Dollar Mostly Subdued Amid Trade Uncertainty

Trading 27 août 2019 Commentaire »

The U.S. dollar index stayed below the unchanged line on Tuesday with the currency turning in a mixed performance against peers, after having exhibited strength in the previous session on renewed optimism about resumption of U.S.-China trade talks.

Trade war tensions escalated over the weekend following the U.S. retaliated to China's move to impose tariffs on about $75 billion worth of American products, by announcing additional tariffs on over $550 billion worth of Chinese products that come into the U.S.

However, concerns faded a bit on Monday after President Donald Trump told reporters at the G7 Summit that Chinese officials got in touch with U.S. officials to restart negotiations.

Despite Trump's comments, there is still uncertainty about officials of the two countries starting another round of discussions on trade, as Chinese Foreign Ministry spokesman Geng Shuang continues to maintain that he has not heard of any recent call.

Geng told reporters at a press briefing on Tuesday that China hopes the U.S. will return to rationality, stop its wrong practices and create conditions for the two sides to resume talks on the basis of mutual respect.

The dollar index declined to a low of 97.86 and despite regaining some ground, was still down in negative territory in late morning trades. It was trailing its previous close by 0.03% at 98.05.

Against the euro, the dollar was up 0.11% at 1.1089.

The Pound Sterling was gaining more than 0.5% with a unit of Sterling fetching $1.2286.

The Japanese currency Yen traded positive on safe-haven appeal. In late afternoon trades, the dollar was trading at 105.75 yen, as against 106.13 yen late Monday.

The dollar was up against the loonie, Aussie and Swiss franc.

In economic news, according to a report from the Conference Board, consumer confidence in the month of May showed a slight deterioration.

The board said its consumer confidence index edged down to 135.1 in August after surging up 135.8 in July. Economists had expected the index to show a much more substantial decrease to 130.0.


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Oil Futures Snap 4-day Losing Streak, Settle Sharply Higher

Trading 27 août 2019 Commentaire »

Crude oil prices rose sharply and snapped a four-day losing streak on Tuesday, after a report indicated a deeper OPEC production cuts. Also, traders went long amid expectations of a significant drop in crude stockpiles in the U.S. in the week ended August 23.

The weekly oil report from the American Petroleum Institute is due later today. The U.S. Energy Information Administration is scheduled to release its weekly crude inventory data Wednesday morning.

West Texas Intermediate Crude oil futures for October ended up $1.29, or 2.4%, at $54.93 a barrel.

On Monday, WTI crude oil futures ended down $0.53, or about 1%, at $53.64 a barrel. A day earlier, oil futures shed 2.1%.

Mild optimism about resumption of U.S.-China trade talks contributed a bit to oil's uptick.

U.S. President Donald Trump said yesterday that he believed Beijing was sincere in its desire to reach an agreement.

The Joint Ministerial Monitoring Committee of OPEC and non-cartel oil producers (OPEC+) reported that OPEC+ production limits, in place since the end of last year, have reached 159% in July 2019, up 22% from a month earlier.

The committee also said it expects a significant drop in crude inventory in the second half of the year.


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Treasuries Show Strong Move Back To The Upside

Trading 27 août 2019 Commentaire »

Following the modest pullback seen in the previous session, treasuries showed a strong move back to the upside during trading on Tuesday.

Bond prices moved modestly higher in early trading and climbed more firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 5.5 basis points to 1.490 percent.

With the drop on the day, the ten-year yield more than offset the uptick seen in the previous session, ending the day at its lowest closing level in three years.

The strength among treasuries reflected their appeal as a safe haven amid renewed uncertainty about the escalating U.S.-China trade war.

President Donald Trump has claimed top Chinese officials called asking for the resumption of trade talks, but Chinese Foreign Ministry spokesman Geng Shuang continues to say he has not heard of any recent call.

Geng told reporters at a press briefing on Tuesday that China hopes the U.S. will return to rationality, stop its wrong practices and create conditions for the two sides to resume talks on the basis of mutual respect.

Meanwhile, traders largely shrugged off a report from the Conference Board showing only a slight deterioration in U.S. consumer confidence in the month of August.

The Conference Board said its consumer confidence index edged down to 135.1 in August after surging up to 135.8 in July. Economists had expected the index to show a much more substantial decrease to 130.0.

"Consumer confidence was relatively unchanged in August, following July's increase," said Lynn Franco, Senior Director of Economic Indicators at the Conference Board. "While other parts of the economy may show some weakening, consumers have remained confident and willing to spend."

She added, "However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers' optimism regarding the short-term economic outlook."

Treasuries saw continued strength following the release of the results of the Treasury Department's auction of $40 billion worth of two-year notes.

The two-year note auction drew a high yield of 1.516 percent and a bid-to-cover ratio of 2.60, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.56.

