AUDUSD remains inside short-term bullish channel and challenges support

Trading 24 juil 2019 Commentaire »

AUDUSD is making higher highs and higher lows on a daily basis since middle of June when it bottomed around 0.6835. Price is now challenging the lower boundary of the upward sloping channel.

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Magenta line - major resistance trend line

Red lines - short-term bullish channel

AUDUSD is trading inside the red short-term bullish channel. Support is found at 0.6960 and resistance at 0.7080. Breaking above 0.7080 will not only provide a new higher high, it will mean that price is breaking above critical resistance trend line. If support fails to hold we should expect a move towards 0.6840 which is the major low area of June.

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EURUSD continues lower as expected after breaking below support of 1.12

Trading 24 juil 2019 Commentaire »

EURUSD is making new lows and this selling pressure should come as of no surprise to traders especially after price had broken below the 1.12 support level. This was noted several times in previous posts and how important a support it was.

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Red line -long-term support

Magenta line - neckline support broken

Blue lines - target of neckline breakdown

EURUSD has broken below the key support of 1.12 and the road to 1.10 has opened. Price has made a bearish formation around 1.12 and combined with a triple top rejection at 1.1280 the mixture is deadly for bulls. Trend is bearish. EURUSD is heading below 1.11 and as long as price is below 1.1280 any bounce is considered selling opportunity. Target to the downside is found between 1.1050 and 1.0975. A bounce towards 1.12 could be seen at the end of this week in order for bears to liquidate some of their profits, but in order to see more downside towards 1.10 we should not see price recapture 1.12.

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Neutral day for Gold but price still vulnerable to a move lower

Trading 24 juil 2019 Commentaire »

Gold price mostly moved sideways today holding above the short-term support at $1,415 and below resistance at $1,430. Gold price is consolidating and if support fails to hold, we should expect a move below $1,400.

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Red rectangle - resistance

Green rectangle - support

Blue rectangle- target if support fails to hold

Black line - resistance broken

Red line - trend line support

Gold price remains in a bullish short-term trend despite the recent pull back from $1,453. Price remains above the support area of $1,415-10 and above the trend line support. Gold price will move towards $1,350-60 only if this support area fails. On the other hand resistance is found at $1,430 and if broken we could expect one more new higher high towards $1,500.

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Treasuries Move Back To The Upside Ahead Of ECB Meeting

Trading 24 juil 2019 Commentaire »

After coming under pressure in afternoon trading on Tuesday, treasuries moved back to the upside during trading on Wednesday.

Bond prices gave back some ground after an early upward move but remained in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.4 basis points to 2.050 percent.

The rebound by treasuries came as traders looked ahead to the European Central Bank's monetary policy decision on Thursday as well as next week's Federal Reserve meeting.

Both the ECB and the Fed are expected to lower interest rates amid concerns about the impact of the U.S.-China trade war on the global economy.

Treasuries pulled back off their best levels following the release of a Commerce Department report showing a stronger than expected rebound in U.S. new home sales in the month of June.

The Commerce Department said new home sales spiked by 7.0 percent to an annual rate of 646,000 in June after plunging by 8.2 percent to a revised rate of 604,000 in May.

Economists had expected new home sales to jump by 5.4 percent to a rate of 660,000 from the 626,000 originally reported for the previous month.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $41 billion worth of five-year notes, which attracted below average demand.

The five-year note auction drew a high yield of 1.824 percent and a bid-to-cover ratio of 2.26, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.36.

Looking ahead, the Treasury is due to announce the results of its auction of $32 billion worth of seven-year notes on Thursday.

Trading on Thursday may also be impacted by reaction to U.S. economic reports on durable goods orders and weekly jobless claims.


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Oil Futures Settle Lower Despite Jump In Stockpiles

Trading 24 juil 2019 Commentaire »

Crude oil futures ended lower on Wednesday, even as data from the Energy Information Administration showed a much larger than expected drop in crude stockpiles in the U.S. last week.

Worries about the outlook for energy demand due to global economic slowdown dragged oil prices down from early highs and pushed them down into negative territory.

West Texas Intermediate Crude oil futures for September ended down $0.89, or about 1.6%, at $55.88 a barrel.

On Tuesday, WTI crude oil futures for September ended up $0.55, or about 1%, at $56.77 a barrel.

The U.S. Energy Information Administration said earlier in the day that crude inventories fell by 10.84 million barrels for the week to July 19, compared to forecast for a draw of 4 million barrels.

The EIA report also said that gasoline inventories decreased by 226,000 barrels last week, while distillate stockpiles rose by 613,00 barrels.

The American Petroleum Institute (API) reported late Tuesday that oil inventory in the U.S. fell by 11 million barrels in the week to July 19, compared to analyst expectations of a much smaller 4 million barrel draw.

