U.S. Dollar Moves To The Downside Following Jobs Data

Trading 02 août 2019 Commentaire »

After initially showing a lack of direction, the value of the U.S. dollar moved to the downside over the course of trading on Friday.

Currently, the U.S. dollar is trading at 106.57 yen versus the 107.34 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1106 compared to yesterday's $1.1085.

With the drop on the day, the value of the U.S. dollar extended the downward move seen over the court of trading on Thursday.

The greenback moved lower after the Labor Department released a report showing U.S. job growth slowed in the month of July but came in line with economist estimates.

The report said non-farm payroll employment climbed by 164,000 jobs in July after jumping by a downwardly revised 193,000 jobs in June.

Economists had expected employment to increase by 164,000 jobs compared to the spike of 224,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate held at 3.7 percent in July, unchanged from June and in line with economist estimates.

"Overall, this report won't be enough to move the needle much in either direction as far as a September rate cut is concerned, but it reinforces our sense that another move next month isn't yet as sure a thing as the markets are now pricing in," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

Traders also continue to react to President Donald Trump's plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.

Trump revealed the plan shortly after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin wrapped up the latest round of trade talks in Shanghai.

The president accused China of failing to follow through on pledges to buy large quantities of U.S. agricultural products and stop the sale of Fentanyl to the U.S.

The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has been a dark cloud over the global economy for over a year.

In typical fashion, China responded to Trump's announcement by threatening to take necessary countermeasures to protect the country's interests.


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Crude Oil Prices Rebound From Thursday's Selloff

Trading 02 août 2019 Commentaire »

Crude oil prices posted a modest recovery on Friday after plummeting more than 6 percent a day earlier on the escalating trade spat between the United States and China.

U.S. President Donald Trump on Thursday announced plans to impose a 10 percent tariff on $300 billion worth of Chinese imports.

West Texas Intermediate jumped $1.09 or 2.00 percent to $55.58 after falling all the way to $54.28 a day earlier.

The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has led to increasing concerns about the outlook for the global economy.

Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal. The trade spat is only going to get worse as Beijing said it would not give an inch under pressure from Washington.


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Treasuries Extend Thursday's Substantial Move To The Upside

Trading 02 août 2019 Commentaire »

Following the substantial increase seen over the course of the previous session, treasuries saw some further upside during trading on Friday.

Bond prices moved higher early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price fell by 3.9 basis points to 1.855 percent.

The ten-year yield extended the nosedive seen on Thursday to once again end the session at its lowest closing level since November of 2016.

Treasuries continued to benefit from their appeal as a safe haven after President Donald Trump announced plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.

Trump revealed the plan shortly after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin wrapped up the latest round of trade talks in Shanghai.

The president accused China of failing to follow through on pledges to buy large quantities of U.S. agricultural products and stop the sale of Fentanyl to the U.S.

The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has been a dark cloud over the global economy for over a year.

In typical fashion, China responded to Trump's announcement by threatening to take necessary countermeasures to protect the country's interests.

Traders were also reacting to a closely watched Labor Department report showing U.S. job growth slowed in the month of July but came in line with economist estimates.

The report said non-farm payroll employment climbed by 164,000 jobs in July after jumping by a downwardly revised 193,000 jobs in June.

Economists had expected employment to increase by 164,000 jobs compared to the spike of 224,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate held at 3.7 percent in July, unchanged from June and in line with economist estimates.

"Overall, this report won't be enough to move the needle much in either direction as far as a September rate cut is concerned, but it reinforces our sense that another move next month isn't yet as sure a thing as the markets are now pricing in," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

Following the slew of major economic events this past week, the economic calendar for next week is relatively sparse.

Traders are still likely to keep an eye on reports on service sector activity and producer prices as well as the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.


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Gold Shows Volatility Amid Escalated Trade Spat

Trading 02 août 2019 Commentaire »

Gold prices saw considerable movement on Friday as trade war fears hit risk assets hard. Risk sentiment waned after U.S. President Donald Trump vowed to slap a 10 percent tariff on $300 billion of Chinese imports from next month.

The new tariffs announced by Trump represent the latest escalation in the trade war between the U.S. and China, which has led to increasing concerns about the outlook for the global economy and has investors looking at safe havens.

