Dollar Loses Ground After Powell's Remarks Hint At Rate Cuts

Trading 10 juil 2019 Commentaire »

The U.S. dollar drifted lower against most major currencies on Wednesday, dragged down by Federal Reserve Chairman Jerome Powell's testimony before the House Financial Services Committee that reignited optimism about a potential rate cut by the Fed later this month.

On the first day of the much awaited two-day testimony before the Congress, Powell said that crosscurrents, such as trade tensions and concerns about global growth, have continued to weigh on the U.S. economic outlook since the central bank's June meeting.

The Fed chief pointed out that increased uncertainties about the economic outlook and muted inflation pressures led the central bank to pledge after the June meeting to "act as appropriate to sustain the expansion."

He noted noted that many meeting participants saw that the case for a somewhat more accommodative monetary policy had already strengthened.

"Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook," Powell said in his prepared remarks.

Meanwhile, James Bullard, the President of the Federal Reserve Bank of St. Louis, said that he would insist on a 25-basis points cut in interest rate at the monetary policy meeting later this month.

According to the minutes of the FOMC's last meeting, Bullard was the one to vote against the decision to keep rates unchanged and argued for a rate cut as an insurance measure.

The minutes, released today, also reveal that the participants agreed that "the risks and uncertainties surrounding their outlooks, particularly those related to the global economic outlook, had intensified in recent weeks."

The dollar index dropped to a low of 97.04, losing nearly 0.5%, before edging up slightly to 97.12.

Against the euro, the dollar eased to $1.1251, giving up nearly 0.4%. The greenback dropped to 1.1265 at one stage.

The pound sterling strengthened to $1.2504, gaining about 0.34%. Data from the Office for National Statistics showed U.K.'s GDP rose 0.3% month-on-month in May following a 0.4% decline in April. The expansion was in line with economists' expectations.

The Japanese yen moved up as well against the greenback, gaining 0.36% at 108.46 yen a dollar.

Against Swiss franc, the dollar shed 0.4% at 0.9896, and against the Aussie, is was down 0.45%, at 0.6959.

The Canadian loonie was up 0.34% with the USD-CAD pair hovering around 1.3083. The Bank of Canada today left its key interest rate unchanged at 1.75%.

"Recent data show the Canadian economy is returning to potential growth," the central bank said in its accompanying statement.

"However, the outlook is clouded by persistent trade tensions. Taken together, the degree of accommodation being provided by the current policy interest rate remains appropriate," it added.

The bank said that it will continue to monitor data ahead of future decisions with a particular focus on developments in the energy sector and the effects of global trade tensions.


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

Treasuries Close Roughly Flat As Traders Shrug Off Powell Comments

Trading 10 juil 2019 Commentaire »

Treasuries recovered from an initial move to the downside on Wednesday and spent the remainder of the session showing a lack of direction.

Bond prices bounced back and forth across the unchanged line before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.061 percent.

The choppy trading came even though comments from Federal Reserve Jerome Powell seemed to confirm the central bank is likely to cut interest rates in the near future.

Powell told members of the House Financial Services Committee that crosscurrents, such as trade tensions and concerns about global growth, have continued to weigh on the U.S. economic outlook since the central bank's June meeting.

The Fed chief pointed out that increased uncertainties about the economic outlook and muted inflation pressures led the central bank to pledge after the June meeting to "act as appropriate to sustain the expansion."

Powell noted that many meeting participants saw that the case for a somewhat more accommodative monetary policy had already strengthened.

"Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook," Powell said in his prepared remarks.

Largely mirroring Powell's remarks, the minutes of the central bank's June meeting released later in the afternoon said many participants believe the case for lowering interest rates has strengthened.

The minutes of the latest Fed meeting noted nearly all participants downwardly revised their assessment of the appropriate path for rates due to global developments that led to heightened uncertainties about the economic outlook.

"Many judged additional monetary policy accommodation would be warranted in the near term should these recent developments prove to be sustained and continue to weigh on the economic outlook," the Fed said.

The central bank added, "Several others noted that additional monetary policy accommodation could well be appropriate if incoming information showed further deterioration in the outlook."

Bond traders also shrugged off the results of the Treasury Department's auction of $24 billion worth of ten-year notes, which attracted slightly below average demand.

The ten-year note auction drew a high yield of 2.064 percent and a bid-to-cover ratio of 2.41, while the en previous ten-year note auctions had an average bid-to-cover ratio of 2.45.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

On Thursday, the Treasury is due to announce the results of its auction of $16 billion worth of thirty-year bonds.

Powell's second day of testimony on Capitol Hill may attract some attention on Thursday along with reports on consumer prices and weekly jobless claims.


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Oil Futures End At 7-week High On Sharp Fall In Crude Supply

Trading 10 juil 2019 Commentaire »

Crude oil prices rose sharply on Wednesday after official data showed a much larger than expected decline in U.S. crude stockpiles in the week ended July 5.

