Dollar Recovers Against Some Rivals, Stays Weak Against Sterling

Trading 27 fév 2019 Commentaire »

The U.S. dollar fared reasonably well against some of its peers on Wednesday even as it extended its weakness against the British currency.

Dovish comments by the Federal Reserve Chairman Jerome Powell took more shine off the greenback earlier in the session. However, the currency recovered and gained in strength as the day progressed to score decent gains against most of its rivals.

The dollar index gained about 0.16% to 96.15.

The British Pound Sterling added to its recent gains, rising to $1.3351 before retreating a bit. Still, at $1.3306, it was up by over 0.4% from previous close.

The British currency has been gaining ground amid rising possibility of a delay to the Brexit deadline. It may be recalled that the British Prime Minister Theresa May said on Tuesday that lawmakers would be able to vote to delay Brexit in the event of her deal getting rejected in a March 12 vote.

Against the Euro, the dollar was trading at 1.1373, gaining about 0.11%, on weak eurozone economic data.

Survey results from the European Commission showed that eurozone economic sentiment deteriorated for a sixth consecutive month and at a faster than expected pace in February. The economic sentiment indicator fell to 105.3 from 106.2 in January. Economists had expected a reading of 106.

The industrial confidence index dropped to -0.2 from 0.7 and the score was worse than the 0.1 economists had predicted. The services confidence measure eased to 7.1 from 8.4 in January, much below an expected reading of 11.

The consumer confidence index edged up to -7.2 from -7.8 in January. The reading was better than the -7.4 flash estimate. Meanwhile, the business climate index showed a score of 0.69 in February, which was unchanged from January.

The greenback was gaining against the Japanese yen, with a dollar fetching 111 yen, up from previous close of 110.58 yen a dollar.

The dollar was up against Swiss Franc as well, with a unit of greenback getting CHF 1.0012, up 0.13% over previous close of CHF0.9999.

The dollar was down against the Canadian currency loonie, easing by about 0.08% at $1.3154. The AUD/USD pair was trading at 0.7138, losing about 0.6%.

On the U.S. economic front, the National Association of Realtors released a report that showed pending home sales index spiked by 4.6% to 103.2 in January after tumbling by 2.3% to a downwardly revised 98.7 in December. Economists had expected pending home sales to rise by 0.4%.

Meanwhile, a government shutdown-delayed report released by the Commerce Department showed new orders for manufactured goods rose by much less than anticipated in the month of December.

The Commerce Department said factory orders inched up by 0.1% in December after falling by a revised 0.5% in November. Economists had expected orders to climb by 0.5%.


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Crude Oil Futures Settle Sharply Higher After Inventory Data

Trading 27 fév 2019 Commentaire »

Crude oil futures rose sharply on Wednesday, buoyed by data showing a significant drop in U.S. crude inventories in the week ended February 22.

The OPEC-led crude output reduction and the U.S. sanctions on Iran and Venezuela also aided oil's uptick.

West Texas Intermediate Crude oil futures for April ended up $1.44, or 2.6%, at %56.94 a barrel.

On Tuesday, crude oil futures for April ended up $0.02, or about 0.04%, at $55.50 a barrel.

According to data released by Energy Information Administration this morning, crude oil inventories in the U.S. dropped for the first time in six weeks, falling by 8.65 million barrels in the week to February 22, more than thrice the expected decline.

In the previous week, crude oil inventories had risen by nearly 3.7 million barrels.

The EIA report said gasoline inventories fell by 1.91 million barrels last week, while distillate stockpiles, which include diesel, decreased by 0.3 million barrels.

Late on Tuesday, a report released by the American Petroleum Institute said U.S. crude oil inventories fell by 4.2 million barrels in the week to Feb. 22.

Oil's rise was also supported by media reports that suggested OPEC and its allies would stick with their agreement to cut oil supply despite pressure from U.S. President Donald Trump to stop artificially tightening markets.

Based on current market data, the OPEC plus group is "likely to continue with the production cuts until the end of the year", Reuters said, citing sources. The cartel will meet in April to decide its output policy.


