Dollar Gains Against Rivals

Trading 25 sept 2019 Commentaire »

The U.S. dollar gained notable ground against major currencies on Wednesday, rebounding from losses in the previous session.

Weak consumer confidence data and news about impeachment inquiry against President Donald Trump weighed on the greenback on Tuesday.

However, with upbeat new home sales data suggesting there may not be aggressive rate cuts by the Federal Reserve, the greenback has bounced back and gained significant ground against some of its major rivals.

The dollar index rose 99.06, gaining nearly 0.75%. It was last seen hovering around 99.00, up by about 0.7%.

Against the euro, the dollar was up 0.7% at 1.0944, gaining from $1.1021 a unit of euro last evening.

The British currency was weak as well against the greenback, with a unit of sterling fetching $1.2356, about 1.1% less than Tuesday's close of $1.2493. Continued uncertainty about Brexit and the UK High Court's ruling that Prime Minister Boris Johnson's decision to suspend Parliament was unlawful weighed on sterling.

The dollar was up 0.7% against the Japanese currency, which was trading at 107.79 a dollar, down from 107.07 yen.

The dollar strengthened to 0.9921 against Swiss franc, gaining about 0.7%. Against the loonie, it was up 0.17% with the dollar-loonie pair trading at 1.3266.

The Aussie was down as much as 0.75% against the greenback, with the pair trading at 0.6750.

Data released by the Commerce Department on Wednesday showed U.S. new home sales rebounded strongly in the month of August following a sharp pullback in the previous month.

The Commerce Department said new home sales surged up by 7.1% to an annual rate of 713,000 in August after plunging by 8.6% to a revised rate of 666,000 in July.

Economists had expected new home sales to jump by 3.9% to a rate of 660,000 from the 635,000 originally reported for the previous month.


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Crude Oil Futures Settles Sharply Lower As Inventories Rise

Trading 25 sept 2019 Commentaire »

Crude oil prices drifted lower on Wednesday after data showed a jump in U.S. crude inventories for a second successive week.

Reports saying Saudi Arabia has restored most of its production capacity contributed as well to the decline in oil prices.

West Texas Intermediate Crude Oil futures for November ended down $0.80, or 1.4%, at $56.49 a barrel.

On Tuesday, WTI crude oil futures for November ended down $1.35, or 2.3%, at $57.29 a barrel.

Data released by the Energy Information Administration (EIA) Wednesday morning showed crude oil inventories in the U.S. rose 2.4 million barrels in the week ended September 20, beating forecasts for a draw of 190,000 barrels.

On Tuesday, the American Petroleum Institute said in its weekly oil report, crude stockpiles were up 1.4 million barrels last week.

The EIA data also showed that gasoline inventories rose by 500,000 barrels last week, while distillate stockpiles declined by 3 million barrels.

Reuters reported, citing sources that Saudi Arabia has restored its oil production capacity to 11.3 million barrels per day, maintaining a faster than expected recovery after the Sept. 14 attacks on its oil facilities.

Besides the jump in U.S. crude inventories and restoration of crude production in Saudi Arabia, worries about a likely drop in energy demand due to the impact of trade war and slowing global economy pushed down oil prices.


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Treasuries Pull Back Sharply After Recent Upward Trend

Trading 25 sept 2019 Commentaire »

After moving sharply higher over the past several sessions, treasuries showed a notable move back to the downside during trading on Wednesday.

Bond prices moved steadily lower throughout the day before closing firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged up by 9.7 basis points to 1.732 percent.

With the sharp increase on the day, the ten-year yield closed higher for the first time in eight sessions.

The pullback by treasuries came as traders reacted to the release of the transcript of President Donald Trump's controversial call with Ukrainian President Volodymyr Zelensky.

The transcript confirms Trump discussed a possible investigation of former Vice President and Democratic frontrunner Joe Biden in the call with Zelensky, although he does not directly link the issue to U.S. aid.

The release of the transcript comes amid claims Trump threatened to withhold military aid from Ukraine unless Zelensky conducted an investigation of Biden and his son Hunter.

A day before the release of the transcript, House Speaker Nancy Pelosi, D-Calif., announced the Democrat-controlled House is moving forward with an official impeachment inquiry of Trump.

Pelosi said she is directing six House committees to proceed with their investigations under the umbrella of the impeachment inquiry, saying Trump "must be held accountable" and "no one is above the law."

The speaker accused Trump of a breach of his constitutional responsibilities by calling upon a foreign power to intervene in the upcoming election.

Pelosi also accused the Trump administration of violating the law by refusing to turn over the whistleblower complaint that sparked the uproar over the call.

The White House is reportedly considering releasing the complaint to Congress, although conservative media outlets have already begun seeking to damage the credibility of the whistleblower.

On the U.S. economic front, the Commerce Department released a report showing U.S. new home sales rebounded strongly in the month of August following a sharp pullback in the previous month.

The Commerce Department said new home sales surged up by 7.1 percent to an annual rate of 713,000 in August after plunging by 8.6 percent to a revised rate of 666,000 in July.

Economists had expected new home sales to jump by 3.9 percent to a rate of 660,000 from the 635,000 originally reported for the previous month.

