Treasuries Pull Back Off Best Levels But Remain Positive

Trading 09 mai 2019 Commentaire »

Following the pullback seen in the previous session, treasuries moved back to the upside during the trading day on Thursday.

Bond prices gave back ground after an early rally but remained in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.5 basis points to 2.457 percent after hitting a low of 2.425.

The rebound by treasuries came amid renewed trade concerns following tough talk from President Donald Trump ahead of two days of U.S.-China trade talks in Washington.

Trump claimed during a rally in Florida on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China "broke the deal."

"So they're flying in, the vice premier tomorrow is flying in - good man - but they broke the deal," Trump told his supporters. "They can't do that, so they'll be paying."

The comments from Trump come as Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the world's two largest economies attempt to reach an historic trade agreement.

Treasuries pulled back off their best levels after Trump told reporters at the White House a trade deal with China is still possible but called tariffs an "excellent" alternative.

Analysts have previously urged investors to focus on Trump's actions rather than his words, suggesting that the president's bluster is merely a negotiating tactic.

On the U.S. economic front, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened in the month of March.

The report said the trade deficit widened to $50.0 billion in March from a revised $49.3 billion in February. Economists had expected the deficit to widen to $50.2 billion.

The wider trade deficit came as the value of imports surged up by 1.1 percent to $262.0 billion compared to a 1.0 percent jump in the value of exports to $212.0 billion.

The Labor Department also released a report showing producer prices increased in line with economist estimates in the month of April.

The report said producer price index for final demand rose by 0.2 percent in April after climbing by 0.6 percent in March. The uptick in prices matched expectations.

Excluding food and energy prices, core producer prices inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected core prices to edge up by 0.2 percent.

A separate Labor Department report showed first-time claims for U.S. unemployment benefits pulled back by less than expected in the week ended May 4th.

The Labor Department said initial jobless claims dipped to 228,000, a decrease of 2,000 from the previous week's unrevised level of 230,000. Economists had expected jobless claims to drop to 220,000.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $19 billion worth of thirty-year bonds, which attracted modestly below average demand.

The thirty-year bond auction drew a high yield of 2.892 percent and a bid-to-cover ratio of 2.20, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.27.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Reaction to news out of the U.S.-China trade talks is likely to drive trading on Friday, overshadowing the Labor Department's typically closely watched report on consumer price inflation.


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Oil Futures Settle Lower As Trade Worries Weigh

Trading 09 mai 2019 Commentaire »

Crude oil prices edged lower on Thursday amid concerns over a likely drop in energy demand in the event of the U.S. and China failing to reach a trade agreement.

The U.S. has stated that it would impose additional tariffs on Chinese goods beginning on Friday and this prompted Beijing to threaten retaliation.

U.S. President Donald Trump claimed during a rally in Florida on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China "broke the deal."

"So they're flying in, the vice premier tomorrow is flying in - good man - but they broke the deal," Trump told his supporters. "They can't do that, so they'll be paying."

The Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the two nations attempt to reach an historic trade agreement.

West Texas Intermediate Crude futures for June settled at $61.71 a barrel, down $0.42 from previous close.

Brent crude oil futures for June edged up slightly to $70.41 a barrel by mid afternoon.

On Wednesday, crude oil futures for June ended up $0.72, or 1.2%, at $62.12 a barrel after data from U.S. Energy Information Administration (EIA) showed an unexpected 4 million barrels drop in crude stockpiles in the week to May 3. Markets had expected inventories to increase by 1.2 million barrels.

A survey from S&P Global Platts released on Thursday showed that OPEC's collective production held steady in April. The report said output rose by 30,000 barrels per day to 30.26 million bpd.

The survey showed Saudi Arabia's production dropped to a 15-month low, while Iran's output fell to levels that were even lower than at previous times when it was under U.S. sanctions.

Despite large increases in output from Iraq and Nigeria, compliance with the output restraint agreement was 116% for the 11 members with quotas, the survey showed.


