Dollar Stays Weak As Traders Look For Direction

Trading 22 août 2019 Commentaire »

Save for a brief while early in the day, the U.S. dollar stayed weak on Thursday as traders looked ahead for clues about stimulus or interest rate cuts from the Federal Reserve at the symposium in Jackson Hole, Wyoming on Friday.

With the minutes of the Federal Reserve's late July meeting, which was released on Wednesday, failing to provide any clear hint about future interest rate cuts, the focus has now shifted to the upcoming speech of Fed chief Jerome Powell in Jackson Hole.

The dollar index dropped to a low of 98.08 around mid morning, and despite recovering to 98.20 later on, was still down in negative territory, trailing its previous close by about 0.1%.

Against the euro, the dollar was down marginally at 1.1084, after having recovered from a low of 1.1114.

Against British Pound Sterling, the dollar weakened to 1.2254, losing more than 1%, with the British currency rallying sharply against most major rivals after German Chancellor Angela Merkel remarked that she has not set a 30-day deadline for the U.K. to find a solution to the Irish "backstop."

The sterling was also supported by comments from French President Emmanuel Macron, who said the Withdrawal Agreement can be amended to allow the UK to leave the European Union with a deal.

The comments by Macron have added to the view that there is a willingness by the EU to talk to the UK on the matter of the Brexit deal that could ultimately prevent a 'no deal' Brexit occurring on October 31.

Against the Yen, the dollar was down 0.18% at 106.43 yen, after moving between 106.26 and 106.65 in the session.

Among other currencies, the Aussie was down more than 0.3% against the greenback with the pair trading at 0.6757.

The loonie was down marginally at $1.3300, while the USD-CHF pair was up 0.18% at 0.9837.

In economic news, data released by the Labor Department said first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended August 17, dropping by 12,000 to 209,000.

Economists had expected jobless claims to dip to 216,000 from the 220,000 originally reported for the previous week.

A separate report released by the Conference Board showed its reading on leading U.S. economic indicators rose by a much more than anticipated 0.5% in the month of July. The index edged down by 0.1% in both May and June.

Traders also looked ahead to the Group of Seven summit this weekend for clues on what additional steps policymakers may take to boost growth.


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Crude Oil Futures Settle Lower Again

Trading 22 août 2019 Commentaire »

Crude oil prices edged lower on Thursday on concerns about outlook for near-term energy demand due to slowing global economy.

However, the recent data that showed a drop in U.S. crude stockpiles, and simmering tensions between the U.S. and Iran limited oil's losses.

The Iranian President Hassan Rouhani said in a speech in Teheran during the unveiling of the Bavar-373, that talks are useless when enemies do not accept logic.

Iran's state TV reported that the Bavar-373 is able to recognize up to 100 targets at a same time and confront then with six different weapons.

West Texas Intermediate crude oil futures for October ended down $0.33, or 0.6%, at $55.35 a barrel.

Brent crude futures were down by about $0.40 at $59.90 a barrel around mid afternoon.

On Wednesday, WTI Crude oil futures for October ended down $0.45, or about 0.8%, at $55.68 a barrel.

Data released by Energy Information Administration on Wednesday showed U.S. crude stockpiles dropped by 2.7 million barrels in the week ended August 16, after registering increases in the previous two weeks.

Gasoline inventories were up 300,000 barrels last week, while distillate stockpiles increased by 2.6 million barrels.

Traders now await the speech of the U.S. Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium on Friday, for clues an future interest rates.

Traders continued to weigh the likely impact of the ongoing U.S.-China trade dispute on the global economy as well as energy demand outlook.


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Gold Futures Settle At Near 2-week Low

Trading 22 août 2019 Commentaire »

Gold futures ended notably lower on Thursday, weighed down by rising bond yields and uncertainty about U.S. interest rate cuts.

Gold prices stayed below the unchanged line as traders awaited cues from a key central bankers' gathering in the United States on Friday. The Federal Reserve Chairman Jerome Powell will speak for the first time since bond markets hit the recession alarm bells.

The dollar index dropped to a low of 98.08 around mid morning. Then, after swiftly edging up to 98.25, eased to 98.16. The index had settled at 98.30 on Wednesday.

Gold futures for December ended down $7.20, or about 0.5%, at $1,508.50 an ounce, the lowest settlement since August 9.

Silver futures for September ended down $0.111 at $17.040 an ounce, while Copper futures for September settled lower by $0.0280 at $2.5575 per pound.

In economic news, data released by the Labor Department said first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended August 17, dropping by 12,000 to 209,000.

