Dollar Turns Weak As Growth Worries Resurface

Trading 02 juil 2019 Commentaire »

After scoring strong gains against most major currencies in the previous session, the U.S. dollar retreated on Tuesday amid fresh concerns about outlook for global growth and on uncertainty about a significant progress in U.S.-China trade talks.

The threat of additional tariffs by the United States against some European Union goods added to the pressure. The U.S. government said it plans to slap tariffs on $4 billion of additional EU goods as part of the long-running spat over aircraft subsidies.

Meanwhile, the euphoria over the decision of the U.S. and China to resume trade negotiations and to not impose fresh tariffs on each other's goods for now subsided a bit after U.S. President Donald Trump commented that any trade deal with China need to be somewhat tilted in favor of the United States.

The dollar index, which dropped to a low of 96.60, recovered to around 96.75 later on in the session, but was still languishing in negative territory, losing about 0.07% from previous close.

Against the euro, the dollar weakened to 1.1323 but recovered subsequently on support at lower levels and was last seen moving around 1.1290, down marginally from previous close.

In eurozone economic news, data from Eurostat showed that Eurozone producer price inflation slowed for the third consecutive month in May, rising 1.6% year-on-year, after rising 2.6% a month earlier. Economists had expected a 1.8% rise in inflation.

In Germany, retail sales grew at a slower pace of 4% in May, after increasing by 4.6% in the previous month.

According to reports, the ECB is unlikely to cut rates at the monetary policy meeting this month. A report in Bloomberg, citing officials, says the policymakers see no need to rush into July rate cut.

However, policymakers are likely to change its language to signal additional stimulus forthcoming sooner rather than later.

The British Pound Sterling, which edged up marginally earlier in the day, weakened as the session progressed, with a unit of sterling fetching $1.2593, about 0.35% less than previous close of $1.2638.

The yen strengthened to 107.76 by noon, but gave up some gains subsequently and was up 0.5% at 107.90 a dollar.

The Aussie gained in strength against most major currencies. Against the greenback, it was up 0.33% with the AUD-USD pair trading at 0.6989.

The Reserve Bank of Australia today slashed its key interest rate by a quarter point for the second month in a row, taking it to a new record low.

The board of the Reserve Bank of Australia, governed by Philip Lowe, cut the cash rate to 1% from 1.25%. The bank had reduced its rate by 25 basis points in June.

"This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target," the bank said in a statement.

Policymakers noted that the reduction will help make further inroads into the spare capacity in the economy.

Against Swiss franc, the U.S. dollar was down 0.14% at 0.9863 and against the loonie it was down 0.17% at 1.3113.


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Ten-Year Yield Pulls Back Below 2%

Trading 02 juil 2019 Commentaire »

Following the pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Tuesday.

Bond prices moved notably higher over the course of morning trading and remained firmly positive throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.6 basis points to 1.976 percent.

With the decrease on the day, the ten-year yield ended the session at its lowest closing level since Election Day of 2016.

The rebound by treasuries came amid renewed trade concerns after the U.S. proposed new tariffs on more European goods as part of an ongoing dispute over aircraft subsidies.

The U.S. Trade Representative issued a supplemental list of approximately $4 billion worth of products that could potentially be subject to additional duties.

In response to public comments and additional analysis, the USTR is adding the supplemental list to an initial list of $21 billion worth of products published on April 12.

The threat of additional tariffs comes as the U.S. and the European Union have been engaged in a long-running World Trade Organization dispute regarding EU aircraft subsidies.

While the U.S. and China have agreed to restart stalled trade talks, the news is a reminder that President Donald Trump is fighting a trade war on multiple fronts.

Following a quiet day on the U.S. economic front, a slew of data is scheduled to be released on Wednesday, including reports on private sector employment, the U.S. trade deficit, and service sector activity.

The Treasury Department is also due to announce the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.

Trading activity may wane as the day progresses, however, as some traders will be looking to get a head start on the Independence Day holiday on Thursday.


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Oil Futures Settle Sharply Lower On Growth Worries

Trading 02 juil 2019 Commentaire »

Crude oil prices plunged sharply on Tuesday as concerns about global energy demand outweighed the decision of OPEC and allies to extend output cuts by another nine months.

The Organization of the Petroleum Exporting Countries and other producers such as Russia, agreed to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices.

Traders were also looking ahead to weekly inventory reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). While API's report is due later in the day, the EIA's inventory data will be out Wednesday morning.

