Crude Oil Futures Settle Sharply Higher

Trading 09 août 2019 Commentaire »

Crude oil prices rose sharply on Friday, extending strong gains recorded in the previous session, on reports Saudi Arabia is set to cut crude exports next month, and on hopes OPEC will increase output cuts.

Oil futures had plunged sharply earlier in the week amid rising concerns about the outlook for energy demand due to the impact of the ongoing U.S.-China trade war on the global economy.

West Texas Intermediate Crude oil futures for September ended up $1.96, or about 3.7%, at $54.50 a barrel.

WTI crude futures for September ended up $1.45, or 2.84%, at $52.54 a barrel on Thursday, after having plunged 4.7% a session earlier.

Despite the gains in the last two sessions, oil futures shed about 2.1% in the week.

According to a report in Reuters, Saudi Arabia, de facto leader of the OPEC, plans to maintain its crude oil exports below 7 million barrels per day in August and September.

A day before, the Bloomberg reported that the kingdom has phoned other oil producers to discuss possible policy responses amid a continued slide in prices.

Traders remain hopeful of more OPEC production cuts despite the International Energy Agency (IEA) cutting its global oil demand growth forecasts for this year and next, citing trade war tensions.

OPEC and its allies have agreed to cut production by 1.2 million b/d through to the end of the first quarter of 2020 to rebalance the market.

Middle East tensions, sanctions on Iran and Venezuela and data from Baker Hughes that shows U.S. energy firms to have cut six oil rigs in the week to August 9, contributed as well to oil's sharp uptick in the session.

The total rig counts now stand at 764, the lowest since February 2018, Baker Hughes said in its report. With this week's reduction, the rig count has declined for six consecutive weeks now.


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Treasuries Close Modestly Lower After Seeing Early Strength

Trading 09 août 2019 Commentaire »

After moving modestly higher early in the session on Friday, treasuries moved back to the downside over the course of the trading day.

Bond prices pulled back well off their best levels of the day and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ticked up by 1.8 basis points to 1.734 percent after hitting a low of 1.680 percent.

Treasuries initially benefited from renewed concerns about the U.S.-China trade war after a report from Bloomberg said President Donald Trump's administration is holding off on decisions about licenses for U.S. companies to restart business with Chinese tech giant Huawei.

Trump previously said his administration would make "timely licensing decisions" but has reportedly decided to delay the decisions in response to China halting its purchases of U.S. agricultural products.

China decided to stop buying U.S. agricultural products in retaliation against Trump's announcement last week that he plans to impose a 10 percent tariff on the remaining $300 billion worth of Chinese imports.

Trump seemed to confirm the report later in the morning, telling reporters the U.S. is "not going to do business" with Chinese tech giant Huawei.

"And I really made the decision. It's much simpler not doing any business with Huawei," Trump said. "That doesn't mean we won't agree to something if and when we make a trade deal."

Trump also indicated he is "not ready" to make a trade deal with China, suggesting the U.S. could skip the next round of trade talks in September.

"We'll see whether or not we keep our meeting in September," Trump said. "If we do, that's fine. If we don't, that's fine."

Buying interest waned over the course of the session, however, inspiring some traders to cash in on the recent strength in the bond markets.

In U.S. economic news, the Labor Department released a report showing a modest increase in producer prices in the month of July.

The Labor Department said its producer price index for final demand rose by 0.2 percent in July after inching up by 0.1 percent in both May and June. The uptick in prices matched economist estimates.

Meanwhile, the report said core producer prices, which exclude food and energy prices, edged down by 0.1 percent in July after climbing by 0.3 percent in June.

The modest pullback in core producer prices came as a surprise to economists, who had expected core prices to rise by 0.2 percent.

"The decline in core producer prices in July confirms that underlying price pressures remain subdued," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "At the margin, that makes it a little more likely that Fed officials will react to any further signs of weakness in the real economy by cutting interest rates again."

The economic calendar for next week starts off relatively quiet but ramps up with the release of closely watched reports on consumer prices, retail sales, industrial production, and housing starts.


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Gold Futures Pare Early Gains, Settle Slightly Weak

Trading 09 août 2019 Commentaire »

Gold futures failed to hold early gains and ended flat on Friday, even as worries about U.S.-China trade dispute lingered after President Donald Trump said the U.S. is "not going to do business" with Chinese tech giant Huawei.

Profit taking after recent strong gains took some shine off the yellow metal.

