Oil Futures Rebound, Settle Sharply Higher Ahead Of Inventory Data

Trading 04 sept 2019 Commentaire »

Crude oil futures rebounded from previous session's losses and recorded their biggest single-session gain in about two months on Wednesday, buoyed by strong service sector data out of China and positive news on the political front.

West Texas Intermediate crude oil futures for October ended up $2.32, or about 4.3%, at $56.26 a barrel.

On Tuesday, WTI Crude oil futures for October ended down $1.16, or 2.1%, at $53.94 a barrel, the lowest close since August 26.

Data showing an acceleration in China's service sector growth in August aided sentiment.

The private survey report said activity in China's services sector expanded at the fastest pace in three months in August.

The Services Purchasing Managers' Index for the month of August came with reading of 52.1, up from 51.6 in July, despite broader economic headwinds.

Traders were looking ahead to weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA).

The API's weekly oil report will be out later today, while the inventory data from EIA will be released at 10:30 AM ET on Thursday. The reports are delayed by a day due to the Labour Day holiday on Monday.

The EIA's report last week said crude stockpiles in the U.S. declined by about 10 million barrels in the week ended August 23.

It is widely expected that crude stockpiles may have dropped down by more than 3 million barrels in the week ended August 30.


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Treasuries Close Roughly Flat After Recovering From Initial Weakness

Trading 04 sept 2019 Commentaire »

After coming under pressure early in the session, treasuries regained ground over the course of morning trading on Wednesday.

Bond prices spent the afternoon lingering near the unchanged line before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.459 percent.

Treasuries initially moved to the downside in reaction to developments overseas, including news that Hong Kong leader Carrie Lam has withdrawn a controversial extradition bill.

The bill, which would have allowed people in Hong Kong to be extradited to mainland China, sparked widespread protests across Hong Kong.

A report showing growth in China's service sector accelerated in August despite broader economic headwinds also reduced the appeal of safe havens such as bonds.

Selling pressure waned shortly after the start of trading, however, as traders expressed continued uncertainty about the U.S.-China trade war and the global economic outlook.

Meanwhile, treasuries showed little reaction to the Federal Reserve's Beige Book, which said the U.S. economy expanded at a modest pace through the end of August.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, will be used by Fed officials to make their decision on interest rates at a two-meeting on September 17th and 18th.

The report noted continued concerns regarding tariffs and trade policy uncertainty but said the majority of businesses remain optimistic about the near-term outlook.

Reports on private sector employment, weekly jobless claims and service sector activity may attract attention on Thursday, although trading activity may be subdued ahead of the release of the Labor Department's more closely watched monthly jobs report on Friday.


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Gold Futures Recover After Early Setback, Settle Modestly Higher

Trading 04 sept 2019 Commentaire »

Gold prices recovered after an early setback on Wednesday and settled modestly higher, riding on dollar's weakness.

Global equities gained in strength amid easing worries about political tensions in the U.K., Hong Kong and Italy, and on mild hopes about U.S.-China trade talks.

The dollar index dropped to 98.45, giving up more than 0.55% from previous close, as equities moved higher after risk appetite improved on positive news from Britain, Hong Kong and Italy.

In Hong Kong, Carrie Lan has reportedly formally withdrawn an extradition bill that triggered months of unrest in the country. The bill, which would have allowed people in Hong Kong to be extradited to mainland China, had sparked widespread protests across Hong Kong.

Gold futures for December ended up $4.50, or about 0.3%, at $1,560.40 an ounce.

Post release of the Beige Book which said the U.S. economy expanded at a modest pace through the end of August, gold futures advanced to $1,562.00 an ounce.

On Tuesday, gold futures for December ended up $26.50, or 1.7%, at $1,555.90 an ounce.

Silver futures for December ended up $0.310, at $19.547 an ounce, while Copper futures for December settled at $2.5950 per pound, gaining $0.0670 for the session.

The Federal Reserve's Beige Book noted continued concerns regarding tariffs and trade policy uncertainty but said the majority of businesses remain optimistic about the near-term outlook.

