U.S. Dollar Turning In Lackluster Performance After Slew Of Data

Trading 15 août 2019 Commentaire »

With traders digesting a deluge of U.S. economic data, the U.S. dollar turned in lackluster performance during trading on Thursday.

Currently, the U.S. dollar is trading at 106.01 yen compared to the 105.91 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1113 compared to yesterday's $1.1139.

The choppy trading on the day came following an avalanche of U.S. economic data, including mixed reports on retail sales and industrial production.

The Commerce Department released a report showing U.S. retail sales climbed by much more than expected in July, partly reflecting the impact of online retail giant Amazon's (AMZN) Prime Day promotion.

The report said retail sales climbed by 0.7 percent in July after rising by a revised 0.3 percent in June. Economists had expected retail sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a drop in auto sales, retail sales surged up by 1.0 percent in July following a revised 0.3 percent increase in June. Ex-auto sales had been expected to climb by 0.4 percent, matching the growth originally reported for the previous month.

The jump in ex-auto sales partly reflected a 2.8 percent spike in sales by non-store retailers amid Amazon's Prime Day sales.

However, the Federal Reserve released a separate report unexpectedly showing a modest decrease in industrial production in July.

The Fed said industrial production edged down by 0.2 percent in July following a revised 0.2 percent increase in June.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The unexpected drop in production was partly due to a pullback in manufacturing output, which fell by 0.4 percent in July after climbing by 0.6 percent in June.

"The soft July industrial production data show that the manufacturing recession continued into the third quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the latest surveys provide some reason for optimism and, as the retail sales data released earlier today highlight, there is still little evidence that this malaise is spreading to the wider economy."

Separate reports from the New York and Philadelphia Federal Reserves showed continued growth in regional manufacturing activity in August, although the pace of growth in the Philadelphia region slowed from last month.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in first-time claims for U.S. unemployment benefits in the week ended August 10th.


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Crude Oil Prices Continue To Fall On Thursday

Trading 15 août 2019 Commentaire »

Crude oil prices saw further downside on Thursday, extending losses from the previous day on continued concerns about the outlook for global demand.

China's threat to retaliate against U.S. tariffs weighed heavily on oil prices.

West Texas Intermediate fell $0.48 or 0.87 percent to $54.47.

Commodity-related stocks continued to bleed on global growth worries, while the euro area government bond yields went further into negative territory, fueling fears of a global recession.

Risk-off sentiment dominates equity markets after the yield on 30-year U.S. treasuries fell below 2 percent for the first time ever in a sign that interest rates will likely remain lower for longer.


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Treasuries Extend Upward Trend Following Slew Of Data

Trading 15 août 2019 Commentaire »

Extending the upward trend seen over the past several sessions, treasuries moved notably higher during trading on Thursday.

Bond prices pulled back off their best levels going into the close but remained firmly positive. As a result the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.2 basis points to 1.529 percent.

With the continued decrease on the day, the ten-year yield tumbled to its lowest closing level in three years.

The advance by treasuries came as traders digest an avalanche of U.S. economic data, including mixed reports on retail sales and industrial production.

The Commerce Department released a report showing U.S. retail sales climbed by much more than expected in July, partly reflecting the impact of online retail giant Amazon's (AMZN) Prime Day promotion.

The report said retail sales climbed by 0.7 percent in July after rising by a revised 0.3 percent in June. Economists had expected retail sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a drop in auto sales, retail sales surged up by 1.0 percent in July following a revised 0.3 percent increase in June. Ex-auto sales had been expected to climb by 0.4 percent, matching the growth originally reported for the previous month.

The jump in ex-auto sales partly reflected a 2.8 percent spike in sales by non-store retailers amid Amazon's Prime Day sales.

However, the Federal Reserve released a separate report unexpectedly showing a modest decrease in industrial production in July.