Spot gold eased from its two-week high $1,446.10 earlier in the day, slipping $2.60 or 0.18 percent to $1,442.50 per ounce. U.S. gold futures were up 1.57 percent at $1,454.85 an ounce.

That announcement on Thursday lifted the precious metal from its lowest level since July 17 at $1,405.50.

Trump also threatened to further raise tariffs if Chinese President Xi Jinping fails to move more quickly to strike a trade deal. The trade spat is only going to get worse as Beijing said it would not give an inch under pressure from Washington.


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Dollar Falls After Nonfarm Payrolls; Rising U.S.-China Trade Woes Weigh

Trading 02 août 2019 Commentaire »

The U.S. dollar drifted lower against its key counterparts in the European session on Friday, after the July job growth came in line with forecasts and as the trade spat between the U.S. and China escalated following Beijing's threat to impose countermeasures, if Washington proceeds with its proposed tariff hike.

Data from the Labor Department showed that the non-farm payroll employment climbed by 164,000 jobs in July after a downwardly revised jump of 193,000 jobs in June.

Economists had expected employment to increase by 164,000 jobs.

The unemployment rate held steady at 3.7 percent in July, unchanged from June, and in line with economists' estimates.

Elsewhere, China warned of retaliatory measures against the U.S. in order to defend its core interests, adding that its consequences must be borne by Washington.

Beijing's announcement came a day after the U.S. President Donald Trump proposed to impose 10 percent tariffs on $300 billion of Chinese imports, starting September 1.

The additional tariffs will cover almost all the goods imported from China into the United States.

Trump's decision came after the stalled trade talks in Beijing. The U.S. President blamed his Chinese counterpart Xi Jinping of breaking the latter's pledge to buy U.S. agricultural goods.

Investors fear that the Federal Reserve would cut interest rates again to support the economy from the trade war uncertainty.

On the economic front, data from the Commerce Department showed that the U.S. trade deficit was little changed in the month of June.

The Commerce Department said the trade deficit narrowed slightly to $55.2 billion in June from a revised $55.3 billion in May.

The US dollar has been declining against its most major counterparts in the Asian session on Trump's tariff threat against Beijing.

The greenback shed 0.7 percent to over a 7-month low of 106.61 versus the yen from Thursday's closing value of 107.33. Next immediate support for the greenback is seen around the 104.00 level.

The minutes from the Bank of Japan's monetary policy session, held on June 19-20, showed that policymakers discussed further easing as most of them shared the view that it was appropriate to persistently continue with the powerful monetary easing.

"The key to overcoming deflation was for the Bank to maintain its stance of taking some kind of policy response if any changes emerged in the baseline scenario of the outlook for prices," the minutes said.

The greenback depreciated to a 9-day low of 0.9837 against the Swiss franc, down by 0.7 percent from Thursday's closing value of 0.9903. The greenback is seen finding support around the 0.96 level.

In Europe, figures from the Federal Statistical Office showed that Switzerland's consumer price inflation eased more than expected in July.

Consumer prices climbed 0.3 percent year-on-year, following a 0.6 percent rise in June. Inflation was forecast to slow moderately to 0.5 percent. After an uptick to 1.2089 against the pound at 9:00 pm ET, the greenback pulled back 0.5 percent to 1.2144 following the data. Should the greenback weaken further, it may find support around the 1.27 level.

Survey data from IHS Markit showed that the UK construction sector continued to shrink in July.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index rose to 45.3 in July from June's ten-year low of 43.1. The score was forecast to climb to 46.0.

In contrast, the greenback bounced off 0.3 percent to 1.1078 a euro, after having dropped to a two-day low of 1.1115 at 3:55 am ET. On the upside, 1.09 is possibly seen as the next resistance level for the greenback.

Data from Eurostat showed that Eurozone producer price inflation eased notably in June largely due to weak energy prices.

Producer price inflation slowed to 0.7 percent in June from 1.6 percent in May. The rate was below the forecast of 0.8 percent.

The U.S. dollar appreciated to over a 6-week high of 1.3266 against the Canadian dollar, after dropping to 1.3205 at 5:00 pm ET. The greenback may possibly challenge resistance around the 1.34 level.

Continuing its early rally, the greenback rose 0.4 percent to a 7-month high of 0.6775 versus the Australian dollar, from Thursday's New York session close of 0.6799. Further uptrend may take the greenback to a resistance around the 0.66 level.