A report from the Commerce Department showed the U.S. trade deficit narrowed to $54.0 billion in July from a revised $55.5 billion in June.

Economists had expected the deficit to narrow to $53.5 billion from the $55.2 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports climbed by 0.6% to $207.4 billion, while the value of imports edged down by 0.1% to $261.4 billion.


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Fed's Beige Book Says U.S. Economy Expanded At Modest Pace

Trading 04 sept 2019 Commentaire »

With the Federal Reserve's next monetary policy decision looming, the central bank's Beige Book released Wednesday said the U.S. economy expanded at a modest pace through the end of August.

The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, will be used by Fed officials to make their decision on interest rates at a two-meeting on September 17th and 18th.

The report noted continued concerns regarding tariffs and trade policy uncertainty but said the majority of businesses remain optimistic about the near-term outlook.

The consumer has recently been seen as a resilient source of strength for the U.S. economy, although the Beige Book described the reports on consumer spending as mixed.

The Beige Book also said overall manufacturing activity was down slightly from the previous report, which may add to concerns about manufacturing after yesterday's disappointing report from the Institute for Supply Management.

The ISM said its purchasing managers index fell to 49.1 in August after dipping to 51.2 in July, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to edge down to 51.0.

With the bigger than expected decrease, the PMI indicated a contraction for the first time since August of 2016 and hit its lowest level since January of 2016.

The Fed also said home sales remained constrained in the majority of districts due primarily to low inventory levels.

Ahead of the Labor Department's closely watched monthly jobs report on Friday, the Beige Book said districts reported modest job growth overall, on par with the previous reporting period.

While employment growth varied by industry, the Fed said some districts noted manufacturing employment was flat to down.

The Beige Book said the pace of wage growth remained modest to moderate, with some districts noting efforts to attract and retain employees in addition to wage increases, including enhanced benefits offerings, work arrangement flexibility, and signing bonuses.

On the inflation front, the Fed said districts indicated modest price increases since the last Beige Book, which was released in mid-July.

Reports on the impact of tariffs on pricing were described as mixed, with some districts anticipating that the effects would not be felt for a few months.


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*Fed's Beige Book: Economy Expanded At Modest Pace Through The End Of August

Trading 04 sept 2019 Commentaire »

Fed's Beige Book: Economy Expanded At Modest Pace Through The End Of August


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Canadian Dollar Advances After BoC Holds Rate Steady

Trading 04 sept 2019 Commentaire »

The Canadian dollar was higher against its major counterparts in the European session on Wednesday, after the Bank of Canada kept its key rate unchanged, while suggesting that the current level of policy stimulus remained appropriate.

The BoC maintained its benchmark rate at 1.75 percent, as expected.

The economy is operating close to potential and inflation is on target, the bank said in its accompanying statement.

But escalating trade conflicts and its impact are taking a toll on the global and Canadian economies.

"As the Bank works to update its projection in light of incoming data, Governing Council will pay particular attention to global developments and their impact on the outlook for Canadian growth and inflation."

The currency showed mixed trading against its major opponents in the Asian session. While it rose against the greenback and the yen, it held steady against the euro. Against the aussie, it declined.

The loonie climbed to a 5-day high of 1.3268 against the greenback, from a low of 1.3345 it touched at 6:30 pm ET. Next key resistance for the loonie is likely seen around the 1.30 level.

After falling to a 5-day low of 1.4692 against the euro at 9:45 am ET, the loonie appreciated to 1.4613 following the decision. The loonie is seen finding resistance around the 1.44 level.

Data from IHS Markit showed that the euro area private sector logged a moderate growth in August, though the pace of expansion improved slightly more than initially estimated.

The final composite output index rose to 51.9 in August from 51.5 in July. The flash score was 51.8. Any reading above 50 indicates expansion in the sector.

The loonie reached as high as 80.07 against the yen, marking a 5-day high. This followed a low of 79.33 seen at 7:45 pm ET. The loonie is likely to find resistance around the 83.5 level.

