Dollar Recovers After Setback, But Stays Largely Subdued

Trading 03 juil 2019 Commentaire »

The U.S. dollar drifted lower Wednesday morning as expectations of an interest rate cut by the Federal Reserve rose after data showed a less than expected increase in U.S. private sector employment in June.

A report from the Institute for Supply showing a notable slowdown in the pace of service sector growth added to the optimism about a rate cut.

The ISM said its non-manufacturing index dropped to 55.1 in June from 56.9 in May, hitting its lowest level since a matching reading in July of 2017. Economists had expected the index to show a more modest decrease to 55.9.

The dollar's subdued display was also due to U.S. President Donald Trump's tweet that the country should match the "currency manipulation game" indulged in by China and Europe.

Trump wrote on Twitter that China and Europe are playing big currency manipulation game and pumping money into their system in order to compete with USA.

"We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!," he added.

The dollar recovered lost ground subsequently and was moving slightly above the flat line later on in the session.

Against the euro, the dollar strengthened to 1.1270, recovering from a low of 1.1308 it touched around mid morning.

The pound sterling weakened to $1.276, losing about 0.14%, after having strengthened to $1.2601 earlier in the day.

The Japanese yen was up marginally at 107.85 a dollar, after moving between 107.53 and 107.92 a dollar.

The greenback shed 0.34% and 0.5%, against the loonie and the Aussie, with the respective pairs trading at 1.3062 and 0.7030.

Against Swiss franc, the dollar was up marginally at 0.9867.

In U.S. economic news, a report from payroll processor ADP showed private sector employment climbed by 102,000 jobs in June after rising by an upwardly revised 41,000 jobs in May. Expectations were for an increase of 140,000 jobs in the month.

Data released by the Labor Department said initial jobless claims in the U.S. dipped to 221,000, a decrease of 8,000 from the previous week's revised total of 229,000.

A report from the Institute for Supply Management said U.S. service sector growth slowed to a nearly two-year low in the month of June, with its non-manufacturing index dropping to 55.1.

According to a report from the Commerce Department, new orders for U.S. manufactured goods fell by a more than expected 0.7% in May, after plunging by a revised 1.2% in April.

Another report from the Commerce Department showed the U.S. trade deficit widened by more than anticipated in the month of May, as the value of imports jumped by much more than the value of exports.

The report said the trade deficit widened to $55.5 billion in May from a revised $51.2 billion in April.

Economists had expected the trade deficit to widen to $54.0 billion from the $50.8 billion originally reported for the previous month.


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

Oil Futures Settle Higher As Inventories Fall Again

Trading 03 juil 2019 Commentaire »

Crude oil prices rebounded on Wednesday, recovering well after a severe setback in the previous session, as data showed U.S. crude inventories fell for a third straight week.

The decision of OPEC and allies to extend output cuts by nine months until March 2020 contributed as well to oil's surge.

West Texas Intermediate crude oil futures ended up $1.09, or 1.9%, at $57.34 a barrel.

On Tuesday, crude oil futures for August ended down $2.84, or 4.8%, at $56.25 a barrel, the lowest settlement in about two weeks.

According to the data released by the Energy Information Administration this morning, U.S. crude stockpiles fell 1.1 million barrels in the week ended June 28, as against expectations for a decline of nearly 3 million barrels.

Gasoline inventories were down by about 1.58 million barrels, much less than an expected drop of about 2.17 million barrels.

Meanwhile, distillate stockpiles increased unexpectedly by 1.58 million barrels.

Data released by the American Petroleum Institute late Tuesday showed that U.S. crude supplies fell by 5 million barrels for the week ended June 28. Analysts had expected a decrease of 3 million barrels.

The API report also showed stockpile declines of 387,000 barrels for gasoline and 1.7 million barrels for distillates.