West Texas Intermediate Crude oil futures for August ended down $2.84, or 4.8%, at $56.25 a barrel, the lowest settlement in about two weeks.

On Monday, WTI crude oil futures ended up $0.62, or 1.1%, at $59.09 a barrel.

Despite the U.S. and China calling a trade truce after the U.S. President Donald Trump and Chinese President Xi Jinping met on the sidelines of the G20 summit last Saturday, trade worries persist.

Investors were also digesting comments from U.S. President Donald Trump that any trade deal with China would need to be somewhat tilted in favor of the United States.

Trump said China has had a "big advantage" over the United States in trade for "many years."

"So obviously you can't make a 50-50 deal. It has to be a deal that is somewhat tilted to our advantage," he added.

The U.S. has intensified its fight with the European Union over aircraft subsidies, proposing tariffs on $4 billion of additional EU goods.

Concerns over the outlook for energy demand have increased with recent data on global manufacturing activity reinforcing worries about slowing world economic growth.

Traders also took note of Bank of England Governor Mark Carney's warning that rising protectionism around the globe could result in a "widespread slowdown" that may require a major policy response.


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Gold Futures Rebound, Settle Notably Higher

Trading 02 juil 2019 Commentaire »

A day after suffering one of the biggest single-session setbacks in recent years, gold futures rebounded strongly on Tuesday as growth worries resurfaced after survey reports cast a shadow over the apparent progress U.S. and Chinese leaders made at the G20 summit.

The U.S. move to propose $4 billion in tariffs on a range of European Union products in a 15-year dispute over aircraft subsidies contributed as well to increased concerns on the international trade front.

The dollar, which had a great outing on Monday, lost ground today. The dollar index, which dropped to a low of 96.60 pared some losses subsequently. At 96.72, it was down 0.13% from previous close.

Gold futures for August ended up $18.70, or 1.4%, at $1,408.00 an ounce.

On Monday, Gold futures for August ended down $24.40, or 1.7%, at $1,389.30 an ounce.

Silver futures for September ended up $0.045, at $15.238 an ounce, while Copper futures for September settled at $2.6640 per pound, down $0.0240 from previous close.

U.S. President Donald Trump's comments that any trade deal with China would need to be somewhat tilted in favor of the United States raised uncertainty about any quick resolution to the trade dispute between the world's two largest economies.

Trump said China has had a "big advantage" over the United States in trade for "many years."

"So obviously you can't make a 50-50 deal. It has to be a deal that is somewhat tilted to our advantage," he added.


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Gold 07.02.2019 – Resistance on the test

Trading 02 juil 2019 Commentaire »

IIndustry news:

Additional comments from White House trade advisor Peter Navarro continue to cross the wires, via Reuters, as he speaks in an interview with CNBC. Below are some key quotes.

"I hope the Fed will lower interest rates going forward."

"U.S. policy toward Huawei and 5G has not changed, Huawei remains on the entity list."

"Selling a small amount of chips to Huawei is small in the scheme of things."

Trading recommendation:

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Gold has been trading higher n past 24 hours but the resistance at the price of $1.404 came to the test and it is not good for buying here. In my opinion there is the potential for more down as long as the Gold is trading below the $1.424.

Yellow rectangle – Resistance ($1.405)

Blue trendline- Support ($1.382)

Red trendline – Downward sloping trendline

MACD oscillator is still in the negative territory below the zero, which is sign that sellers are still in control even there was a rally on the Gold. As long as the Gold is trades below the level of $1.424, I would watch for selling opportunities. Sell zone is set at the price of $1.405 (yellow rectangle). Downward target is set at the price of $1.382.

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GBP/USD 07.02.2019 – New momentum low on the oscillator, downward move still in play

Trading 02 juil 2019 Commentaire »

Industry news:

In her prepared remarks to be delivered in London, Cleveland Federal Reserve Bank President Loretta Mester on Tuesday argued that cutting rates now could reinforce negative sentiment and encourage financial imbalances and added that she'd like to gather more information before considering a change in the monetary policy.

The US Dollar Index didn't react to these hawkish remarks and was last seen virtually unchanged on the day near 96.80

.

Trading recommendation

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:

GBP traded according to my yesterday's game plan. GBP did almost tested our first target at the price of 1.2565. Anyway, I still see strong downside pressure and potential of downward targets at 1.2565 and 1.2515.

