Oil Futures Plunge Sharply, End At Near 16-week Low

Trading 31 mai 2019 Commentaire »

Crude oil prices plunged sharply on Friday as concerns about outlook for energy demand rose amid growing worries about trade dispute.

The U.S. President Donald Trump's announcement of new tariffs on all goods coming from Mexico has further dented investor sentiment, which is already down due to the ongoing U.S.-China trade spat.

Trump tweeted on Thursday that from 10 June, a 5% tariff would be imposed on goods imported from Mexico and then added that the tariff would slowly rise until the problem of illegal immigration of drugs and people into the U.S. from Mexico is resolved.

With fears of a global recession gripping the market, crude oil prices plummeted today, extending recent losses.

West Texas Intermediate Crude oil futures for July ended down $3.09, or 5.5%, at $53.50 a barrel, the lowest settlement since the second week of February.

For the week, crude oil futures lost as much as 8.7%, and shed more than 16% in the month of May.

Data showing a contraction in China's manufacturing activity in May and Thursday's EIA report that showed a smaller-than-expected drop in U.S. crude stockpiles last week too contributed to oil's slide today.

According to the data released by the U.S. Energy Information Administration Thursday morning, crude inventories declined by 280,000 barrels in the week ended May 24th, about three times less than what analysts had forecast.

Gasoline inventories were up by 2.2 million barrels last week, against expectations of a modest fall.


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Treasuries See Further Upside Amid Threat Of More Tariffs

Trading 31 mai 2019 Commentaire »

Treasuries moved sharply higher during trading on Friday, extending the strong upward move seen over the past several sessions.

Bond prices jumped at the start of trading and saw some further upside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 8.5 basis points to 2.142 percent.

With the steep drop on the day, the ten-year yield once again slumped to its lowest closing level since September of 2017.

Treasuries continued to benefit from their appeal as a safe haven after President Donald Trump revealed plans to use tariffs to compel Mexico to make efforts to stop the flow of illegal immigrants across the country and into the U.S.

"On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP," Trump announced in a post on Twitter

He added, "The Tariff will gradually increase until the Illegal Immigration problem is remedied, at which time the Tariffs will be removed."

Trump revealed in a subsequent White House statement the tariffs will be raised to 10 percent on July 1st if the crisis persists, with tariffs eventually rising as high as 25 percent by October 1st.

The president argued the sustained imposition of tariffs will produce a massive return of jobs back to U.S., describing the move as an effort to "firmly and forcefully" stand up for America's interests.

"We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous, and deeply unfair problem," Trump said.

"The United States has been very good to Mexico for many years," he added. "We are now asking that Mexico immediately do its fair share to stop the use of its territory as a conduit for illegal immigration into our country."

The threat of new tariffs on Mexican imports comes amid the escalating trade dispute between the U.S. and China, which has recently weighed on stocks and raised concerns about the global economic outlook.

Reflecting the collapse of U.S.-China trade talks, the University of Michigan released a report showing a bigger than expected downward revision to its reading on U.S. consumer sentiment in the month of May.

The report said the consumer sentiment index for May was downwardly revised to 100.0 from the preliminary reading of 120.4.

The index remains notably higher than the final April reading of 97.2 but came in below economists for a reading of 101.5.

Any developments on the trade front are likely to once again take the spotlight next week, potentially overshadowing some key economic data.

The monthly jobs data due next Friday may be the one economic report that can break through the noise generated by Trump's seemingly ever-escalating trade conflicts.

Reports on manufacturing and service sector activity, construction spending, factory orders, and the U.S. trade deficit could also attract attention if there are no developments on the trade front.


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Gold Futures Rise To 7-week Closing High As Trade Tensions Rise

Trading 31 mai 2019 Commentaire »

Gold prices surged higher on Friday as global equities tumbled on fears of a recession after the U.S. President Donald Trump announced a 5% tariff on Mexican goods imported into U.S.

Trump, who revealed that the tariff move is to compel Mexico to make efforts to stop flow of illegal immigrants across the country and into the U.S., added that the tariff will gradually increase till the illegal immigration problem is solved.

Investor sentiment, which was already down due to worries about an escalation in the U.S.-China trade conflict, weakened further after Trump's latest move.

Recent data showing a less than initially estimated acceleration in U.S. economic growth, higher initial jobless claims and a drop in pending home sales continued to support the yellow metal's rise.

The dollar's fall and the data showing a contraction in China's manufacturing activity in April contributed as well to the increased demand for the safe haven asset.

The dollar index dropped to a low of 97.72, losing about 0.4%.

Gold futures for August ended up $18.70, or 1.5%, at $1,311.10 an ounce, the highest settlement since April 10.

On Thursday, gold futures for August ended up $6.10, or 0.5%, at $1,292.40 an ounce. For the week, gold futures gained 2.1%.

