Dollar Largely Subdued As Traders Look For Direction

Trading 09 sept 2019 Commentaire »

The U.S. dollar stayed largely subdued on Monday, with traders looking ahead to the upcoming monetary policy meetings of the European Central Bank and the Federal Reserve.

With recent data on U.S. jobs turning out to be a bit weak, and the impact of the ongoing trade war between the U.S. and China continuing to hurt growth, it is widely expected that central banks across the globe will step up stimulus to support growth.

The U.S. Federal Reserve reiterated recently that it would "act as appropriate" to support economic expansion. The ECB, as well, hinted at additional stimulus.

The ECB's policy move will be know this Thursday, while the Fed is scheduled to announce its policy next week.

The dollar index, which declined to a low of 98.14 a little past noon, recovered some lost ground subsequently and was last seen at 98.32, down 0.08% from previous close.

Against the euro, the dollar was down 0.15%, at 1.1047, even as a survey from behavioral research institute Sentix said the assessment of the current situation suggested that a recession is imminent.

Meanwhile, Germany's exports increased in July, while imports decreased from the previous month, raising hopes that foreign trade contributed positively to economic growth at the start of the third quarter.

The pound sterling was up nearly 0.5% against the dollar with a unit of sterling fetching $1.2343, compared to $1.2285 on Friday.

Data released by the Office for National Statistics today showed the UK economy expanded in July, largely driven by a rebound in services. The report said GDP expanded 0.3% in July, after staying flat in June. Economists had forecast marginal growth of 0.1%.

July's surprisingly strong rise in GDP suggests that the U.K. has not fallen into a recession.

The dollar was up nearly 0.3% against the Japanese currency, with a unit fetching 107.23 yen, up from 106.92 yen late Friday.

The dollar was down marginally against the loonie at 1.3165, due largely to higher crude oil prices.

Against the Aussie, the dollar shed about 0.25% trading at 0.6863. Against Swiss franc, the dollar gained nearly 0.5%, at 0.9921.

In U.S. economic news today, a report released by the Federal Reserve said consumer credit surged up by $23.3 billion in July after climbing by a downwardly revised $13.8 billion in June.

Economists had expected consumer credit to jump by $16.0 billion compared to the $14.6 billion increase originally reported for the previous month.

The bigger than expected increase in total consumer credit reflected notable growth in both revolving and non-revolving credit.

Compared to the same month a year ago, consumer credit in July was up by 6.8%, as revolving credit spiked by 11.2% and non-revolving credit increased by 5.3%.


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Treasuries Show Notable Move Back To The Downside

Trading 09 sept 2019 Commentaire »

Following the rebound seen over the course of the previous session, treasuries showed a notable move back to the downside during trading on Monday.

Bond prices came under pressure in morning trading and remained firmly negative throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.2 basis points to 1.622 percent.

The weakness among treasuries partly reflected reflects optimism about further stimulus from global central banks, with the European Central Bank expected to cut interest rates at a meeting on Thursday.

Expectations for another interest rate by the U.S. Federal Reserve next week were also bolstered by last Friday's weaker than expected jobs data.

Data from China showing an unexpected drop in exports in August has also added to the hopes of more stimulus to stave off a global recession.

Official data showed Chinese exports in August unexpectedly fell by 1 percent compared to year ago, reflecting the ongoing trade dispute with the U.S.

Subsequently, the trade war also remained on investors' minds, although traders seem optimistic about high-level trade talks scheduled for next month.

Some political observers have suggested President Donald Trump may soften his stance on China in order to reach an agreement and prevent a U.S. recession just before Election Day.

Looking ahead, trading on Tuesday may be impacted by reaction to the results of the Treasury Department's auction of $38 billion worth of three-year notes.


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Oil Futures Settle Sharply Higher On Saudi's Pledge To Support Cuts

Trading 09 sept 2019 Commentaire »

Crude oil prices rose sharply on Monday, riding on comments from Saudi Arabia that it would continue to support output cuts by OPEC and other producers.

Data showing an increase in oil imports by China last month, expectations that global central banks would step up stimulus to boost economic growth contributed as well to crude oil's uptick in the session.

West Texas Intermediate Crude oil futures for December ended up $1.33, or about 2.4%, at $57.85 a barrel.

On Friday, WTI Crude oil futures for December rebounded from early weakness and ended up $0.22, or about 0.4%, at $56.52 a barrel.

