Treasuries Give Back Ground On Stronger Than Retail Sales Growth

Trading 16 juil 2019 Commentaire »

After moving modestly higher over the course of the two previous sessions, treasuries gave back some ground during trading on Tuesday.

Bond prices climbed off their worst levels in afternoon trading but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3 basis points to 2.122 percent.

The pullback by treasuries came following the release of a report from the Commerce Department showing much stronger than expected U.S. retail sales growth in the month of June.

The Commerce Department said retail sales rose by 0.4 percent in June, matching the downwardly revised increase in May. Economists had expected retail sales to inch up by 0.1 percent.

Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, jumped by 0.7 percent in June after climbing by an upwardly revised 0.6 percent in May.

ING Chief International Economist James Knightley said the report suggests consumer spending rose robustly in the second quarter, which he expects to help keep GDP growth above 2 percent.

"Despite this, financial markets continue to price in four 25 basis point interest rate cuts from the Federal Reserve over the next 18 months," Knightley said.

He added, "Yet, in an environment where growth is solid, core inflation is close to target, unemployment is near 50-year lows and stock markets are at all-time highs, there seems little justification for anything more than precautionary rate cuts."

Meanwhile, a separate report from the Fed showed U.S. industrial production was unexpectedly flat June, as a steep drop in utilities output offset increases in manufacturing and mining output.

The Fed said industrial production was unchanged in June after climbing by 0.4 percent in May. Economists had expected production to edge up by 0.2 percent.

Treasuries climbed off their worst levels in afternoon trading after President Donald Trump told reporters U.S.-China trade talks still have a "long way to go" and once again threatened to impose tariffs on another $325 billion worth of Chinese goods.

A report on housing starts may attract some attention on Wednesday along with the Federal Reserve's Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.


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Oil Futures Settle Sharply Lower

Trading 16 juil 2019 Commentaire »

Crude oil prices tumbled on Tuesday amid signs U.S. and Iranian officials may start new negotiations and on reports that Hurricane Barry did not cause any significant damage to oil infrastructure in the Gulf of Mexico.

West Texas Intermediate Crude oil futures for August ended down $1.96, or 3.3%, at $57.62 a barrel, the lowest settlement since July 5.

On Monday, WTI crude oil futures for August ended down $0.63, or about 1.1%, at $59.58 a barrel, amid worries over outlook for energy demand growth.

U.S. President Donald Trump said at a Cabinet meeting today that progress has been made with Iran, signaling tensions could ease in the Mideast.

Although Trump did not give details about the progress, Secretary of State Mike Pompeo said at the meeting Iran had said it was prepared to negotiate about its missile program.

After Barry weakened to a tropical depression and moved further inland, producers on Monday began restoring output.

Anadarko said it has restarted production at its Marlin offshore facility. "We expect to resume production at all of our operated facilities that were shut in due to Barry following platform assessments and availability of third-party infrastructure," Anadarko said in a statement.

Meanwhile, traders were looking ahead to the weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA).

While API will release its report later today, the EIA's inventory data will be out Wednesday morning.


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Gold Futures Settle Lower As Dollar Rises On Retail Data

Trading 16 juil 2019 Commentaire »

Gold prices edged lower on Tuesday as the dollar gained in strength, buoyed by strong U.S. retail sales data.

However, lingering concerns about the outlook for the global economy due to the ongoing U.S.-China trade dispute limited the yellow metal's decline.

The dollar index advanced to 97.42 and was last seen at 97.40, up nearly 0.5% from previous close.

Gold futures for August ended down $2.30, or about 0.2%, at $1,411.20 an ounce.

On Monday, gold futures for August ended up $1.30, or 0.1%, at $1,413.50 an ounce, a near-two week high.

Silver futures for September ended up $0.313, at $15.678 an ounce, while Copper futures for September settled at $2.7000 per pound, down $0.0110 from previous close.

Data released by the Commerce Department said retail sales rose by 0.4% in June, matching the downwardly revised increase in May. Economists had expected retail sales to inch up by 0.1% compared to the 0.5% growth originally reported for the previous month.

Excluding a continued increase in auto sales, retail sales still rose by 0.4% in June after climbing by a downwardly revised 0.4% in May.

A report from the Labor Department showed U.S. import prices fell by more than expected in the month of June, decreasing by 0.9%. Revised data showed prices were unchanged in May.

Import prices had been expected to drop by 0.7% compared to the 0.3% decrease originally reported for the previous month.

The report showed that export prices slumped by 0.7% in June after dipping by 0.2% in May. Economists had expected another 0.2% drop.