The dollar index was down 0.15%, at 97.47, despite coming off the session's low of 97.36.

Gold futures for December ended down $1.00, or about 0.07%, at $1,508.50, off the session's high of $1,521.10.

On Thursday, gold futures for December ended down $10.10, or about 0.7%, at $1,509.50 an ounce. For the week, gold futures gained about 3.5%

Silver futures for September ended down $0.005, at $16.931 an ounce, while Copper futures for September settled at $2.5890 per pound, down $0.0185 from previous close.

Trump said, "And I really made the decision. It's much simpler not doing any business with Huawei. That doesn't mean we won't agree to something if and when we make a trade deal."

He also indicated that he "is not ready" to make a trade deal with China, suggesting the U.S. could skip the next round of trade talks in September.

Earlier, a report in Bloomberg said the Trump administration is holding off on decisions about licenses for U.S. companies to restart business with Huawei following China halting its purchases of U.S. agricultural products.

In U.S. economic news, the Labor Department's report said its producer price index for final demand rose by 0.2% in July after inching up by 0.1% in both May and June. The uptick in prices matched economist estimates.

Meanwhile, the report said core producer prices, which exclude food and energy prices, edged down by 0.1% in July after climbing by 0.3% in June. Economists had expected core prices to rise by 0.2%.


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August 9, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 09 août 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.

On July 5, a bearish range breakout was demonstrated below 1.2550 (the lower limit of the depicted consolidation range). Hence, quick bearish decline was demonstrated towards the price zone of 1.2430-1.2385 (where the lower limit of the movement channel came to meet the GBPUSD pair).

On July 18, a recent bullish movement was initiated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered few weeks ago.

Moreover, Bearish breakdown below 1.2350 facilitated further bearish decline towards 1.2320, 1.2270 and 1.2125 which correspond to significant key-levels on the Weekly chart.

The current price levels are quite risky/low for having new SELL entries. That's why, Previous SELLERS were advised to have their profits gathered.

Recently, temporary weak signs of bullish recovery were demonstrated around 1.2100.

This was supposed to push the GBP/USD to retrace towards 1.2260 then 1.2320 if sufficient bullish momentum was demonstrated above 1.2230.

However, Today, recent bearish decline is being demonstrated below 1.2090.

Further bearish decline may be demonstrated towards 1.2000 (Prominent Weekly Bottom) where further price action should be assessed.

Trade Recommendations:

Intraday traders were advised to look for early bullish breakout above 1.2230 for a counter-trend BUY entry.

Conservative traders should wait for bullish pullback to pursue towards 1.2320 - 1.2350 for new valid SELL entries.

S/L should be placed above 1.2430. Initial T/P level to be placed around 1.2279 and 1.2130.

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The euro will face new challenges

Trading 09 août 2019 Commentaire »

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Financial markets are gradually recovering after a busy week. New militant statements from the Bank of China and Donald Trump is not received. Well, the attacks of the owner of the White House on the excessively "hawkish" policy of the Fed are perceived by traders as an increase in the likelihood of a rate cut in September. Investors for the most part digest the information received and study the opinions of experts on the recession in the United States

Wall Street Journal respondents increased the chances of monetary policy easing at the next FOMC meeting to 63.9% from 49.8%. The risks of a recession in the US economy over the next 12 months are estimated at 33.6% against 30.1% in the last survey and 18.3% a year ago. It is worth noting that the recent figure is the highest since 2011. In Bloomberg, the probability of a recession on the 12-month horizon is raised to 35% from 31%, and Reuters estimates the chances of a recession over two years at 45%.

The US economy at the end of this year will grow by 2.3%, according to Bloomberg respondents. Previously, it was about an increase of 2.5%. In the third quarter, GDP growth will slow to 1.8% from 2.1%. The world economy, according to the news agency, will expand this year by 3.2%, rather than 3.3%, as previously expected.

So, everything is clear with America. As for the eurozone, if the region's economy were not as weak as it is now, the euro would have attacked long ago. But there is no question of this, because the health of German exports and industrial production, undermined by trade wars, spoils everything. The German economy clings to the service sector with all its might, but the leading indicators are inexorable – they begin to warn of a recession. We need a fiscal stimulus, as the expansion of the monetary system will further complicate the difficult fate of the banking system.Reducing the ECB rate to -0.5% will increase the costs of banks associated with the service of negative rates by 60%, Bloomberg estimated.