Recent data showing a drop in U.S. oil rig count for the third straight week and a larger than expected drop in U.S. crude stockpiles in the week ended August 30 supported oil's rise.

Saudi Arabia reiterated that it would support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman.

A Saudi official is reported to have said that there would be no shift in Saudi and OPEC policy on the output cuts and that Prince Abdulaziz would work to strengthen OPEC and non-OPEC cooperation.

Comments from Israeli Prime Minister Benjamin Netanyahu that Iran has a secret nuclear facility and his calling for action against the Middle Eastern nation too contributed to the rise in oil prices.


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U.S. Consumer Credit Jumps Much More Than Expected In July

Trading 09 sept 2019 Commentaire »

Consumer credit in the U.S. increased by much more than expected in the month of July, according to a report released by the Federal Reserve on Monday.

The Fed said consumer credit surged up by $23.3 billion in July after climbing by a downwardly revised $13.8 billion in June.

Economists had expected consumer credit to jump by $16.0 billion compared to the $14.6 billion increase originally reported for the previous month.

The bigger than expected increase in total consumer credit reflected notable growth in both revolving and non-revolving credit.

Revolving credit, which largely reflects credit card debt, climbed by $10.0 billion in July after edging down by 0.2 percent in the previous month.

Additionally, non-revolving credit, such as student loans and car loans, jumped by $13.3 billion in July after surging up by $13.9 billion in June.

Compared to the same month a year ago, consumer credit in July was up by 6.8 percent, as revolving credit spiked by 11.2 percent and non-revolving credit increased by 5.3 percent.


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Lithuania Inflation Slows In August

Trading 09 sept 2019 Commentaire »

Lithuania's consumer price inflation slowed in August after accelerating in the previous month, figures from the statistical office showed on Monday.

The consumer price index climbed 2.6 percent year-on-year following a 2.7 percent increase in July. In June, inflation was 2.5 percent.

Inflation was led by an increase in prices for vegetables, electricity, restaurants, caf?s, meat, tobacco, pharmaceutical, as well as by a decrease in prices for solid fuel, fuels and lubricants, heat energy. On a month-on-month basis, the CPI decreased for a third straight month, down 0.4 percent in August after a 0.3 percent fall in July.

Separate data from the statistical office showed that the trade deficit was EUR 0.35 billion in July versus EUR 31.8 million in June. Exports increased 2.1 percent year-on-year and imports climbed 10.3 percent.


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Analysis for EUR/USD and GBP/USD on September 9th. Surprises in the British Kingdom

Trading 09 sept 2019 Commentaire »

EUR/USD

analytics5d764c2f97893.png

On Friday, September 6, the EUR/USD pair ended with a decrease of 5 basis points, which did not affect the current wave pattern, suggesting the construction of a downward wave 5 in the expected 3. Thus, an unsuccessful attempt to break through the 76.4% of the Fibonacci level – still sends the euro/dollar instrument down to 9 and 8 figures. Most of Friday's economic reports in America were not received by the foreign exchange market. Neither Nonfarm, nor unemployment, nor salary data entailed serious exchange rate fluctuations. This is odd. Today, tomorrow and the day after tomorrow, there will be no interesting reports in the EU and the US. Monday, thus, could be used by the market to "close" Friday's events. But, as we can see, today the activity of the currency market leaves much to be desired. Hence the conclusion: the markets are focused on the ECB meeting, which will be held on Thursday, and until the moment when its results will be known, they do not want to open new deals. To build wave 5, it will be very helpful if the ECB lowers its key rate. However, in the last months of the presidency, anything can be expected from Mario Draghi. By and large, he does not care whether to lower the rate or not. Over the past two months, it is unlikely that the dramatically deteriorating economic situation of the eurozone can be corrected. It would even be better if there were no changes in monetary policy in recent months, so that Christine Lagarde, who is likely to take Draghi's place, could begin to implement her plans, not with ultra-low rates.

Purchase targets:

1.1248 – 0.0% according to Fibonacci

Sales targets:

1.0893 – 161.8% according to Fibonacci

1.0807 – 200.0% according to Fibonacci

General conclusions and recommendations:

The euro/dollar pair continues to build a downward wave 3 and presumably completed the construction of an internal corrective wave 4. I recommend selling the pair with the targets located near the calculated levels of 1.0893 and 1.0807, which corresponds to 161.8% and 200.0% of Fibonacci, the MACD signal "down" (already available) in the calculation of the construction of the wave 5.