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Thirty-Year Bond Auction Attracts Modestly Below Average Demand

Trading 09 mai 2019 Commentaire »

Finishing off this week's series of long-term securities auctions, the Treasury Department sold $19 billion worth of thirty-year bonds on Thursday, attracting modestly below average demand.

The thirty-year bond auction drew a high yield of 2.892 percent and a bid-to-cover ratio of 2.20.

Last month, the Treasury sold $16 billion worth of thirty-year bonds, drawing a high yield of 2.930 percent and a bid-to-cover ratio of 2.25.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous seven-year note auctions had an average bid-to-cover ratio of 2.27.

Today's thirty-year bond auction came after the Treasury sold $38 billion worth of three-year notes on Tuesday and $27 billion worth of ten-year notes on Wednesday.


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EUR/USD 5 Star Signal | Fundamental + Technical Analysis

Trading 09 mai 2019 Commentaire »

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Fundamental:

The prospect of budget conflict with EU is causing the currency slide as Italy's leaders attacked new deficit forecasts by the European Union, setting up prospect of a renewed budget conflict with the bloc. That has lifted premium over German bunds to the highest since February and is keeping the euro near its lowest in 2 years. Meanwhile, the decline is also fueled by the dimming global outlook as trade tensions escalated between US and China and the flare-up of political risk ahead of European Parliamentary elections this month. Elsewhere, new US sanctions imposed on Iran's industrial metals sector is also adding bearish pressure to the currency as Trump warns Europe to stop doing business with Iran and vowed to squeeze Tehran further until it fundamentally alters its conduct. On the other hand, Iran threatened to enrich their uranium again beyond agreed limits unless Europe throws them a lifeline, adding on to the negative risk sentiment. While some investors seek solace in the delay of the auto tariffs decisions while EU and Japan continues talks with US, it is likely to be short lived.

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Technical analysis:

Sell entry: 1.1227

Why it's good: Price is seeing strong descending resistance pushing it down and that level has nice retracement, extension and overlap resistance.

Take profit : 1.1144

Why it's good: That's a nice swing low level and a 61.8% profit taking extension level.

Stop loss: 1.1277

Why it's good: Gives us enough breathing space and is also a nice pullback resistance + 76.4% Fibonacci retracement. Price would need to break the descending resistance line to even come close to this.

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Gold Futures Settle Higher On Safe Haven Appeal

Trading 09 mai 2019 Commentaire »

Gold prices edged higher on Thursday as traders sought the safe haven asset after equities tumbled on escalating trade war worries.

Reports about U.S.'s conflicts with Iran and news about North Korea launching more projectiles besides violating international sanctions also aided gold's uptick.

The dollar's decline too supported the yellow metal, while the demand for safe haven Japanese yen and government bonds limited the commodity's gains.

The dollar index, which dropped to a low of 97.24, recovered a bit subsequently, but was still down in the red at 97.41, down by about 0.19% from previous close.

Gold futures for June settled at $1,285.20, gaining $3.80, or 0.3%, for the session.

On Wednesday, gold futures for June ended down $4.20 at $1,281.40 an ounce.

Silver futures for July ended down $0.089, at $14.773 an ounce, while Copper futures for July settled at $2.7715 per pound, down $0.0030 from previous close.

The United States will raise tariffs on $US200 billion of Chinese goods to 25% from 10% on Friday unless there are signs of progress in trade negotiations.

U.S. President Donald Trump said on Wednesday that the U.S. is planning to raise tariffs on Chinese goods because China "broke the deal."

"So they're flying in, the vice premier tomorrow is flying in - good man - but they broke the deal," Trump told his supporters. "They can't do that, so they'll be paying."

The comments from Trump come as Chinese Vice Premier Liu He is set to take part in the latest round of trade talks as officials from the world's two largest economies attempt to reach an historic trade agreement.