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Treasuries Show Notable Move Back To The Downside

Trading 27 fév 2019 Commentaire »

Treasuries showed a notable move to the downside during trading on Wednesday, more than offsetting the strength seen in the previous session.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced by 5.7 basis points to 2.693 percent.

The pullback extended the recent see-saw performance by treasuries, with the ten-year yield stuck in a narrow range throughout the month of February.

On the U.S. economic front, the National Association of Realtors released a report showing pending home sales rebounded by much more than anticipated in the month of January.

NAR said its pending home sales index spiked by 4.6 percent to 103.2 in January after tumbling by 2.3 percent to a downwardly revised 98.7 in December. Economists had expected pending home sales to rise by 0.4 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Meanwhile, a government shutdown-delayed report released by the Commerce Department showed new orders for manufactured goods rose by much less than anticipated in the month of December.

The Commerce Department said factory orders inched up by 0.1 percent in December after falling by a revised 0.5 percent in November. Economists had expected orders to climb by 0.5 percent.

Traders also kept an eye on President Donald Trump's second summit with North Korean leader Kim Jong Un, looking for more concrete signs of progress toward the denuclearization of the Korean peninsula.

"Kim Jong Un and I will try very hard to work something out on Denuclearization & then making North Korea an Economic Powerhouse," Trump said on Twitter this morning. "I believe that China, Russia, Japan & South Korea will be very helpful!"

News out of the Trump-Kim summit may impact trading on Thursday along with reports on weekly jobless claims, fourth quarter GDP, and Chicago-area business activity.


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Gold Futures Settle Lower Again

Trading 27 fév 2019 Commentaire »

Gold prices drifted lower on Wednesday, extending losses to a third successive session, as investors weighed geopolitical news and the Federal Reserve Chairman's testimonies about the central bank's monetary policy stance.

Despite the ongoing tensions between India and Pakistan after the recent terror attack in Pulwama and the Indian Air Force's raid that destroyed Jaish-e-Mohammad terror camps in Pakistan and the high profile Donald Trump - Kim Jong Un meet, the yellow metal stayed weak today.

Uncertainty about U.S.-China trade deal increased after U.S. Trade Representative Robert Lighthizer told members of the House Ways and Means Committee that China needs to go beyond pledging to buy more U.S. goods to reach to a long-term trade agreement.

"We can compete with anyone in the world, but we must have rule, enforced rules, that make sure market outcomes and not state capitalism and technology theft determine winners," Lighthizer said. His comments, however, failed to push up gold prices.

Gold futures for April ended down $7.30, or 0.6%, at $1,321.20 an ounce.

On Tuesday, gold futures ended down $1.00, or about 0.7%, at $1,328.50 an ounce.

Silver futures for March ended down $0.160, at $15.766 an ounce, while Copper futures for March settled at $2.9625 per pound, gaining $0.0120 for the session.

In U.S. economic news, the National Association of Realtors' report said its pending home sales index spiked by 4.6% to 103.2 in January after tumbling by 2.3% to a downwardly revised 98.7 in December. Economists had expected pending home sales to rise by 0.4%.

Meanwhile, a government shutdown-delayed report released by the Commerce Department showed new orders for manufactured goods rose by much less than anticipated in the month of December.

The Commerce Department said factory orders inched up by 0.1% in December after falling by a revised 0.5% in November. Economists had expected orders to climb by 0.5%.


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*U.S. Crude Oil Inventories Tumble 8.6 Million Barrels In Week Ended 2/22

Trading 27 fév 2019 Commentaire »

U.S. Crude Oil Inventories Tumble 8.6 Million Barrels In Week Ended 2/22


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U.S. Factory Orders Inch Up Less Than Expected In December

Trading 27 fév 2019 Commentaire »

A government shutdown-delayed report released by the Commerce Department on Wednesday showed new orders for U.S. manufactured goods rose by much less than anticipated in the month of December.

The Commerce Department said factory orders inched up by 0.1 percent in December after falling by a revised 0.5 percent in November.