Silver futures for July ended up $0.076, at $14.567 an ounce, while Copper futures for July settled at $2.6400 per pound, down $0.0140 from previous close.

In today's economic news from U.S., a report from the University of Michigan said the consumer sentiment index for May was downwardly revised to 100.0 from the preliminary reading of 120.4. The downward revision was much bigger than what was expected.

Although the index remains notably higher than the final April reading of 97.2, it has fallen short of expectations for a reading of 101.5.

Meanwhile, personal income in the U.S. rose by more than expected in the month of April, increasing by 0.5%, after inching up by 0.1% in March, according to a report released by the Commerce Department. Economists had expected personal income to rise by 0.3%.

The report also said personal spending increased by 0.3% in April after spiking by an upwardly revised 1.1% in March.


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Bitcoin analysis for May, 31.2019

Trading 31 mai 2019 Commentaire »

BTC has been trading sideways at the price of $8.364. Anyway, we fund strong down break in the backgorund and the movement that we got now looks very corrective. Watch for selling opportunities.

analytics5cf16a74e4892.jpg

White lines – bear flag

White rectangle- strong resistance

Red horizontal line – swing low (support)

After the strong down break, we found that corrctive structure, which is sign that we might expect downside continuation. Our advice is to watch for selling opportunities on the potential break of the bear flag. Downward reference is set at the price of $8.000. Resistance levels are set at $8.435 and $9.077. Stochastic went into overbought condition and BTC did setup for nice drop.

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Analysis of Gold for May, 31.2019

Trading 31 mai 2019 Commentaire »

Gold did extacly how we planned yesterday. Our targets from yesterday were met. Gold is in strong upward momentum and you should only focus on buying opportuntiies on the pullbacks.

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Red rectangle – target 1

Red rectangle- target 2

Strong upward momentum on the Gold. The price did break the resistance level at $1.284, which was the clear sign of the upward continuation. Our advice is to watch for potential upward contination but on the pullbacks. Intraday support is seen at the price of $1.298. Upward references are seen at the price of $1.310 and $1.322. Stochastic made new momentum high, which is another sign of the strong upward momentum.

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GBP/USD analysis for May, 31.05.2019

Trading 31 mai 2019 Commentaire »

GBP/USD has been trading upwards as we expected. The price did break the supply trendline and downward channel, which is sign of the strength. Watch for bull flag to confirm further upside.

analytics5cf1658a6abb8.jpg

White lines – downward channel

White rectangle- key support

Red horizontal line – Important resistance

We found strong break of the downward channel in the background. This is strong confirmation of the future rally. Also, the double bottom is confirmed on the H1 time-frame, which is another sign of the strength. The important swing high is broken at 1.2625 and you should watch for buying opportuntiies. The upward references is set at 1.2700. Downward references are set at 1.2600 and 1.2557.

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U.S. Consumer Sentiment Improves Less Than Initially Estimated In May

Trading 31 mai 2019 Commentaire »

Reflecting the collapse of U.S.-China trade talks, the University of Michigan released a report on Friday showing a bigger than expected downward revision to its reading on U.S. consumer sentiment in the month of May.

The report said the consumer sentiment index for May was downwardly revised to 100.0 from the preliminary reading of 120.4.

The index remains notably higher than the final April reading of 97.2 but came in below economists for a reading of 101.5.

"Although consumer sentiment remained at very favorable levels, confidence significantly eroded in the last two weeks of May," said Surveys of Consumers chief economist Richard Curtin

He added, "The late-month decline was due to unfavorable references to tariffs, spontaneously mentioned by 35% of all consumers in the last two weeks of May, up from 16% in the first half of May and 15% in April and equal to the peak recorded last July in response to the initial imposition of tariffs."

The report said the current economic conditions index fell to 110.0 in May from 112.3 in April, while the index of consumer expectations surged up to 93.5 from 87.4.

On the inflation front, one-year inflation expectations jumped to 2.9 percent in May from 2.5 percent in April after five-year inflation expectations climb to 2.6 percent from 2.3 percent.

"While higher inflation expectations modestly reduced real income expectations, the largest impact was on buying conditions for appliances and other large household durables, which fell to their lowest level in four years," Curtin said.

He added, "The combination of higher inflation and a slower pace of spending provide conflicting signals for monetary policy."


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Yen Trades Higher After Trump's Tariff Move On Mexico

Trading 31 mai 2019 Commentaire »

The Japanese yen traded higher against its major counterparts in the European session on Friday, as U.S. President Donald Trump's threat to impose tariffs on Mexican goods as well as weak Chinese manufacturing data sparked risk aversion.

Trump on Thursday announced new tariffs on all goods coming from Mexico to curb illegal immigration across the border to the U.S.

In a tweet, Trump said that from 10 June a 5 percent tariff would be imposed and would slowly rise until the situation is resolved.