Treasuries saw continued weakness after the Treasury Department revealed this month's auction of $41 billion worth of five-year notes attracted slightly below average demand.

The five-year note auction drew a high yield of 1.600 percent and a bid-to-cover ratio of 2.32, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.36.

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

Looking ahead, the Treasury is due to announce the results of its auction of $32 billion worth of seven-year notes on Thursday.

A batch of U.S. economic data could also impact trading on Thursday, with traders likely to keep an eye on reports on second quarter GDP, weekly jobless claims, and pending home sales.


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Gold Futures End Sharply Lower As Dollar Rises

Trading 25 sept 2019 Commentaire »

Gold prices declined sharply on Wednesday as the dollar gained against major currencies and equities recovered after a weak start.

The slide in gold prices was so steep that gold futures posted their biggest single-session loss in nearly three weeks.

Stocks gained in strength after a sluggish start, despite news about impeachment inquiry into U.S. President Donald Trump on allegation that he breached his constitutional responsibilities by calling upon a foreign power to intervene in the upcoming election.

Data showing a bigger than expected jump in new home sales in the month of August lifted sentiment.

The dollar rose on easing prospects of aggressive rate cuts by the Federal Reserve.

The dollar index rose to 99.05, gaining more than 0.7%.

Gold futures for December ended down $27.90, or about 1.8%, at $1,512.30 an ounce.

On Tuesday, gold futures for December ended up $8.70, or about 0.6%, at $1,540.20 an ounce, the highest settlement in about three weeks.

Silver futures for December ended down $0.555, at $18.073 an ounce, while Copper futures for December settled at $2.6120 per pound, gaining $0.0055 for the session.

House Speaker Nancy Pelosi, D-Calif., announced that the Democrat-controlled House is moving forward with an official impeachment inquiry of President Donald Trump.

Pelosi said she is directing six House committees to proceed with their investigations under the umbrella of the impeachment inquiry, saying Trump "must be held accountable" and "no one is above the law."

Trump faces allegations he threatened to withhold military aid from Ukraine unless Ukrainian President Volodymyr Zelensky conducted an investigation of former Vice President Joe Biden, the frontrunner for the Democratic presidential nomination.

A transcript released by the White House confirms that Trump discussed a possible investigation of Biden in a call with Zelensky, although he does not directly link the issue to U.S. aid.

On the economic front, data released by the Commerce Department showed U.S. new home sales rebounded strongly in the month of August following a sharp pullback in the previous month.

The data said new home sales surged up by 7.1% to an annual rate of 713,000 in August after plunging by 8.6% to a revised rate of 666,000 in July.

Economists had expected new home sales to jump by 3.9% to a rate of 660,000 from the 635,000 originally reported for the previous month.


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Five-Year Note Auction Attracts Slightly Below Average Demand

Trading 25 sept 2019 Commentaire »

A day after revealing its two-year note auction attracted above average demand, the Treasury Department showed this month's auction of $41 billion worth of five-year notes attracted slightly below average demand.

The five-year note auction drew a high yield of 1.600 percent and a bid-to-cover ratio of 2.32.

Last month, the Treasury also sold $41 billion worth of five-year notes last month, drawing a high yield of 1.365 percent and a bid-to-cover ratio of 2.48.

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 five-year note auctions had an average bid-to-cover ratio of 2.36.

Looking ahead, the Treasury is due to announce the results of its auction of $32 billion worth of seven-year notes on Thursday.


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September 25, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 25 sept 2019 Commentaire »

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In Early August, another consolidation-range was temporarily established between the price levels of (1.2100 - 1.2220) except on August 9 when temporary bearish decline below 1.2100 was executed towards 1.2025 (Previous Weekly-Bottom).

Since then, the GBP/USD pair has been trending-up within the depicted bullish channel except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.

Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back above 1.2230 where the pair looked overbought.

However, further bullish momentum was demonstrated towards 1.2320 maintaining the bullish movement inside the depicted movement channel.

Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a reversal wedge pattern was established.

As anticipated, the reversal wedge pattern was confirmed by the end of Monday's consolidations supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

The Long-term outlook remains bearish as long as the upper limit of the current movement channel around 1.2500 - 1.2550 remains defended by the GBP/USD bears.

Yesterday, the backside of the confirmed reversal wedge was successfully re-tested around 1.2500 where a new episode of bearish rejection was expressed.

Bearish persistence below 1.2440-1.2400 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price level of 1.2360 which is currently being tested

Trade Recommendations:

Conservative traders can look for another SELL entry around the backside of the broken channel (Anywhere around 1.2400).

T/P level to be placed around 1.2360, 1.2330 and 1.2280 while S/L should be set as a H4 candlestick closure above 1.2500.

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September 25, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 25 sept 2019 Commentaire »

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Few weeks ago, 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.

Intraday traders were advised to search for a valid BUY entry anywhere around the price levels of 1.0950. Target levels were successfully reached within the recent bullish movement during last weeks' consolidations.

Shortly After, the EUR/USD pair was testing the backside of both broken trends around 1.1060-1.1080 where significant bearish pressure pushed the pair directly towards 1.0940 (Prominent Weekly Bottom).