West Texas Intermediate Crude oil futures for August ended up $2.60, or about 4.5%, at $60.43 a barrel, a seven-week high.

On Tuesday, WTI crude oil futures for August ended up $0.17, or 0.3%, at $57.83 a barrel, recovering from a low of $57.29 a barrel.

Data released by Energy Information Administration (EIA) this morning showed U.S. crude stockpiles fell by 9.5 million barrels in the week ended July 5, nearly five times the expected drop. That was the fourth straight weekly decline in U.S. crude inventories.

The EIA report also said that gasoline inventories were down 1.5 million barrels in the week to July 5, higher than an expected fall of 1.3 million barrels.

Meanwhile, distillate stockpiles increased by 3.7 million barrels, beating forecasts for an increase of 0.74 million barrels.

On Tuesday, a report from the American Petroleum Institute (API) said crude oil inventories in the U.S. saw a decrease of 8.129 million barrels in the week ended July 5, compared to analyst expectations of a smaller 3.081 million barrel draw.

Traders were also digesting reports from the National Hurricane Center about the possibilities of a tropical disturbance becoming a storm later on Wednesday or Thursday. Major producers have reportedly evacuated rigs in the Gulf of Mexico.


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July 10, 2019 : EUR/USD is facing a confluence of SUPPLY levels around 1.1275.

Trading 10 juil 2019 Commentaire »

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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 failed to provide enough bullish support for the EUR/USD.

The recent bearish breakdown below 1.1235 invited further bearish momentum to move towards 1.1175.

However, significant bullish momentum was earlier demonstrated around 1.1200 bringing the EUR/USD pair again above 1.1235.

That's why, the current bullish pullback is expected to pursue towards the price zone around 1.1275 where a confluence of resistance/supply levels come to meet the pair.

Bearish price action should be anticipated near the price zone of 1.1275 where a valid Intraday SELL position can be considered.

Trade recommendations :

For Intraday traders, a valid SELL entry is expected to be offered at retesting of the broken key-zone around 1.1275.

Initial Target levels to be located around 1.1235, 1.1200 and 1.1175.

Stop Loss should be placed above 1.1300.

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

Dollar Slides As Fed Powell's Cautious Remarks Bolster Rate Cut Hopes

Trading 10 juil 2019 Commentaire »

The U.S. dollar drifted lower against its key opponents in the European session on Wednesday, after Federal Reserve Chair Jerome Powell cautioned that worries about the strength of the global economy and continued trade tensions posed challenges to U.S. economic outlook, supporting hopes for a rate cut by the Federal Reserve as early as this month.

In his prepared remarks to the House Financial Services Committee, Powell struck a downbeat tone on economy, saying that crosscurrents re-emerged, creating greater uncertainty to U.S. economy.

The Fed Chairman noted that the Fed pledged after the June meeting to "act as appropriate" to sustain the economic expansion, pointing out many participants saw the case for a somewhat more accommodative monetary policy had strengthened.

Based on incoming data and other developments since the June meeting, it appeared that uncertainties around trade tensions and concerns about global growth continue to weigh on the U.S. economic outlook, Powell cautioned.

Weak inflation is likely to be even more persistent than the Committee currently anticipate, he added.

Also in focus is the Fed minutes from the June 18-19 meeting, due at 2:00 pm ET.

At the meeting, the Fed opened the door for rate cuts by removing the description of its rate policy as patient.

The Fed next meets on July 30-31 and markets are widely expecting a rate cut of 25 basis points.

The currency held steady against its major counterparts in the Asian session, excepting the yen.

The greenback depreciated 0.3 percent to a 2-day low of 108.66 against the yen, following a 1-1/2-month high of 108.99 set at 8:45 pm ET. At yesterday's close, the pair was worth 108.85. Should the greenback continues its downtrend, 106.00 is possibly seen as its next support level.

Data from the Bank of Japan showed that Japan producer prices fell 0.5 percent on month in June.

That missed expectations for a monthly decline of 0.1 percent, which would have been unchanged from the May reading.

The greenback was down by 0.4 percent against the franc, falling to a 5-day low of 0.9896. The pair was valued at 0.9935 when it ended deals on Tuesday. Further downtrend may lead the greenback to a support around the 0.97 region.

The greenback fell to a 5-day low of 1.1247 against the euro, after rising to 1.1202 at 8:30 pm ET. This marked a drop of 0.3 percent from Tuesday's closing quote of 1.1208. The greenback is seen finding support around the 1.14 region.

Having climbed to 1.2444 against the pound at 2:15 am ET, the greenback pulled back, dropping 0.6 percent to 1.2521. The pair had closed Tuesday's deals at 1.2458. Next key support for the greenback may be located around the 1.26 level.

