Dollar Displays Strength, Holds Near 3-week High

Trading 08 juil 2019 Commentaire »

The U.S. dollar extended recent gains and stayed near three-week highs on Monday, riding on speculation that the Federal Reserve is very unlikely to announce a steep interest rate cut later this month.

Optimism about a substantial reduction in interest rate by the Federal Reserve faded on Friday after the Labor Department showed a much bigger than expected increase in job growth in the month of June.

For further clues about whether the Fed will cut interest rate this month or the quantum of cut if any, are likely to emerge after Jerome Powell's testimony before Congress on July 10 and 11.

The dollar index, which retreated a bit after advancing to 97.41, edged higher again and was last seen at 97.42, up 0.13% from previous close.

Against the euro, the dollar strengthened to $1.1207, gaining about 0.15%, after opening at $1.1235.

Survey data from the behavioural economics institute Sentix said euro area investor confidence weakened in July to its lowest level over four-and-a-half years, damping expectations of a rebound due to some de-escalation of trade tensions.

In Germany, industrial output grew 0.3% month-on-month in May, reversing a revised 2% fall in April. The rate of growth came in line with expectations. On a yearly basis, industrial output decreased 3.7% after easing 2.3% a month ago. Output was forecast to drop 3.2%.

Another report from Destatis said Germany's exports rebounded in May, advancing 1.1% month-on-month, in contrast to a 3.4% decrease in April. Shipments were forecast to advance 0.8%.

Meanwhile, imports dropped unexpectedly by 0.5%, following a 0.9% drop in April. Economists had forecast a 0.4%. In May, Germany's trade surplus increased to EUR 18.7 billion from EUR 16.9 billion in the previous month.

A monthly survey from Bank of France noted that France's economy is forecast to grow at a slightly slower pace of 0.2% in the second quarter. That was down from an earlier forecast for a 0.3% expansion.

The greenback was up 0.12% against Pound Sterling, with a unit of the latter fetching $1.2510, as against previous close of $1.2525.

The Japanese yen weakened to 108.76 a dollar, losing about 0.26%, after data released by the Cabinet Office on Monday showed core machine orders in Japan were down by a much bigger-than-expected 7.8% on month in May, at 842.9 billion yen. Economists had expected orders to fall 3.7% in May following the 5.2% increase in April.

On a yearly basis, core machine orders fell 3.7% versus expectations for a drop of 3.6% following the 2.5% gain in the previous month.

The dollar was up 0.11% against both Aussie and loonie, with the respective pairs trading at 0.6972 and 1.3096.

Against Swiss franc, the greenback gained about 0.3% at 0.9945. The Turkish Lira fell sharply against the dollar, as Turkey's President Recep Tayyip Erdogan fired the Governor of the central bank, Murat Cetinkaya, following his refusal to cut interest rates to help stimulate economic growth.

The Lira declined to a low of 5.7999 against the greenback, before recovering to 5.7374 a dollar, still down nearly 2% from previous close.

On Friday, data from the Labor Department showed that U.S. employment surged up by 224,000 jobs in June after edging up 72,000 jobs in May. Economists had expected employment to increase by about 160,000 jobs.

The focus is also on the minutes of the June FOMC meeting as well as closely-watched reports on consumer and producer price inflation, all due during the course of this week.


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Treasuries Show Modest Move Back To The Upside

Trading 08 juil 2019 Commentaire »

Following the sharp pullback seen last Friday, treasuries showed a modest move back to the upside during trading on Monday.

Bond prices gave back some ground after an early advance but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.034 percent.

Treasuries benefited from bargain hunting following the sell-off seen in the previous session, when the ten-year yield surged up by 9.5 basis points.

While last Friday's strong jobs data has dented optimism about a near-term interest rate cut, the Federal Reserve is still expected to lower rates eventually.

CME Group's FedWatch Tool still points to a rate cut at the next Federal Reserve meeting later this month, although expectations have dramatically shifted toward a 25 basis point cut rather than a 50 basis point cut.

The shift comes after the Labor Department's closely watched report showed employment jumped by 224,000 jobs in June compared to expectations for an increase of 160,000 jobs.

In light of the focus on the outlook for rates, trading activity was somewhat subdued ahead of Fed Chairman Jerome Powell's congressional testimony later this week.

Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.

Powell is scheduled to deliver opening remarks at a Boston Fed conference on "Stress Testing" on Tuesday but may refrain from directly addressing interest rates.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of $38 billion worth of three-year notes.


