Dollar Turns Weak On Rate Cut Bets, IMF's Comments

Trading 17 juil 2019 Commentaire »

The dollar was mostly subdued against major currencies on Wednesday, after scoring notable gains in the previous two sessions. Expectations that the Fed will cut interest rates later this month rendered the currency weak.

The International Monetary Fund's comment that the greenback is overvalued by 6% to 12%, based on near-term economic fundamentals contributed as well to the dollar's decline.

The dollar index eased to a low of 97.16 around noon, losing about 0.25% from previous close, before edging up to 97.22 by late afternoon.

Against the euro, the dollar edged down to 1.1225, losing 0.14% in the process.

Eurozone consumer inflation rose by a revised 1.3% year-on-year in June, slightly faster than the 1.2% rise in May, according to final data from Eurostat. The flash estimate showed a steady growth of 1.2% in June.

Eurozone construction output declined for the third straight month in May, another data from Eurostat showed Wednesday.

Construction output fell 0.3% month-on-month in May, smaller than the 1.7% decrease seen in April. This was the third consecutive decline in production.

Building construction dropped 0.3% and civil engineering output decreased 0.8% in May.

On a yearly basis, growth in construction output eased to a 4-month low of 2% from 3.1% in April.

In the EU28, construction output fell 0.3% on month but grew 2.5% from the previous year.

The British Pound Sterling gained about 0.23% against the dollar, at $1.2434. Earlier in the day, the sterling strengthened to $1.2456.

The yen recovered from an early lower of 108.33 and rose to 108.01 a dollar, gaining about 0.2% from previous close.

The dollar was down nearly 0.3% against the loonie with the dollar-loonie pair trading at 1.3050. Against the Aussie and Swiss franc, the dollar was down marginally at 0.7012 and 0.9873, respectively.

In economic news today, a report from the Commerce Department said housing starts slid by 0.9% to an annual rate of 1.253 million in June after slipping by 0.4% to a revised rate of 1.265 million in May.

Economists had expected housing starts to fall by 0.6% to a rate of 1.261 million from the 1.269 million originally reported for the previous month.

The report also said building permits plunged by 6.1% to an annual rate of 1.220 million in June after climbing by 0.7 percent to a revised rate of 1.299 million in May.

Economists had expected building permits to rise by 0.5% to a rate of 1.300 million from the 1.294 million originally reported for the previous month.

A report from the Federal Reserve on Wednesday said economic activity continued to expand at a modest pace overall from mid-May through early July.

The Beige Book noted the assessment of the economy was little changed from the prior reporting period.

The Fed referenced widespread concerns about the possible negative impact of trade-related uncertainty but said the economic outlook was generally positive for the coming months, with expectations of continued modest growth.

The report said job growth was slightly slower than the previous reporting period but continued at a modest pace on balance.

With regard to inflation, the districts indicated the rate of price inflation was stable to down slightly from the prior reporting period.

While higher tariffs and rising labor costs led to some increases in input costs, firms' ability to pass on cost increases to final prices was restrained by brisk competition.


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Treasuries Move Back To The Upside On Disappointing Housing Data

Trading 17 juil 2019 Commentaire »

Following the pullback seen in the previous session, treasuries showed a notable move back to the upside during trading on Wednesday.

Bond prices moved steadily higher over the course of the session before closing firmly in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.1 basis points to 2.061 percent.

The strength among treasuries came after the Commerce Department released a report showing a bigger than expected drop in housing starts as well as a nosedive in building permits.

The Commerce Department said housing starts slid by 0.9 percent to an annual rate of 1.253 million in June after slipping by 0.4 percent to a revised rate of 1.265 million in May.

Economists had expected housing starts to fall by 0.6 percent to a rate of 1.261 million from the 1.269 million originally reported for the previous month.

The report also unexpectedly showed a substantial pullback in building permits, an indicator of future housing demand.

Building permits plunged by 6.1 percent to an annual rate of 1.220 million in June after climbing by 0.7 percent to a revised rate of 1.299 million in May.

Economists had expected building permits to rise by 0.5 percent to a rate of 1.300 million from the 1.294 million originally reported for the previous month.

With the much steeper than expected drop, building permits fell to their lowest level since hitting a rate of 1.201 million in May of 2017.