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

Gold Ends At Over 6-year High As Rate Cut Hopes Rise

Trading 03 juil 2019 Commentaire »

Gold futures ended at over 6-year high on Wednesday as the dollar stayed subdued amid speculation about a rate cut sometime soon and on lingering concerns over trade tensions.

The appointment of IMF Managing Director Christine Lagarde as the new President of the European Central Bank and disappointing economic data out of Asia and the U.S. contributed as well to the rise of the yellow metal.

Lagarde would succeed Mario Draghi when his term expires at the end of October.

The dollar index declined to a low of 96.59 in late morning trades before recovering to 96.79, netting a marginal gain.

Gold futures for August ended up $12.90, or 0.9%, at $1,420.90 an ounce, after rising to a high of $1,441.00 earlier in the session.

Silver futures for September ended up $0.098, at $15.336 an ounce, while Copper futures for September settled with a gain of $0.0190, at $2.6830 per pound.

The euphoria over the U.S.-China trade truce that buoyed up equities faded after reports suggested the U.S. Commerce Department's enforcement staff was told earlier this week that China's Huawei should still be treated as blacklisted.

Meanwhile, the U.S. Commerce Department has imposed duties of more than 400% on steel imports from Vietnam.

In U.S. economic news, a report from payroll processor ADP showed private sector job growth reaccelerated in the month of June but still came in below economist estimates.

The report said private sector employment climbed by 102,000 jobs in June after rising by an upwardly revised 41,000 jobs in May. Expectations were for an increase of 140,000 jobs in the month.

Data released by the Labor Department said initial jobless claims in the U.S. dipped to 221,000, a decrease of 8,000 from the previous week's revised total of 229,000.

A report from the Institute for Supply Management said U.S. service sector growth slowed to a nearly two-year low in the month of June, with its non-manufacturing index dropping to 55.1.

According to a report from the Commerce Department, new orders for U.S. manufactured goods fell by a more than expected 0.7% in May, after plunging by a revised 1.2% in April.

Another report from the Commerce Department showed the U.S. trade deficit widened by more than anticipated in the month of May, as the value of imports jumped by much more than the value of exports.

The report said the trade deficit widened to $55.5 billion in May from a revised $51.2 billion in April.

Economists had expected the trade deficit to widen to $54.0 billion from the $50.8 billion originally reported for the previous month.


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

Treasuries Extend Upward Move On Disappointing Economic Data

Trading 03 juil 2019 Commentaire »

Following the strong upward move seen in the previous session, treasuries saw some further upside during the trading day on Wednesday.

Bond prices moved higher early in the session and remained positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.3 basis points to 1.953 percent.

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

The strength among treasuries came as a batch of largely disappointing U.S. economic data reinforced expectations for a near-term interest rate cut by the Federal Reserve.

Initial buying interest was generated in reaction to a report from payroll processor ADP showing private sector job growth reaccelerated in the month of June but still came in below economist estimates.

ADP said private sector employment climbed by 102,000 jobs in June after rising by an upwardly revised 41,000 jobs in May.

Economists had expected employment to increase by about 140,000 jobs compared to the addition of 27,000 jobs originally reported for the previous month.

"Even with the US-China trade talks back on track (for now at least) the evidence of a slowdown in employment growth should still be enough to persuade the Fed to cut rates in either July or September," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

CME Group's FedWatch tool shows an interest rate cut of at least 25 basis points at the Fed's July meeting is priced into the markets, although Ashworth said expectations of a 50 basis point cut "seem misplaced."

Treasuries saw some further upside after a report from the Institute for Supply showing a notable slowdown in the pace of service sector growth added to the optimism about a rate cut.

The ISM said its non-manufacturing index dropped to 55.1 in June from 56.9 in May, hitting its lowest level since a matching reading in July of 2017.

While a reading above 50 still indicates growth in service sector activity, economists had expected the index to show a more modest decrease to 55.9.

A separate report released by the Commerce Department showed the U.S. trade deficit widened by more than anticipated in the month of May, as the value of imports jumped by much more than the value of exports.