Rising tensions in the Middle East, optimism about U.S.-China trade talks and API's data showing a significant drop in U.S. crude inventories lifted crude oil prices earlier in the day.

However, oil futures turned weak later on in the session, weighed down by the IMF's recent decision to lower its growth forecasts for the U.S. and the global economy for this year and next.

The International Monetary Fund on Tuesday cut its growth forecasts for the global economy for this year and next.

Gulf tensions continued to hurt sentiment after the American military said the U.S. may have brought down two Iranian drones in the Gulf last week, not one.

Iranian President Hassan Rouhani said today his country was open to holding talks on its nuclear program but would not surrender under the name of negotiation.


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Gold Futures Settle Higher On Rate Cut Hopes

Trading 24 juil 2019 Commentaire »

Gold prices moved higher on Wednesday as the dollar stayed largely weak amid rising expectations that the Federal Reserve will cut interest rate next week to support growth.

Rising geopolitical tensions, weak economic data out of the U.S. and Europe, and hopes of monetary easing by the European Central Bank too prompted investors to seek the safe haven asset.

Gold's uptick was also due to rising prospects of the U.K. exiting the European Union without a deal.

The dollar index, which dropped to a low of 97.55, recovered to 97.81 later on in the day, but was still seen struggling to make any significant move up in positive territory.

Gold futures for August ended up $1.90, or 0.13%, at $1,423.60 an ounce.

On Tuesday, gold futures for August ended down $5.20, or about 0.4%, at $1,421.70 an ounce.

Silver futures for September ended up $0.150, at $16.626 an ounce, while Copper futures for September settled at $2.7120 per pound, gaining $0.0120 for the session.

In geopolitical news, Gulf tensions remain at elevated levels after the American military said the U.S. may have brought down two Iranian drones in the Gulf last week.

Meanwhile, Iranian President Hassan Rouhani said Wednesday that Iran was open to holding talks on its nuclear program but would not surrender under the name of negotiation.

Global growth concerns linger after the IMF lowered its forecast for global growth this year and next, citing trade and Brexit uncertainties.

Many believe that Boris Johnson, who took over as the Primer Minister of the U.K. today, will take a hard line in pushing the country out without an EU pact in hand.

In U.S. economic news today, a report from the Commerce Department showed new homes sales in the U.S. showed a substantial rebound in the month of June. The report said new home sales increased by 0.7% to an annual rate of 646,000 in June, after plunging by 8.2% to a revised rate of 604,000 in May. Economists had expected new home sales to jump by 5.4% in June.


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July 24, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 24 juil 2019 Commentaire »

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Back in June 24, 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, extensive bullish pullback was expected to pursue again towards the price zone around 1.1275 where a double-top Bearish pattern was demonstrated.

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

By the end of last week, lack of enough bearish momentum below 1.1235 brought another bullish pullback towards the depicted key zone around 1.1235 spiking up to 1.1275 (a Weekly High) where significant bearish rejection and a bearish engulfing candlestick were demonstrated.

Fortunately, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1235 which stands as Intraday Supply zone to be watched for Intraday SELL entries upon any bullish pullback.

Further bearish decline was expected to pursue towards 1.1175 where early signs of bullish recovery is being demonstrated.

Intradaily bullish pullback may be demonstrated towards 1.1200 where another valid SELL entry can be offered.

On the other hand, bearish breakdown below 1.1175 will probably facilitate a quick bearish decline towards 1.1115 (Previous Weekly Low).

Trade recommendations :

For Intraday traders, another valid SELL entry can be offered anywhere around 1.1200.

Initial Target levels to be located around 1.1175 then 1.1115 while Stop Loss should be placed above 1.1240.

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Five-Year Note Auction Attracts Below Average Demand

Trading 24 juil 2019 Commentaire »

Continuing the release of the results of this month's long-term securities auctions, the Treasury Department revealed on Wednesday that its auction of $41 billion worth of five-year notes attracted below average demand.

The five-year note auction drew a high yield of 1.824 percent and a bid-to-cover ratio of 2.26.

Last month, the Treasury also sold $41 billion worth of five-year notes, drawing a high yield of 1.791 percent and a bid-to-cover ratio of 2.35.

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

The ten previous five-year note auctions had an average bid-to-cover ratio of 2.36.

Looking ahead, the Treasury is due to announce the results of its auction of $32 billion worth of seven-year notes on Thursday.


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ECB To Lay Ground For September Rate Cut

Trading 24 juil 2019 Commentaire »

The European Central Bank is likely to alter the wording of its forward guidance on Thursday to give a clear signal that interest rates would be cut soon, and that policymakers are ready to add more stimulus if the euro area macroeconomic outlook deteriorates further.