Treasuries saw continued strength following the release of the Federal Reserve's Beige Book, which said economic activity continued to expand at a modest pace overall from mid-May through early July.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the assessment of the economy was little changed from the prior reporting period.

The Fed referenced widespread concerns about the possible negative impact of trade-related uncertainty but said the economic outlook was generally positive for the coming months, with expectations of continued modest growth.

Trading on Thursday may be impacted by reaction to reports on weekly jobless claims, Philadelphia-area manufacturing activity, and leading economic indicators.


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Oil Settles Lower After Data Shows Jump In Gasoline Build

Trading 17 juil 2019 Commentaire »

Crude oil prices drifted lower on Wednesday after official data from U.S. Energy Information Administration (EIA) showed a smaller than expected drop in crude stockpiles and a big jump in gasoline supply in the week ended July 11.

The data also showed a big jump in distillate stock piles in the week.

West Texas Intermediate Crude oil futures for August ended down $0.84, or about 1.5%, at $56.78 a barrel.

On Tuesday, WTI crude oil futures for August ended down $1.96, or 3.3%, at $57.62 a barrel, the lowest settlement since July 5.

Speculation about fresh U.S.-Iran negotiations on the nuclear deal issue and concerns about the outlook for energy demand dragged down oil prices for a second straight day.

According to data released by EIA earlier in the day, crude inventories in the U.S. dropped by 3.1 million barrels last week, against expectations for a drop of about 2.7 million barrels.

The data also showed gasoline inventories were up 3.6 million barrels, compared with expectations for a 925,000-barrel decline. Meanwhile, distillate stockpiles rose by 5.7 million barrels in the week, substantially more than the expected 613,000-barrel increase.

On Tuesday, the American Petroleum Institute (API) reported a small crude oil inventory draw of 1.401 million barrels for the week ending July 11, compared to analyst expectations for a decrease of 2.7 million barrels.


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Fed's Beige Book Indicates Positive Outlook Despite Trade-Related Uncertainty

Trading 17 juil 2019 Commentaire »

A report from the Federal Reserve on Wednesday said economic activity continued to expand at a modest pace overall from mid-May through early July.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, noted the assessment of the economy was little changed from the prior reporting period.

The Fed referenced widespread concerns about the possible negative impact of trade-related uncertainty but said the economic outlook was generally positive for the coming months, with expectations of continued modest growth.

The report said job growth was slightly slower than the previous reporting period but continued at a modest pace on balance.

Labor markets continued to be described as tight, with some districts noting worker shortages across most sectors, especially in construction, information technology, and health care.

However, the Fed said some manufacturing and information technology firms in the Northeast reduced their number of workers.

A few reports highlighted concerns about securing and renewing work visas, flagging this as a source of uncertainty for continued employment growth, the Fed said.

With regard to inflation, the districts indicated the rate of price inflation was stable to down slightly from the prior reporting period.

While higher tariffs and rising labor costs led to some increases in input costs, firms' ability to pass on cost increases to final prices was restrained by brisk competition.


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Gold Futures Settle At Over 6-year High As Dollar Loses Ground

Trading 17 juil 2019 Commentaire »

Gold futures recorded their best settlement in more than six years on Wednesday, as expectations of a rate cut later this month weighed on the dollar and prompted investors to seek the safe haven commodity.

After two successive days of notable gains, the greenback eased today. The dollar index, which edged up slightly to 97.44 early on in the day, retreated to 97.16 later, losing about 0.25%.

Gold futures for August ended up $12.10, or about 0.9%, at $1,423.30 an ounce, the highest settlement since mid-May 2013.

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

Silver futures for September ended up $0.293, at $15.971 an ounce, while Copper futures for September settled higher by $0.0160, at $2.7160 per pound.

The Federal Reserve Chairman Jerome Powell told a dinner audience at the Bank of France in Paris on Tuesday the central bank is "carefully monitoring" downside risks to U.S. growth and "will act as appropriate to sustain the expansion."

Hopes about a steep cut in interest rate faded on Tuesday after data showed a bigger than expected increase in retail sales in June and factory output too rose more than expected in the month.

Traders were also following the developments on the trade fron. U.S. President Donald Trump, who said U.S. and China have "a long way to go" for a deal to happen, also threatened to impose tariffs on another $325 billion worth of Chinese goods.