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Gold 07.08.2019 – Rejection of the critical resistance

Trading 08 juil 2019 Commentaire »

Industry news:

Prices remain well supported by fundamentals: the central bank of Poland said on Friday it had switched some $5 billion of its foreign reserves out of currency and into gold in June, adding to the list of active central bank buyers. However, short-term speculative buying appears to have eased off in the wake of the U.S. employment report.

In a session bereft of major economic reports in the U.S., Japan's core machinery orders fell by the most in eight months - another a worrying sign that global trade tensions are hitting corporate investment.

Trading recommendation:

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Gold has been trading sideways in past 24 hours. Light volume today and down break of the rising wedge on the 1H time-frame is clues that we got today. Important resistance is set at the price of $1.407. Watch for selling opportunities.

Green rectangle – Resistance 1 ($1.407) – Fibonacci confluence

Red lines- Broken rising wedge

Yellow rectangle – Support ($1.381)

Both MACD and Stochastic did flip down, which is confirmation that sellers are present. As long as the Gold is trading below the $1.407, I would like to watch for selling opportunities on the rallies. Downward target is set at the price of $1.381. The potential break of the resistance at $1.407 may lead us to $1.422.

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GBP/USD 07.08.2019 – Bullish divergence at the critical support

Trading 08 juil 2019 Commentaire »

Industry news:

US YIELD CURVE INVERSION TALKING POINTS:

  • A key spread in the US Treasury yield curve – the 3m10s – is now suggesting that there is nearly a 33% chance of a recession hitting the United States within the next 12-months.
  • The US yield curve inversion comes as US growth concerns around the US-China trade war have provoked the Federal Reserve into a more dovish policy stance.
  • US recession fears thanks to the US-China trade war now see a 90% chance of 50-bps of interest rate cuts by the end of the year, and a 51% chance of 75-bps of interest rate cuts.

Trading recommendation:

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GBP is testing the key support level at the price of 1.2500 (round number), which will be critical for further development for the GBP/USD. Watch closely the level of 1.2500 cause buyers may load their position from this point. Buying is preferable

Green rectangle – Resistance 1 (1.2557)

Green rectangle- Resistance 2 1.2590)

Yellow rectangle – Important support (1.2500)

Red lines – Bullish divergence

All three oscillators are showing the bullish divertgence.RSI oscillator, Stochastic and MACD. As long as the GBP is trading below 1.2475, I would watch for buying opportunities with the targets at 1.2557 and 1.2590. I do expect reversion to the mean type of acrivity. I do expect that price back into 20 EMA (Median line of the Keltner Channel.)Only if there is clear breakout of the 1.2475, I would watch for potential selling opportunities but not now at the critical support 1.2500.

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Bitcoin analysis for July 8, 2019: nearing $12,000 for breakout or rejection?

Trading 08 juil 2019 Commentaire »

Bitcoin has been quite impulsive with the recent bullish pressure after breaking above $11,500 area with a daily close. The price has been consolidating and correcting at the edge of $11,500 area for a while. This movement gained impulsive momentum after a strong break above had been observed.

Bitcoin was able to gain almost 3% within a few minutes' time and held steady at $11,900, which is the highest level the cryptocurency has traded at for the past days. As per the current market formation, bitcoin has yet to break above $12,000, so the trend isn't 100% bullish. This is a good reason: $12,000 has acted as a minor resistance level over the past few weeks.

One of the fastest rallies for Bitcoin was breaking $11,500 area. The the price held in this area for a particular amount of time and breaking above it washed away the bears residing at the edge. There are certain speculations that bitcoin could hit $14,000 by the mid of July but it is still quite indecisive as the price resides below $12,000 area with a daily close.

As of the current scenario, the price has been quite indecisive with the past 3 hours of price action which is expected to lead to certain retrace towards $11,500 again before the price attempts to break above $12,000 area. As per current momentum, a break above $12,000 can turn out to be false whereas certain pullback lower would enhance the upcoming bullish move for the further upward thrust in the process to target $14,000 and later towards $15,000 in the coming days.

TRADING LEVELS:

SUPPORT – 11,000, 11,500

RESISTANCE – 12,000, 12,500, 13,000

BIAS – BULLISH

MOMENTUM – VOLATILE

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July 8, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 08 juil 2019 Commentaire »

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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 considered.

Trade recommendations :

For Intraday traders, a valid SELL entry was previously suggested at retesting of the broken key-zone around 1.1235.

Initial Target levels to be located around 1.1200 and 1.1175.

