Dollar Slides As U.S. Consumer Inflation Falls

Trading 11 jan 2019 Commentaire »

The U.S. dollar was lower against its most major counterparts in the European session on Friday, as a data showed that the nation's consumer inflation worsened in December driven by a steep drop in gasoline prices.

Data from the Labor Department showed that U.S. consumer prices edged slightly lower in the month of December.

The consumer price index slipped by 0.1 percent in December after coming in unchanged in November. The slight drop in consumer prices matched economist estimates.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in December, matching the increases seen in the two previous months as well as expectations.

The data cemented hopes that the Fed will take a pause on rate hikes in the near future, as remarked by Fed officials, including Chairman Jerome Powell.

In a speech on Thursday, Powell predicted no recession in 2019 and underscored the message of patience with further interest-rate hikes.

Fed Vice Chairman Richard Clarida also said the Fed could afford to take a wait-and-see stance on interest rates if headwinds to the economy from financial markets or global growth prove persistent.

The greenback depreciated to 108.15 against the yen, down from a high of 108.47 touched at 7:45 pm ET. The pair was worth 108.43 when it finished deals on Thursday. On the downside, 106.00 is possibly seen as the next support level for the greenback.

Data from the Ministry of Finance showed that Japan had a current account surplus of 757.2 billion yen in November. That exceeded expectations for a surplus of 566.3 billion yen and was down from 1,309.9 billion yen in October.

The trade balance reflected a deficit of 559.1 billion yen versus expectations for a shortfall of 612.6 billion yen, following the 321.7 billion yen deficit in the previous month.

The greenback fell back to 0.9814 against the Swiss franc, after rising to 0.9843 at 7:00 pm ET. At yesterday's close, the pair was worth 0.9843. The next likely support for the greenback is seen around the 0.97 level.

The greenback remained lower at 1.1543 against the euro, reversing from a high of 1.1496 seen at 5:45 pm ET. The pair finished yesterday's trading at 1.1500. The greenback is seen finding support around the 1.18 level.

The greenback held steady against the pound, after having dropped to a 1-1/2-month low of 1.2850 at 5:45 am ET. The greenback had set a 2-day high of 1.2710 against the pound early in the European session. The pound-greenback pair was quoted at 1.2744 at yesterday's close.

Data from the Office for National Statistics showed that UK economic growth improved for a second straight month in November, led by services and construction growth, and exceeded economists' expectations.

Gross domestic product grew 0.2 percent from October, when the economy expanded 0.1 percent. Economists had expected the pace of growth to remain unchanged. In September, GDP stagnated.

On the flip side, the greenback bounced off to 0.7197 against the aussie and 0.6816 against the kiwi, from its early more than 4-week low of 0.7235 and more than 3-week low of 0.6844,respectively. The greenback is poised to challenge resistance around 0.70 against the aussie and 0.66 against the kiwi.

The greenback appreciated to a 2-day high of 1.3269 against the loonie, following a decline to a 2-day low of 1.3183 at 4:15 am ET. Next key resistance for the greenback is possibly seen around the 1.34 level.

The U.S. monthly budget statement for December is scheduled for release in the New York session.


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Bitcoin analysis for January 11, 2019

Trading 11 jan 2019 Commentaire »

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Trading recommendations:

According to the 30M time - frame, I found strong selling pressure in the background, which is a sign that sellers are in control. Anyway, usually after the stong impulsive movement we may expect the correction. I have found that BTC is created possible bearish flag pattern, which is a sign for potential downward continuation. My advice is to watch for selling opportunities after a breakout of the flag. A downward target is set at the price of $3.333.

Support/Resistance

$3.641 – Intraday resistance

$3.478– Intraday support

$3.333 – Objective target 1

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Bitcoin analysis for January 11, 2019

Trading 11 jan 2019 Commentaire »

analytics5c38a863d8a78.png

Trading recommendations:

According to the 30M time - frame, I found strong selling pressure in the background, which is a sign that sellers are in control. Anyway, usually after the stong impulsive movement we may expect the correction. I have found that BTC is created possible bearish flag pattern, which is a sign for potential downward continuation. My advice is to watch for selling opportunities after a breakout of the flag. A downward target is set at the price of $3.333.

Support/Resistance

$3.641 – Intraday resistance

$3.478– Intraday support

$3.333 – Objective target 1

With InstaForex you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4.

The material has been provided by InstaForex Company - www.instaforex.com

Analysis of Gold for January 11, 2019

Trading 11 jan 2019 Commentaire »

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Recently, Gold has been trading sideways at the price of $1,288.00. Anyway, according to the H4 time – frame, I have found potential overbought conditions. The price rejected from the upper diagonal of the upward channel, which is a sign that resistance held successfully. I also found the hidden bearish divergence on the RSI oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. I expected Gold to retreat and test the median line of the channel. The downward targets are set at the price of $1,276.00 and at the price of $1,250.95.

The material has been provided by InstaForex Company - www.instaforex.com

Analysis of Gold for January 11, 2019

Trading 11 jan 2019 Commentaire »

analytics5c38a6552b762.png

Recently, Gold has been trading sideways at the price of $1,288.00. Anyway, according to the H4 time – frame, I have found potential overbought conditions. The price rejected from the upper diagonal of the upward channel, which is a sign that resistance held successfully. I also found the hidden bearish divergence on the RSI oscillator, which is another sign of weakness. My advice is to watch for selling opportunities. I expected Gold to retreat and test the median line of the channel. The downward targets are set at the price of $1,276.00 and at the price of $1,250.95.

The material has been provided by InstaForex Company - www.instaforex.com

U.S. Consumer Prices Edge Lower Amid Steep Drop In Gas Prices

Trading 11 jan 2019 Commentaire »

Consumer prices in the U.S. edged slightly lower in the month of December, according to a report released by the Labor Department on Friday, with the modest decrease largely reflecting a steep drop in gasoline prices.