In economic news today, a report from the Commerce Department said housing starts slid by 0.9% to an annual rate of 1.253 million in June after slipping by 0.4% to a revised rate of 1.265 million in May.

Economists had expected housing starts to fall by 0.6% to a rate of 1.261 million from the 1.269 million originally reported for the previous month.

The report also said building permits plunged by 6.1% to an annual rate of 1.220 million in June after climbing by 0.7 percent to a revised rate of 1.299 million in May.

Economists had expected building permits to rise by 0.5% to a rate of 1.300 million from the 1.294 million originally reported for the previous month.


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July 17, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 17 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.

The current 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

July 17, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 17 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) confirmed 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 are currentlybeing demonstrated.

As mentioned in a previous article, 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

EUR/USD. July 17. Results of the day. Inflation in the European Union has accelerated slightly

Trading 17 juil 2019 Commentaire »

4-hour timeframe

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The amplitude of the last 5 days(high-low): 62p – 41p – 37p – 31p – 62p.

Average amplitude over the last 5 days: 47p(39p).

The most interesting macroeconomic report of today was, of course, the inflation report in the EU. As it turned out, the consumer price index in June accelerated to 1.3%, while experts predicted the preservation of the previous "figures", that is, 1.2% y/y. Core inflation showed an increase of 1.1% in accordance with predicted values. This information was supposed to support the euro currency, as it is at least some positive news from the European Union. However, traders seem to have judged otherwise. After all, the target of 2.0% set by the European Central Bank is very far away, and in the long term, 2% of inflation has not been seen for a long time. Thus, the growth of 0.1% is not particularly pleased with the foreign exchange market. There were no more important macroeconomic publications on July 17th. We can only recall the trade war between China and the United States. After the G20 summit, many traders were overwhelmed with optimism, as Donald Trump and Xi Jinping said that the countries were returning to negotiations. However, as we wrote back then, "to return to negotiations" does not mean "to agree". Yesterday, the US President wrote on his Twitter that the fall in the growth rate of China's economy to the levels of 1992 is directly related to the introduction of duties by America. And that Washington can further increase the pressure on China if it imposes duties on absolutely all imports from this country. In turn, the Ministry of Foreign Affairs of China made a statement, according to which 6.2% of GDP – is "good figures" in any case, given the slowdown in global economic growth. Thus, as we can see, there is no question of any truce, and the signing of the notorious trade deal is still very far away. And not the fact that the parties will be able to agree.

Trading recommendations:

The EUR/USD pair started the weakest upward correction with the target of the critical line. Thus, now the sales of the euro are still relevant to the targets at the levels of 1.1179 and 1.1157, but after the completion of the correction round.

It is recommended to buy the euro/dollar pair not before fixing the price back above the critical line with the first targets of 1.1274 and 1.1306, but with the minimum lots, as the bulls remain extremely weak.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-Sen – red line.

Kijun-Sen – blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD Indicator:

A red line and a histogram with white bars in the indicator window.

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

*U.S. Crude Oil Inventories Drop 3.1 Million Barrels In Week Ended 7/12

Trading 17 juil 2019 Commentaire »

U.S. Crude Oil Inventories Drop 3.1 Million Barrels In Week Ended 7/12


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Gold 07.17.2019 – Strong bullish momentum but resistance on the test

Trading 17 juil 2019 Commentaire »

The Gold did perfect test-reject of our yesterday's downward target $1.401 and it rallied all the way to the resistance at the price of $1.419. Since I found resistance levels at $1.419 and $1.4126, I would watch for selling opportunities. Logical downward objective is set at the price of $1.407.

Industry news:

The Consumer Price Index (CPI) rose 2.0% on a year-over-year basis in June, down from a 2.4% increase in May, largely due to lower month-over-month energy prices. Excluding energy, the CPI rose 2.6% year over year. Prices increased year over year in all eight major components.

On a seasonally adjusted monthly basis, the CPI declined 0.1% in June, following a 0.3% gain in May.

Technical view: .

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On the H1 time-frame I found that there is a strong up void spike, which is sign of the strong upward momentum. Anyway, since there is a resistance around $1.419, I would advise you to watch for selling opportunities. Watch for potential sell divergence on the oscillator to confirm potential down turn. Potential downward target is set at the price of $1.407.

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