and additional three hikes in 2019.

Investors await reports on U.S. producer and consumer inflation due this week to help shape the pace of Fed tightening.

Economists forecast the CPI to rise 0.2 percent on a monthly basis in September, the same rate as seen in August.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the pound and the euro, it held steady against the franc and the yen.

The greenback edged up to 0.9945 against the franc, from a 4-day low of 0.9907 seen at 3:00 am ET. On the upside, 1.01 is possibly seen as the next resistance for the greenback.

Data from the State Secretariat for Economic Affairs showed that Switzerland's unemployment rate dropped marginally in September.

The unemployment rate dropped to a seasonally adjusted 2.5 percent in September from 2.6 percent in August. The rate matched economists' expectations.

The greenback strengthened to 1.1460 against the euro, a level unseen since August 20. The greenback is seen finding resistance around the 1.13 mark.

Figures from Destatis showed that Germany's industrial production declined unexpectedly in August.

Industrial output slid 0.3 percent from July, confounding expectations for an increase of 0.5 percent. Production had decreased 1.3 percent in July.

Having dropped to an 11-day low of 1.3133 against the pound at 8:15 pm ET, the greenback reversed direction and appreciated to 1.3028. The next possible resistance for the greenback is seen around the 1.29 level.

Quarterly economic survey from British Chambers of Commerce showed that the UK economy is stuck in a rut due to Brexit uncertainties.

In the report, the BCC said there is little to be cheerful about as growth flatlines and business confidence weakens in the third quarter.

The greenback spiked up to a 10-day high of 1.3010 against the loonie and held steady thereafter. The greenback is poised to target resistance around the 1.32 level.

On the flip side, the greenback held steady against the yen, after having declined to an 11-day low of 113.25 at 4:45 am ET. The pair finished Friday's trading at 113.70.


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Serbia CB Holds Key Rate Unchanged Sixth Time

Trading 08 oct 2018 Commentaire »

Serbia's central bank held its key interest rate steady in October for a sixth consecutive policy session.

The Executive Board voted to keep the key policy rate on hold, at 3 percent, the National Bank of Serbia said in a statement.

The rate was reduced by a quarter-point each in both March and April.

The bank expects inflation to continue to move within its tolerance band of 3 plus or minus 1.5 percent in the next two years.

Inflation was 2.6 percent in August and the core figure that excludes volatile prices was 1.1 percent. Policymakers also expect economic growth to exceed 4 percent this year, driven by investment that will underpin the robust manufacturing exports. That said, "caution in monetary policy conduct is still mandated, primarily because of developments abroad", the Executive Board assessed.

"Nevertheless, the Executive Board points out that the resilience of our economy to potential negative effects from the international environment has increased, owing to improved macroeconomic fundamentals and overall prospects," the bank added. The next policy session is scheduled for November 8. ING Bank expects the NBS to maintain its current policy stance for the rest of the year.

"A "soft tightening" however by narrowing the standing facilities corridor could be on the table towards the end of the year, followed by firmer liquidity management and eventually hike rates in-sync with the ECB," ING Bank economist Valentin Tataru said ahead of the rate decision announcement.


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German Industrial Output Declines Unexpectedly

Trading 08 oct 2018 Commentaire »

Germany's industrial production declined unexpectedly in August on a notable weakness in construction, suggesting that the economy lost some momentum in the third quarter.

Data from Destatis showed that industrial output slid 0.3 percent from July, confounding expectations for an increase of 0.5 percent. This was the third consecutive decline in output. Production had decreased 1.3 percent in July.

On a yearly basis, industrial production logged a fall of 0.1 percent in August, in contrast to the expected growth of 0.1 percent and a 1.5 percent increase seen in July.

Excluding energy and construction, industrial production dropped 0.1 percent month-on-month in August.

Among components, energy production advanced 1.3 percent in August, while construction output contracted 1.8 percent.

Output of consumer goods grew 1.4 percent and that of intermediate goods showed an increase of 0.1 percent. On the other hand, capital goods output decreased 0.7 percent.

"It would still be too premature to dent our optimism," Carsten Brzeski, an ING DiBa economist, said.

"Too often has there been a surge in industrial (and economic) activity in Germany after the summer vacation."

The fall in industrial output was much weaker than expected and suggests that the economy is very unlikely to match second quarter's 0.5 percent expansion in the third quarter, Jennifer McKeown, an economist at Capital Economics, said.

But Germany will continue to be one of Eurozone's strongest performers, the economist noted.

Elsewhere, a survey from the think tank Sentix showed that despite the negative discussions about the automotive industry and the question marks over the continued existence of the current government coalition, the German economic data remain stable.

The investor confidence index for Germany rose to 20.0 in October from 18.1 in September.


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Intraday technical levels and trading recommendations for GBP/USD for October 8, 2018

Trading 08 oct 2018 Commentaire »

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On September 13, the depicted daily downtrend line which came to meet the pair around 1.3025-1.3090 failed to offer enough bearish pressure on the pair. Since then, the GBP/USD pair has been demonstrating a successful bullish breakout so far.

On September 21, the GBP/USD short-term outlook turned to become bearish towards 1.3010 (50% Fibonacci level) and 1.2940 (recent demand level) where the backside of the broken uptrend was retested.

Recently, the price level of 1.2900-1.2940 (the backside of the broken uptrend) demonstrated significant bullish recovery where the current bullish movement was initiated.

The current bearish decline shouldn't exceed the price level of 1.3010 (50% Fibo level), so that a further bullish advance can occur towards 1.3100, 1.3210 and 1.3290.

Any bearish breakdown below 1.3000 invalidates the bullish breakout scenario allowing a further decline towards 1.2910 (previous weekly low).

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Ireland's Construction Growth At 11-Month Low

Trading 08 oct 2018 Commentaire »

Ireland's construction activity expanded strongly in September but the pace of growth eased to an 11-month low, survey results from IHS Markit showed Monday.

The Ulster Bank Construction Purchasing Managers' Index dropped to 56.2 in September from 58.3 in August. Nonetheless, a score above 50 indicates expansion in the sector.

Activity has risen continuously on a monthly basis since September 2013, with the latest expansion the weakest in almost a year.

The strongest increase in activity across the three broad categories covered by the survey was on commercial projects, the first time this has been the case since June.

Commercial activity expanded sharply and the rate of growth in activity on housing projects remained marked, but slowed for the second month running. Meanwhile, civil engineering activity decreased moderately, the first fall in three months.


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Intraday technical levels and trading recommendations for EUR/USD for October 8, 2018

Trading 08 oct 2018 Commentaire »

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On the weekly chart, the EUR/USD pair is demonstrating a high-probability Head and Shoulders reversal pattern where the right shoulder is currently in progress (recent bearish engulfing weekly candlestick).

On September 10, the price level of 1.1500 offered temporary bullish recovery. A quick bullish movement was demonstrated towards the upper limit of the price range (1.1750). However, the EUR/USD bulls failed to pursue towards higher bullish targets.

Instead, evident bearish rejection is being demonstrated on the daily chart. Recent bearish movement is currently taking place below 1.1520 (the lower limit of the consolidation range).

As for the bearish side of the market to be dominant, the EUR/USD pair should keep moving below 1.1520. The first bearish target would be located around 1.1420 then 1.1275 if sufficient bearish momentum is demonstrated.

On the other hand, re-closure above the price level of 1.1520 brings the EUR/USD pair back inside the depicted consolidation range (1.1520-1.1750) until breakout occurs in either direction.

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