The Fed said industrial production edged down by 0.2 percent in July following a revised 0.2 percent increase in June.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The unexpected drop in production was partly due to a pullback in manufacturing output, which fell by 0.4 percent in July after climbing by 0.6 percent in June.

"The soft July industrial production data show that the manufacturing recession continued into the third quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the latest surveys provide some reason for optimism and, as the retail sales data released earlier today highlight, there is still little evidence that this malaise is spreading to the wider economy."

Separate reports from the New York and Philadelphia Federal Reserves showed continued growth in regional manufacturing activity in August, although the pace of growth in the Philadelphia region slowed from last month.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in first-time claims for U.S. unemployment benefits in the week ended August 10th.

The economic calendar is relatively light on Friday, although traders are still likely to keep an eye on reports on housing starts and consumer sentiment.


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Gold Prices See Additional Support On Thursday

Trading 15 août 2019 Commentaire »

Gold prices saw continued upside on Thursday following solid gains a day earlier as traders move back to safe havens as fears of global recession mounted.

Spot gold was up $7.00 or 0.46 percent at $1,523.10, while gold futures advanced $6.05 or 0.39 percent to $1,533.60.

Risk-off sentiment dominates equity markets after the yield on 30-year U.S. treasuries fell below 2 percent for the first time ever in a sign that interest rates will likely remain lower for longer.

The U.S. yield curve remains inverted for the second day running today, triggering an extensive flight to safety. The yield curve has inverted before each recession in the past half-decade.

The precious metal had reached a six-year high Tuesday on concerns over the trade dispute between the United States and China before easing later in the day.


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BTC 08.15.2019 – New momentum down and possible more downside

Trading 15 août 2019 Commentaire »

Industry news:

The cryptocurrency market sentiment is hitting rock-bottom as of late with the Cryptocurrency Fear & Greed Index hitting a 244-day low. This level has not been seen since December 13, 2018, when Bitcoin (BTC) collapsed to $3,000.

Technical view:

analytics5d55944f9699d.jpg

My second downward target at the price of $9,170 has been reached and there is a chance for more downward movement.

Yellow rectangle – Support ($9,170)

Magneta rectangle –Support 2 and downward target ($8,070)

Green lines – Bollinger band

MACD is showing the new momentum down on the oscillator, which is good indication for further downside continuation move. Watch for any decent rally on lower frames to establish new selling positions. Main target is set at the price of $8,080/

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EUR/USD for August 15,2019 – Downward brekaout of 6-day trading range

Trading 15 août 2019 Commentaire »

EUR/USD did break the 6-day balance to the downside and it is down breakout mode. There is still more downside yet to come in my opinion and potential test of 1.1035.

analytics5d55867ebac12.jpg

Green rectangles – Balance boundaries

Blue rectangle – Resistance (1.1130)

Magenta rectangle – Swing low support (1.1035)

EUR did establish lower highs and lower lows, which is clear sign for me that trend is downward and that supply is in the control. Usually, when we are in the breakout mode, I would wait for 3-5 days before any short-term long entry. I would watch mostly for selling positions on the rallies. Key swing low is set at 1.1035.

Stochastic oscillator is holding into extreme low reading but that is normal due to the breakout of bracket.

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Gold 08.15.2019 – Gold in the buy zone

Trading 15 août 2019 Commentaire »

Gold price continues to trade sideways inside the flag pattern. I expect more upside to come on the Gold due to strong underlying bullish trend.

analytics5d557caf8beef.jpg

Red line – expected path

Blue rectangle – Resistance 1 ($1,533)

Blue rectangle – Resistance 2 ($1,550)

Yellow rectangle – Support ($1,505)

Gold price continues to trade inside the range of the flag pattern. Support is at $1,505 and resistance at $1,533. The break above $1,523 could give us a target of around $1,533-$1,550. Bulls are in control I so far I don't see any reversal signal. As long as the Gold is trading above the $1,505 level, you should watch for long positions.