The greenback gained 0.7 percent against the New Zealand dollar, touching a 1-1/2-month high of 0.6505. The pair had ended Thursday's trading session at 0.6550. The greenback is likely to face resistance around the 0.64 level, if it rallies again.

Survey data from ANZ showed that New Zealand's consumer confidence deteriorated in July. The consumer confidence index fell to 116.4 in July from 122.6 in June.


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August 2, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 02 août 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 previous bullish channel) which failed to provide enough bullish support for the EUR/USD pair.

In the period between 8 - 22 July, sideway consolidation range was established between 1.1200 - 1.1275 until a triple-top reversal pattern was demonstrated around the upper limit.

Shortly after, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1235.

Early bearish breakdown below 1.1175 facilitated further bearish decline towards 1.1115 (Previous Weekly Low) where bullish rejection was recently demonstrated on July 25.

That's why, Intraday bullish pullback was demonstrated towards 1.1175-1.1200 where a valid SELL entry was suggested in a previous article.

Earlier this week, bearish persistence below 1.1115 allowed further bearish decline towards 1.1025 where significant signs of bullish recovery were demonstrated.

Risky traders were advised to watch for bullish persistence above 1.1050 as a bullish signal for Intraday BUY entry with bullish target projected towards 1.1115-1.1140.

It's already running in profits. S/L should be advanced to entry levels to offset the associated risk.

The price zone of 1.1115-1.1140 (confluence of a recent SUPPLY level & the upper limit of the newly-established bearish channel) stands as a prominent SUPPLY zoneto be watched for bearish rejection and a possible SELL entry.

Trade recommendations :

Conservative traders should wait for a continuation of the current bullish pullback towards 1.1140 for a valid SELL entry.

S/L should be placed above 1.1175 while initial T/P level should be located around 1.1025.

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U.S. Factory Orders Rise Less Than Expected In June

Trading 02 août 2019 Commentaire »

A report released by the Commerce Department on Friday showed a rebound in new orders for U.S. manufactured goods in the month of June.

The Commerce Department said factory orders rose by 0.6 percent in June after tumbling by a downwardly revised 1.3 percent in May.

Economists had expected factory orders to climb by 0.8 percent compared to the 0.7 percent drop originally reported for the previous month.

The rebound in factory orders came as durable goods orders surged up by 1.9 percent in June after plunging by 2.3 percent in May.

Transportation equipment led the rebound in durable goods orders, soaring by 3.7 percent in June after plummeting by 7.5 percent in May.

On the other hand, the report said orders for non-durable goods slid by 0.5 percent in June after falling by 0.3 percent in the previous month.

The Commerce Department also said shipments of manufactured goods rose by 0.4 percent in June after inching up by 0.1 percent in May, while inventories of manufactured goods showed another 0.2 percent uptick.

With shipments rising by more than inventories, the inventories-to-shipments ratio slipped to 1.37 in June from 1.38 in May.


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U.S. Consumer Sentiment Shows Slight Uptick In July

Trading 02 août 2019 Commentaire »

After previously releasing preliminary data showing a slight improvement in U.S. consumer sentiment in the month of July, the University of Michigan released a report on Friday showing its reading on consumer sentiment was unrevised.

The report said the consumer sentiment index for July came in at 98.4, unchanged from the preliminary reading and up slightly from the final June reading of 98.2. Economists had expected the index to be unrevised.

"Consumer sentiment remained unchanged in late July from the mid-month reading, with all component questions showing only small and offsetting changes," said Surveys of Consumers chief economist Richard Curtin.

"Economic confidence has been remarkably stable since the start of 2017, despite ongoing trade uncertainties," he added. "The resilience displayed has been primarily due to a renewed sense of personal financial optimism."

The report said the current economic conditions index dipped to 110.7 in July from 111.9 in June, while the index of consumer expectations inched up to 90.5 from 89.3.

On the inflation front, one-year inflation expectations edged down to 2.6 percent in July from 2.7 percent in June, although five-year inflation expectations rose to 2.5 percent from 2.3 percent.


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*U.S. Factory Orders Rise 0.6% In June

Trading 02 août 2019 Commentaire »

U.S. Factory Orders Rise 0.6% In June


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*U.S. Consumer Sentiment Index Unrevised At 98.4 In July

Trading 02 août 2019 Commentaire »

U.S. Consumer Sentiment Index Unrevised At 98.4 In July


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