U.S. Dollar Fluctuates Amid Uncertainty About Trade Talks

Trading 19 fév 2019 Commentaire »

Reflecting uncertainty about trade talks between the U.S. and China, the value of the U.S. dollar has fluctuated over the course of trading on Tuesday.

The U.S. dollar is currently trading at 110.60 yen compared to yesterday's 110.62 yen. Against the euro, the dollar is valued at $1.1342 compared to yesterday's $1.1311.

Meanwhile, the British pound has shown a notable advance versus the dollar, climbing to $1.3066 from $1.2924.

The choppy trading came as the next round of U.S.-China trade talks get underway in Washington, D.C. this week.

News that China accused the U.S. of attempting to curtail its technology development by putting pressure on allies to shun networks supplied by Huawei Technologies raised concerns about tensions between the world's two largest economies.

However, President Donald Trump later told reporters the U.S.-China trade talks are "going very well" and once again hinted that an early March deadline to reach a deal could be postponed.

"I can't tell you exactly about timing, but the date is not a magical date," Trump said in the Oval Office. "A lot of things can happen."

Trump claimed China is "trying to move fast" so that an increase in tariffs on Chinese goods currently set to take effect does not happen.

On the U.S. economic front, the National Association of Home Builders released a report showing a much bigger than expected improvement in homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index climbed to 62 in February after rising to 58 in January. Economists had expected the index to inch up to 59.

With the increase, the index continued to recover after hitting a more than three-year low of 56 in December.

"Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment," said NAHB Chairman Randy Noel.

He added, "In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season."


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Oil Prices Remain Mixed Ahead Of Inventory Data

Trading 19 fév 2019 Commentaire »

Oil prices were mixed throughout Tuesday as investors awaited inventory data due later in the day for direction.

Brent crude prices pulled back from 2019 highs on concerns that slowing economic growth in the U.S., China and Europe may dent fuel demand this year.

U.S. crude futures were moving higher on optimism surrounding OPEC-led production cuts and the U.S. sanctions against exporters Iran and Venezuela.

Global benchmark Brent crude eased two cents or 0.03 percent to $66.48 per barrel, recovering from an early drop to $66.17 per barrel. It remains near the 2019 high of $66.83 a barrel hit in the previous session.

U.S. West Texas Intermediate (WTI) crude futures were up 66 cents or 1.18 percent at $56.45 per barrel.

The immediate focus now remains on the U.S. weekly crude supplies data due later in the day.


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Treasuries Pull Back Off Best Levels But Close Moderately Higher

Trading 19 fév 2019 Commentaire »

After ending last Friday's trading slightly lower, treasuries moved back to the upside over the course of the session on Tuesday.

Bond prices gave back some ground after an early upward move but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 2.647 percent.

Treasuries may have benefited from their appeal as a safe haven amid uncertainty about the potential for a trade deal between the U.S. and China as the next round of trade talks get underway in Washington, D.C. this week.

News that China accused the U.S. of attempting to curtail its technology development by putting pressure on allies to shun networks supplied by Huawei Technologies raised concerns about tensions between the world's two largest economies.

However, President Donald Trump later told reporters the U.S.-China trade talks are "going very well" and once again hinted that an early March deadline to reach a deal could be postponed.

"I can't tell you exactly about timing, but the date is not a magical date," Trump said in the Oval Office. "A lot of things can happen."

Trump claimed China is "trying to move fast" so that an increase in tariffs on Chinese goods currently set to take effect does not happen.

Meanwhile, bond traders largely shrugged off a report from the National Association of Home Builders showing a much bigger than expected improvement in homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index climbed to 62 in February after rising to 58 in January. Economists had expected the index to inch up to 59.

With the increase, the index continued to recover after hitting a more than three-year low of 56 in December.

"Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment," said NAHB Chairman Randy Noel.

He added, "In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season."

Trading on Wednesday may be impacted by reaction to the release of the minutes of the Federal Reserve's latest monetary policy meeting, which may shed additional light on the central bank's "patient" approach to raising interest rates.


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Gold Prices Hit Fresh 10-Month High

Trading 19 fév 2019 Commentaire »

Gold prices continued to climb Tuesday, setting fresh 10-month highs and the dollar held firmer against the yen after the Bank of Japan hinted at further monetary policy easing.

Speaking to Parliament, Bank of Japan Governor Haruhiko Kuroda said the central bank is willing to ease its monetary policy further if the Japanese currency's strength curbs economic growth.

Spot gold surged $21.37 or 1.62 percent at $1,339.33 per ounce after hitting a 10-month high of $1,327.64 an ounce in the previous session.

Investors also are keeping tabs on the latest round of trade talks between the United States and China, which resume today in Washington following a successful round of talks last week in Beijing.

