U.S. Dollar Comes Under Pressure Following Fed Announcement

Trading 20 mar 2019 Commentaire »

After showing a lack of direction earlier in the day, the value of the U.S. dollar came under pressure following the Federal Reserve's monetary policy announcement on Wednesday.

The U.S. dollar is trading at 110.63 yen compared to the 111.39 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1424 compared to yesterday's $1.1352.

The drop in the value of the greenback came after the Fed announced its widely expected decision to leave interest rates unchanged while also indicating the central bank no longer expected to raise rates this year.

The Fed decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent in support of its mandate of fostering maximum employment and price stability.

The central bank's forward projections also indicated interest rates are likely to remain unchanged for the remainder of the year.

The forecast for interest rates to be unchanged at the end of the current year compares to the December projections indicating two rate hikes.

The downward revision to the rate projections comes as the Fed noted data received since its January meeting points to a slowdown in economic growth from the solid rate seen in the fourth quarter of 2018.

Kevin Doran, chief investment officer at AJ Bell, accused the Fed of kowtowing to the stock markets and President Donald Trump, who has been harshly critical of Powell and the central bank for raising rates.

"Despite protestations to the contrary, it seems evident that the Fed is kowtowing to stock market reaction to the prospect of higher interest rates and increasing levels of political interference," Doran said.

"It is all too obvious that nothing of significance is likely to happen on rates until such time that the asset price inflation being stoked by the current economic backdrop seeps its way into 'real world' inflation on the high streets," he added. "Maybe we should cut out the middle-man and leave Trump to announce rates on Twitter?"

Looking ahead, trading in the currency markets on Thursday may be impacted by the Bank of England's monetary policy decision as well as U.S. reports on weekly jobless claims and leading economic indicators.


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

Gold Prices Rise Again On Wednesday

Trading 20 mar 2019 Commentaire »

Gold prices continued to climb on Wednesday as the dollar weakened further after the Federal Reserve release its dovish monetary policy.

The Fed kept interest rates unchanged as expected, but it also now indicated interest rates are likely to remain unchanged for the remainder of 2019.

Earlier projections had indicated as many as two rate hikes before the end of the year, but the downward rate revision points to an expected slowdown in economic growth in the first quarter of this year while inflation remains comfortable.

Gold futures for April settled up $6.84 or 0.52 percent at $1,314.30 an ounce. On Tuesday, gold futures for April added $5.00 or 0.4 percent at $1,306.50 an ounce.

Silver was up 12 cents or 0.78 percent to $15.52 and platinum climbed $12.50 or 1.47 percent to $868.00.


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Oil Prices Spike After Inventory Data, Fed

Trading 20 mar 2019 Commentaire »

Oil prices jumped Wednesday after data showed an unexpectedly large drop in crude oil inventories last week. According to reports, inventories tumbled 9.6 million barrels in the week ended March 15.

Oil prices also reacted to the latest FOMC decision and statement Wednesday afternoon. The Federal Reserve kept interest rates unchanged following its two-day monetary policy meeting, as expected. But it also now indicated interest rates are likely to remain unchanged for the remainder of the year.

Earlier projections had indicated as many as two rate hikes before the end of the year, but the downward rate revision points to an expected slowdown in economic growth in the first quarter of this year while inflation remains comfortable.

The Fed's now projection sent the U.S. dollar lower and oil prices higher.

Global benchmark Brent crude climbed 77 cents or 1.14 percent to $68.19 per barrel, while U.S. West Texas Intermediate (WTI) crude futures advanced 87 cents or 1.47 percent at $60.16 per barrel.


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Treasuries Rally In Reaction To Dovish Fed Announcement

Trading 20 mar 2019 Commentaire »

After seeing moderate strength for much of the session, treasuries accelerated to the upside following the Federal Reserve's monetary policy announcement.

Bond prices pulled back off their best levels going into the close but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 7.9 basis points to 2.535 percent.

With the notable decrease on the day, the ten-year yield ended the session at its lowest closing level in well over a year.

The rally by treasuries came after the Fed announced its widely expected decision to leave interest rates unchanged while also indicating the central bank no longer expects to raise rates this year.

The Fed decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent in support of its mandate of fostering maximum employment and price stability.

The central bank's forward projections also indicated interest rates are likely to remain unchanged for the remainder of the year.

The forecast for interest rates to be unchanged at the end of the current year compares to the December projections indicating two rate hikes.

The downward revision to the rate projections comes as the Fed noted data received since its January meeting points to a slowdown in economic growth from the solid rate seen in the fourth quarter of 2018.

The Fed reiterated that it will be patient as it determines future adjustments to interest rates to support a sustained economic expansion, strong labor market conditions, and inflation near 2 percent.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the reaction by treasuries suggests "investors were surprised by the dovish tone of the accompanying statement and economic projections."