Economists widely expect that rate cut to come in September in the form of a 10 basis points reduction to the deposit rate, which is already in negative territory at a record low -0.40 percent.

That said, a few economists expect the bank to announce a rate cut as early as this month. The Governing Council, led by ECB President Mario Draghi, is set to announce the policy decision at 7.45 am in Frankfurt on Thursday. Draghi will hold his post-decision press conference at 8.30 am ET.

Minutes of the June policy session showed that policymakers agreed that the bank need to be ready to ease the policy stance further as uncertainties were likely to continue in the coming months.

Economists expect the bank to announce further asset purchases after September's interest rate reduction, but clearly signal on Thursday that stimulus is coming.

The ECB ended its massive EUR 2.6 trillion Asset Purchase Programme, which began in 2015, in December.

The main refi rate is currently at a record low zero percent and the marginal lending facility rate is at 0.25 percent.

Disappointing macro data, tentative signs that the resilience of the domestic economy is faltering, a potential rate cut by the Fed and continued dovish communication from ECB officials since Sintra, have all pushed the ECB to the?point of no return, ING economist Carsten Brzeski said.

"It seems as if the ECB will try to talk a very final talk before walking the walk in September," the economist added. "However, the risk to this call remains that Mario Draghi will try to surprise financial markets. It would not be the first time."

Danske Bank analysts expect Draghi to also reveal that ECB staff have been tasked to examine a big easing package including tiering.

Policymakers were open to exploring the need for a tiering system for interest rates, ECB Executive Board member Benoit Coeure said in an interview to the Financial Times in June. Currently, the prevailing view in the Governing Council is that the tiering system is not needed, Coeure said, adding that "we also agree that it deserves further reflection."

A tiered deposit rate can partly reduce the burden of the cost banks pay on the cash they park at the ECB.

While leaving the interest rates unchanged on June 6, the ECB extended its forward guidance to reflect its view that rates will remain at the present level at least through the first half of 2020.

However, economic data have been mixed since then and there has been no let up in the global concerns such as protectionism and trade tensions.

In June, Draghi said in a speech in Sintra, Portugal, that the ECB still has room to cut interest rates and to adopt measures to cushion the side effect from low interest rates.

The stimulus signal from Draghi attracted an accusation from the US President Donald Trump that Europe was engaging in currency manipulation.

Eurozone interest rates were raised last in July 2011 by 25 basis points.

Draghi, whose term ends in October, is set to be the only ECB chief thus far who did not raise interest rates. The impending rate cut and further stimulus would be his final push to rev up euro area growth and inflation.

Early this month, IMF Chief Christine Lagarde was chosen to replace Draghi as the ECB President. The former French finance minister is the first woman to be at the helm of the central bank for 19 countries that has euro as the currency.

ECB staff is considering a potential review of the bank's monetary policy strategy, including its inflation goal, Bloomberg reported this week. Such discussions are set to gain momentum under the new ECB chief Lagarde.

The ECB targets inflation "below, but close to 2 percent."

Rate-setters considered the need for "more strategic" measures if inflation continued to remain low and that the bank's communication should stress that deviations of inflation from the bank's target in both directions would be tolerated, minutes of the June policy session revealed.


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July 24, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 24 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.

Moreover, signs of bearish rejection have been manifested near 1.2750 (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 1.2550 (the lower limit of the depicted consolidation range).

In July 18, a recent bullish movement was initiated around 1.2385 (the lower limit of the depicted movement channel).

A bullish pullback was demonstrated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered by the end of last week's consolidations.

Bearish persistence below 1.2460 (38.2% Fibonacci levels) was mandatory to ensure further bearish decline.

However, lack of sufficient bearish momentum was demonstrated around 1.2430 (38.2% Fibonacci Level).

That's why, another bullish pullback is currently being demonstrated towards 1.2500 (61.8% Fibonacci level) which constitutes a prominent Intraday Supply Level to be watched for bearish rejection & another SELL Entry.

Bearish breakdown below 1.2430 (38.2% Fibonacci Level) is mandatory to allow further bearish decline towards 1.2360 where the lower limit of the depicted movement channel comes to meet the GBP/USD pair.

Moreover, Bearish breakdown below 1.2360 is needed to facilitate further bearish decline towards 1.2320 and 1.2270 which correspond to significant key-levels on the Weekly chart.

On the other hand, please note that any bullish breakout above 1.2560 invalidates the previously mentioned bearish scenario.

Trade Recommendations:

For traders who missed the initial trade, another SELL Entry can be taken upon the current bullish pullback towards 1.2500.

Initial T/P levels to be located around 1.2430 and 1.2360 while S/L should be placed above 1.2560.

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