However, China has accused the U.S. of fueling cybersecurity fears, thus risking exacerbating tensions between the two countries.


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U.S. Homebuilder Confidence Shows Significant Improvement In February

Trading 19 fév 2019 Commentaire »

Reflecting growing consumer confidence and falling interest rates, the National Association of Home Builders released a report on Tuesday showing a significant increase in U.S. homebuilder confidence in the month of February.

The report said the NAHB/Wells Fargo Housing Market Index climbed to 62 in February after rising to 58 in January. Economists had expected the index to inch up to 59.

With the increase, the index continued to recover after hitting a more than three-year low of 56 in December.

"Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment," said NAHB Chairman Randy Noel.

He added, "In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season."

The much bigger than expected increase by the headline index reflected continued gains by all of the component indices.

The component gauging expectations in the next six months surged up to 68 in February from 63 in January, while the metric charting buyer traffic climbed to 48 from 44 and the index measuring current sales conditions rose to 67 from 64.

"The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5% in November to 4.4% this week," said NAHB Chief Economist Robert Dietz. "However, affordability remains a critical issue."

He added, "Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points."

Next Tuesday, the Commerce Department is scheduled to release data on new residential construction in the month of December that was postponed due to the government shutdown.


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*U.S. Housing Market Index Climbs To 62 In February

Trading 19 fév 2019 Commentaire »

U.S. Housing Market Index Climbs To 62 In February


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BITCOIN Analysis for February 19, 2019

Trading 19 fév 2019 Commentaire »

Bitcoin has been riding a rally after consolidating at the edge of $3,600 for a few days. The bullish pressure turned impulsive and non-volatile after the third bounce off the $3,600 was hit which was carried by the dynamic levels like 20 EMA, Tenkan, and Kijun line all the way towards $4,000 resistance area where it is currently holding with certain volatility. Currently the price is moving lower amid bearish pressure from the area of $4,000 from where the price will make a correction under bearish pressure before the price resumes the bullish momentum to break above $4,000 and reach upcoming price area of $4,250 and later towards $4,500 in the coming days. The price may close above $4,000 that will encourage a further continuation of this non-volatile bullish trend in the future.

SUPPORT: 3,000, 3,500, 3,600

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BULLISH

MOMENTUM: NON-VOLATILE

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Intraday technical levels and trading recommendations for EUR/USD for February 19, 2019

Trading 19 fév 2019 Commentaire »

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Since June 2018, the EUR/USD pair has been moving sideways with slight bearish tendency within the depicted bearish Channel (In RED).

On November 13, the EUR/USD demonstrated recent bullish recovery around 1.1220-1.1250 where the current bullish movement above the depicted short-term bullish channel (In BLUE) was initiated.

Bullish fixation above 1.1430 was needed to enhance further bullish movement towards 1.1520. However, the market has been demonstrating obvious bearish rejection around 1.1430 few times so far.

The EUR/USD pair has lost its bullish momentum since January 31 when a bearish engulfing candlestick was demonstrated around 1.1514 where another descending high was established then.

On February 5, a bearish daily candlestick closure below 1.1420 terminated the recent bullish recovery.

This allowed the current bearish movement to occur towards 1.1300-1.1270 where the lower limit of the depicted DAILY channel comes to meet the pair.

The EUR/USD pair was demonstrating weak bullish recovery around the depicted price zone (1.1300-1.1270) with early signs of bearish reversal probability.

A bearish flag pattern may become confirmed if bearish persistence below 1.1250 is achieved on the daily-chart basis. Pattern target is projected towards 1.1000.

Trade Recommendations:

A counter-trend BUY entry was already suggested near the price level (1.1285) (the lower limit of the depicted movement channel).Stop Loss to be located below 1.1225 while T/P level to be located around 1.1350 and 1.1420.

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February 19, 2019 : GBP/USD is demonstrating bullish breakout outside the H4 bearish channel.

Trading 19 fév 2019 Commentaire »

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On December 12, the previously-dominating bearish momentum came to an end when the GBP/USD pair visited the price levels of 1.2500 where the backside of the broken daily uptrend was located.

Since then, the current bullish swing has been taking place until January 28 when the GBP/USD pair was almost approaching the supply level of 1.3240 where the recent bearish pullback was initiated.

Shortly after, the GBP/USD pair lost its bullish persistence above 1.3155.

Hence, the short-term scenario turned bearish towards 1.2920 (38.2% Fibonacci) then 1.2820-1.2800 where (50% Fibonacci level) as well as a previous prominent top are located (Highlighted in BLUE).

Last week, lack of bullish demand was demonstrated around 1.2920 until Friday when significant bullish recovery was demonstrated around 1.2800-1.2820 (Fibonacci 50% level) resulting in a Bullish Engulfing daily candlestick.