The Commerce Department said the trade deficit widened to $55.5 billion in May from a revised $51.2 billion in April. Economists had expected the trade deficit to widen to $54.0 billion.

The wider trade deficit came as the value of imports surged up by 3.3 percent to $266.2 billion compared to a 2.0 percent jump in the value of exports to $210.6 billion.

Andrew Hunter, Senior U.S. Economist at Capital Economics, said the wider than expected deficit suggests net trade was a "slightly bigger drag on second-quarter GDP growth than we had previously anticipated."

"Despite the recent ceasefire agreed between Presidents Donald Trump and Xi Jinping, we still think it is slightly more likely than not that the trade dispute with China will ultimately escalate further," Hunter said.

He added, "The upshot is that net trade is likely to remain a modest drag on growth over the second half of this year, which we expect to compound a sharp slowdown in domestic demand growth."

Following the holiday on Thursday, trading on Friday is likely to be driven by reaction to the Labor Department's closely watched monthly jobs report.

Employment is expected to increase by 160,000 jobs in June after rising by 75,000 jobs in May, while the unemployment rate is expected to hold at 3.6 percent.


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

July 3, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 03 juil 2019 Commentaire »

analytics5d1ce79d710d0.jpg

Since February 28, the EURUSD pair has been moving within the depicted channel with slight bearish tendency.

Short-term outlook turned to become bearish towards 1.1175 (a previous weekly bottom which has been holding prices above for some time.

On the highlighted period between (May 17th and June 5th), temporary bearish breakdown below 1.1175 was demonstrated on the chart.

This allowed further bearish decline to occur towards 1.1115 where significant bullish recovery brought the EUR/USD pair back above 1.1175 which stands as a prominent DEMAND level until now.

Initially, Temporary Bullish breakout above 1.1335 was initially demonstrated (suggesting a high probability bullish continuation pattern).

However, the EURUSD pair has failed to maintain that bullish persistence above 1.1320 and 1.1275 (the depicted price levels/zones). This was followed by a deeper bearish pullback towards 1.1175 where significant bullish price action was demonstrated on June 18.

The EURUSD looked overbought around 1.1400 facing a confluence of supply levels. Thus, a bearish pullback was initiated towards 1.1275 as expected in a previous article.

Further Bearish decline below 1.1275 calls for a deeper bearish pullback towards 1.1235 where the lower limit of the newly-established bullish channel as well as a prominent demand zone come to meet the EUR/USD pair.

Overall, Short-term outlook remains bullish as long as bullish persistence above 1.1235 (Demand-Zone) is maintained on the H4 chart.

Trade recommendations :

For Intraday traders, a valid BUY entry can be considered anywhere around 1.1235. Initial Target levels to be located around 1.1275 and 1.1320.

Bearish breakout below 1.1200 invalidates this mentioned scenario.

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

Treasury Announces Details Of Long-Term Securities Auctions

Trading 03 juil 2019 Commentaire »

On Thursday, the Treasury Department announced the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury plans to sell $38 billion worth of three-year notes, $24 billion worth of ten-year notes and $16 billion worth of thirty-year bonds.

The results of the three-year note auction will be announced next Tuesday, the results of the ten-year note auction will be announced next Wednesday and the results of the thirty-year bond auction will be announced next Thursday.

Last month's three-year note and thirty-year bond auctions attracted above average demand, while the ten-year note auction attracted average demand.


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

July 3, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 03 juil 2019 Commentaire »

analytics5d1ce3dc537dd.jpg

Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550 with a prominent key-level around 1.2650.

On June 4, temporary bullish consolidations above 1.2650 were demonstrated for a few trading sessions. However, the price level of 1.2750 (consolidation range upper limit) has prevented further bullish advancement.

That's why, the GBP/USD failed to establish a successful bullish breakout above 1.2750. Instead, early signs of bearish rejection have been manifested (Head & Shoulders reversal pattern with neckline located around 1.2650).

