Treasuries Move To The Upside In Late-Day Trading

Trading 18 juil 2019 Commentaire »

After showing a lack of direction throughout most of the session, treasuries moved to the upside in the final hour of trading on Thursday.

Bond prices managed to remain firmly positive going into the close of trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.3 basis points to 2.038 percent.

The late-day strength among treasuries came as comments from New York Federal Reserve President John Williams seemed to endorse a near-term interest rate cut by the Fed.

In remarks at the Central Bank Research Association's annual meeting in New York, Williams argued it "pays to act quickly to lower rates at the first sign of economic distress."

"My wife is a professor of nursing, and she says one of the best things you can do for your children is to get them vaccinated," Williams said. "It's better to deal with the short-term pain of a shot than to take the risk that they'll contract a disease later on."

"I think about monetary policy near the zero lower bound-or ZLB for short-in much the same way," he added. "It's better to take preventative measures than to wait for disaster to unfold."

Williams' comments come after the minutes of the latest Fed meeting noted several participants believed a near-term rate cut was appropriate from a risk-management perspective, as it could help cushion the effects of possible future adverse shocks to the economy.

Treasuries showed a lack of direction earlier in the day as traders digested a mixed batch of U.S. economic data, including a Labor Department report showing a modest rebound in first-time claims for U.S. unemployment benefits in the week ended July 13th.

The report said initial jobless claims inched up to 216,000, an increase of 8,000 from the previous week's revised level of 208,000.

The uptick came after the drop seen in the previous week pulled jobless claims down to their lowest level since hitting a nearly 50-year low in the week ended April 13th.

A separate report from the Philadelphia Federal Reserve showed its reading on regional manufacturing activity jumped much more than expected in the month of July.

The Philly Fed said its diffusion index for current general activity surged up to 21.8 in July after tumbling to 0.3 in June, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 5.0.

Meanwhile, the Conference Board released a report showing an unexpected decrease by its index of leading U.S. economic indicators in the month of June.

The Conference Board said its leading economic index fell by 0.3 percent in June after coming in unchanged in May. The drop surprised economists, who had expected the index to inch up by 0.1 percent.

"As the US economy enters its eleventh year of expansion, the longest in US history, the LEI suggests growth is likely to remain slow in the second half of the year," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.

A preliminary report on consumer sentiment in July may attract attention on Friday along with comments by St. Louis Fed President James Bullard, who voted to cut interest rates by 25 basis points at the last Fed meeting.


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

Crude Oil Futures Settle Sharply Lower

Trading 18 juil 2019 Commentaire »

Crude oil futures declined sharply on Thursday despite opening on a positive note, as resumption of service in the Gulf of Mexico region raised concerns about excess supply in the market.

Oil prices tumbled amid expectations of increased supply from Gulf of Mexico region after several facilities resumed service, having escaped largely unaffected by Hurricane Barry.

Worries about the outlook for energy demand due to slowing global economy and the likely impact of the ongoing U.S.-China trade dispute continued to weigh on the commodity.

West Texas Intermediate Crude oil futures for August ended down $1.48, or about 2.6%, at $55.30 a barrel.

On Wednesday, WTI Crude oil futures for August ended down $0.84, or about 1.5%, at $56.78 a barrel.

Several platforms across the Gulf of Mexico were evacuated last week and the resultant output cuts lifted crude oil prices. However, with production resuming from early this week after the storm crossed over, concerns about supply shortage have faded now.

Royal Dutch Shell reported on Wednesday that it resumed about 80% of its average daily production in the Gulf of Mexico region.

The official data from U.S. Energy Information Administration (EIA) on Wednesday showed a larger than expected drop in crude inventories in the U.S., but revealed a big jump in gasoline inventories.

Oil's fall this week is also due to reports about likely discussions between the U.S. and Iran on the nuclear missile issue.


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

Gold Futures Settle Higher Again

Trading 18 juil 2019 Commentaire »

Gold prices moved higher on Thursday, extending gains from previous session, as the dollar weakened further amid growing optimism about an interest rate cut later this month.

Gold prices eased early on in the session, but surged higher as the day progressed, as rising concerns over global slowdown and uncertainty about the progress in U.S.-China trade negotiations prompted investors to seek the safe haven asset.

The dollar index dropped to a low of 96.92, losing 0.33%, after initially edging up from previous close of 97.22.

Gold futures for August ended up $4.80, or 0.3%, at $1,428.10 an ounce, a fresh high since mid May 2013.

On Wednesday, gold futures for August settled at $1,423.30 an ounce, gaining $12.10, or about 0.9%.