Bullish breakout above 1.1260 invalidates the mentioned SELL position.

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BTC 07.08.2019 – Sell zone at the price of $12.000

Trading 08 juil 2019 Commentaire »

Industry news:

India's national police academy has launched a cryptocurrency course for high-ranking officers of the Indian Police Service. Among the objectives of the course are the functioning and legal aspects of cryptocurrencies, as well as investigations of cases involving digital coins. The Indian police continue to regularly uncover crypto-related schemes as the government deliberates on the regulatory framework for cryptocurrency.

Trading recommendation:

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BTC did rally in past 24 hours and is now testing the key resistance at the price of $12.000 and also round number. Pay attention to the resistance at the price of $12.000 cause it is good sell zone up there.

Orange rectangle – Resistance ($12.000)

Yellow rectangle- Support 1 ($10.753)

Red rectangle – Support 2 ($9.750)

Red lines – Upward channel (upper line on test )

RSI oscillator and Stochastic are showing the potential overbought condition right on the critical resistance and I expect new selling wave. As long as the BTC is trading below $12.000, I would watch for selling opportunities on the rallies, level of $12.000 looks like a solid sell zone. Downward targets are set at the price of $10.753 and $9750.The material has been provided by InstaForex Company - www.instaforex.com

German Industrial Output, Exports Recover In May

Trading 08 juil 2019 Commentaire »

Germany's industrial production and exports recovered in May, while the slump in imports continued, data from Destatis showed Monday.

Industrial output grew 0.3 percent month-on-month in May, in line with expectations, reversing a revised 2 percent fall in April.

On a yearly basis, industrial output decreased 3.7 percent and also bigger than the 2.3 percent fall seen a month ago. Output was forecast to drop 3.2 percent.

Excluding energy and construction, industrial production gained 0.9 percent in May.

Another report from Destatis showed that exports advanced more-than-expected 1.1 percent month-on-month in May, in contrast to a 3.4 percent decrease in April. Shipments were forecast to advance 0.8 percent.

Meanwhile, imports dropped unexpectedly by 0.5 percent, following a 0.9 percent drop in April. Economists had forecast a 0.4 percent increase.

Consequently, the trade surplus increased to a seasonally adjusted EUR 18.7 billion from EUR 16.9 billion in the previous month.

On a yearly basis, exports advanced 4.5 percent versus a 0.2 percent drop in April. At the same time, growth in imports climbed to 4.9 percent from 2.5 percent.

On an unadjusted basis, the trade surplus climbed to EUR 20.6 billion from EUR 17.9 billion in the previous month.

Data showed that the current account surplus totaled EUR 16.5 billion in May compared to EUR 13 billion last year.

Economists noted that the recovery in production as suggested by the latest official data does not signal an end to the downturn in German industry.

The economy ministry said industrial economy is set to remain subdued in months ahead due to weak order intake and gloomy business climate.

Data released last week revealed that factory orders declined 2.2 percent in May reflecting a sharp decrease in foreign orders.

The German economy is likely to grow only slightly in the third quarter, following a likely contraction in the second quarter, Ralph Solveen, deputy head of economic research at Commerzbank, said. Andrew Kenningham, Capital Economics' economist said it now looks almost certain that production declined in the second quarter overall, contributing to a sharp slowdown in German GDP growth, and the business surveys for June have been gloomy.

Bundesbank last month said the largest euro area economy is set to contract slightly in the second quarter as temporary factors that boosted first quarter growth faded.

The Purchasing Managers' survey showed that Germany's manufacturing remained the weakest-performer in the currency bloc. The sector contracted for the sixth month in a row as a slowdown in the auto industry weighed on order books.


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July 8, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 08 juil 2019 Commentaire »

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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.

A bullish position can ONLY be considered if 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.

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Technical analysis of AUD/USD for July 08, 2019

Trading 08 juil 2019 Commentaire »

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Overview:

The AUD/USD pair is set above strong support at the levels of 0.6876 and 0.6810. This support has been rejected four times confirming the uptrend. The major support is seen at the level of 0.6810, because the trend is still showing strength above it. Accordingly, the pair is still in the uptrend in the area of 0.6810 and 0.6876. The AUD/USD pair is trading in the bullish trend from the last support line of 0.6876 towards thae first resistance level of 0.6937 in order to test it. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 0.6937 and further to the level of 0.7005. The level of 0.7005 will act as the major resistance and the double top is already set at the point of 0.7005. At the same time, if there is a breakout at the support level 0.6810, this scenario may be invalidated.

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