Economists had expected jobless claims to dip to 216,000 from the 220,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average inched up to 214,500, an increase of 500 from the previous week's revised average of 214,000.

A report released by the Conference Board showed its reading on leading U.S. economic indicators rose by much more than anticipated 0.5% in the month of July. The index edged down by 0.1% in both May and June.

The minutes of the Federal Reserve's monetary policy meeting in late May, which was released on Wednesday, failed to provide any clarity about further U.S. interest rate cuts.

Traders also looked ahead to the Group of Seven summit this weekend for clues on what additional steps policymakers may take to boost growth.


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Treasuries Move To The Downside Following Early Volatility

Trading 22 août 2019 Commentaire »

Treasuries recovered from an initial drop only to pull back once again over the course of the trading session on Thursday.

Bond prices finished the day off their early lows but still firmly in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.3 basis points to 1.610 percent.

The initial weakness among treasuries came as the minutes of the Federal Reserve's latest monetary policy meeting failed to provide much clarity about the outlook for interest rates.

With the subsequent recovery attempt, however, the yield on the two-year note briefly dropped below the yield on the ten-year note.

The yield curve inversion, an indicator of a looming recession, sparked a sharp pullback on Wall Street, although selling pressure waned over the course of the day.

Treasuries drifted back to the downside as the day progressed as traders looked ahead to Fed Chairman Jerome Powell's speech at the Jackson Hole Economic Policy Symposium on Friday.

On the U.S. economic front, the Labor Department released a report before the start of trading showing first-time claims for unemployment benefits fell by much more than expected in the week ended August 17th.

The report said initial jobless claims dropped to 209,000, a decrease of 12,000 from the previous week's revised level of 221,000. Economists had expected jobless claims to dip to 216,000.

A separate report released by the Conference Board showed its reading on leading U.S. economic indicators rose by much more than anticipated in the month of July.

The Conference Board said its leading economic index climbed by 0.5 percent in July after edging down by 0.1 percent in both May and June.

Ataman Ozyildirim, Senior Director of Economic Research at the Conference Board, said the leading economic index suggests the economy will continue to expand in the second half of 2019 but noted "it is likely to do so at a moderate pace."

Powell's speech is likely to be in the spotlight on Friday, overshadowing the Commerce Department's report on new home sales in July.


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August 22, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 22 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 (the lower limit of the movement channel) which failed to provide consistent bullish demand for the GBP/USD.

Moreover, Bearish breakdown below 1.2350 facilitated further bearish decline towards 1.2320, 1.2270 and 1.2100 which correspond to significant key-levels on the Weekly chart.

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

Two weeks ago, a temporary consolidation-range was demonstrated above 1.2100 before Friday when another bearish movement could be executed towards 1.2025.

Recent bullish recovery was demonstrated off the recent bottom (1.2025). This brought the GBP/USD pair back above 1.2100 (recently-established demand Level).

As expected, recent bullish movement was demonstrated towards 1.2230.

Further bullish advancement is expected to pursue towards 1.2320 if the current bullish momentum above 1.2100 (the short-term uptrend) is maintained on a daily basis.

On the other hand, any bearish breakout below 1.2100 invalidates the previous scenario allowing another bearish visit towards 1.2025.

Trade Recommendations:

Intraday traders are advised to look for a bullish entry anywhere around 1.2170.

Initial T/P level to be placed around 1.2250 and 1.2340 while S/L should be placed below 1.2100.

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 22 août 2019 Commentaire »

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

The Treasury revealed 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, attracting below average demand.


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August 22, 2019 : EUR/USD bulls are demonstrating a reversal pattern waiting for a breakout above 1.1115.

Trading 22 août 2019 Commentaire »

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Back in June 24, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels which generated significant bearish pressure over the pair.

Shortly after, In the period between 8 - 22 July, a 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 below 1.1175.

This facilitated further bearish decline towards 1.1115 (Previous Weekly Low) then 1.1025 (the lower limit of the depicted recent bearish channel) where significant signs of bullish recovery were demonstrated.

Risky traders were advised to look for bullish breakout above 1.1050 as a bullish signal for Intraday BUY entry with bullish targets around (1.1115, 1.1175 and 1.1235). All of which were successfully reached.

For the past two weeks, the depicted Key-Zone around 1.1235 has been standing as a prominent Supply Area where THREE Bearish Engulfing H4 candlesticks were demonstrated.

Thus, the EUR/USD was trapped between 1.1235-1.1175 for a few trading sessions until bearish breakout below 1.1175 occurred on August 14.

