Dollar Rebounds After Fed Policy Statement

Trading 01 mai 2019 Commentaire »

The U.S. dollar, which exhibited weakness ahead of the Federal Reserve's monetary policy statement, rebounded after the Fed held the interest rate unchanged and explained its outlook for the economy.

The dollar index dropped to a low of 97.15 early on in the session, but rallied to 97.73 after the Federal Reserve Chairman Jerome Powell continued to project a patient approach to setting its benchmark interest rate and gave no indication that a cut was any more likely than an increase at this moment.

"We do think that our policy stance is appropriate right now, we don't see a strong case for moving in either direction," he said.

Earlier in the day, a report released by payroll processor ADP showed private sector employment surged up by 275,000 jobs in April after climbing by an upwardly revised 151,000 jobs in March.

Economists had expected employment to increase by about 180,000 jobs compared to the addition of 129,000 jobs originally reported for the previous month.

Meanwhile, growth in U.S. manufacturing activity slowed much more than expected in the month of April, according to a report released by the Institute for Supply Management this morning, with activity expanding at its slowest pace in well over two years.

The ISM said its purchasing managers index slid to 52.8 in April after unexpectedly climbing to 55.3 in March, hitting its lowest level since October of 2016.

A report released by the Commerce Department said construction spending slumped by 0.9% to an annual rate of $1.282 trillion in March after climbing by 0.7% to a revised rate of $1.293 trillion in February. Economists had expected spending to inch up by 0.1%.

Against British Pound Sterling, the dollar was down 0.08% at 1.3045, recovering from a low of 1.3103 a pound.

In economic news, UK mortgage approvals for house purchase fell to its lowest level in over a year in March and consumer credit growth was the weakest in nearly five-and-a-half years as the original Brexit deadline approached, figures from the Bank of England showed on Wednesday.

In contrast, data released last week by UK Finance had shown that mortgage approvals hit a nine-month high in March.

UK house prices rose at the fastest annual pace in five months in April, but inflation remained subdued, survey data from the Nationwide housing society showed on Wednesday.

The house price index rose 0.9% year-on-year following a 0.7% increase in March. Economists had expected the inflation rate to remain unchanged.

Net mortgage lending grew to GBP 4.1 billion in March versus GBP 3.3 billion in February. Economists had forecast GBP 3.5 billion lending.

A survey report from IHS Markit showed UK manufacturing expansion slowed to a two-month low in April amid a decline in export business and an easing in the robust pace of stock-building.

The IHS Markit/CIPS Purchasing Managers' Index, or PMI, fell to 53.1 in April from March's 13-month high of 55.1. The score was in line with economists' expectations.

The euro was down by about 0.2% at $1.1194, drifting down from $1.1266 a unit.

The Japanese Yen was little changed in late afternoon trades, after having strengthened to 111.06 a dollar earlier in the session before falling to a low of 111.61.

The dollar was up nearly 0.5% against the Aussie with the pair trading at 0.7014. Against the loonie, the greenback was up 0.4% at 1.3444, and against Swiss Franc, it was down 0.14% at 1.0179.


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Gold price inability to break above resistance will lead prices towards $1,260.

Trading 01 mai 2019 Commentaire »

Gold price as expected since $1,270 has bounced for a back test of the major support area of $1,280-90. Now there are a lot of chances that the entire back test is over as bulls remain too weak to break above $1,290-$1,300. The next leg down should follow soon.

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Blue line - major resistance trend line

Red line -RSI support trend line

Red rectangle - major confluence area of resistance (previous support)

Gold price remains below the blue trend line resistance and shows rejection signs once again at the red rectangle area that is now resistance and was once support. Inability by the bulls to recapture the $1,280-90 level is a bearish sign. Since this support area was broken we said that we expect prices to move lower towards $1,250-60. Price fell as low as $1,266 and we said expect a back test and then maybe another move lower. As long as price is below $1,300 we continue to expect prices to move lower towards $1,250-60 or even lower. Any bounce is considered a selling opportunity. Gold should see $1,250-60 if price breaks below $1,270.

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Treasuries Pull Back Near The Unchanged Line After Seeing Early Strength

Trading 01 mai 2019 Commentaire »

After moving to the upside in morning trading, treasuries pulled back near the unchanged line going into the close of trading on Wednesday.

Bond prices ended the day nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.511 percent after hitting a one-month low of 2.455 percent.

The late-day pullback by treasuries came after Federal Reserve Chairman Jerome Powell dashed traders' hopes for a near-term interest rate cut.

In his post-monetary policy meeting press conference, Powell said the Fed sees "transitory factors" contributing to recent low inflation readings.

Powell said the Fed would take persistently low inflation into account when setting policy but currently expects inflation to return to the 2 percent objective.

The comments from Powell came after the Fed announced its widely expected decision to leave interest rates unchanged.

The Fed maintained the target range for the federal funds rate at 2.25 to 2.50 percent for the third consecutive meeting.