Economists had expected orders to climb by 0.5 percent compared to the 0.6 percent decrease originally reported for the previous month.

The uptick in factory orders came as a jump in orders for durable goods was largely offset by a steep drop in orders for non-durable goods.

The report said durable goods orders surged up by 1.2 percent in December, largely reflecting a 3.2 percent spike in orders for transportation equipment.

On the other hand, the Commerce Department said non-durable goods orders slumped by 1.0 percent in December, extending the 2.0 percent nosedive seen in November.

Shipments of manufactured goods edged down by 0.2 percent in December after falling by 0.5 percent in November, while inventories of manufactured goods were virtually unchanged after slipping by 0.1 percent.

Subsequently, the report showed the inventories-to-shipments ratio in December was unchanged from the previous month at 1.35.


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U.S. Pending Home Sales Rebound Much More Than Expected In January

Trading 27 fév 2019 Commentaire »

After reporting a steep drop in U.S. pending home sales in the previous month, the National Association of Realtors released a report on Wednesday showing pending sales rebounded by much more than anticipated in the month of January.

NAR said its pending home sales index spiked by 4.6 percent to 103.2 in January after tumbling by 2.3 percent to a downwardly revised 98.7 in December.

Economists had expected pending home sales to rise by 0.4 percent compared to the 2.2 percent slump originally reported for the previous month.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

"A change in Federal Reserve policy and the reopening of the government were very beneficial to the market," said NAR chief economist Lawrence Yun.

He added, "Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers."

Despite the monthly increase, pending home sales in January were down by 2.3 percent compared to the same month a year ago.

NAR said three of the four major regions of the country experienced a decline compared to a year ago, while the Northeast enjoyed a slight growth spurt.

Looking ahead, Yun said the positive pending home sales figures in January are likely to continue, noting, "Income is rising faster than home prices in many areas and mortgage rates look to remain steady."

Next Tuesday, the Commerce Department is scheduled to release government shutdown-delayed data on new home sales in the month of December.


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Technical analysis for USDX for February 27, 2019

Trading 27 fév 2019 Commentaire »

The Dollar index has stopped its decline at important short-term Fibonacci retracement level. If we see a new upward move with higher highs and higher lows from the current levels, we should then expect another run higher towards 97 for the big test.

analytics5c76a982ca1cf.png

Orange rectangle - major resistance area

Blue line - short-term trend line support

The Dollar index is making higher highs and higher lows holding above the blue trend line support. Price has stopped the decline at the 61.8% Fibonacci level and there are high chances of making a bounce from current levels. Major resistance remains at the orange rectangle area. To reach that level we first need to see a break above the short-term resistance of 96.75. Breaking above the orange rectangle will open the way for a move to 100. Support at 95.50 is critical for bulls as a break below it will open the way for a deeper decline towards 94-93.

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Technical analysis for Bitcoin for February 27, 2019

Trading 27 fév 2019 Commentaire »

Bitcoin has made a two and half month move higher from $3,000$ to $4,250 where it tested important weekly resistance levels and got rejected. Medium- and long-term trend remain bearish.

analytics5c76a7a4711c6.png

Blue line - major trend line resistance

Red lines - horizontal resistance levels

Orange rectangle - overbought RSI

With the RSI at overbought levels and turning lower, price getting rejected at both the blue downward sloping trend line and at the red horizontal resistance level, things do not look bullish for Bitcoin. Price remains below key resistance level of $4,400. A weekly close above this level will confirm medium-term trend change to bullish. Until then trend remains bearish. Short-term support is found at $3,650 and as long as price is above this level, bulls continue to hope for another challenge of the blue trend line resistance. Breaking above $4,400 will open the way for a move towards the next horizontal major resistance at $5,750. Until this happens, longer-term trend remains bearish and Bitcoin is vulnerable to a move below $3,000.

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*U.S. Pending Home Sales Jump 4.6% In January

Trading 27 fév 2019 Commentaire »

U.S. Pending Home Sales Jump 4.6% In January


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