U.S. Dollar Mixed Following First Quarter GDP Data

Trading 26 avr 2019 Commentaire »

Following the release of preliminary data on U.S. first quarter GDP, the U.S. dollar turned in a mixed performance on Friday.

The U.S. dollar is trading at 111.64 yen compared to the 111.63 yen it fetched at the close of New York trading on Thursday. Against the euro, however, the dollar is valued at $1.1150 compared to yesterday's $1.1132.

The mixed performance comes as traders react to the Commerce Department's preliminary reading on first quarter GDP.

While the report showed an unexpected acceleration in GDP growth in the first quarter, economists expressed concerns about the underlying data.

The Commerce Department said real gross domestic product jumped by 3.2 percent in the first quarter after climbing by 2.2 percent in the fourth quarter of 2018.

The acceleration in the pace of growth came as a surprise to economists, who had expected GDP to increase by 2.1 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the much stronger than expected GDP growth would seem to "make a mockery of claims that the U.S. economy is slowing as the fiscal stimulus fades."

"After all, 3.2% is well above the economy's 2% potential pace and the 2.2% gain in the final quarter of last year," Ashworth said. "Looking beyond the headline number, however, there are plenty of causes for concern."

Ashworth predicted positive contributions from net trade, inventories and highways investment will all be reversed in the coming quarters and continues to expect overall growth to slow this year.


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Crude Oil Prices Continue To Slide On Friday

Trading 26 avr 2019 Commentaire »

Crude oil prices declined for the third straight day on Friday on concerns for outlook of the global economy.

Even a Baker Hughes report showing a significant drop in U.S. oil rig count didn't stop West Texas intermediate from tumbling $1.85 or 2.84 percent to $63.26 per barrel - nor could a stronger than expected GDP reading in the United States.

The International Energy Agency (IEA) said earlier this week that markets are adequately supplied and that global spare production capacity remains at comfortable levels.

Oil prices surged earlier in the week after the U.S. said it wouldn't extend sanctions waivers for countries importing crude oil from Iran, which could remove around 1.1 million barrels per day from the market.

But prices quickly turned lower again when analysts suggested that Saudi Arabia and other countries likely have more than enough oil to keep the markets well supplied.


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Treasuries Move Back To The Upside Following GDP Data

Trading 26 avr 2019 Commentaire »

After ending the previous session modestly lower, treasuries moved back to the upside during the trading day on Friday.

Bond prices pulled back off their best levels going into the close but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.9 basis points to 2.505 percent.

Treasuries moved higher early in the session as traders reacted to the Commerce Department's preliminary reading on first quarter GDP.

While the report showed an unexpected acceleration in GDP growth in the first quarter, economists expressed concerns about the underlying data.

The Commerce Department said real gross domestic product jumped by 3.2 percent in the first quarter after climbing by 2.2 percent in the fourth quarter of 2018.

The acceleration in the pace of growth came as a surprise to economists, who had expected GDP to increase by 2.1 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said the much stronger than expected GDP growth would seem to "make a mockery of claims that the U.S. economy is slowing as the fiscal stimulus fades."

"After all, 3.2% is well above the economy's 2% potential pace and the 2.2% gain in the final quarter of last year," Ashworth said. "Looking beyond the headline number, however, there are plenty of causes for concern."

Ashworth predicted positive contributions from net trade, inventories and highways investment will all be reversed in the coming quarters and continues to expect overall growth to slow this year

The Federal Reserve will move into the spotlight next week, with the central bank due to announce its latest monetary policy decision on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, the accompanying statement and Fed Chairman Jerome Powell's subsequent press conference are still likely to attract attention.

Traders are also likely to keep a close eye on the monthly jobs data as well as reports on personal income and spending, consumer confidence, pending home sales, and manufacturing and service sector activity.


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Gold Prices Rise Following U.S. GDP Data

Trading 26 avr 2019 Commentaire »

Gold prices moved higher on Friday after the U.S. reported better than expected GDP data.