The Labor Department said its consumer price index slipped by 0.1 percent in December after coming in unchanged in November. The slight drop in consumer prices matched economist estimates.

Energy prices showed another significant decrease during the month, plunging by 3.5 percent in December following a 2.2 percent slump in the previous month.

The steep drop in gasoline prices led the way lower, with gas prices plummeting by 7.5 percent in December after tumbling by 4.2 percent in November.

On the other hand, the report said food prices climbed by 0.4 percent in December, the largest increase since May of 2014. Prices for fruits and vegetables surged higher.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in December, matching the increases seen in the two previous months as well as expectations.

Higher prices for shelter, recreation, medical care, and household furnishings and operations more than offset lower prices for airline fares, used cars and trucks, and motor vehicle insurance.

The report said the annual rate of consume price growth slowed to 1.9 percent in December from 2.2 percent in November, while the annual rate of core consumer price growth was unchanged at 2.2 percent.

"With real economic growth solid and the stock market continuing to rebound, we suspect that it's still too soon to assume that the Fed's tightening cycle is over," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the continued stability of core inflation could give the Fed more room to pause, as officials assess the impact of the slowdown in global growth and tightening in financial conditions on the domestic economy."

Next Tuesday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of December.


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GBP / USD: pound calculates options

Trading 11 jan 2019 Commentaire »

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Next week, a fateful vote on Brexit is due to take place in the British parliament, the outcome of which will determine the fate of the pound sterling.

According to representatives of Commerzbank, if the deputies approve the "divorce" agreement, this will be the driver of growth of the GBP / USD pair to the level of 1.31.

Experts of Mizuho Bank, in turn, noted that in the event of a negative scenario, including a new referendum, a vote of no confidence in Teresa May and special elections, the pound sterling could fall to $ 1.1.

"In the current situation, the extension of the UK's withdrawal from the EU looks like the most likely scenario. In this case, the British currency could rise to $ 1.36 and strengthen against the euro to 85 pence," analysts at BNP Paribas believe.

"According to our estimates, short positions in the pound sterling have doubled. This suggests that an upward movement is more likely than a downward movement," they added.

Today, the pound rose to $ 1.28 after the Evening Standard publication reported an increased likelihood of postponing Britain's exit from the EU, although then spokesman for Prime Minister Theresa May later denied this information.

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EUR/USD analysis for January 11, 2019

Trading 11 jan 2019 Commentaire »

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Recently, the EUR/USD pair has been trading sideways at the price of 1.1524. According to the M15 time fame, I have found the intraday buying climax in the background, which is a sign that buyers became trapped and that buying at this stage is risky. I have also found the breakout of the upward channel in the background, which is another sign of weakness. My advice is to watch for selling opportunities. The downward target is set at the price of 1.1485.

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Dollar loses credibility

Trading 11 jan 2019 Commentaire »

The USD index correction started in mid-December continues to gain momentum. Investors closed long positions on the US dollar due to the increased likelihood of a slowdown in the US economy, a pause in the process of normalizing the Fed's monetary policy and increasing political risks. The disconnection of the government turned out to be the longest in the entire history. According to experts of the Financial Times, it will deduct 0.1 pp from GDP every two weeks. Donald Trump does not give up and is going to declare a state of emergency in the country, which does not contribute to the growth of interest in assets issued in the United States.

According to the consensus forecast of the Wall Street Journal economists, the US economy in 2019 will slow down from 3% to 2.2% and chances of a recession have risen to 25%, which was the highest level since 2011. Experts do not count more than one increase in the federal funds rate in the current year, which is generally consistent with FOMC estimates. The derivative market estimates the probability of a single act of monetary restriction at 17% but even at the September meeting, the Fed was ready to tighten monetary policy three times. However, the fall in stock indices and the yield of treasury bonds forced her to doubt the correctness of the decisions made.

Dynamics of the likelihood of a recession in the US economy

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The Central Bank did not disregard the testimony of financial markets. Along with concerns about the slowdown of the global economy and the leisurely pace of inflation, these were used as the main argument in favor of a pause in the normalization process. Jerome Powell and other FOMC representatives are increasingly talking about patience. Even yesterday's "hawks" in the face of Eric Rosengren and Charles Evans argue that the best tactic is "sit and see." Macroeconomic statistics for the United States returns to be the center of attention but turning off the government creates serious difficulties for the Fed in understanding the way the US economy is moving.

The dollar is not easy but the euro is not yet able to take advantage of the weakness of its main competitor. The weak data on French and German industrial production, the reluctance of core inflation in the eurozone to go far from the 1% mark, and the phrases about the growing downside risks in GDP for the common currency in the minutes of the December meeting of the Governing Council. If the European Central Bank does not normalize it, EUR / USD is unlikely to break above 1.18, even against the backdrop of such a weak US dollar as it is now.

USD Dynamics index

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The euro may be challenged by a vote in the British parliament on Brexit scheduled for January 14. Rejecting Theresa May's plan, lawmakers will lend a helping hand to pound sellers. At the same time, the synchronous dynamics of EUR / USD and GBP / USD strengthens the risks of returning the euro to the boundaries of the previous consolidation range of 1.1265-1.1485. On the contrary, if the "bulls" succeed in keeping the quotes above the base of the 15th figure, the probability of continuing the rally to the target by 88.6% according to the "Shark" pattern will increase.

EUR / USD daily chart

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*U.S. Dollar Slides To 108.15 Against Yen Following U.S. CPI

Trading 11 jan 2019 Commentaire »

U.S. Dollar Slides To 108.15 Against Yen Following U.S. CPI


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