Dollar Rises As Rate Cut Hopes Fade After Jobs Data

Trading 05 juil 2019 Commentaire »

The U.S. dollar advanced notably against most major currencies on Friday, buoyed by data showing stronger-than-expected jobs growth in the month of June.

The somewhat upbeat data dampened hopes for a near-term interest rate cut by the Federal Reserve. Over the past few sessions, traders were betting on a steep cut in interest rates after key Fed officials hinted at such a possibility. Recent economic data also seemed to suggest a cut in interest rate as early as this month.

The dollar index rose to near 3-week high of 97.44 earlier in the day, but gave up some gains as the session progressed. It was last seen hovering around 97.25, up by about 0.5% from previous close.

Against the euro, the dollar was up over 0.5% at $1.1226, despite having pared some gains after rising to a high of $1.1208.

The greenback, at $1.2526, was up more than 0.4% against the pound sterling. It strengthened to $1.2481 before paring some gains.

The Japanese yen weakened to 108.64 a dollar before recovering modestly to 108.50 a dollar, but still down with a pronounced loss of more than 0.6%.

The dollar was up by about 0.7% against Swiss franc with the pair trading at 0.9920.

Against the Aussie, the dollar gained nearly 0.6% at 0.7981, while its gains were a modest 0.17% at 1.3074 against the loonie.

Data from the Labor Department showed that employment surged by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May. Economists expected employment to increase by about 160,000 jobs.

Despite the stronger than expected job growth, the unemployment rate inched up to 3.7% in June from 3.6% in May. The unemployment rate had been expected to hold steady.

The Federal Reserve Chairman Jerome Powell said last last month that risks to economic outlook had intensified and the bank would "act as appropriate to sustain the expansion."

St. Louis Fed chief James Bullard also hinted at a likely cut in interest rates in the near term.

However, today's solid jobs data has somewhat dimmed chances of any steep cut interest rates later this month.


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

Treasuries Pull Back Sharply On Better Than Expected Jobs Data

Trading 05 juil 2019 Commentaire »

Treasuries showed a substantial move to the downside during trading on Friday, giving back ground after moving notably higher over the two previous sessions.

Bond prices fell sharply early in the session and remained firmly negative throughout the trading day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged up by 9.5 basis points to 2.048 percent.

With the jump on the day, the ten-year yield rebounded strongly after ending Wednesday's trading at its lowest closing level since Election Day of 2016.

The pullback by treasuries came in reaction to the release of a closely watched Labor Department report showing a substantial reacceleration in the pace of U.S. job growth in the month of June.

The report said employment surged up by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May.

Economists had expected employment to increase by about 160,000 jobs compared to the addition of 75,000 jobs originally reported for the previous month.

The data points to a rebound in the labor market following the weakness seen in May, dampening investor hopes for a near-term interest rate cut by the Federal Reserve.

Andrew Hunter, Senior U.S. Economist at Capital Economics, said the strong jobs data would seem to "make a mockery" of market expectations the Fed will cut interest rates by up to 50 basis points later this month.

"Employment growth is still trending gradually lower but, with the stock market setting new records and trade talks back on (for now at least), the data support our view that Fed officials are more likely to wait until September before loosening policy," Hunter said.

Despite the stronger than expected job growth, the report said the unemployment rate inched up to 3.7 percent in June from 3.6 percent in May. The unemployment rate had been expected to hold steady.

However, the uptick in the unemployment rate reflected an increase in the size of the labor force, which expanded by 335,000 people compared to the 247,000-person jump in the household survey measure of employment.

The outlook for interest rates is likely to remain in focus next week, as Fed Chairman Jerome Powell sits down for two days of Congressional testimony and the central bank releases the minutes of its latest monetary policy meeting.

Closely watched reports on consumer and producer price inflation could also have an impact on perceptions of the likelihood of an interest rate cut.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.


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

Crude Oil Futures Settle Modestly Higher

Trading 05 juil 2019 Commentaire »

Oil futures settled modestly higher on Friday, but registered a loss of about 1.6% for the week, as traders continued to weigh the commodity's near-term supply and demand prospects.

West Texas Intermediate crude oil futures for August ended up $0.17, or 0.3%, at $57.51 a barrel.

Recent data from the U.S. Energy Information Administration showed a smaller-than-expected drop in U.S. crude stockpiles in the week ended June 28, as refineries consumed less crude than the week before.

The detention of a supertanker believed to be carrying Iranian crude to Syria by British Royal Marines in Gibraltar did not any significantly impact oil prices.

Factory orders data out of the U.S. and Germany have raised concerns about global economic growth and the outlook for near-term energy demand.

German factory orders decreased 2.2% month-on-month in May, in contrast to a 0.4% rise in April, official data showed today. Economists had forecast a marginal fall of 0.1%.

In the United States, new orders for factory goods fell for a second straight month in May while shipments barely rose, pointing to continued weakness in manufacturing.