Information leaked to the network that Germany is seriously discussing the possibility of a stimulating budget policy has pushed the yields of German government securities up. If official Berlin really decides to do this, then the euro will have some anchor of salvation, able to help the "bulls" on EUR/USD to finally go beyond the range of consolidation of $1.1175–1.1245.

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Moment of truth for Italy

On Friday, the euro won back most of the losses recorded on Thursday, caused by the new political crisis in Italy. The leader of the "League" Matteo Salvini announced the collapse of the ruling coalition in the country and called for new elections to strengthen his power. The most striking reaction to the news was in the stock and bond markets, where there was a large-scale sale of Italian assets.

Salvini complained about the absence of a majority in Parliament and pointed to the need to "get rid of uncertainty." Italian Prime Minister Giuseppe Conte is going to announce a vote of no confidence.

Time is short

According to sociologists, 62% of Italians would like to see Salvini as Prime Minister. Early elections are expected to take place in October, and negotiations may then be needed to form a new coalition, possibly with the brothers of Italy, another far-right party. Despite Salvini's popularity among voters, he may need a partner.

The right-wing government is likely to be more organic than the "hodgepodge" of the 5-Star Movement, which has ruled Italy for just over a year. The new authorities will take a tough stance on immigration, and the conflict with the EU, apparently, cannot be avoided. At the same time, the costs of infrastructure projects blocked by the representatives of the "Five stars" can be expanded. Meanwhile, numerous contradictions that have undermined the coalition will reappear on the surface. The "League" is split into eurosceptics who advocate Italy's exit from the eurozone, and a more pragmatic faction that supports tax cuts and compromises with allies.

Undoubtedly, Salvini managed to keep these two camps together, but only because he did not have to take full responsibility for what the current government is doing. Now, this time is running out.

If a new general election is held and Salvini wins, the League will have to demonstrate its true position after several years of generous promises. For Italy, the moment of truth is coming.

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Canadian Falls After Downbeat Jobs Data

Trading 09 août 2019 Commentaire »

The Canadian dollar declined against its major counterparts in the European session on Friday, after a data showed that the economy shed jobs unexpectedly in July, while the jobless rate rose.

Data from Statistics Canada showed that the employment fell by 24,200 jobs in July, after a decline of 2,200 jobs in the previous month. Economists had expected the employment to rise by 15,000 jobs. The jobless rate rose to 5.7 percent from 5.5 percent in June. Economists had forecast the jobless rate to remain unchanged for the month.

Separate data showed that Canadian building permits fell in June, largely due to a decrease in the value of multi-family and institutional permits.

The building permits dropped to 3.7 percent in June, compared to a revised 12.2 percent fall in the previous month. Economists were looking for a gain of 1 percent.

The loonie showed mixed trading in the previous session. While it rose against the yen and the greenback, it was steady against the euro. Against the aussie, it fell.

The loonie declined to 79.68 against the yen, from a 3-day high of 80.27 hit at 10:30 pm ET. The loonie is seen finding support around the 77.00 level.

Having climbed to a 3-day high of 1.3207 against the greenback at 8:15 am ET, the loonie reversed direction and fell to 1.3274 after the data. The loonie is poised to find support around the 1.34 level.

The loonie slipped to 0.9033 against the aussie, following a 2-day high of 0.8970 seen at 5:15 pm ET. Next likely support for the loonie is seen around the 0.91 level.

The loonie reversed from an early high of 1.4784 against the euro, falling to 1.4869. If the loonie falls further, 1.50 is seen as its next support level.

Data from Destatis showed that Germany's exports dropped marginally in June, while imports increased for the first time in three months.

Exports fell by a seasonally adjusted 0.1 percent month-on-month in June, reversing a 1.3 percent rise in May. The rate came in line with expectations.


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"The Great Combinators": What are Washington and Beijing ready to do to win the trade war?

Trading 09 août 2019 Commentaire »

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Two cars are moving towards each other on a country road, they are led by Donald Trump and Xi Jinping. Both drivers are aware of the risks, but neither wants to lose face, and each relies on the strength of the national economy.

Experts continue to wonder how far the parties can go in order to turn the trade confrontation in their favor.

The Chinese gambit

"Many investors assume that the Celestial Empire is ready to accept the slowdown of its economy and the world to prevent the election of D. Trump for a second term," said Naka Matsuzawa, chief strategist of Nomura.