China's Commerce Ministry said recently that the country will take "necessary countermeasures" if the U.S. follows through on a planned increase in tariffs on Chinese goods on Friday.


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May 9, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 09 mai 2019 Commentaire »

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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 broken uptrend line demonstrated significant bearish rejection.

Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900 and 1.2850.

Last week, a bullish pullback was executed towards the price levels around 1.3035 - 1.3070 (50% - 61.8% Fibonacci levels) where temporary bearish rejection was demonstrated.

However, by the end of Friday's consolidations, significant bullish momentum was initiated around 1.3000.

Hence, a bullish breakout above 1.3075 was temporarily achieved.

Temporarily, short-term outlook turns to become bullish until bearish breakdown below 1.3035 (50% Fibonacci level) was achieved earlier Yesterday.

Currently, The price zone of 1.3030-1.3060 constitutes a prominent supply-zone to be watched for bearish entries.

On the other hand, H4 bullish breakout above 1.3075 enhances a quick bullish visit towards 1.3150 and 1.3200 where the most recent top was established on May 3.

Trade Recommendations:

Conservative traders should be waiting for signs of bearish reversal around the depicted price levels (1.3035-1.3070) as a valid SELL signal.

T/p levels to be located around 1.2950 and 2880.

Any bullish breakout above 1.3080 invalidates this bearish scenario.

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May 9, 2019 : EUR/USD Offering a valid SELL opportunity around 1.1235.

Trading 09 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.

On April 24-26, another bullish head and shoulders pattern was being demonstrated around 1.1140 on the H4 chart.

Moreover, the market has failed to sustain bearish pressure below the price Level of 1.1175.

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

Trade recommendations :

Conservative traders can look for a valid SELL entry anywhere around the price level of 1.1235.

S/L should be placed around 1.1260.

Initial Target levels should be located around 1.1200, 1.1175 and 1.1140.

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

EURUSD bulls try to break above the triangle pattern

Trading 09 mai 2019 Commentaire »

EURUSD made a sharp move higher towards 1.1250 and above the short-term triangle pattern we mentioned yesterday. But price fell back inside the triangle. So far we consider this as a fake break out which is a bearish sign.

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Blue line - resistance trend line

Red line - support

Black line - medium-term resistance

EURUSD has resistance at 1.1230-1.1260 as we mentioned yesterday. Price has still been trading below it and has not yet broken above it. So trend remains bearish. Bulls need to hold above 1.1175 which is short-term support and then try another move higher above 1.1260. This will open the way for a move higher towards the black trend line resistance at 1.1310. Holding above 1.1175 and breaking above 1.1270 will begin a new sequence of higher highs and higher lows and this could imply that a major low is in.

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Gold price still below major resistance

Trading 09 mai 2019 Commentaire »

Gold price is back at $1,285 just below the important resistance trend line from $1,347 and the short-term high at $1,290. Gold bulls still have hopes for an upward break out but another rejection will ruin their plans.

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Red line - major resistance trend line

Blue line - RSI support

Green rectangle - major confluence area

Gold price is back inside the green area just below the red downward sloping resistance trend line. As long as the RSI holds above the blue trend line and price is above $1,278, bulls still have hopes for more upside. But a break below $1,278 will decrease dramatically the chances for a move higher. Next important support is at $1,266. Breaking it will open the way for a move below $1,250. A break above $1,290 will open the way for a move towards $1,300 and higher.

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Bitcoin analysis for May 09, 2019

Trading 09 mai 2019 Commentaire »

Bitcoin has been trading neutral but the fake breakout of the resistance is present, which is sign of the potential weakness.

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Purple rectangle – Resistance $6.271

Green rectangle – Support $5.758

Green lines – Upward channel – resistance on the test

We found the fake breakout of the yesterday's high at the price of $6.271, which is clear sign that buyers got exhausted and that weakness is very possible. Since that price went higher above the balance and failed, the downward target becomes the opposite extreme of the balance, which is the level of $5.758. Watch for selling opportunities on the rallies.

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