Euro Declines As German Yields Tumble; ECB Rehn Suggests More Stimulus

Trading 04 juil 2019 Commentaire »

The euro fell against its major counterparts in the European session on Thursday, as German bond yields fell below the European Central Bank's deposit rate and ECB policy maker Olli Rehn hinted at further stimulus to counter a prolonged slowdown in growth.

Germany's benchmark 10-year government bond yield was down at -0.396%, a record low.

The move signaled market expectations for further rate cuts in the wake of geopolitical uncertainties and weak inflation outlook.

In an interview with Boersen Zeitung, Rehn said that further monetary stimulus is required until there is improvement in economic and inflation prospects.

The recent slowdown in growth should not be viewed as a brief temporary dip in the economy, he told.

"We are experiencing a longer phase of weaker growth," Rehn added.

Data from Eurostat showed that Eurozone retail sales declined unexpectedly in May signaling weak consumer spending in the 19- nation currency bloc.

Retail sales slid 0.3 percent month-on-month in May, following a revised 0.1 percent fall in April. This was the second consecutive fall. Sales were forecast to grow 0.3 percent.

The currency rose against its major counterparts in the Asian session, excepting the pound.

The euro declined to 1.1113 against the franc, from a 2-day high of 1.1138 hit at 9:30 pm ET. The next possible support for the euro is seen around the 1.09 level.

After rising to 1.1295 against the greenback at 10:00 pm ET, the euro reversed direction, falling as low as 1.1273. The euro is seen finding support around the 1.11 mark.

The euro briefly pared gains to 0.8964 against the pound, following an advance to 0.8977 at 2:45 am ET. If the euro drops further, it may locate support around the 0.88 level.

The single currency edged lower to 121.54 against the yen, from a high of 121.72 seen at 4:15 am ET. Further downtrend may take the euro to a support around the 119.00 region.

The euro fell to a 2-1/2-year low of 1.4707 against the loonie, compared to yesterday's closing value of 1.4725. On the downside, 1.46 is possibly seen as the next support level for the euro.

The euro fell back to 1.6045 against the aussie, heading to pierce near a 2-month low of 1.6025 touched at 10:00 pm ET. The euro is poised to find support around the 1.59 level.

Data from the Australian Bureau of Statistics showed that Australia's retail sales logged a marginal growth in May indicating weak consumer spending in the economy.

Retail sales rose 0.1 percent month-on-month in May, offsetting a 0.1 percent drop in April. Sales were forecast to climb 0.2 percent.

The euro retreated to 1.6857 against the kiwi, from a high of 1.6898 hit at 4:30 am ET. This may be compared to more than a 2-month low of 1.6798 touched in the Asian session. Next key support for the euro is likely seen around the 1.66 region.

U.S. stock markets are closed in observance of Independence Day.


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

July 4, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 04 juil 2019 Commentaire »

analytics5d1e1c20824f1.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) confirmed 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 may 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

EURUSD near important Fibonacci support

Trading 04 juil 2019 Commentaire »

EURUSD is trading just below 1.13 near important short-term Fibonacci support levels, with high chances of a reversal to the upside if bulls manage to break above 1.1320. Short-term bullish divergence signals are seen but no reversal confirmation yet.

analytics5d1e1959cab3e.png

Green line - important support trend line

Black line - RSI resistance trend line

EURUSD is trading around 61.8% Fibonacci level and remains above the green trend line support. As long as price is above this trend line we remain bullish medium-term. The RSI has broken above the black trend line resistance but price has not broken above short-term resistance of 1.13-1.1320. Breaking above 1.1320 will signal a move back towards 1.14. Most probable scenario is to see a new upward move, but first we might see a new lower low around 1.1260 and a new bullish divergence before reversing to the upside.

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

Gold 07.04.2019 – Downside is expected

Trading 04 juil 2019 Commentaire »

The Gold didn't have enough power to break the swing high at $1.438 and high was missed by few ticks, which is sign for me that buyers got very exhausted there. Since there is the fail test of high in the background, my focus is on downside. Short-term resistance-fib confluence level is set at $1.420 and this level is my main focus for potential selling positions.

analytics5d1e0e5ebd3cf.jpg

analytics5d1e0e75a412a.jpg

The focus now shifts to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with 75,000 in May. On the daily time-frame I found that there is bear cross on the Stochastic and MACD, which represents short-term downtrend. Fibonacci expansion target is set at $1.400 (FIB 61.8%) also a round number and then $1.380 (FIB 100%). The 4H time-frame is showing the consolidation but also fresh new cross on the MACD oscillator, which is good confirmation for further downside. Today is holiday in US and light volume is expected till end of the day.

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

German Manufacturers Expect To Launch Short-time Work In Next 3 Months

Trading 04 juil 2019 Commentaire »

The share of German manufacturers planning to launch short-time work programs, known as Kurzarbeit, over the next three months hit its highest level since the start of 2013, a survey by the ifo Institute showed on Thursday. The survey found that 8.5 percent of manufacturers expect to introduce short-time work in the next three months versus 2.6 percent in the same period last year.

According to the ifo survey, 3.8 percent of manufacturers have already introduced short-time work programs, which is the highest value since mid-2013. The figure has risen almost steady from only 0.4 percent, its last low at the end of 2017, the survey found.