Silver futures for September ended up $0.227, at $16.198 an ounce, while Copper futures for September settled at $2.7100 per pound, down $0.0060 from previous close.

In economic news, data released by the Labor Department showed first-time claims for U.S. unemployment benefits increased in line with economist estimates in the week ended July 13th.

The report said initial jobless claims inched up to 216,000, an increase of 8,000 from the previous week's revised level of 208,000. Economists had expected jobless claims to creep up to 216,000 from the 209,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average edged down to 218,750, a decrease of 250 from the previous week's revised average of 219,000.

A report from the Federal Reserve Bank of Philadelphia showed its reading on regional manufacturing activity jumped much more than expected in the month of July.

The Philly Fed said its diffusion index for current general activity surged up to 21.8 in July after tumbling to 0.3 in June, with a positive reading indicating growth in regional manufacturing Activity. Economists had expected the index to rise to 5.0.

The Conference Board's report showed an unexpected decrease by its index of leading U.S. economic indicators in the month of June.

The Conference Board said its leading economic index fell by 0.3% in June after coming in unchanged in May. The drop surprised economists, who had expected the index to inch up by 0.1 percent.

"As the US economy enters its eleventh year of expansion, the longest in US history, the LEI suggests growth is likely to remain slow in the second half of the year," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.

The unexpected drop by the leading economic index reflected negative contributions from building permits, the ISM New Orders Index, and average weekly initial jobless claims.


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

Treasury Announces Details Of 2-Year, 5-Year, And 7-Year Note Auctions

Trading 18 juil 2019 Commentaire »

The Treasury Department announced the details of this month's auctions of two-year, five-year, and seven-year notes on Thursday.

The Treasury plans to sell $40 billion worth of two-year notes, $41 billion worth of five-year notes and $32 billion worth of seven-year notes.

The results of the two-year note auction will be announced next Tuesday, the results of the five-year note auction will be announced next Wednesday and the results of the seven-year note auction will be announced next Thursday. Last month, the Treasury also sold $40 billion worth of two-year notes, $41 billion worth of five-year notes and $32 billion worth of seven-year notes.

The two-year and five-year note auctions both attracted average demand last month, while the seven-year note attracted modestly below average demand.


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

July 18, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 18 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.

Recently, quick bearish decline was expected to occur towards 1.2450-1.2400 (the lower limit of the current movement channel) where recent bullish rejection and a bullish pullback was initiated.

Further bullish advancement was demonstrated towards the depicted price zone 1.2480-1.2500 (61.8% - 50% Fibonacci levels) where bearish pressure is expected to be demonstrated.

However, any bullish breakout above 1.2500 (61.8% Fibonacci level) enhances further bullish pullback towards the backside of the broken consolidation range (1.2550) where another valid SELL entry will probably be offered.

Trade Recommendations:

Conservative traders can wait for a pullback towards the backside of the broken consolidation range (1.2550) for a valid SELL Entry.

T/P levels to be located around 1.2480 and 1.2430.

S/L should be placed above 1.2590.

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

GBP/USD. July 18th. Results of the day. An unexpected statement by Michel Barnier resurrected the pound

Trading 18 juil 2019 Commentaire »

4-hour timeframe

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The amplitude of the last 5 days(high-low): 74p – 60p – 67p – 125p – 75p.

The average amplitude over the last 5 days: 80P(81p).

The British pound is finally able to breathe more or less freely after a report on retail sales in the UK in July showed an increase and was higher than the forecast values, which predicted another decline. Also, support for the British currency was provided by the speech of Michel Barnier, chief negotiator for Brexit from the European Union, in which he said that the EU is open to an alternative proposal for the Northern Ireland border. But this point is very indicative, from our point of view. The pound sterling is growing again on rumors. That is, by and large, Barnier only gave hope to the market that London and Brussels will still be able to agree, and then the pound began to be in demand. Last year and at the beginning of this year, the pound has repeatedly shown growth solely on the expectations of traders, on the expectations of the imminent completion of the entire Brexit procedure, on the expectations of the adoption of the "deal" and each time hopes were not justified, the British currency then fell even lower. What did Barnier essentially say? Only that the EU is still willing to consider an alternative plan for the border between Ireland and Northern Ireland. This does not mean that the terms of the agreement reached with Theresa May will be revised, that this proposal will be approved by the EU countries, the European Commission and the European Parliament. That is, in fact, nothing has changed in the Brexit procedure at the moment, only a new information branch has appeared, which can now also be monitored, since the Forex market reacts to it. Now, we are waiting for the statements of Boris Johnson and Jeremy Hunt regarding the possible alternative on the most fundamental issue.