Spot gold rose $10.60 or 0.83 percent to $1,286.40 per ounce and will likely post its first weekly gain since March 22.

U.S. economic growth unexpectedly jumped in the first quarter of 2019, advancing 3.2 percent after climbing 2.2 percent in the fourth quarter of 2018. It also handily beat forecasts for a gain of 2.1 percent.

Despite reassuring data from the U.S. and China recently, global growth worries continue to linger.

Turkey's central bank on Thursday kept its one-week repo rate constant at 24 percent, citing sluggish economic conditions due to tight financial conditions.

The Bank of Japan revised its forward guidance and pledged to keep extremely low interest rates until at least the spring of 2020, reflecting an increasingly pessimistic inflation outlook.

The U.S. Federal Reserve is done raising interest rates until at least the end of next year, with some analysts expecting a rate cut by the end of 2020.


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U.S. Consumer Sentiment Dips Less Than Initially Estimated In April

Trading 26 avr 2019 Commentaire »

Revised data released by the University of Michigan on Friday showed U.S. consumer sentiment dipped by slightly less than initially estimated in the month of April.

The consumer sentiment index for April was upwardly revised to 97.2 from the preliminary reading of 96.9, although the index remains below the final March reading of 98.4. Economists had expected the index to be upwardly revised to 97.0.

Surveys of Consumers chief economist Richard Curtin noted the index has recorded only small monthly variations since President Donald Trump first took office, remaining between 95.0 and 99.0 for 21 of the past 28 months.

"Variations within plus or minus 2.0 percentage points for the Sentiment Index meant that most of the monthly changes were statistically insignificant," Curtin said.

He added, "The last time consumer sentiment was as favorable for as long a period of time was during the late stages of the Clinton expansion."

The report said the current economic conditions index edged down to 112.3 in April from 113.3 in March, while the index of consumer expectations dipped to 87.4 from 88.8.

On the inflation front, one-year inflation expectations were unchanged from the previous month at 2.5 percent, but five-year inflation expectations fell to 2.3 percent in April from 2.5 percent in March.


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Dollar Little Changed Following U.S. Consumer Sentiment Index

Trading 26 avr 2019 Commentaire »

After the release of the University of Michigan's final consumer sentiment index for April at 10:00 am ET Friday, the greenback changed little against its major counterparts.

The greenback was trading at 111.55 against the yen, 1.0194 against the franc, 1.1155 against the euro and 1.2919 against the pound around 10:02 am ET.


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*U.S. Consumer Sentiment Index Upwardly Revised To 97.2 In April

Trading 26 avr 2019 Commentaire »

U.S. Consumer Sentiment Index Upwardly Revised To 97.2 In April


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U.S. Dollar Slides Despite Strong GDP Data

Trading 26 avr 2019 Commentaire »

The U.S. dollar fell against its major counterparts in early New York deals on Friday, after a sharp rise initially following the release of strong GDP data for the first quarter.

Data from the Commerce Department report showed an unexpected acceleration in the pace of U.S. economic growth in the first quarter.

Preliminary data showed real gross domestic product jumped by 3.2 percent in the first quarter after climbing by 2.2 percent in the fourth quarter of 2018.

The acceleration in the pace of growth came as a surprise to economists, who had expected GDP to increase by 2.1 percent.

Investors await the University of Michigan's revised reading on consumer sentiment for April, due at 10:00 am ET.

The consumer sentiment index for April is expected to be upwardly revised to 97.0 from 96.9, which was down from 98.4 in March.

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

The greenback depreciated to 1.1155 against the euro, reversing from near a 2-year high of 1.1111 touched immediately after the data. The greenback is seen finding support around the 1.13 level.

The greenback pulled back to a 2-day low of 1.2918 against the pound, following a high of 1.2874 hit in immediate aftermath of the data. The next possible support for the greenback is seen around the 1.32 level.

After touching near a 4-month high of 1.0236 against franc soon after the data release, the greenback retreated to 1.0198. Next key support for the greenback is likely seen around the 1.00 level.