Meanwhile, the Fed also confirmed that it intends to conclude the gradual reduction of its balance sheet by the end of September.

The Fed noted it plans to slow the reduction of its holdings of Treasury securities by reducing the cap on monthly redemptions from the current level of $30 billion to $15 billion beginning in May 2019.

The central bank also said its intends to continue to allow its holdings of agency debt and agency mortgage-backed securities to decline, consistent with the aim of holding primarily Treasury securities in the longer run.

Reaction to the Fed announcement may continue to impact trading on Thursday along with reports on weekly jobless claims, Philadelphia-area manufacturing activity and leading economic indicators.


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*Fed Chairman Powell Holding Post-Meeting Press Conference

Trading 20 mar 2019 Commentaire »

Fed Chairman Powell Holding Post-Meeting Press Conference


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March 20, 2019: GBP/USD Intraday technical levels and trading recommendations

Trading 20 mar 2019 Commentaire »

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On January 2nd, the market initiated the depicted uptrend line around 1.2380.

This uptrend line managed to push price towards 1.3200 before the GBP/USD pair came to meet the uptrend again around 1.2775 on February 14.

Another bullish wave was demonstrated towards 1.3350 before the bearish pullback brought the pair towards the uptrend again on March 11.

A weekly gap pushed the pair slightly below the trend line (almost reaching 1.2960) . However, significant bullish recovery was demonstrated rendering the mentioned bearish gap as a false bearish breakout.

Moreover, a short-term bearish channel was broken to the upside following the mentioned bullish recovery on March 11.

That's why, bullish persistence above 1.3060 allowed the GBPUSD pair to pursue the bullish momentum towards 1.3130, 1.3200 then 1.3360 where the current bearish pullback was initiated.

Bullish persistence above 1.3250 ( 50% Fibonacci expansion level ) was needed for confirmation of a bullish Flag pattern. However, significant bearish pressure was demonstrated below 1.3250.

Hence, the short term outlook turned to become bearish towards 1.3180 then 1.3095 where the depicted uptrend line comes to be tested again.

Bearish persistence below 1.3185 (23.6% Fibonacci expansion) is mandatory for further bearish decline. Any bullish breakout above which, gives early warning for sellers.

Trade Recommendations:

Intraday traders should wait for a valid SELL signal anywhere around (1.3215-1.3250).

T/P level to be located around 1.3180 and 1.3090. SL to be set as rebound H4 closure above 1.3200-1.3250 again.

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

Bitcoin analysis for March 20, 2019

Trading 20 mar 2019 Commentaire »

Bitcoin has been trading sideways at the price of $3.987. Our view from yesterday is still valid.

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BTC exited from consolidation phase (potential bullish flag pattern), and we anticipate the upward trend to continue. Stochastic oscillator is ready for an upswing. This is a good sign of an ongoing trend. Short-term resistance is seen at the price of $4.020 and $4.170. Key intraday support is seen at the price of $3.928.

Trading recommendation: We are bullish on BTC from 3.870, and we added new long position on the breakout of $4.000. Stop loss order is to be placed at $3.770, and take profit order is to be set at $4.170.

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

EUR/USD analysis for March 20, 2019

Trading 20 mar 2019 Commentaire »

EUR/USD has been trading sideways at around 1.1358. Demand is still buoyant, so be careful when selling.

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According to the H1 time – frame, I have found a potential bullish Wolfe wave pattern in progress. The projected target for the upside is at the price of 1.1500. The price should go towards the estimated target level. Currently there is a running flat bearish correction in creation and bearish divergence on the macd oscillator, which are signs that EUR/USD might trade a bit lower before new buyers join the market. Support level is seen at the price of 1.1293 and the key resistance is seen at the price of 1.1512.

Trading recommendation: We are bullish on the EUR from 1.1358. Protective stop is placed at the price of 1.1495 and the main target is set at the price of 1.1500

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

*U.S. Crude Oil Inventories Tumble 9.6 Million Barrels In Week Ended 3/15

Trading 20 mar 2019 Commentaire »

U.S. Crude Oil Inventories Tumble 9.6 Million Barrels In Week Ended 3/15


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Analysis of Gold for March 20, 2019

Trading 20 mar 2019 Commentaire »

Gold has been trading downwards. The price tested the level of $1.304.77. Bearish momentum is still going on, be careful with buying.

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According to the M30 time – frame, I have found double fail tests of the high at $1.310.65, which is a sign that buyers don't have power for any strong push. Gold did break the rising trendline, which is another sign of weakness. Bearish divergence on the MACD oscillator is another sign of waning buying power. Resistance level is seen at the price of $1.310.65 and the support is seen at $1.292.40. Watch for a bearish flag before you sell.

Trading recommendation: We closed our long position on Gold on the breakeven and we are looking to short Gold. If you are aggressive, you can sell from $1.302.00 with the take profit at $1.292.50 and protective stop at $1.311.00.

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