"The economic slowdown is gradually having an effect on the labor market," Timo Wollmershaeuser, head of ifo Economic Forecasts said. "German industry has been in recession since the middle of last year. Short-time work is the method of choice when companies want to retain their skilled workers despite difficult economic times."

Mirroring a slowing economy, German unemployment barely decreased in June after a strong increase in May, which was the first increase in nearly two years. The number of unemployed persons fell by 1,000, preliminary data from the Federal Employment Agency showed at the start of the week. The jobless rate was 5 percent in June, unchanged from May, when it had risen from the re-unification low of 4.9 percent logged in each of the previous two months to mark the first increase since November 2013.

Underemployment also grew in June and the number of vacancies remained high, but slowed noticeably. Citing the initial projections from Germany's Federal Employment Agency, ifo said short-time work programs are set to expand to cover almost 44,000 people in April, due to the tough economic situation, versus just 13,000 workers last year. The agency is currently assuming a decline in the number of short-time workers between May and July, the think tank noted.


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

July 4, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 04 juil 2019 Commentaire »

analytics5d1e0c84b67eb.jpg

Since February 28, the EURUSD pair has been moving within the depicted downside 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 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.

Otherwise, any bearish breakdown below 1.1235 invites further bearish momentum to push towards 1.1175 as an initial destination.

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

Gold price stays above short-term support

Trading 04 juil 2019 Commentaire »

Gold price got rejected at $1,439 and has pulled back towards previous resistance now support at $1,400. Gold is in a trading range and it is better to be neutral until we see a clear break of resistance or support.

analytics5d1e0b3aea448.png

Red rectangle - support

Green line - trend line support

Yellow rectangle - resistance

Gold price has resistance at $1,439-40 and support at $1,400. As long as price is above the green trend line and the red rectangle bulls will have hopes for a move towards $1,500-$1,520. Breaking above $1,440 will confirm this bullish scenario. However yesterday's double top and rejection at $1,440 is a bearish sign. Breaking below $1,400 will open the way for a move towards $1,300-$1,330. So now we wait.

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

Eurozone Retail Sales Log Unexpected Fall

Trading 04 juil 2019 Commentaire »

Eurozone retail sales declined unexpectedly in May signaling weak consumer spending in the 19- nation currency bloc, official data revealed Thursday.

Retail sales slid 0.3 percent month-on-month in May, following a revised 0.1 percent fall in April, Eurostat reported. This was the second consecutive fall. Sales were forecast to grow 0.3 percent after April's initially estimated decrease of 0.4 percent.

Food, drinks and tobacco sales decreased 0.5 percent and non-food product sales dropped 0.1 percent. Sales of automotive fuels were down markedly by 1.3 percent.

On a yearly basis, retail sales growth eased to 1.3 percent from revised 1.8 percent a month ago. This was the slowest growth seen so far this year. Growth in sales was forecast to moderate to 1.6 percent.

Data cast doubt on the strength of the service sector, Bert Colijn, an ING economist, said. That is not enough for the European Central Bank to go on, but it may push the bank closer to quick action, the economist added.

Christina Iacovides, an economist at Capital Economics, said retail sales data supports the assessment that GDP growth in the bloc slowed to 0.2 percent in the second quarter.

Looking ahead, lower inflation is likely to raise households' spending power, but any increase in spending growth will be small, the economist added.


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

EUR/USD for July 04,2019 – Sellers in control

Trading 04 juil 2019 Commentaire »

The euro didn't have enough power yesterday to break our important confluence-resistance level at the price of 1.1300 and also round number. The price did very quick rejection of our confluence resistance Fibonacci Retracement 38.2%/61.8% and on that way confirmed present of sellers. If the EUR clean the level of 1.1270, the downward movement may continue.

.analytics5d1e0a5f17d24.jpganalytics5d1e0aa934ad1.jpg

The focus now shifts to U.S. non-farm payrolls data due on Friday, which economists expect to have risen by 160,000 in June, compared with 75,000 in May. On the daily time-frame I found that there is completion of the ABC correction and the price is trading below the 5SMA, which is sign of the short term downtrend. Fibonacci expansion target is set at 1.1200 also a round number. Both Stochastic and MACD on the daily time frame are trending lower, which only confirms sellers activity. Pay attention on key resistance levels 1.1300 and 1.1325. Both resistance levels are based on multi Fibonacci levels and as long the price is trading below these numbers, the selling opportunities will be preferable. The 4H time-frame is showing the consolidation. Today is holiday in US and light volume is expected till end of the day.

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

Romania Keeps Key Rate Unchanged

Trading 04 juil 2019 Commentaire »

Romania's central bank left its key interest rate unchanged, as widely expected, on Thursday.

The board of the National Bank of Romania decided to retain its policy rate at 2.50 percent. The bank also maintained its deposit facility rate at 1.50 percent and the lending facility at 3.50 percent.

Policymakers also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.

The board noted that inflation remained at 4.1 percent in May, above the band of target and expectations. Economic growth improved to 5 percent in the first quarter driven by consumption.

The board said the decisions aim to ensure and preserve price stability over the medium term in a manner conducive to achieving sustainable economic growth and amid safeguarding financial stability.

Continued weakness in key euro-zone trading partners and a dovish shift among central banks across the globe are arguments in favor of keeping policy on hold, Liam Carson, an economist at Capital Economics, said.

However, the Romania's central bank will soon be forced to raise interest rates to cool the economy, Carson noted.


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