Data from the Office for National Statistics showed that UK gross domestic product grew in the month of May after a decline in April.

GDP rose 0.3 percent month-on-month in May following a 0.4 percent decline in April. The expansion was in line with economists' expectations.

The greenback weakened to a 2-day low of 1.3077 against the loonie, down by 0.5 percent from a high of 1.3138 at 2:45 am ET. The greenback ended yesterday's trading at 1.3126 against the loonie. Extension of the greenback's downward trading is likely to see it challenging support around the 1.30 mark.

Following nearly a 3-week high of 0.6910 set at 3:45 am ET, the greenback reversed direction and reached as low as 0.6960 against the aussie. The aussie-greenback pair was worth 0.6927 at yesterday's close. The greenback is poised to seek support around the 0.715 level.

The greenback declined to a 2-day low of 0.6652 against the kiwi, from near a 3-week high of 0.6565 seen at 10:00 pm ET. The greenback was trading at 0.6605 a kiwi at yesterday's New York session close. The currency is likely to face support around the 0.68 level, if it weakens again.

Data from Statistics New Zealand showed that New Zealand food prices dropped 0.7 percent on month in June - both seasonally adjusted and unadjusted.

That follows the 0.7 percent monthly increase in May.

In today's events, the Federal Reserve's minutes from the June meeting are scheduled for release in the New York session.

At 1:30 pm ET, Federal Reserve Bank of St. Louis President James Bullard will deliver a speech at the Official Monetary and Financial Institutions Forum Meeting in St. Louis.


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

*U.S. Crude Oil Inventories Tumble By 9.5 Million Barrels In Week Ended 7/5

Trading 10 juil 2019 Commentaire »

U.S. Crude Oil Inventories Tumble By 9.5 Million Barrels In Week Ended 7/5


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

U.S. Wholesale Inventories Rise In Line With Estimates In May

Trading 10 juil 2019 Commentaire »

A report released by the Commerce Department on Wednesday showed wholesale inventories in the U.S. increased in line with economist estimates in the month of May.

The Commerce Department said wholesale inventories rose by 0.4 percent in May after climbing by 0.8 percent in April. The continued rise in inventories matched expectations.

Inventories of durable goods edged up by 0.3 percent in May, as sharp increases in inventories of automotive products and professional equipment were partly offset by steep drops in inventories of lumber, metals and electrical equipment.

The report said inventories of non-durable goods also climbed by 0.5 percent, with notable growth in inventories of farm products and miscellaneous non-durable goods offsetting a slump in inventories of petroleum products.

The Commerce Department also said wholesale sales inched up by 0.1 percent in May after falling by 0.4 percent in April.

Sales of durable goods climbed by 0.6 percent amid a spike in inventories of automotive products and hardware, while sales of non-durable goods fell by 0.4 percent due in part to a nosedive in apparel sales.

With inventories rising by more than sales, the inventories/sales ratio for merchant wholesalers ticked up to 1.35 in May from 1.34 in April.


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

UK Economic Growth Set To Slow

Trading 10 juil 2019 Commentaire »

UK gross domestic product grew in the month of May after a decline in April, but the pace of expansion is widely expected to slow in the coming months as the new Brexit deadline looms and the global economy cools. GDP rose 0.3 percent month-on-month in May following a 0.4 percent decline in April, figures from the Office for National Statistics showed on Wednesday. The expansion was in line with economists' expectations. In March, GDP edged up 0.1 percent. However, the rolling three-month growth slowed to 0.3 percent in the quarter to May from 0.4 percent in the three months to April. Economists had forecast 0.1 percent expansion. In the January to March period, the growth was 0.5 percent.

Elsewhere on Wednesday, the National Institute for Economic and Social Research predicted that the UK economy shrunk in the second quarter, but is set to grow in the three months to September, thus "narrowly" avoiding a recession. The think tank said the economy is on the course to contract 0.1 percent in the second quarter, but likely to expand 0.2 percent in the third quarter. The NIESR has forecast 1.4 percent growth for this year, but stressed that the risks were tilted to the downside because of economic and political uncertainties related to Brexit negotiations. "The latest ONS data and recent surveys suggest that the economy has lost considerable momentum since the first quarter," NIESR economist Janine Boshoff said.

"This reflects the impact of Brexit-related uncertainty and slower growth in the global economy outside of the United States."

The monthly growth in May was largely driven by a 1.4 percent expansion each in industrial production and manufacturing after declines in April, ONS data showed. Industrial production grew 1.4 percent monthly in May following a revised 2.9 percent slump in April, thus equaling the gain logged in March. Manufacturing grew 1.4 percent from April, when it plunged 4.2 percent. In March, output grew 1.6 percent. Economists had forecast 1.5 percent growth in industrial production and a 2.2 percent gain in manufacturing in May.