The latest survey from Jibun Bank showed that Japan services sector activity accelerated in August, with a PMI score of 53.3.

That's up from 51.8 in July and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Having declined to near a 4-week low of 0.9051 against the aussie at 9:45 am ET, the loonie rebounded to 0.9008. Should the loonie rises further, 0.88 is seen as its next resistance level.

Data from the Australian Bureau of Statistics showed that Australia's gross domestic product gained a seasonally adjusted 0.5 percent on quarter in the second quarter of 2019.

That was in line with expectations and unchanged from the previous three months following an upward revision from +0.4 percent.


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September 4, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 04 sept 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.

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 provided temporary bullish demand for sometime (Bullish Triple-Bottom pattern).

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

However, the depicted Triple-Bottom pattern was invalidated especially after the EURUSD pair bulls have failed to establish Bullish persistence above 1.1115.

Moreover, the recently established short-term uptrend line has been invalidated as well thus rendering the short-term outlook as bearish.

By the end of last week's consolidations, a quick bearish decline was demonstrated towards 1.0965 - 1.0950 where the backside of the broken channel came to meet the EURUSD pair again.

Risky traders were advised to look for a valid BUY entry anywhere around the price levels of 1.0950. It's already running in profits. Remaining T/p level to be located around 1.1050 and 1.1070.

Trade recommendations :

Conservative traders should wait for the current bullish pullback to pursue towards 1.1050-1.1070 for a valid SELL entry.

S/L should be placed just above 1.1095 while target levels can be determined later based on upcoming price action.

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

UK Chancellor Unveils Biggest Increase In Public Spending In 15 Years

Trading 04 sept 2019 Commentaire »

UK Chancellor of the Exchequer Sajid Javid on Wednesday unveiled a GBP 13.8 billion boost to government spending in areas such as health, education and security, which was the biggest increase in 15 years.

Presenting the Spending Round 2019, Javid said, "We are turning the page on austerity and beginning a new decade of renewal."

The chancellor said day-to-day departmental spending will now grow by 4.1 percent above inflation in 2020-21 compared to the previous year.

Further, no government department will see a cut to its day-to-day budget for the first time since 2002, he added.

Javid also announced a GBP 2 billion in Brexit funding and no-deal preparedness for 2020-21, which is in addition to the GBP 2.1 billion he provided for the same during his initial days as Chancellor.


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September 4, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 04 sept 2019 Commentaire »

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

Moreover, Bearish breakdown below 1.2385 (Broken Key-Support) facilitated further bearish decline towards 1.2320, 1.2210 and 1.2100 which corresponded to significant key-levels on the Weekly chart.

In Early August, another consolidation-range was temporarily 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 (Lower limit of the recently established consolidation-zone).

As expected, further bullish advancement was demonstrated towards 1.2230 then 1.2280 where recent bearish rejection was demonstrated.

Bullish persistence above 1.2160 (the recent consolidation range pivot-point) was needed to enhance further bullish advancement towards 1.2320 then 1.2380.

However, recent bearish rejection was demonstrated around 1.2215 (backside of the depicted broken uptrend line).

That's why, another quick bearish decline took place towards 1.2100 then 1.2000 (corresponding to a prominent bottom established on August 9).

Yesterday, early signs of bullish recovery (Bullish Engulfing candlesticks) were manifested around 1.1960 bringing the GBPUSD back above above 1.2100.

As expected, further bullish advancement was demonstrated towards 1.2200. However, the GBPUSD pair looks overbought around the current price levels (1.2200) which constitute a prominent SUPPLY level to be watched for bearish rejection.

Trade Recommendations:

Conservative traders can have a valid SELL entry anywhere around the current price levels 1.2180-1.2200 (upper limit of the recent consolidation range & backside of the depicted broken uptrend).

T/P level to be placed around 1.2100 and 1.2020, while S/L should be placed above 1.2250.

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

*Canadian Dollar Rebounds To 0.9008 Against Aussie

Trading 04 sept 2019 Commentaire »

Canadian Dollar Rebounds To 0.9008 Against Aussie


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