Trump latest announcement came on the heels of persistent trade tensions with China, further exacerbating growth concerns.

China's manufacturing activity declined in May for the first time in three months amid ongoing trade spat with the U.S, official data showed.

Risk sentiment took a hit, triggering a rally in safe havens such as U.S. and German bonds, the Japanese yen and gold.

Data from the Ministry of Land, Infrastructure, Transport and Tourism showed that Japan's housing starts declined for the first time in five months in April.

Housing starts dropped 5.7 percent year-on-year in April, after a 10.0 percent increase in March. Economists had forecast the housing starts to fall 0.8 percent. This was the first decline since December.

The currency has been trading in a positive territory against its major rivals in the Asian session.

The yen firmed to a 5-month high of 108.71 against the greenback and a 3-week high of 108.09 against the franc, from Thursday's closing values of 109.62 and 108.75, respectively. The next possible resistance for the yen is seen around 106.00 against both the greenback and the franc.

The yen that closed yesterday's trading at 122.00 against the euro and 138.19 against the pound strengthened to near 5-month highs of 121.17 and 136.63, respectively. If the yen rallies further, 118.00 and 133.00 are possibly seen as its next resistance levels against the euro and the pound, respectively.

The Japanese yen also moved up to near 5-month highs of 75.09 against the aussie, 80.16 against the loonie and 70.68 against the kiwi, compared to yesterday's closing values of 75.77, 81.21 and 71.36, respectively. The yen is seen finding resistance around 73.5 against the aussie, 78.5 against the loonie and 69.0 against the kiwi.


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Chicago Business Barometer Indicates Faster Growth In May

Trading 31 mai 2019 Commentaire »

Growth in Chicago-area business activity reaccelerated in the month of May after slowing over the two previous months, MNI Indicators revealed in a report released on Friday.

MNI Indicators said its Chicago business barometer rose to 54.2 in May after falling to a two-year low of 52.6 in April, with a reading above 50 indicating growth in regional business activity. Economists had expected the index to inch up to 53.7.

Despite the bigger than expected increase by the business barometer, MNI Indicators said the survey still points to softness in business activity, with the three-month average slipping to a two-year low.

"Furthermore, it is evident that business confidence in Q2 is going to be significantly weaker than Q1, which already was at sluggish levels," said MNI Indicators.

The rebound by the business barometer reflected increases by both the production and new orders indexes, with the new orders index rising for the first time in three months.

Meanwhile, the report said the employment index fell to its lowest level since October of 2017, reflecting weaker demand for labor amid the slower growth in demand and production seen since the turn of the year.

"Indicators are significantly below their last year averages but are moving towards their long-term means, implying that if business conditions are not as bright as they were, they are not bad either," said Shaily Mittal, Senior Economist at MNI.

MNI Indicators noted prices at the factory gate picked up a little following last month's double-digit decline amid a rise in the price of oil.


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GBP/USD. May 31. Results of the day. Brexit party can seize power in Britain in case of dissolution of Parliament

Trading 31 mai 2019 Commentaire »

4-hour timeframe

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The amplitude of the last 5 days (high-low): 86p – 81p – 54p – 59p – 60p.

The average amplitude over the last 5 days: 68p (72p).

As for the pound/dollar pair, the bears did not even want to reduce the "dollar" positions at the end of the month, so great is the desire to sell the pound further. Well, given the serious political crisis in the UK, the resignation of Prime Minister May, the complete uncertainty with the prospects of Brexit, traders can understand. At the end of May, the pound fell to the US dollar by 4.5 cents. The pair has approached the 1.5-year lows, and if the situation in Britain does not improve in the near future, it risks the continuation of the fall. Only the early selection of a new Prime Minister and the unity of the Parliament on Brexit (current or new composition) can save the pound. Traders need clarity on the question: what awaits the country in the future? We are talking not only about private traders but also about major institutional players, banks and Central banks. It is no secret that the pound is used by many large financial institutions as the currency of reserve storage. Given how much the pound fell over the past three years, the share of reserves in the pound declined. It can be reduced in the future, provoking even greater collapses of the British currency. Thus, the Parliament urgently needs to elect a new Prime Minister and begin to agree on the final version of Brexit or re-elect parliamentarians. Given the sharp drop in the popularity of the Labor party and the Conservatives, it is possible that Nigel Farage's party will win in the new parliamentary elections.

Trading recommendations:

The pound/dollar currency pair may start the correction at the end of the month, but has not yet begun. If the MACD indicator turns up, it is recommended to reduce short positions and wait for the correction to be completed for new sales of the pound sterling.

Buy orders can be considered very small lots not earlier than fixing the price above the Kijun-Sen line with the first goal of the Senkou Span B line.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-Sen – red line.

Kijun-Sen – blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD Indicator:

A red line and a histogram with white bars in the indicator window.

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