The latest rebound in manufacturing was driven largely by a pick-up in the production of transport equipment, after several car firms shut down production around the originally Brexit deadline of March 29, the ONS said.

The UK is now set to leave the European Union on October 31. "Attention within firms will be increasingly turning back to contingency planning for a possible 'no deal' Brexit in October, which is often a costly exercise and will inevitably draw some resources away from possible investment projects," ING economist James Smith said. "We expect investment to resume its downward trend over the summer."

Smith said the Bank of England is likely to keep its key interest rate unchanged this year as the economist does not expect any dramatic improvement in the growth story in the third quarter.

The index of services was unchanged from April, when it edged up 0.1 percent. Economists had expected the modest growth to continue. The construction output rose 0.6 percent in May after declines of 0.5 percent and 1.5 percent in April and March. Separate data from the ONS showed that the UK visible trade deficit narrowed to GBP 11.524 billion in May from GBP 12.761 billion in April. Economists had expected a shortfall of GBP 12.500 billion.

Exports grew 3.5 percent month-on-month, after a 9 percent slump in April. Imports decreased 0.6 percent following a 11.7 percent plunge in the previous month.


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

UK Economic Growth Set To Slow

Trading 10 juil 2019 Commentaire »

UK gross domestic product grew in the month of May after a decline in April, but the pace of expansion is widely expected to slow in the coming months as the new Brexit deadline looms and the global economy cools. GDP rose 0.3 percent month-on-month in May following a 0.4 percent decline in April, figures from the Office for National Statistics showed on Wednesday. The expansion was in line with economists' expectations. In March, GDP edged up 0.1 percent. However, the rolling three-month growth slowed to 0.3 percent in the quarter to May from 0.4 percent in the three months to April. Economists had forecast 0.1 percent expansion. In the January to March period, the growth was 0.5 percent.

Elsewhere on Wednesday, the National Institute for Economic and Social Research predicted that the UK economy shrunk in the second quarter, but is set to growth in the three months to September, thus "narrowly" avoiding a recession. The think tank said the economy is on the course to contract 0.1 percent in the second quarter, but likely to expand 0.2 percent in the third quarter. The NIESR has forecast 1.4 percent growth for this year, but stressed that the risks were tilted to the downside because of economic and political uncertainties related to Brexit negotiations. "The latest ONS data and recent surveys suggest that the economy has lost considerable momentum since the first quarter," NIESR economist Janine Boshoff said.

"This reflects the impact of Brexit-related uncertainty and slower growth in the global economy outside of the United States."

The monthly growth in May was largely driven by a 1.4 percent expansion each in industrial production and manufacturing after declines in April, ONS data showed. Industrial production grew 1.4 percent monthly in May following a revised 2.9 percent slump in April, thus equaling the gain logged in March. Manufacturing grew 1.4 percent from April, when it plunged 4.2 percent. In March, output grew 1.6 percent. Economists had forecast 1.5 percent growth in industrial production and a 2.2 percent gain in manufacturing in May.

The latest rebound in manufacturing was driven largely by a pick-up in the production of transport equipment, after several car firms shut down production around the originally Brexit deadline of March 29, the ONS said.

The UK is now set to leave the European Union on October 31. "Attention within firms will be increasingly turning back to contingency planning for a possible 'no deal' Brexit in October, which is often a costly exercise and will inevitably draw some resources away from possible investment projects," ING economist James Smith said. "We expect investment to resume its downward trend over the summer."

Smith said the Bank of England is likely to keep its key interest rate unchanged this year as the economist doest not expect any dramatic improvement in the growth story in the third quarter.

The index of services was unchanged from April, when it edged up 0.1 percent. Economists had expected the modest growth to continue. The construction output rose 0.6 percent in May after declines of 0.5 percent and 1.5 percent in April and March. Separate data from the ONS showed that the UK visible trade deficit narrowed to GBP 11.524 billion in May from GBP 12.761 billion in April. Economists had expected a shortfall of GBP 12.500 billion.

Exports grew 3.5 percent month-on-month, after a 9 percent slump in April. Imports decreased 0.6 percent following a 11.7 percent plunge in the previous month.


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

Gold 07.10.2019 – Good sell zone around $1.408

Trading 10 juil 2019 Commentaire »

The Gold did exactly what I expected yesterday. Gold is at the critical Fibonacci confluence resistance at the price of $1.408. This area may provide very good selling opportunity.

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On the 4H time-frame I found that there is rejection of the key Fibonacci confluence that I marked with the green rectangle. It is not bad idea to look for short opportunity on the Gold with the potential protective stop at $1.415. There is a good chance that Gold trades at least to previous swing high at $1.399 or even $1.382. On Daily time-frame, I found that there is the test of the 3DMA, which provides nice resistance.

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