Trading recommendations:

The pound/dollar currency pair continues its upward correction. Thus, traders are advised to wait until it is completed and re-trade down with the targets at 1.2400 and 1.2391, if the pair rebounds from the line Kijun-Sen.

It will be possible to buy the British currency after the reverse consolidation of the pair above the Kijun-Sen line, which will lead to a change of trend to an upward one. Targets – Senkou Span B line and the level of 1.2621, the minimum lots.

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

EUR/USD. July 18th. Results of the day. European Central Bank prepares to lower rates and resume QE

Trading 18 juil 2019 Commentaire »

4-hour timeframe

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The amplitude of the last 5 days (high-low): 41p – 37p – 31p – 62p – 34p.

Average amplitude over the last 5 days: 41p (47p).

From a technical point of view, the downward movement of the EUR/USD pair is absolutely logical. The price has fulfilled the critical Kijun-Sen line, and as the bulls remain extremely weak, the pendulum has outweighed the bears. It so happened that this event coincided with the hit in the media and online publications information that the ECB as well as the Fed, is preparing to reduce the key rate. The only difference is that monetary policy will be eased, most likely in September. But the European Central Bank can reduce the rate by 0.5% at once, to a historic low. Many experts believe that in July (25th), Mario Draghi will give a specific signal to the market that the rate will be lowered. Thus, at the end of his term of office, Draghi is preparing for a very decisive action regarding monetary policy. The main reason for the reduction of the key rate lies, of course, in the lower rates of economic growth and GDP, as well as in weak inflation, which is much lower than the target level of the ECB. Moreover, there is talk among traders that the ECB can go to the resumption of the QE program and will again begin to buy up assets, flooding the economy with freshly printed money. The question is, will it happen during Mario Draghi's reign or already under Christine Lagarde? Anyway, this is another factor that can put pressure on the euro in the long term. As you can see, the Fed is preparing to lower the rate, the ECB is preparing to lower the rate and resume the program of quantitative easing. The Fed will lower the rate from 2.5%, the ECB – from 0.0%. Low inflation in the EU is 1.3%, in the States – 1.6%. Wherever you throw, everywhere America feels much better than Europe, which can be a defining moment in the prospects of the euro/dollar pair.

Trading recommendations:

The EUR/USD pair completed an upward correction near the Kijun-Sen line. Thus, sales of the euro currency with targets at 1.1175 and 1.1157 are now relevant.

We recommend buying the euro/dollar pair not earlier than fixing the price above the critical line with the first target of 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

EUR/USD: ECB rumors, Mnuchin’s refutation, and Italy again

Trading 18 juil 2019 Commentaire »

The euro/dollar pair cannot determine the vector of its movement. The weakness of the European currency pulls the price down to the borders of the 11th figure, but the uncertainty of traders in the development of further dollar rally does not allow the EUR/USD bears to identify new price horizons.

In general, the fundamental picture is not in favor of the euro, especially in light of the rumors published today about the possible actions of the ECB. At the same time, the dollar also cannot gain universal support against the background of incomprehensible prospects for US-China relations, as well as against the background of possible actions of the White House regarding the overvalued greenback. In the end, the pair is forced to trade in a flat, although the general trend is directed toward reducing the price of EUR/USD. However, to consolidate the pair within the 11th figure, bears need a strong information occasion. At the moment, the fundamental background of the pair is very controversial.

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Let's start with the problems of the single currency. Actually, traders have not learned anything new today – the information published by Bloomberg once again reminded investors that they need to prepare for the easing of monetary policy on the part of the ECB. According to insider information, the members of the European regulator are ready at the July meeting to update the ECB's mandate on inflation. According to rumors, the Central Bank will revise (reduce) the target inflation level, which is now "slightly below" two percent in the medium term. The euro/dollar pair, which this morning rose almost to the middle of the 12th figure, reacted instantly, falling by 45 points. After all, the information that the ECB can revise its inflation target is a warning signal for traders. Such a step will create conditions for a long period (longer than the market assumes) of application of incentive programs. Although this is just a rumor, traders "believed" them, hurrying to get rid of the euro.

However, not only macroeconomics puts pressure on the single currency. Today, Italy reminded of itself again, where political passions have been boiling for several weeks. And if earlier, the foreign exchange market ignored these events (reasonably considering it a local conflict), today's statement by Deputy Prime Minister Luigi Di Maio (leader of the "5-star movement") sent a signal to a possible political crisis in the country. He accused his coalition partners – the League party – of provoking the collapse of the coalition government. In turn, the leader of the "League" Matteo Salvini allowed the possibility of early elections, putting forward similar accusations towards his colleagues. The fact is that the two leading parties of Italy have faced serious disagreements regarding the election of German Ursula von der Leyen to the post of head of the European Commission. According to preliminary agreements, representatives of both parties had to vote for her candidacy in the European Parliament. However, members of the "League" in the end, voted against it. With a minimum margin (only 9 votes) Leyen took her post, but this situation has exacerbated the conflict between the members of the Italian coalition.