Also, traders appeared to be trying to figure out the likely impact of the recent decision of OPEC and allies to extend output cuts by nine months until March 2020 on global oil supply.


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

Gold Ends Lower As Dollar Rises On Upbeat Jobs Data

Trading 05 juil 2019 Commentaire »

Gold prices tumbled on Friday, as the dollar gained in strength after data showing a stronger-than-expected jobs data dented hopes of any steep interest rate cut in the near-term by the Federal Reserve and took shine off the yellow metal.

The dollar index rose to 97.44 and despite paring some gains subsequently, was still up by a notable margin of over 0.5% at 97.32.

Gold futures for August ended down $20.80, or 1.5%, at $1,400.10 an ounce.

On Wednesday, gold futures for August settled 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.

Gold futures shed about 1% in the holiday-shortened week.

Gold prices rose to over six-month highs on Wednesday amid growing expectations that the Federal Reserve would cut interest rates as early as this month, after key Fed officials sounded dovish and recent economic data too hinted at such a move.

Silver futures for September ended down $0.335, at $15.001 an ounce, while Copper futures for September settled lower by $0.0220, at $2.6610 per pound.

Data released by the U.S. Labor Department today said employment surged up by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May.

Economists had expected employment to increase by about 160,000 jobs compared to the addition of 75,000 jobs originally reported for the previous month.

However, the unemployment rate inched up to 3.7% in June from 3.6% in May. The unemployment rate had been expected to hold steady.

On the trade front, talks between the U.S. and China will resume next week after U.S. President Donald Trump and Chinese President Xi Jinping agreed to trade war truce at the G20 summit.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to engage in talks with China's Vice Premier Liu He.


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

EURUSD under pressure challenges major support

Trading 05 juil 2019 Commentaire »

EURUSD is trading right above 1.12 and has broken critical trend line and Fibonacci levels. Bulls need to step in now in order to save the bullish scenario. Otherwise the bears regain medium-term trend control.

analytics5d1f7a2c79f49.png

Green line - major trend line support

EURUSD has broken the 61.8% Fibonacci retracement. Price has broken also the upward sloping green trend line support connecting the last two important lows. These are bearish signs. Bulls need to recover price soon and bring it back above 1.13 if they want to keep their hopes alive for a move towards 1.14-1.15. Major support ahead at 1.1180. Breaking below it will put 1.11 in danger and will push price towards 1.10. Resistance remains at 1.13-1.1320. Breaking it will bring bulls back in control of the short-term trend.

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

Gold price challenges important medium-term support

Trading 05 juil 2019 Commentaire »

Gold price has moved towards $1,390-$1,400 as expected and is challenging the recent lows at $1,393. Breaking below this level will open the way for a move towards $1,335-$1,300, as price has also broken below important trend line support. Bulls need to act now if they want to save the short-term trend.

analytics5d1f78ff0e049.png

Green line -trend line support

Yellow rectangle - double top resistance

Red rectangle - short-term support

Gold price looks vulnerable. The first warning signs came with the double top and rejection. Price has broken the green trend line support. This is another bearish signal. If the red rectangle breaks also, we expect price to move towards $1,335-$1,300 area. Short-term trend is bearish. Bulls need to recover from current levels if they want to avoid a deeper pull back.

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

Reducing Fed Rate Cut Hopes After Solid Jobs Data Buoys Dollar

Trading 05 juil 2019 Commentaire »

The U.S. dollar spiked higher against its major counterparts in the European session on Friday, as a data showed that U.S. jobs growth accelerated more than forecast in June, tempering fears about weak labor market and possibility of an imminent rate cut by the Federal Reserve.

Data from the Labor Department showed that employment surged by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May. Economists expected employment to increase by about 160,000 jobs.

Despite the stronger than expected job growth, the unemployment rate inched up to 3.7 percent in June from 3.6 percent in May. The unemployment rate had been expected to hold steady.

The jobs data soothed concerns about weak labor market, after ADP data fell short of expectations in May.

Late last month, Fed Chair Jerome Powell indicated that risks to economic outlook had intensified and the bank would "act as appropriate to sustain the expansion."

Today's solid data is likely to reduce the odds for a rate cut at the meeting later this month.

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

The greenback appreciated to more than a 2-week high of 1.2512 against the pound, up 0.6 percent from a low of 1.2588 seen at 2:15 am ET. The pair was worth 1.2576 when it closed deals on Thursday. Next key resistance for the greenback is seen around the 1.24 level.

Data from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house prices declined for the first time in three months in June.

House prices decreased 0.3 percent month-on-month in June, reversing a 0.4 percent rise in May. Prices were forecast to fall 0.4 percent.

The greenback added 0.7 percent to a 4-day high of 108.51 against the yen, after having dropped to 107.76 at 5:00 pm ET. At Thursday's close, the pair was valued at 107.81. The greenback may test resistance around the 111.00 region, if it rallies again.