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

Trading on Wednesday may be impacted by reaction to the results of the Treasury's auction of $41 billion worth of five-year notes.


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Gold Futures Settle At Over 6-year High

Trading 27 août 2019 Commentaire »

Gold futures rose to near six-and-a-half year closing high on Tuesday, as U.S. stocks fell after a buoyant start and treasury yields dropped.

Due to a lack of clarity about resumption of trade talks between the U.S. and China, traders turned cautious with regard to fresh buying in stocks and chose the safe-haven asset instead.

The dollar index declined to 97.86, but recovered some losses as it moved on to 98.01. The dollar index had closed at 98.08 on Monday.

Gold futures for December ended up $14.60, or about 1%, at $1,551.80 an ounce, the highest settlement since April 2013.

On Monday, gold futures for December ended with a small loss at $1,537.20 an ounce.

Silver futures for September ended up $0.512, or 2.9%, at $18.153 an ounce, the best close since April 2017.

Copper futures for September settled at $2.5475 per pound, gaining $0.0040.

On the trade front, U.S. President Donald Trump has claimed top Chinese officials called asking for the resumption of trade talks, but Chinese Foreign Ministry spokesman Geng Shuang continues to say he has not heard of any recent call.

Geng told reporters at a press briefing on Tuesday that China hopes the U.S. will return to rationality, stop its wrong practices and create conditions for the two sides to resume talks on the basis of mutual respect.

According to a report from the Conference Board, consumer confidence in the month of May showed a slight deterioration.

The board said its consumer confidence index edged down to 135.1 in August after surging up 135.8 in July. Economists had expected the index to show a much more substantial decrease to 130.0.


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Two-Year Note Auction Attracts Slightly Above Average Demand

Trading 27 août 2019 Commentaire »

The Treasury Department kicked off this week's announcements of the results of its long-term securities auctions on Tuesday by revealing its auction of $40 billion worth of two-year notes attracted slightly above average demand.

The two-year note auction drew a high yield of 1.516 percent and a bid-to-cover ratio of 2.60.

Last month, the Treasury also sold $40 billion worth of two-year notes, drawing a high yield of 1.825 percent and a bid-to-cover ratio of 2.50.

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 two-year note auctions had an average bid-to-cover ratio of 2.56.

Looking ahead, he Treasury is due to announce the results of its auctions of $41 billion worth of five-year notes and $32 billion worth of seven-year notes on Wednesday and Thursday, respectively.


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Swiss Stocks End Higher

Trading 27 août 2019 Commentaire »

The Switzerland stock market recovered after a weak start on Tuesday, gained in strength as the session progressed and eventually ended on a firm note, as investors picked up shares after three successive days of losses.

Mild optimism about resumption of U.S.-China trade talks helped ease worries about trade tensions and rendered the mood positive.

The benchmark SMI ended up 70.25 points, or 0.72%, at 9,786.08. The index, which edged down to a low of 9,685.69 in the first hour, rose to a high of 9,798.18 in late afternoon trades.

The index shed a total of around 1.3% in the previous three sessions.

Novartis gained 2.14%. Alcon shares advanced nearly 2% after the company announced it has won FDA approval of Acrysof IQ Panoptix trifocal intraocular lens.

Swisscom, Lonza Group and Nestle ended nearly 1% up. SGS, Roche Holding and Sika posted modest gains.

Swiss Life Holding declined 1.4%. Swiss Re, Zurich Insurance and LafargeHolcim ended modestly lower.

In the midcap space, Flughafen Zurich and Doma Kaba Holding gained 2.2% and 2%, respectively. Ems Chemie Holding, Sunrise Communications, OC Oerlikon Group, PSP Swiss Property, AMS and Lindt & Spruengli also closed with notable gains.

Most of the markets across Europe ended on a firm note. The pan European Stoxx 600 advanced 0.63%. Germany and France closed on a bright note, with their benchmarks DAX and CAC 40, gaining 0.62% and 0.67%, respectively. The U.K.'s FTSE 100 edged down 0.08%.


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Pound Up As UK Opposition Parties To Prevent No-deal Brexit Using Legislation

Trading 27 août 2019 Commentaire »

The pound strengthened against its major counterparts in the European session on Tuesday, after the leaders of the opposition parties of the U.K. agreed to act together to try and prevent a no-deal Brexit, including the possibility of passing legislation.

In a joint statement, the leaders said that they would find practical ways to prevent no-deal, including the possibility of passing legislation and a vote of no confidence.

The leaders agreed to oppose Johnson's plans to suspend parliament to force through a no deal when Parliament will return from its recess next week.

The cross-party talks were hosted by Labour leader Jeremy Corbyn with the Scottish National Party, the Liberal Democrats, the Green Party and the Independent Group today morning.

Boris Johnson and the European Commission president Jean-Claude Juncker will speak today to discuss about Brexit deal.