GBP/USD

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The GBP/USD pair lost about 50 base points on September 6, but today it resumed the increase and thus continues to build the expected wave C as part of the upward correction section of the trend. Today in the UK, reports on GDP and industrial production came out. Against the background of all that is happening in the United Kingdom, meaning Brexit and the political crisis associated with it, it is very strange to see a GDP growth in July of 0.3%, instead of the projected + 0.1%, and an increase of 0.1% in industrial production in July, instead of a projected decline.

analytics5d764c5806167.png

Against the background of recent months, the increase of + 0.1% looks weak and unconvincing, and in annual terms, production fell by 0.9%, which is still higher than forecasts. Despite the contradictory and unexpected statistics, the pound takes advantage of the given chances and continues to rise. Today, there will be no interesting publications, but wave c takes on a 5-wave form and threatens to turn out to be very long. Will he be hindered by any new developments around Brexit? After all, the latest data suggests that Boris Johnson is not going to give up after the defeat in Parliament. Today, by the way, there will be a vote on the issue of early elections or rather re-elections. Thus, the evening for GBP/USD can be very interesting.

Sales targets:

1.2016 – 0.0% according to Fibonacci

Purchase targets:

1.2401 – 50.0% according to Fibonacci

1.2489 – 61.8% according to Fibonacci

General conclusions and recommendations:

The downward trend is still considered complete. Thus, it is expected to continue the construction of the upward wave with targets located near the calculated marks of 1.2401 and 1.2489, which corresponds to 50.0% and 61.8% of Fibonacci. You can buy a pound now when the news tension has subsided a bit, but I still do not recommend doing so in large volumes.

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GBP/USD: plan for the American session on September 9th. The UK economy gave a surprise and returned the demand for the British

Trading 09 sept 2019 Commentaire »

To open long positions on GBP/USD, you need:

The British pound rose in the first half of the day after a more than excellent report indicating the growth of the UK economy in July this year by 0.3% compared to June. Given that economists had hoped for a minimum growth of 0.1%, bulls quickly returned to the market, which allowed them to break above the highs of last week and gain a foothold. At the moment, the task of buyers is to break the resistance of 1.2387, which limited the upward potential and which I pointed out in my morning forecast. This will allow you to keep the bullish market, which will target the highs of 1.2427 and 1.2460, where I recommend fixing the profits. If the bears build a downward correction in the second half of the day, the support will be provided by the level of 1.2325, and it is possible to open long positions for a rebound near the minimum of 1.2278.

To open short positions on GBP/USD, you need:

Sellers will actively protect the maximum of 1.2387, and the formation of a false breakdown there in the second half of the day will lead to a correction of GBP/USD to the support area of 1.2325, where I recommend fixing the profits. With a larger closing of long positions, the pair can test the area of 1.2278. If the bullish momentum in the North American session leads to a breakthrough of the resistance of 1.2387, it is best to consider new short positions after updating local highs in the areas of 1.2427 and 1.2460. However, without Brexit news, and preferably positive, counting on a larger growth of GBP/USD will be very problematic, as the market is in balance and a new informational occasion is required.

Signals of indicators:

Moving Averages

Trading is above 30 and 50 moving averages, indicating a further bullish scenario.

Bollinger Bands

In the case of a decline in the pair in the second half of the day, the average border of the indicator around 1.2295 will provide support.

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Description of indicators

  • MA (moving average) 50 days– yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR/USD: plan for the American session on September 9th. Another failure of sellers at the level of 1.1020 maintains a balance

Trading 09 sept 2019 Commentaire »

To open long positions on EURUSD, you need:

From a technical point of view, in the absence of important fundamental statistics, nothing has changed. In the first half of the day, buyers of the euro managed to protect the level of 1.1020, which keeps the balance in the market and hope for the continuation of the upward trend amid expectations of lower interest rates in the United States. Currently, the emphasis remains on breaking through the level of 1.1053, which will lead to the updating of last week's maximum in the area of 1.1082 and to the test of new resistance of 1.1115, where I recommend taking the profits. In the scenario of EUR/USD decline, you can count on support in the area of 1.1020, however, opening long positions from there is best after a false breakdown, or buy a pair for a rebound from a minimum of 1.0989.