"China can further reduce the import of agricultural goods from America in an attempt to undermine the position of D. Trump before the presidential elections to be held in November 2020," said UBS investment Director Mark Haefele.

The US budget is already losing a lot of money because of compensation payments to farmers, who are almost the most affected by the trade war in the country.

"Perhaps the Celestial Empire will decide to wait for the change of power in Washington. If necessary, China can respond with targeted measures to put D. Trump's election positions at risk, even if the global economy and financial markets are under attack," David Bianco of the DWS Group said.

"However, Beijing's strategy may come out sideways to him. Aggressive measures against China will be supported by both parties in the US Congress, and the next US president may take a similar position," N. Matsuzawa warns.

In addition, further deterioration of the Chinese economy can destabilize the country, which has already faced protests in Hong Kong. In the second quarter, China's GDP showed minimal growth over the past 27 years.

According to the National Bureau of Statistics of China, in July, producer prices fell by 0.3% in annual terms against the expected -0.1%. This was the first decline in the last three years.

"The dynamics of this index has a high correlation with corporate profits and signals a drop in demand for commodity assets due to the ongoing trade war between the US and China. All this is an extremely "bearish" factor for the Chinese stock market, while the possibilities of the People's Bank of China to stimulate the economy are extremely limited," said Kungwa Kim, an analyst at Bloomberg.

Recall that the decline in producer prices in 2016 caused a drop in the yield of Chinese government bonds, and after that there was a collapse of stock indices. Then experts started talking about the "hard landing" of the Chinese economy. The situation may repeat itself. And this can happen much earlier than the next presidential election in the United States, which is waiting for the Celestial Empire, with high hopes for the defeat of D. Trump.

"Economic problems and the likely decline in the Chinese stock market may force the country's authorities to make serious concessions and conclude a trade deal with the US," Julian Evans-Pritchard from Capital Economics said.

Trump bets on surprise

The American leader really wants to conclude a trade agreement with Xi Jinping, but his strategy is to force the enemy to guess. Therefore, he chose the right moment to announce something unexpected: plans to introduce 10% duties on imports of Chinese goods to the United States in the amount of $300 billion.

It should be recognized that the American side has enough ambitions in the current confrontation: a world without duties, and a fair "playing field" with China, and sustainable economic growth due to the opening of new markets, and the cessation of intellectual property theft.

"The President has repeatedly said that his ultimate goal within the framework of the world trade system is zero tariffs, absence of trade barriers and subsidies. He's rebuilding the American economy. This process is not easy and complicated due to trade imbalances. Therefore, we strive for fair, free and mutual trade with China," said Larry Kudlow, chief economic adviser to the White House.

Meanwhile, D. Trump continues to make attacks towards China, but does not give a clear idea of what will be the result after the potential conclusion of a trade deal with Beijing. He often talks about the growth rate of the US economy exceeding 3%, but so far Washington's trade tariffs are acting on US GDP in the opposite direction.

Yes, duties are beating on China, and theoretically, the United States is able to change the supply chain and push China to the periphery of world commerce. However, this does not guarantee free trade, which could bring the American economy to a new level.

"It is likely that the parties will be able to reach a reasonable compromise in the longer term, but investors will have a hard time on the way to it. Moreover, the risk that the situation could spiral out of control, has increased significantly", the DWS noted.

A trade war could escalate into a currency

According to some analysts, having involved the yuan in the trade war, Beijing is at great risk, as the devaluation of the national currency will lead to capital flight from the country. However, allowing the yuan to weaken, China hits D. Trump in a "sore spot", who has repeatedly expressed dissatisfaction with too strong greenback.

Further weakness of the yuan may increase the risks of foreign exchange intervention on the part of Washington, aimed at reducing the USD rate.

However, according to UBS experts, these measures can have the opposite effect and support the dollar.

"In order for the intervention against greenback to work, the growth of the US economy and the advantage of high interest rates should not be so obvious. At the same time, the growth prospects of the Chinese and European economies should improve, which raises certain doubts," the Bank's strategists said.

"A more likely outcome of the currency war is a further increase in uncertainty, which, ironically, could be positive for the dollar if investors are afraid of a slowdown in the world economy, and volatility will increase," they added.

In addition, interventions are rarely successful if they are made by the US Treasury without the approval of the Fed. The US Central Bank may limit the impact of this step on the markets.

"Even if D. Trump orders the Treasury to take part in the currency intervention in an attempt to weaken the dollar, the unilateral nature of such actions is unlikely to be anything more than a temporary influence," representatives of the National Australia Bank noted.