The central bank said information received since its previous meeting in March showed economic activity rose at a solid rate.

After the March meeting, the Fed noted the pace of economic growth had slowed from the solid rate in the fourth quarter.

The Fed said in its latest statement that the labor market remains strong but pointed out slower first quarter growth in household spending and business fixed investment.

With regard to inflation, the central bank said lower energy prices had contributed to lower annual inflation but noted inflation for items other than food and energy remains near 2 percent.

Treasuries moved to the upside earlier in the session following the release of a report from the Institute for Supply Management showing the slowest pace of growth in manufacturing activity in over two years.

The ISM said its purchasing managers index slid to 52.8 in April after unexpectedly climbing to 55.3 in March, hitting its lowest level since October of 2016.

A reading above 50 still indicates growth in the manufacturing sector, although economists had expected the index to show a much more modest decrease to 55.0.

Reports on weekly jobless claims, labor productivity and costs, and factory orders may attract some attention on Thursday, although trading activity may be subdued ahead of the more closely watched monthly jobs report due on Friday.


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Crude Oil Futures Settle Lower After Inventory Data

Trading 01 mai 2019 Commentaire »

Crude oil prices slipped on Wednesday after data showed a much larger than expected increase in U.S. crude stockpiles in the week ended April 27.

However, due to the escalating crisis in Venezuela and the ongoing U.S. sanctions against Iranian oil, the drop in crude prices was not any significantly pronounced.

Markets were digesting news about the latest events in Venezuela amid mass protests against the government.

According to reports, hundreds of Venezuelans rallied on Tuesday after opposition leader Juan Guaido called for a "military uprising" in his strongest move to remove President Nicolas Maduro since declaring himself interim president earlier this year.

Many observers fear this could lead to escalating violence and further disruptions to crude supply.

West Texas Intermediate Crude oil futures for June settled at $63.30 a barrel, losing $0.31 for the session.

Brent Crude oil futures were lower slightly at $72.04 a barrel a little past 2 PM ET.

According to the weekly data released by the Energy Information Administration (EIA), crude inventories in the U.S. increased by 9.9 million barrels to 470.6 million barrels last week, hitting the highest level since January.

The EIA report said gasoline inventories were up by 0.9 million barrels last week, as against a decrease of 1 million barrels a week earlier.

Distillate stockpiles dropped by 1.3 million barrels in the week, nearly down 0.5% from the expected decline.

The report released by the American Petroleum Institute late Tuesday showed a 6.8 million barrels increase in U.S. crude stockpiles last week.


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Gold Futures Settle Slightly Lower

Trading 01 mai 2019 Commentaire »

Gold prices edged slightly lower on Wednesday as traders went for riskier assets such as equities thanks to better-than-expected quarterly earnings and earnings guidance from Apple Inc and data showing a notable jump in private sector employment in the month of April.

The dollar index, which moved around 97.30 earlier in the day, dropped to 97.15 after the Fed announced its policy, and was last seen trading at 97.20, down by about 0.3% from previous close.

Gold futures for June settled down $1.50, or 0.1%, at $1,284.20 an ounce.

On Tuesday, gold futures for June ended up $4.20 at $1,285.70 an ounce, after falling by $7.30 a session earlier.

Silver futures for July ended down $0.255, at $14.729 an ounce, while Copper futures for July settled at 2.8015, down $0.1025 from previous close.

After the Federal Reserve announced its monetary policy at 2 PM ET., gold prices edged up a bit.

The Fed left its short-term fund rates unchanged at 2.25 to 2.5% for the third consecutive meeting.

The central bank said information received since its previous meeting in March showed economic activity rose at a solid rate.

After the March meeting, the Fed noted the pace of economic growth had slowed from the solid rate in the fourth quarter.

The Fed said in its latest statement that the labor market remains strong but pointed out slower first quarter growth in household spending and business fixed investment.

On inflation, the bank said lower energy prices had contributed to lower annual inflation but noted inflation for items other than food and energy remains near 2%.

"On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed," the Fed said.

The Fed said it continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near its symmetric 2% objective as the most likely outcomes.

Earlier, a report released by payroll processor ADP showed private sector employment surged up by 275,000 jobs in April after climbing by an upwardly revised 151,000 jobs in March.

Economists had expected employment to increase by about 180,000 jobs compared to the addition of 129,000 jobs originally reported for the previous month.

"April posted an uptick in growth after the first quarter appeared to signal a moderation following a strong 2018," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

She added, "The bulk of the overall growth is with service providers, adding the strongest gain in more than two years."

Meanwhile, growth in U.S. manufacturing activity slowed much more than expected in the month of April, according to a report released by the Institute for Supply Management this morning, with activity expanding at its slowest pace in well over two years.

The ISM said its purchasing managers index slid to 52.8 in April after unexpectedly climbing to 55.3 in March, hitting its lowest level since October of 2016.