A quick bearish pullback towards 1.2650 was expected shortly.

Bearish breakdown below 1.2650 (reversal pattern neckline) confirms the reversal pattern with bearish projection target located at 1.2550 and 1.2510.

Short-term outlook remains under bearish pressure as long as the market keeps moving below 1.2650 (mid-range key-level and neckline of the reversal pattern).

In general, Obvious Bearish breakdown below 1.2570 confirms a trend reversal into bearish on the intermediate term. Immediate bearish decline would be expected towards 1.2505 initially.

Any bullish pullback towards 1.2650 should be considered as a valid SELL signal for Intraday traders.

On the other hand, a bullish position can ONLY be considered if EARLY Bullish persistence above 1.2650 is re-achieved on the current H4 chart.

Trade Recommendations:

Intraday traders can have a valid SELL Entry anywhere around the neckline of the depicted reversal pattern near 1.2650.

T/P levels to be located around 1.2600, 1.2550 and 1.2505.

S/L should be placed above 1.2700.

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

*U.S. Crude Oil Inventories Dip 1.1 Million Barrels In Week Ended 6/28

Trading 03 juil 2019 Commentaire »

U.S. Crude Oil Inventories Dip 1.1 Million Barrels In Week Ended 6/28


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

U.S. Factory Orders Drop More Than Expected In May

Trading 03 juil 2019 Commentaire »

New orders for U.S. manufactured goods fell by more than anticipated in the month of May, according to a report released by the Commerce Department on Wednesday.

The Commerce Department said factory orders slid by 0.7 percent in May after plunging by a revised 1.2 percent in April.

Economists had expected factory orders to drop by 0.5 percent compared to the 0.8 percent decrease originally reported for the previous month.

The report said orders for durable goods slumped by 1.3 percent in May after tumbling by 2.8 percent in April, unrevised from the preliminary data published last week.

Orders for transportation equipment led the way lower once again, plummeting 4.6 percent in May following a 7.6 percent nosedive in April.

The Commerce Department said orders for non-durable goods also edged down by 0.2 percent in May after rising by 0.4 percent in the previous month.

Shipments of manufactured goods inched up by 0.1 percent in May after falling by 0.6 percent in April, while inventories of manufactured goods rose by another 0.2 percent.

With inventories rising by slightly more than shipments, the inventories-to-shipments ratio ticked up to 1.38 in May from 1.37 in April.


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

U.S. Service Sector Growth Slows To Nearly Two-Year Low In June

Trading 03 juil 2019 Commentaire »

With President Donald Trump's global trade war creating uncertainty, the Institute for Supply Management released a report on Wednesday showing U.S. service sector growth slowed to a nearly two-year low in the month of June.

The ISM said its non-manufacturing index dropped to 55.1 in June from 56.9 in May, hitting its lowest level since a matching reading in July of 2017.

While a reading above 50 still indicates growth in service sector activity, economists had expected the index to show a more modest decrease to 55.9.

"The comments from the respondents reflect mixed sentiment about business conditions and the overall economy," said Anthony Nieves Chair of the ISM Non-Manufacturing Business Survey Committee. "A degree of uncertainty exists due to trade and tariffs."

The bigger than expected drop by the headline index came as the business activity index tumbled to 58.2 in June from 61.2 in May and the new orders index slumped to 55.8 from 58.6.

The employment index also plunged to 55.0 in June from 58.1 in May, indicating a significant slowdown in the pace of job growth in the service sector.

On the other hand, the report said the prices index surged up to 58.9 in June from 55.4 in May, pointing to a notable reacceleration in the pace of price growth.

The ISM released a separate report on Monday showing a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of June.

The purchasing managers index edged down to 51.7 in June after slipping to 52.1 in May, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 51.0.

With the continued decrease, the index dropped to its lowest level since hitting a matching reading in October of 2016.


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