Bearish breakout below 1.1175 promoted further bearish decline towards 1.1075 where the backside of the broken bearish channel has been providing significant bullish demand so far (A Bullish Triple-Bottom pattern is in progress).

A quick bullish breakout above 1.1115 is needed to confirm the short-term trend reversal into bullish. This would enhance another bullish spike towards 1.1175.

Trade recommendations :

Conservative traders were advised to have a valid BUY entry anywhere around 1.1070 (where the backside of the broken bearish channel is roughly located).

Initial T/P levels should be located around 1.1130, 1.1175 and 1.1200.

S/L should be placed just below 1.1020.

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

U.S. Leading Economic Index Climbs More Than Expected In July

Trading 22 août 2019 Commentaire »

A report released by the Conference Board on Thursday showed its reading on leading U.S. economic indicators rose by much more than anticipated in the month of July.

The Conference Board said its leading economic index climbed by 0.5 percent in July after edging down by 0.1 percent in both May and June.

"Housing permits, unemployment insurance claims, stock prices and the Leading Credit Index were the major drivers of the improvement," said Ataman Ozyildirim, Senior Director of Economic Research at the Conference Board.

He added, "However, the manufacturing sector continues exhibiting signs of weakness and the yield spread was negative for a second consecutive month."

Ozyildirim said the leading economic index suggests the economy will continue to expand in the second half of 2019 but noted "it is likely to do so at a moderate pace."

The report said coincident economic index rose by 0.2 percent for the second consecutive month, while the lagging economic index climbed by 0.6 percent in July following a 0.5 percent increase in June.


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Pound Strengthens On Merkel's Comments On Brexit Deal

Trading 22 août 2019 Commentaire »

The pound strengthened against its major counterparts in the New York session on Thursday, after German Chancellor Angela Merkel remarked that she has not set a 30-day deadline for the U.K. to find a solution to the Irish "backstop."

Merkel clarified that yesterday's comments were meant to hint that what can be achieved in three or two years can also be found in 30 days.

"Better said, one must say that one can also achieve it by October 31," she said at a speech in the Hague.

On Wednesday, Merkel suggested British Prime Minister Boris Johnson to come up with alternative plans for the Irish border within 30 days. Her comments were misinterpreted as a deadline to Johnson to find a solution to the Irish border issue.

The Distributive Trades Survey from the Confederation of British Industry showed that British retailers reported the sharpest decline in sales volumes and orders since 2008.

About 10 percent of respondents reported that sales volumes were up on a year ago in August, while 58 percent said they were down, giving a balance of -49 percent. A net 10 percent expects sales volumes to fall at a slower pace next month.

The pound advanced to more than 3-week highs of 0.9028 against the euro and 1.2273 against the greenback, from its early low of 0.9158 and a 2-day low of 1.2108, respectively. The next possible resistance for the pound is seen around 0.87 against the euro and 1.27 against the greenback.

The pound climbed to 3-week highs of 1.2065 against the franc and 130.70 against the yen, from its early low of 1.1886 and a 2-day low of 128.76, respectively. If the pound rises further, 1.26 and 136.5 are likely seen as its next resistance levels against the franc and the yen, respectively.


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Indonesia Slashes Key Interest Rate Again

Trading 22 août 2019 Commentaire »

Indonesia's central bank unexpectedly slashed its key interest rate for a second straight month in August in a bid to support growth amid a global slowdown.

The Board of Governors, led by Governor Perry Warjiyo, decided to reduce the 7-day reverse repo rate by 25 basis points to 5.50 percent, Bank Indonesia said in a statement on Thursday.

Economists had expected the rate to remain unchanged. The previous change in the rate was a quarter-point reduction in July, which was the first cut since September 2017. Both the deposit and lending rates were reduced by a quarter-point each to 4.75 percent and 6.25 percent, respectively.

The current policy is consistent with low inflation forecasts that are below the midpoint of the target and continues to give attractive returns on investment in domestic financial assets to foreign investors, Bank Indonesia said. The rate cut is also a pre-emptive measure to cushion the impact of the global economic slowdown on the economic growth, the bank added. The annual economic growth rate slowed to 5.05 percent from 5.07 percent in the previous quarter, due to declining exports. The central bank projected the economic growth for this year to be below the midpoint of the 5.0-5.4 percent range before increasing towards the middle of the 5.1-5.5 percent range in 2020.

The bank projected inflation this year to be below the midpoint of the 3.5?1 percent target corridor and within the target range for 2020, namely 3.0?1 percent. "We expect BI to monitor closely the next moves of the Fed as well as the stability of IDR before seriously considering further rate cuts in the near term," ING economist Nicholas Mapa said.


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