A report released by the Commerce Department said construction spending slumped by 0.9% to an annual rate of $1.282 trillion in March after climbing by 0.7% to a revised rate of $1.293 trillion in February. Economists had expected spending to inch up by 0.1%.


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

Federal Reserve Leaves Rates Unchanged For Third Straight Meeting

Trading 01 mai 2019 Commentaire »

As widely expected, the Federal Reserve announced on Wednesday that it has decided to leave interest rates unchanged.

The Fed maintained the target range for the federal funds rate at 2.25 to 2.50 percent for the third consecutive meeting.

The central bank said information received since its previous meeting in March showed economic activity rose at a solid rate.

After the March meeting, the Fed noted the pace of economic growth had slowed from the solid rate in the fourth quarter.

The Fed said in its latest statement that the labor market remains strong but pointed out slower first quarter growth in household spending and business fixed investment.

With regard to inflation, the central bank said lower energy prices had contributed to lower annual inflation but noted inflation for items other than food and energy remains near 2 percent.

"On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed," the Fed said.

The Fed said it continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near its symmetric 2 percent objective as the most likely outcomes.

Nonetheless, the central bank reiterated it will be patient as it determines future adjustments to interest rates due to global economic and financial developments and muted inflation.

The announcement from the Fed comes a day after President Donald Trump urged the central bank to slash interest rates by as much as a full percentage point.

"Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening," Trump said in a post on Twitter.

He added, "We have the potential to go up like a rocket if we did some lowering of rates, like one point, and some quantitative easing."

Some analysts accused the Fed of capitulating to Trump's demands by revealing after its previous meeting that officials no longer expect to raise rates this year.

The Fed is scheduled to announce its next monetary policy decision after a two-meeting on June 18-19, with CME Group's FedWatch Tool currently indicating a nearly 71 percent chance rates will be left unchanged.

The FedWatch Tool shows a nearly 27 percent chance that the Fed will lower interest rates by 25 basis points to 2 to 2.25 percent.


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*Federal Reserve Leaves Interest Rates Unchanged

Trading 01 mai 2019 Commentaire »

Federal Reserve Leaves Interest Rates Unchanged


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Treasury Reveals Details Of Next Week's Long-Term Securities Auctions

Trading 01 mai 2019 Commentaire »

On Wednesday, the Treasury Department announced the details of next week's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury said it plans to sell $38 billion worth of three-year notes next Tuesday, $27 billion worth of ten-year notes next Wednesday and $19 billion worth of thirty-year bonds next Thursday.

Last month, the Treasury sold $38 billion worth of three-year notes, $24 billion worth of ten-year notes and $16 billion worth of thirty-year bonds.

The three-year note auction attracted below average demand, while the ten-year and thirty-year bond auctions attracted above average demand.


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May 1, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 01 mai 2019 Commentaire »

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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 significant bearish rejection was demonstrated on April 15.

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 on April 23.

Currently, the price zone around 1.1235-1.1250 has turned into supply-zone to be watched for bearish rejection.

Two days ago, a recent bullish head and shoulders pattern was being demonstrated around 1.1140 on the H4 chart.

That's why, conservative traders were suggested to wait for another bullish pullback towards 1.1230-1.1250 for a valid SELL entry.

Trade recommendations :

Conservative traders can look for a valid SELL entry anywhere around the current price levels (1.1250).

S/L should be located above 1.1280 while Target levels canbe located around 1.1170 and 1.1130.

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

May 1, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 01 mai 2019 Commentaire »

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

On March 11, a Weekly bearish gap pushed the pair below the uptrend line (almost reaching 1.2960) before the bullish breakout above short-term bearish channel could be achieved.

Shortly after, the GBPUSD pair demonstrated weak bullish momentum towards 1.3200 then 1.3360 where the GBPUSD failed to achieve a higher high above the previous top achieved on February 28.

Instead, the depicted recent bearish channel was established.

Significant bearish pressure was demonstrated towards 1.3150 - 1.3120 where the depicted uptrend line failed to provide any bullish support leading to obvious bearish breakdown.

On March 29, the price levels of 1.2980 (the lower limit of the newly-established bearish movement channel) demonstrated significant bullish rejection.

This brought the GBPUSD pair again towards the price zone of (1.3160-1.3180) where the upper limit of the depicted bearish channel as well as the backside of the depicted uptrend line demonstrated significant bearish rejection.

Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900, 1.2800 and 1.2750 where the lower limit of the depicted channel comes again to meet the GBPUSD pair.

This week, As expected, a bullish pullback occurred towards price levels around 1.3050 which is currently failing to provide immediate bearish supply for the pair affected by negative fundamental data from the US.

For the bullish side to regain dominance, quick bearish closure should be achieved below 1.3070.

Trade Recommendations:

Bearish rejection should be anticipated around the current price levels (1.3090) as long as the market fails to achieve any bullish breakout above 1.3130 (78.6% Fibo).

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