MACD is holding into positive territory, which is good confirmation for my long bias...

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U.S. Business Inventories Unexpectedly Unchanged In June

Trading 15 août 2019 Commentaire »

With a drop in retail inventories offsetting an increase in manufacturing inventories, the Commerce Department released a report on Thursday showing U.S. business inventories were virtually unchanged in the month of June.

The Commerce Department said business inventories came in flat in June after rising by 0.3 percent in May. Economists had expected inventories to inch up by 0.1 percent.

Retail inventories fell by 0.3 percent in June after climbing by 0.3 percent in May, while manufacturing inventories rose by 0.2 percent for the second consecutive month.

The report also said wholesale inventories came in virtually unchanged in June following a 0.4 percent increase in May.

Meanwhile, the Commerce Department said business sales crept up by 0.1 percent in June after edging down by 0.1 percent in May.

While wholesale sales slid by 0.3 percent during the month, manufacturing and retail sales climbed by 0.4 percent and 0.3 percent, respectively.

With sales rising and inventories unchanged, the total business inventories/sales ratio edged down to 1.39 in June from 1.40 in May.


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U.S. Homebuilder Confidence Unexpectedly Improves In August

Trading 15 août 2019 Commentaire »

Despite rising construction costs, a chronic shortage of workers and a lack of buildable lots, the National Association of Home Builders released a report on Thursday showing an unexpected uptick in U.S. homebuilder confidence in the month of August.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 66 in August after ticking up to 65 in July. Economists had expected the index to come in unchanged.

"While 30-year mortgage rates have dropped from 4.1 percent down to 3.6 percent during the past four months, we have not seen an equivalent higher pace of building activity because the rate declines occurred due to economic uncertainty stemming largely from growing trade concerns," said NAHB Chief Economist Robert Dietz.

He added, "Although affordability headwinds remain a challenge, demand is good and growing at lower price points and for smaller homes."

The unexpected uptick by the HMI came as the components gauging current sales conditions and traffic of prospective buyers both rose by two points to 73 and 50, respectively.

On the other hand, the NAHB said the measure charting sales expectations in the next six months edged down by one point to 70.

The Commerce Department is scheduled to release a separate report on new residential construction in the month of July on Friday.

Economists expect housing starts to rise to an annual rate of 1.257 million in July after falling to a rate of 1.253 million in June.

Building permits, an indicator of future housing demand, are expected to jump to a rate of 1.270 million in July after plunging to a rate of 1.220 million in June.


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U.S. Industrial Production Unexpectedly Dips 0.2% In July

Trading 15 août 2019 Commentaire »

Industrial production in the U.S. unemployment unexpectedly showed a modest decrease in the month of July, according to a report released by the Federal Reserve on Thursday.

The Fed said industrial production edged down by 0.2 percent in July following a revised 0.2 percent increase in June.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The unexpected drop in production was partly due to a pullback in manufacturing output, which fell by 0.4 percent in July after climbing by 0.6 percent in June.

The report also showed a 1.8 percent slump in mining output, as Hurricane Barry caused a sharp but temporary decline in oil extraction in the Gulf of Mexico.

On the other hand, utilities output showed a substantial rebound, spiking by 3.1 percent in July after plunging by 3.3 percent in June, as a brief heatwave on the east coast boosted demand for air conditioning.

"The soft July industrial production data show that the manufacturing recession continued into the third quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the latest surveys provide some reason for optimism and, as the retail sales data released earlier today highlight, there is still little evidence that this malaise is spreading to the wider economy."

The Fed also said capacity utilization for the industrial sector dipped to 77.5 percent in July from a revised 77.8 percent in June.

Economists had expected capacity utilization to slip to 77.8 percent from the 77.9 percent originally reported for the previous month.

Capacity utilization in the utilities sector rose to 76.6 percent, while capacity utilization in the manufacturing and mining sectors dropped to 75.4 percent and 89.2 percent, respectively.


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