Preliminary data from the Cabinet Office showed that Japan's leading index eased to the lowest level in six-and-a-half years in May.

The leading index, which measures the future economic activity fell to 95.2 in May from 95.9 in April. The economists had expected a score of 95.3.

The greenback was up by 0.5 percent against the euro, touching a new 2-week high of 1.1226. The greenback had finished yesterday's trading at 1.1284 against the euro. Further uptrend may take the greenback to a resistance around the 1.10 level.

Figures from Destatis showed that Germany's factory orders declined more-than-expected in May.

Factory orders decreased 2.2 percent month-on-month in May, in contrast to a 0.4 percent rise in April. Economists had forecast a marginal fall of 0.1 percent.

The USD-CHF pair approached a new 2-week high of 0.9926, gaining 0.8 percent from a 2-day low of 0.9843 it set early in the Asian session. The pair was quoted at 0.9847 at yesterday's close. Continuation of the greenback's uptrend may see it challenging resistance around the 1.01 level.

After falling to 1.3044 at 5:45 pm ET, the greenback reversed direction to hit a 3-day high of 1.3129 against the loonie. The greenback had ended Thursday's trading at 1.3046 against the loonie. The currency is poised to face resistance around the 1.335 mark.

The greenback was 0.6 percent higher at a 3-day high of 0.6981 against the aussie, compared to Thursday's New York session close of 0.7021. The greenback is seen challenging resistance around the 0.66 level.

The greenback reached as high as 0.6623 against the kiwi, setting a 9-day high. This marked a 1 percent gain from yesterday's closing value of 0.6687. Should the currency rallies again, 0.64 is possibly seen as its next resistance level.


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

ING: ECB To Wait Until September Before Easing

Trading 05 juil 2019 Commentaire »

The European Central Bank is likely to wait until September before it delivers another stimulus in the form of a deposit rate cut and provide some hint at restarting asset purchases, ING economist Carsten Brzeski said Friday.

A rate is now just a question of 'when' rather than 'if', the economist said, referring to ECB President Mario Draghi's speech in Sintra, Portugal, in which he signaled that the central bank still has room to cut interest rates and adopt stimulus measures. ECB Governing Council's next rate-setting session is scheduled on July 25 in Frankfurt. "Draghi's track record in over-delivering and trying to be ahead of the curve, however, could bring a rate cut already at the ECB's July meeting. In our view a very close call," Brzeski said. "Unless the days leading up to the July meeting bring more disappointing macro data, we think the ECB will wait until the September meeting to deliver a 10bp rate cut in the deposit facility, combined with a clear commitment to restarting quantitative easing."

Policymakers are unlikely to exhaust all their policy options as they might need them in case of a disorderly Brexit, the economist said. Brzeski also pointed out that the ECB may introduce a tiering system for excess liquidity in future as a lower negative deposit rate for a longer time to come will increasingly hurt bank profitability.

The economist said it is almost certain that a new corporate bond purchase programme would be launched. Regarding the nomination of IMF Chief Christine Lagarde as the new ECB President, Brzeski said there will be little change in the ECB's monetary policy over the coming months.

"In fact, extended forward guidance, new dovishness and probably a new round of QE before she enters office have tied Lagarde to the Draghi chains going into 2020," the economist added.


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

July 5, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 05 juil 2019 Commentaire »

analytics5d1f66fb3c8a6.jpg

Since February 28, the EURUSD pair has been moving within the prvious 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 enhanced a deeper bearish decline towards 1.1235 (the lower limit of the newly-established bullish channel) which is failing to provide enough bullish support for the EURUSD.

The current bearish breakdown below 1.1235 invites further bearish momentum to push towards 1.1175 where recent price action should be watched.

Trade recommendations :

For Intraday traders, a valid SELL entry can be considered anywhere at retesting of the broken key-zone near 1.1235.

Initial Target levels to be located around 1.1200 and 1.1175.

Bullish breakout above 1.1260 invalidates the mentioned SELL position.

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

July 5, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 05 juil 2019 Commentaire »

analytics5d1f6046db720.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.

Moreover, 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, the recent Bearish breakdown below 1.2570 - 1.2550 (the lower limit of the depicted consolidation range) confirms a trend reversal into bearish on the intermediate term.

Immediate bearish decline was expected towards 1.2505 - 1.2490. Further bearish decline is expected to pursue towards 1.2444 (the lower limit of the current movement channel).

On the other hand, any bullish pullback towards 1.2550-1.2570 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 1.2570 is re-achieved on the current H4 chart.

Trade Recommendations:

Intraday traders can have a valid SELL Entry anywhere around the lower limit of the broken consolidation range near (1.2550-1.2570).

T/P levels to be located around 1.2490 and 1.2440.

S/L should be placed above 1.2620.

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