The Federal Reserve released a report that showed industrial production was unchanged in June after climbing by 0.4% in May. Economists had expected production to edge up by 0.2%.

The report said manufacturing output climbed by 0.4% and mining output rose by 0.2%.

According to a report from the National Association of Home Builders, homebuilder confidence has unexpectedly shown a modest improvement in the month of July. The NAHB/Wells Fargo Index inched up to 65 in July after dropping to 64 in June. Economists had expected the index to come in unchanged.

On the trade front, U.S. President Donald Trump reportedly commented that an agreement with China on trade tariffs had "a long way to go".


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U.S. Business Inventories Rise Slightly Less Than Expected In May

Trading 16 juil 2019 Commentaire »

The Commerce Department released a report on Tuesday showing U.S. business inventories increased by slightly less than expected in the month of May.

The report said business inventories rose by 0.3 percent in May after climbing by 0.5 percent in April. Economists had expected inventories to rise by 0.4 percent.

Manufacturing inventories edged up by 0.2 percent during the month, while retail and wholesale inventories both climbed by 0.4 percent.

The Commerce Department also said business sales crept up by 0.2 percent in May after dipping by 0.2 percent in April.

The rebound in business sales came as retail sales rose by 0.3 percent and manufacturing and wholesale sales both inched up by 0.1 percent.

With inventories and sales both rising, the total business inventories/sales ratio in June came in unchanged from the previous month at 1.39.


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U.S. Homebuilder Confidence Unexpectedly Improves In July

Trading 16 juil 2019 Commentaire »

Homebuilder confidence has unexpectedly shown a modest improvement in the month of July, according to a report released by the National Association of Home Builders on Tuesday.

The report said the NAHB/Wells Fargo Index inched up to 65 in July after dropping to 64 in June. Economists had expected the index to come in unchanged.

"Builders report solid demand for single-family homes," said NAHB Chairman Greg Ugalde. "However, they continue to grapple with labor shortages, a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes."

The unexpected uptick by the housing market index reflected single-point increases by all three of the component indices.

The metric charting buyer traffic crept up to 48, while the component gauging expectations in the next six months and the index measuring current sales conditions inched up to 71 and 72, respectively.

On Wednesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of June.

Housing starts are expected to dip to an annual rate of 1.261 million in June after unexpectedly dropping to a rate of 1.269 million in May.


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July 16, 2019 : EUR/USD confirms a recent double-top reversal pattern around 1.1235.

Trading 16 juil 2019 Commentaire »

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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 recent bullish pullback was expected to pursue towards the price zone around 1.1275 where a confluence of resistance/supply levels came to meet the pair.

A recent double-top Bearish pattern was demonstrated around the price zone of 1.1275 where a valid Intraday SELL position was suggested in previous articles.

Recent Bearish breakdown of the pattern neckline around (1.1235) confirms the short-term trend reversal into bearish towards 1.1175.

Any bullish pullback towards the depicted key zone around 1.1235 should be considered for a valid SELL entry.

On the other hand, a bullish breakout above (1.1235-1.1250) brings the EUR/USD pair again between depicted price-zones (1.1235-1.1275) until another breakout attempt is demonstrated in either directions (More probably to the downside).

Trade recommendations :

For Intraday traders, another valid SELL entry can be offered at retesting of the broken neckline around 1.1235.

Initial Target levels to be located around 1.1200 and 1.1175.

Stop Loss should be placed above 1.1260.

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

U.S. Industrial Production Unexpectedly Flat Amid Steep Drop In Utilities Output

Trading 16 juil 2019 Commentaire »

With a steep drop in utilities output offsetting increases in manufacturing and mining output, the Federal Reserve released a report on Tuesday showing U.S. industrial production was unexpectedly flat in the month of June.

The Fed said industrial production was unchanged in June after climbing by 0.4 percent in May. Economists had expected production to edge up by 0.2 percent.

Industrial production was unchanged as utilities output plunged by 3.6 percent, with milder-than-usual temperatures reducing demand for air conditioning.

On the other hand, the report said manufacturing output climbed by 0.4 percent, partly reflecting a 2.9 percent jump in production of motor vehicles and parts.

Excluding autos, production rose by 0.2 percent, although Michael Pearce, Senior U.S. Economist at Capital Economics, noted manufacturing output still declined by 2.2 percent annualized in the second quarter.

"With the global backdrop still weak and the survey evidence consistent with manufacturing output declining, we expect the manufacturing sector to remain weak in the second half too," Pearce said.