Traders fear that if it really comes to early elections, the wave of anti-European sentiment in Italy will come to power more radical eurosceptics, which will only strengthen the political conflict between Rome and Brussels. Although the likelihood of the "Italexit" is small enough, the next political confrontation may have a negative impact on the dynamics of growth of the European economy, which is experiencing not the best times.

All of the above fundamental factors quite reasonably pull EUR/USD down to the borders of the 11th figure. But as soon as today, the pair approached the level of 1.1205, the southern momentum faded and the price actually returned to the opening level. This happened for several reasons. First, the dollar reacted strongly to the comments of the Minister of Finance of the USA Steven Mnuchin, which denied the rumors about the intentions of the White House to devalue the dollar. Perhaps the dollar bulls were confused by the very wording of this refutation. Mnuchin said that "at the moment" there is no change in the policy of a strong dollar, although this issue may be considered in the future. In other words, although the Minister denied such intentions in the short term, he did not rule them out in the future. Such rhetoric remains uncertain about the dollar's prospects, especially if the Fed at its July meeting takes a less "dovish" position than the market expects.

In addition, yesterday in the United States, quite disappointing macroeconomic data were published. The number of issued permits for housing construction decreased by 6% in June-this is the worst result in the last two years. This indicator is an important leading indicator of the health of the real estate market (and the economy as a whole), so such a weak dynamics suspended the growth of the dollar throughout the market.

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Thus, both the dollar and the euro continue to be under pressure of their own fundamental problems. The single currency in this confrontation looks, of course, weaker – but due to the lack of powerful info drivers, EUR/USD bears cannot develop a full-scale downward movement to the main support level of 1.1100. Therefore, the pair will continue to hang out in the flat in the near future, trading in the range of 1.1160-1.1280 (the lower and middle lines of the Bollinger Bands indicator on D1, respectively).

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

U.S. Leading Economic Index Unexpectedly Drops 0.3% In June

Trading 18 juil 2019 Commentaire »

Reflecting weaknesses in new orders for manufacturing, housing permits, and unemployment insurance claims, the Conference Board released a report on Thursday showing an unexpected decrease by its index of leading U.S. economic indicators in the month of June.

The Conference Board said its leading economic index fell by 0.3 percent in June after coming in unchanged in May. The drop surprised economists, who had expected the index to inch up by 0.1 percent.

"As the US economy enters its eleventh year of expansion, the longest in US history, the LEI suggests growth is likely to remain slow in the second half of the year," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.

The unexpected drop by the leading economic index reflected negative contributions from building permits, the ISM New Orders Index, and average weekly initial jobless claims.

Ozyildirim the interest rate spread also made a small negative contribution for the first time since late 2007.

Meanwhile, the report said positive contributions from the Leading Credit Index, average weekly manufacturing hours, and stock prices helped limit the downside for the index.

The Conference Board also said its coincident economic index crept up by 0.1 percent in June after rising by 0.2 percent in May.

The uptick came as positive contributions from employees on non-farm payrolls, personal income less transfer payments and manufacturing and trade sales more than offset a negative contribution from industrial production.

Reflecting positive contributions from four of its seven components, the lagging economic index also climbed by 0.6 percent in June after dipping by 0.2 percent in May.

The rebound by the index came amid positive contributions from the average duration of unemployment, commercial and industrial loans outstanding, the ratio of manufacturing and trade inventories to sales, and the ratio of consumer installment credit outstanding to personal income.


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

July 18, 2019 : EUR/USD maintains short-term bearish outlook below 1.1235.

Trading 18 juil 2019 Commentaire »

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Back in June, Temporary Bullish breakout above 1.1335 was demonstrated (suggesting a high probability bullish continuation pattern).

However, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels.

Thus, a bearish movement was initiated towards 1.1275 followed by 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.

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 recent bullish pullback towards the depicted key zone around 1.1235 was suggested be considered as a valid SELL entry.

Fortunately, evident bearish rejection (bearish engulfing H4 candlestick) was recently expressed around 1.1235. This supports the suggested bearish trade which is running in profits.

On the other hand, any bullish breakout above (1.1235-1.1250) should be watched as it 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, a 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