The greenback was trading lower at 111.60 against the yen, quickly erasing its post-data advance to 112.02. The greenback is poised to find support around the 110.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan retail sales rose a seasonally adjusted 0.2 percent on month in March.

That beat expectations for a flat reading and was down from the 0.4 percent increase in February.

Extending early slide, the greenback slid to a 2-day low of 0.7053 against the aussie and a 3-day low of 0.6671 against the kiwi, from its previous highs of 0.7007 and 0.6619, respectively. Further downtrend may take the greenback to support levels of around 0.72 against the aussie and 0.68 against the kiwi.

The greenback dipped to a 2-day low of 1.3459 against the loonie, from a high of 1.3498 seen at 5:45 am ET. The greenback is likely to find support around the 1.31 region, should it falls again.

The University of Michigan's final consumer sentiment index for April will be out at 10:00 am ET.


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April 26, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 26 avr 2019 Commentaire »

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On January 10th, the market initiated the depicted bearish channel around 1.1570.

Since then, the EURUSD pair has been moving within the depicted channel with slight bearish tendency.

On March 7th, recent bearish movement was demonstrated towards 1.1175 (channel's lower limit) where significant bullish recovery was demonstrated.

On March 18, a significant bullish attempt was executed above 1.1380 (the upper limit of the Highlighted-channel) demonstrating a false/temporary bullish breakout.

On March 22, significant bearish pressure was demonstrated towards 1.1280 then 1.1220.

Few weeks ago, a bullish Head and Shoulders reversal pattern was demonstrated around 1.1200. This enhanced further bullish advancement towards 1.1300-1.1315 (supply zone) where recent bearish rejection was being demonstrated.

Short-term outlook turned to become bearish towards 1.1280 (61.8% Fibonacci) then 1.1235 (78.6% Fibonacci).

For Intraday traders, the price zone around 1.1235 (78.6% Fibonacci) stood as a temporary demand area which paused the ongoing bearish momentum for a while before bearish breakdown could be executed few days ago.

Conservative traders were advised to wait for a bullish pullback towards the newly-established supply zone around 1.1235 for a valid SELL entry.

On the long-term, bearish persistence below 1.1235 enhances further bearish decline towards 1.1170 then 1.1115 if enough bearish momentum is expressed.

The current price levels are quite risky for having new sell orders. That's why, conservative traders should be waiting for another bullish pullback towards 1.1230-1.1250 for a valid SELL entry.

Trade recommendations :

For those who had SELL entries around 1.1235 upon the recent bullish pullback, Remaining TP levels should remain located around 1.1115 and 1.1050. SL should lowered to 1.1170 to secure their profits.

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Russia CB Holds Rate Steady Again; Signal Cut In Near Term

Trading 26 avr 2019 Commentaire »

Russia's central bank held the key interest rate unchanged in April for a third policy session in a row and suggested that the rate may be lowered in the near term if the macroeconomic situation evolves as expected.

The Board of Directors decided to hold the key rate steady at 7.75 percent, the Bank of Russia said in a statement on Friday, in line with economists' expectations.

"In its key rate decision-making, the Bank of Russia will take into account inflation and economic dynamics against the forecast, as well as risks posed by external conditions and the reaction of financial markets," the bank said.

"If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in Q2-Q3 2019."

The previous change in the rate was a quarter-point hike in December 2018. A similar size raise was undertake in September last year, which was the first since 2014.

The September and December interest rate hikes were sufficient to curb the effects of one-off pro-inflationary factors, the central bank said. The bank has forecast annual inflation to return to 4 percent in the first half of 2020.

Growth is forecast at 1.2-1.7 percent this year. The central bank noted that annual inflation started to subside in April after annual inflation peaked in March. Consumer prices current growth rates track somewhat below the Bank of Russia forecast and short-term pro-inflationary risks have abated, the bank said.

The next policy session is scheduled for June 14.


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