The Fed said mining output also rose by 0.2 percent, but Pearce said output in the sector is likely to begin declining modestly in the second half of the year unless the recent rally in oil prices continues.

The report also said capacity utilization for the industrial sector edged down to 77.9 percent in June from 78.1 percent in May. Economists had expected capacity utilization to come in unchanged.

Capacity utilization in the mining sector crept up to 75.9 percent, while capacity utilization in the mining sector dipped to 91.5 percent and capacity utilization in the utilities sector slumped to 74.6 percent.

"Rising spare capacity reduces the need for firms to invest and will help maintain downward pressure on core inflation, both of which will be key reasons why the Fed is likely to cut interest rates in the coming weeks," said Pearce.


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Analysis of BITCOIN for July 16, 2019: BTC struggling to overcome $10,000

Trading 16 juil 2019 Commentaire »

Bitcoin is still struggling to sustain the bullish pressure above $10,500. As the price remains above $10,000 with a daily close, Bitcoin bulls have a good chance to push the price higher.

Bitcoin and the overall crypto market have faced prolonged downward pressure that they have been battling with over the past several weeks. The downward pressure that led Bitcoin back towards the four-figure price region was first sparked when the crypto currency sharply jumped to $13,800 which proved to be an unsustainable rally that subsequently led to an extended period of sideways trading. A daily volume has fallen off marginally as the digital asset continues to make lower highs and lower lows. The head and shoulders pattern is in progress. A break of the neckline is yet to come.

Recently, the American Treasury Secretary was fairly bearish on cryptocurrencies, mentioning their ability to be used by criminals for illicit activities, like money laundering, the sale of illicit drugs, and hacking which had diverted the overall market sentiment to bearish.

Bitcoin is expected to lose momentum as currently the price is trading below $10,500. BTC is expected to spend a few days sideways from $10,000 to $10,500 before any definite trend momentum. As the price remains above $10,000, there will be certain possibility of a bounce soon.

TECHNICAL OVERVIEW:

The price is trading inside the Kumo cloud resistance area holding below $10,500 with a strong intraday bearish close. The dynamic levels like 20 EMA, Tenkan and Kijun line are above the current price which can act as resistance. The Chikou Span has found support in the price line which might lead to certain bullish pressure, but no other bullish pressure can sustain until the price clears above $10,500 again to establish a strong momentum. For further upward thrust to continue, a break above $10,500 with a daily close is required.

TRADING LEVELS and BIAS:

SUPPORT: 9,500, 9,800, 10,000

RESISTANCE: 10,500, 11,000, 11,500, 12,000

BIAS: Bearish

MOMENTUM: Volatile

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Dollar Little Changed Following NAHB Housing Market Index

Trading 16 juil 2019 Commentaire »

The U.S. business inventories for May and NAHB housing market index for July have been released at 10:00 am ET Tuesday. Following these data, the greenback changed little against its major rivals.

The greenback was trading at 108.21 against the yen, 0.9875 against the franc, 1.1218 against the euro and 1.2423 against the pound around 10:02 am ET.


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July 16, 2019 : GBP/USD is about to establish a sideway-range near 1.2400 before resuming bearish decline.

Trading 16 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.

In June , temporary bullish consolidation patterns were demonstrated above 1.2650 for a few trading sessions.

However, the price level of 1.2750 (consolidation range upper limit) has prevented further bullish advancement few times so far.

Moreover, signs of bearish rejection have been manifested (Head & Shoulders reversal pattern with neckline located around 1.2650).

Bearish breakdown below 1.2650 (reversal pattern neckline) confirmed the reversal pattern with bearish projection target located at 1.2550, 1.2510 and 1.2450.

Intermediate-term technical 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).

Moreover, 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 short-term.

On the other hand, the recent bullish pullback towards 1.2550-1.2570 was recommended as a valid SELL opportunity for Intraday traders. All bearish Target levels have already been reached.

Quick bearish decline was expected to occur towards 1.2450-1.2400 (the lower limit of the current movement channel) where early signs of bullish rejection and a bullish pullback should be considered.

Intraday traders can have a short-term BUY trade anywhere around (1.2400 - 1.1450) provided that no bearish breakdown occurs below 1.2400 (the lower limit of the depicted movement channel).

Trade Recommendations:

Intraday traders can have a valid BUY Entry anywhere around the lower limit of the current movement channel (1.2400).

T/P levels to be located around 1.2450 and 1.2510. S/L should be placed below 1.2370.

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