Green rectangle – Support (1.2565)

Blue rectangle- Support 2 (1.2515)

Yellow rectangle – Intraday resistance (1.2630)

MACD oscillator is showing the new momentum low in the background and the GBP is trading in the negative territory, which confirms my bearish view. Stochastic oscillator is in oversold zone together with the RSI oscillator, which is sign that we can see rally before new wave down. The level of 1.2600 is round number and potential good zone for selling, so pay attention to that level. As long as the GBP is trading below the 1.2665, I would watch for selling opportunities.

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BTC 07.02.2019 – Sell zone at the price of $10.600

Trading 02 juil 2019 Commentaire »

Industry news:

Binance, the world's largest cryptocurrency exchange by trading volume, is soon to launch futures trading.

During a presentation at the Asia Blockchain Summit in Taipei on Tuesday, Changpeng "CZ" Zhao, founder and CEO of the exchange, showcased a futures trading interface on Binance with features including longs and shorts on crypto assets.

.Trading recommendation:

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BTC did exactly what I expected yesterday. BTC did test our first target at the price of $9.695 and after then rejected. Pay attention to the resistance at the price of $10.612 cause it is good sell zone up there.

Red rectangle – Support ($9.695)

Green rectangle- Support 2 ($9.200)

Purple rectangle – Resistance ($10.612)

MACD oscillator is showing the new momentum low in the background and the BTC is trading in the negative territory, which confirms my bearish view. RSI oscillator and Stochastic are showing the potential rally before new selling wave. As long as the BTC is trading below $11.376, I would watch for selling opportunities on the rallies, level of $10.612 looks like a solid sell zone. Downward targets are set at the price of $9.695 and $9200.The material has been provided by InstaForex Company - www.instaforex.com

EURUSD no sign of reversal yet, trend remains bearish in the short-term

Trading 02 juil 2019 Commentaire »

EURUSD is trading right above 1.13 but I believe this bounce from 1.1275 is just a pause to the down trend. Price is expected to move lower towards 1.1250 where we will see a big test of the trend.

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Green line - major support trend line

Red rectangle - target area of possible reversal

EURUSD is in a bearish short-term trend. Price is expected to move towards the red rectangle area and test the green trend line. EURUSD is at the 61.8% Fibonacci retracement of its last move higher, but I believe we might see price move a bit lower first before reversing. There is still no sign of trend reversal in the short-term, but I expect to see first signs of bullish divergence soon.

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Gold bounce could be near

Trading 02 juil 2019 Commentaire »

Gold price remains in a short-term bearish trend but medium-term trend remains bullish as long as price is above the break out area of $1,350-60. Gold price could make one minor new lower low but is expected to bounce strongly towards at least $1,400.

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Green line - major support trend line

Red rectangle- broken support

Gold price is trading right above the green trend line support. Price so far has retraced 50% of the rise from $1,320 and only 38% of the rise from $1,275. Gold price is expected to bounce from around current levels at least towards $1,400. Gold price has resistance the previous support at $1,400. Major resistance next is found at $1,425. If broken we expect Gold to see $1,500. Until then price is vulnerable to the downside.

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Dollar: do not retreat or surrender. Australian won back the decision of the Central Bank

Trading 02 juil 2019 Commentaire »

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The US dollar settled near a three-month low amid weak indicators of industrial production, while the Australian rose after the Central Bank lowered interest rates expectedly, but at the same time voiced a more balanced forecast. JPMorgan's global production index fell to its lowest level in almost seven years, the sector shrank for the second month in a row, and Morgan Stanley reports also showed a decline in world production for the first time since 2016.

The dollar index versus the basket of major currencies fell by 0.1% to 96.75 points, not far from the three-month low of 95.84 reached last week, as traders are confident that the Fed will lower interest rates at least three times by the end of the year. Nevertheless, dollar's losses were relatively insignificant compared with a 0.6% rebound on Monday, when risky assets rose amid progress in relations between Washington and China.

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The Australian dollar is the only one in the world currency markets with strong growth, the AUD gained 0.3% after the Central Bank reported a rate cut and signaled a future weakening of monetary policy. The regulator lowered interest rates by 25 basis points, to a record low of 1.00%, in line with economists' expectations. In a statement, the bank said that it will resort to reducing rates again "if necessary." Some analysts called this phrase "the promise" of an additional rate cut, which previously seemed less likely.

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