Bearish Breakout below the price level of 1.0940 was needed to enhance further bearish decline towards 1.0900 and 1.0840 (Fibonacci Expansion Key-Levels).

However, considerable bullish rejection was demonstrated as a quick bullish spike towards 1.1100 where another episode of bearish rejection was expressed.

Currently, the EUR/USD is trapped within a narrow consolidation range extending between (1.0990 - 1.1090) until breakout occurs in either directions.

By the end of last week's consolidations, Bearish Breakout below 1.1030 was demonstrated. This renders the recent bullish spike as a bullish trap.

That's why, initial bearish decline was expected towards 1.0940-1.0920 while the price levels around 1.1030 remain significant supply levels where bearish rejection was anticipated.

As Expected, the recent bullish pullback towards the price level of 1.1030 was Obviously rejected by the end of Yesterday's consolidations.

Moreover, Bearish persistence below the price level of 1.0970 (recent daily bottom) is mandatory to enhance quick bearish decline towards 1.0930 and 1.0898 (Fibonacci Expansion 78.6%).

Trade recommendations :

Intraday traders were advised to look for a valid SELL entry around the price level of 1.1030.

Target levels should be located at 1.0965, 1.0930 and 1.0898 while S/L should be lowered to 1.1060.

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

U.S. New Home Sales Rebound More Than Expected, Extending Recent Volatility

Trading 25 sept 2019 Commentaire »

Reflecting an extension of the volatility seen in recent months, the Commerce Department released a report on Wednesday showing U.S. new home sales rebounded strongly in the month of August following a sharp pullback in the previous month.

The Commerce Department said new home sales surged up by 7.1 percent to an annual rate of 713,000 in August after plunging by 8.6 percent to a revised rate of 666,000 in July.

Economists had expected new home sales to jump by 3.9 percent to a rate of 660,000 from the 635,000 originally reported for the previous month.

The bigger than expected rebound came as new home sales in the West bounced back, spiking by 16.5 percent to a rate of 191,000 in August after plummeting by 15.9 percent to 164,000 in July.

New home sales in the South also shot up by 6.0 percent to a rate of 426,000, while new home sales in the Midwest and Northeast tumbled by 3.0 percent and 5.9 percent to 64,000 and 32,000, respectively.

The report also said the median sales price of new houses sold in August was $328,400, up 7.5 percent from $305,400 in July and up 2.2 percent from $321,000 a year ago.

The estimate of new houses for sale at the end of August was 326,000, representing 5.5 months of supply at the current sales rate. The months of supply was down from 5.9 at the end July.

Last Thursday, the National Association of Realtors released a separate report showing an unexpected jump in U.S. existing home sales in the month of August.

NAR said existing home sales surged up by 1.3 percent to an annual rate of 5.49 million in August after spiking by 2.5 percent to a rate of 5.42 million in July.

The continued increase came as a surprise to economists, who had expected existing home sales to pull back by about 0.4 percent.


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*U.S. Crude Oil Inventories Rise By 2.4 Million Barrels In Week Ended 9/20

Trading 25 sept 2019 Commentaire »

U.S. Crude Oil Inventories Rise By 2.4 Million Barrels In Week Ended 9/20


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Gold is dominated by multidirectional drivers

Trading 25 sept 2019 Commentaire »

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The rally of the yellow precious metal, which led it to historic highs, slowed down.

According to experts, the rate of gold is now influenced by such multidirectional factors as the slowdown in the global economy, the strengthening of the US dollar and the current policy of the Fed to interest rates.

After reaching the local bottom last August at $1,160 per 1 ounce, the precious metal was able to recover thanks to its status as a "haven" asset. In May, gold received an additional boost to growth amid expectations of easing the monetary policy of the Federal Reserve, which usually leads to a decrease in the USD rate and an increase in the value of the precious metal.

At the September meeting, FOMC officials were divided, reducing the chances of new rounds of rate cuts. At the same time, the head of the Fed, Jerome Powell, continues to repeat that the regulator is monitoring the situation and is ready to continue easing policy as necessary.

It is noteworthy that gold continues to grow even against the backdrop of a strengthening dollar.

Why is greenback getting more expensive if the rally of the precious metal is the result of expectations of a federal funds rate cut that will harm the US currency? One of the reasons analysts call the increased demand for treasuries from abroad, where the onset of a recession seems almost inevitable, and almost zero or even negative rates make US state funds with their yield a kind of "Klondike".

What to expect from gold next?

Shortly, "bulls" on XAU/USD can once again test monthly highs in the area of $1,560 per 1 ounce. However, to do this, they will first need to overcome strong resistance in the area of $1,525 – 1,530.

The only thing that worries – gold will storm the highs in the last decade of September. This is the end of the quarter and the fiscal year in the US. That is, time to take stock and record the results.

As a rule, market reversals are often observed at such times. If at this time we see strong growth, it will soon be replaced by a decline.

This could happen this time too. However, it is hardly worth waiting for a long correction of gold, although it can be quite sharp.

Given the strong growth in the price of the precious metal in recent months, a decrease of $150 could be expected.

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