The yen is the main beneficiary of the escalation of the trade war

"The economic situation in the Land of the Rising Sun is far from ideal, but in the case of a market shock caused, for example, by geopolitics, the yen will be the best refuge," Rabobank economists believe.

"In recent years, the growth of the global economy has reduced the demand for safe haven currencies. For most of this year, expectations about easing monetary policy by global central banks balanced the flow of bad news related to trade conflicts and global economic problems. Thus, regulators stimulated demand for "risk" and suppressed the volatility of the foreign exchange market. However, Washington's determination to continue to put pressure on Beijing leaves little chance of an early conclusion of a trade agreement between them. Disagreements over intellectual property rights, the forced transfer of technology and subsidies to Chinese companies may be insurmountable," they said.

"According to our estimates, in the next couple of years, the escalation of the trade war will annually deduct 0.6% of the world GDP. This will increase the demand for protective assets. In this regard, we decided to lower the 12-month forecast for the USD/JPY pair from 108 to 104," Rabobank said.

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BTC 08.09.2019 – Symmetrical trirangle in creation based on 4H time-frame

Trading 09 août 2019 Commentaire »

Industry news:

The potential for a "no-deal" scenario as the UK leaves the European Union in October of this year could drive bitcoin to new highs, some industry players estimate.

As many have already experienced first-hand, the British pound has lost a fair amount of value against both the euro and the U.S. dollar as fears build up that a no-deal Brexit may in fact happen. And as the bitcoin-as-a-safe-haven theory goes, the digital asset should become more attractive for investors as the value of their national fiat currencies go down.

Daily view:

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Based on the daily time-frame, I found that BTC is trading in the 4-day balance between the $11.180 and $12.370. MACD oscillator is still showing the upside momentum and you should watch for eventual breakout upside to confirm further upward continuation.

Important levels to watch based on daily view:

Resistance levels:

$12.800

$13.000

Support levels:

$11.000

$10.800

4H time-frame view:

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Based on the 4H time-frame, I found well defined symmetrical triangle, which is mostly continuation pattern. The potential up breakout may lead the BTC into the $12.850 zone.

Trading recommendation:

Watch for buying opportunities in case of the upward break with the target at $12.840

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Gold 08.09.2019 -Trading range envorminet, potential new wave down

Trading 09 août 2019 Commentaire »

Gold has been downwards and the price tested the level of $1.495. Gold got a failed test of the resistance at $1.510 in the background, which is sign that buyers lost power and potentially became overbought. There is a chance that Gold my try to trade towards support $1.490.

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Yellow rectangle – Intraday resistance ($1.500)

Purple horizontal line – Important swing low ($1.490)

Gold has failed to break the important swing high at $1.510 in the background, which is sign for potential downward movement. I see potential intraday selling opportunity at $1.500 with targets at $1.490-$1.482. MACD oscillator is showing low momentum, which represents the balanced regime. As long as the Gold is trading below that $1.505, watch for selling on the rallies.

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

U.S. Producer Prices Rise In Line With Estimates, Core Prices Unexpectedly Dip

Trading 09 août 2019 Commentaire »

Largely reflecting a rebound in energy prices, the Labor Department released a report on Friday showing a modest increase in U.S. producer prices in the month of July.

The Labor Department said its producer price index for final demand rose by 0.2 percent in July after inching up by 0.1 percent in both May and June. The uptick in prices matched economist estimates.

The modest increase in producer prices was largely due to a spike in energy prices, which surged up by 2.3 percent in July after plunging by 3.1 percent in June.

Meanwhile, the report said core producer prices, which exclude food and energy prices, edged down by 0.1 percent in July after rising by 0.3 percent in June.

The modest pullback in core producer prices came as a surprise to economists, who had expected core prices to rise by 0.2 percent.

The unexpected dip in core prices came as prices for final demand services also slipped by 0.1 percent in July after climbing by 0.4 percent in June.

A 0.3 percent drop in prices for services less trade, transportation, and warehousing more than offset modest increases in prices for trade, transportation, and warehousing services.

Compared to the same month a year ago, producer prices in July were up by 1.7 percent, unchanged from the annual rate of growth seen in the previous month.

On the other hand, the report said the annual rate of growth in core consumer prices slowed to 2.1 percent in July from 2.3 percent in June.

The Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of July next Tuesday.


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