European stocks were mixed as coalition talks continued in Italy and investors awaited further clarity on the Trump administration's future approach to the U.S.-China trade war.

Italy's anti-establishment Five Star Movement suspended talks on forming a new ruling coalition with the opposition Democratic Party, insisting it would end talks unless Giuseppe Conte can remain prime minister.

Data from UK Finance showed that UK mortgage approvals rose to its highest level in two-and-a-half years in July.

The number of loans approved for house purchase by high street banks rose 10.6 percent year-on-year to a seasonally adjusted 43,342 in July, which was the highest figure since early 2017. In June, approvals were 43,775.

The currency traded mixed against its major counterparts in the Asian session. While it held steady against the euro and the franc, it fell against the greenback and the yen.

The pound climbed to 1.2310 against the greenback, its strongest since July 29. The next possible resistance for the pound is seen around the 1.26 mark.

The pound strengthened to a 4-day high of 130.39 against the yen, from Monday's closing value of 129.64. The pound is seen finding resistance around the 133.00 level.

Data from the Bank of Japan showed that Japan producer prices rose 0.1 percent on month in July - in line with expectations following the 0.1 percent decline in June.

On a yearly basis, producer prices gained 0.5 percent - shy of expectations for an increase of 0.6 percent and down from 0.7 percent in the previous month.

The pound firmed to near a 4-week high of 1.2091 versus the franc, compared to 1.1955 hit late New York Monday. The pound is likely to challenge resistance around the 1.25 mark.

The pound appreciated to a new 4-week high of 0.9016 versus the euro from yesterday's closing value of 0.9084. The pound may face resistance around the 0.88 level, if it rises again.

Data from Destatis showed that Germany's economy contracted slightly, as initially estimated, in the second quarter.

Gross domestic product shrank 0.1 percent sequentially in the second quarter, reversing the first quarter's 0.4 percent expansion. This was the first fall in three quarters and matched the initial estimate.


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August 27, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 27 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.

Then, 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.

Shortly-After in Mid-August, the EUR/USD has been 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).

Bullish persistence above 1.1115 is needed to confirm the short-term trend reversal into bullish.

This would enhance another bullish spike towards 1.1175 as an initial bullish target.

Trade recommendations :

Conservative traders can have a valid BUY entry anywhere around 1.1090. Initial T/P levels should be located around 1.1150, 1.1175 and 1.1200.

S/L should be placed just below 1.1040 ( the depicted newly-established uptrend line).

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

August 27, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 27 août 2019 Commentaire »

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On July 5, a bearish consolidation range-breakout was demonstrated below 1.2550 corresponding to the lower limit of the depicted consolidation range.

Moreover, Bearish breakdown below 1.2385 (Prominent Bottom) facilitated further bearish decline towards 1.2320, 1.2270 and 1.2100 which corresponded to significant key-levels on the Weekly chart.

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

In Early August, a temporary consolidation-range was established above 1.2100 before August 9 when temporary bearish movement was 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 then 1.2280 where recent bearish rejection was previously manifested towards 1.2215-1.2200.

For the intermediate-term, Further bullish advancement is expected to pursue towards 1.2320 then 1.2380 as long as the current bullish momentum above 1.2200 and 1.2160 (the recent consolidation range pivot-point) is maintained on a daily basis.

On the other hand, If the current bullish movement pursued further bullish momentum, price action should be watched cautiously around 1.2380 as bearish rejection maybe anticipated around this price level (being a correspondent to a broken Key-Support dating back to July 17).

Trade Recommendations:

Intraday traders were advised to have a valid bullish entry anywhere around 1.2215-1.2180. It's already running in profits.

Next T/P level to be placed around 1.2290, 1.2340 and 1.2385 while S/L should be advanced to 1.2170 to offset the associated risks.

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

Daily analysis of NZD/CHF for 27.08.2019

Trading 27 août 2019 Commentaire »

analytics5d654e19a5583.pngnz

The above picture is the daily chart of NZD/CHF. This currency pair has been in a downtrend from the start of the year. Now the price has stalled near the 0.62000 area. The price is acting as support for NZD/CHF. The green line shows the resistance area from where we can expect some price reaction. The moving average is indicated by a blue line. The price is continuously trading below the blue line, and this proves the dominance of sellers. From a trading point of view, the pair does suggest gainful trading opportunities. However, if you still wish to trade this currency pair, you should wait until the price crosses the blue moving average line and then you can comfortably take a buy. Again, this would be a very aggressive entry. So, your stop loss has to be tight near 0.62000. We recommend you to trade following the trend. This is possible if the price retraces back to our green line and trades below the moving average line. If this happens, you have a good excuse to take the sell with minimum risk. But if we don't get that retracement, do not chase the market by selling at the current market price (CMP). Your stop loss will be above 0.66000 and target will be at the recent low. This could result in 1:3 risk to reward ratio, which is not bad at all.

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