This led to the current bullish breakout above the depicted H4 bearish channel. Expected bullish targets are projected towards 1.2970, 1.3040 and 1.3200.

Bullish persistence above 1.2920 (38.2% Fibonacci) is mandatory so that the current bullish movement can pursue towards the mentioned bullish targets.

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AUD / USD: RBA Protocol gives more questions than answers

Trading 19 fév 2019 Commentaire »

The minutes of the RBA meeting was somewhat controversial, leaving more questions than answers. The rhetoric was "dovish" in nature, although the ambiguity of the wording allows for a different assessment of the prospects for the Australian currency.

In today's Asian session, the Reserve Bank of Australia published the minutes of its last meeting. This document turned out to be somewhat controversial, leaving more questions than answers. In general, the protocol's rhetoric was "dovish" in nature, although the ambiguity of the wording allows for a different assessment of the prospects for the Australian currency.

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At the January meeting of the RBA, the regulator lowered the forecast for economic growth in the country to three percent from the previous value of 3.5%. In the protocol, this situation is explained by the fact that the level of uncertainty at the moment has increased in many ways. First of all, we are talking about the slowdown of the Chinese economy and the world economy as a whole, as well as the Australian consumer activity. Here it is really necessary to note the fact that the volume indicator of retail sales in January collapsed in the negative area for the first time since February 2018. It reached the level of -0.4% with the forecast of a decline to zero.

Consumer sentiment index and activity index in the service sector also show weak dynamics, which is partly due to low wage growth. In fact, this figure has been stagnant for a long time despite the decline in unemployment. All of these lead to the fact that inflation in Australia remains consistently low at the level of 1.8% per year, while the target level of the Reserve Bank is set at around two percent.

Separately, the regulator stopped on the situation in the Australian housing market. Let me remind you that housing has fallen in price in almost all major cities of Australia especially in Sydney and Melbourne. Prices have been falling for 13 of the last 15 months and over the past three months, the rate of decline has accelerated significantly. Since the peak recorded in the fall of 2017, property in Australia has fallen in price by more than 6 percent. To some surprise, the Australian regulator took a rather ambiguous position on this issue. The ministry noted that the cost of housing has been actively growing for a long time, thus the current price reduction "is likely to have only a small impact on the economy." At the same time, the regulator warned that if the current dynamics is "stronger", this factor will not only reduce the level of consumption.

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Naturally, members of the RBA did not ignore more global issues. The Central Bank is still concerned about the resumption of the trade war between China and the United States, as this trade conflict is a "significant risk" for the global economic outlook, according to the RBA. Also in Australia, they are seriously concerned about the slowdown in the Chinese economy, the pace of which turned out to be stronger than their own forecasts.

Summarizing all the above, the regulator made a very ambiguous conclusion. According to the Central Bank, the interest rate can either increase or decrease in the future and the probability of the implementation of these options is "almost the same". However, at the moment there are no arguments in favor of a rate change (at least in the short term), the regulator will adhere to stability in this matter.

The Australian dollar reacted to the published protocol with a minimum decrease by only 30 points, dropping to the bottom of the 71st figure. The indistinct rhetoric of the RBA did not allow the bears of the AUD/USD pair to seize the initiative, hence, the price did not even test the boundaries of the 70th figure. n contrast to the head of the regulator Philip Low, the regulator members voiced a more vague position that does not allow us to unequivocally talk about increasing the likelihood of a rate cut this year. The vast majority of experts surveyed also tend to think that the Central Bank will maintain the status quo in the foreseeable future. More than half of them believe that the rate will remain unchanged throughout this and next year, at least until the first quarter of 2021.

It is worth recalling that on Friday (February 22), the head of the Reserve Bank of Australia, Philip Lowe, will speak in the country's parliament where he will report to members of the Standing Committee on Economics of the House of Representatives. The theme of his presentation involves a broad assessment of the current situation so he can more clearly determine the prospects for the country's monetary policy. On the other hand, given the rhetoric of the published protocol, it is unlikely to deviate from the announced course, especially against the background of a possible "truce" between the United States and China. The dynamics of the labor market can also have a significant impact on Aussie. The unemployment rate should remain at the same five-percent mark but the increase in the number of employees will decrease slightly to 15.2 thousand, relative to the previous month.

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Overall, Aussie continues to trade in the flat, ranging in the 100 price point range at 0.7060-0.7160. The levels of support and resistance are slightly lower and slightly higher than the indicated boundaries. Thus, approaching the "round" mark of 0.70, there is a strong support level of 0.7030 where the lower line of the Bollinger Bands coincided with the upper boundary of the Kumo cloud at this price point on the daily chart.

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