To open short positions on EURUSD, you need:

Sellers of the euro activated after updating the resistance of 1.1053, and the formation of a false breakdown there will be the first signal to open short positions in the expectation of a return and correction to the support of 1.1020. However, the more important task is to break through and consolidate below this minimum, which will push EUR/USD to the area of large levels of 1.0989 and 1.0955, where I recommend taking the profit. In a scenario of further growth above the resistance of 1.1053, it is best to count on sales on a rebound from the maximum of 1.1082, which kept the pair yesterday from further growth last week.

Signals of indicators:

Moving Averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates the lateral nature of the market.

Bollinger Bands

Volatility is low, which does not give signals to enter the market.

analytics5d7646bfcfb6c.png

Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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Canadian Dollar Advances As Saudi's Remarks Lift Oil Prices

Trading 09 sept 2019 Commentaire »

The Canadian dollar strengthened against its most major counterparts in the European session on Monday, as oil prices advanced after Saudi Arabia's new energy minister Prince Abdulaziz bin Salman indicated that OPEC and its allies would stick to its production cuts to support oil prices.

Crude for October delivery rose $0.32 to $56.85 per barrel.

Prices were also supported by a rise in oil imports in China in August and comments from the United Arab Emirates' energy minister that OPEC and its allies are committed to balancing the crude market.

After Prince Abdulaziz, a long-time member of the Saudi delegation to OPEC, was appointed to the post on Sunday, replacing Khalid al-Falih, a Saudi official said that there would be no shift in Saudi and OPEC policy on the output cuts and that Prince Abdulaziz would work to strengthen OPEC and non-OPEC cooperation.

This is the first time the energy portfolio has been handed to a member of the royal family.

European stocks were trading mixed after data showed that China's exports fell unexpectedly in August amid escalating trade dispute with the U.S. administration.

Hopes of further stimulus from global central banks helped to limit the downside to some extent ahead of a European Central Bank meeting slated for Thursday.

The loonie was trading mixed against its major counterparts in the Asian session. While it held steady against the greenback and the euro, it rose against the yen. Versus the aussie, it declined.

The loonie advanced to 81.37 against the yen, its biggest since August 2. If the loonie gains further, 83.5 is likely seen as its next resistance level.

The loonie climbed to near a 6-week high of 1.3154 against the greenback, from last week's closing value of 1.3164. On the upside, 1.30 is likely seen as the next resistance level for the loonie.

The loonie appreciated to near a 2-year high of 1.4503 against the euro, compared to 1.4514 hit late New York Friday. The next likely resistance for the loonie is seen around the 1.43 level.

Data from Destatis showed that Germany's exports increased in July, while imports decreased from the previous month.

Exports advanced 0.7 percent month-on-month in July, reversing a 0.1 percent fall in June. Meanwhile, imports dropped 1.5 percent after rising 0.7 percent a month ago.

In contrast, the loonie dropped to 0.9045 against the aussie, from a high of 0.9006 hit at 5:00 pm ET. The loonie is seen finding support around the 0.92 level.

Data from the Australian Bureau of Statistics showed that Australia's mortgage approvals increased more-than-expected in July.

The number of owner occupier loans increased 4.2 percent, much larger than the expected growth of 1.5 percent.

Looking ahead, U.S. consumer credit for July is scheduled for release in the New York session.


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BTC 09.09.2019 – First target reached, potential for second target

Trading 09 sept 2019 Commentaire »

Industry news:

As reported by Business Times, the BitMEX exchange run by Arthur Hayes is demonstrating the biggest trading volume of Bitcoin futures - $1.06 bln or – open interest, in other words.

Major BTC traders are trying to make profits on digital gold by trading BTC-based derivatives, such as futures contracts.

Technical view:

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Bitcoin did exactly what I expected last week and our first target at the price of $10.390 has been reached. Next potential downward target is set at the price of $9.450.

Pink lines – Larger symmetrical triangle in play

Black lines - Channel

Green falling line – Expected path

I still expect potential new wave for potential fulfill of the lower symmetrical triangle boundary. Additionally, I found that momentum on the upside decreasing in last up wave, which is indication for the weak buyers on the market. Key support is at $9.450 and resistance at $11.000 and $11.200. Bulls need to be very cautious as there is strong aggressive selling from the key resistance. As long as the Bitcoin is trading below $11.200, I would watch for selling opportunities. Watch for selling opportunities on the rallies on lower frames 5/15 for better timing.The material has been provided by InstaForex Company - www.instaforex.com