Seven-Year Note Auction Attracts Slightly Above Average Demand

Trading 26 sept 2019 Commentaire »

Finishing off this week's announcements of the results of its long-term securities auctions, the Treasury Department revealed Thursday that its auction of $32 billion worth of seven-year notes attracted slightly above average demand.

The seven-year note auction drew a high yield of 1.633 percent and a bid-to-cover ratio of 2.49.

Last month, the Treasury also sold $32 billion worth of seven-year notes, drawing a high yield of 1.489 percent and a bid-to-cover ratio of 2.16.

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 seven-year note auctions had an average bid-to-cover ratio of 2.44.

Earlier this week, the Treasury released the results of its auctions of $40 billion worth of two-year notes and $41 billion worth of five-year notes.

While the two-year note auction attracted average demand, the five-year note auction attracted slightly below average demand.


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September 26, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 26 sept 2019 Commentaire »

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On September 5, the EUR/USD pair was testing the backside of both broken trends around 1.1060-1.1080 where significant bearish pressure was demonstrated pushing 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 pressure was expressed.

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.

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

Currently, the EUR/USD is demonstrating a long-term Double-TOP pattern extending between (1.0930 - 1.1080) with neckline located around 1.0940.

Bearish persistence below 1.0940 confirms this long-term pattern. Pattern projection target would be located around 1.0840.

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

Trade recommendations :

Intraday traders who were advised to have a valid SELL entry around the price level of 1.1030 can gather their profits around the current price levels.

Conservative traders should wait for a considerable bearish closure below 1.0940 for a valid SELL entry. Initial Target levels should be located at 1.0900, 1.0850 and 1.0830.

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September 26, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 26 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 most recent top established around 1.2500 remains defended by the GBP/USD bears.

On Tuesday, 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 levels of 1.2360 and 1.2310 where early signs of bullish rejection is being demonstrated Today.

Trade Recommendations:

Conservative traders can wait for bullish pullback towards the backside of the broken channel (Anywhere around 1.2400) for another valid SELL entry.

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 1.2450.

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U.S. Pending Home Sales Rebound More Than Expected In August

Trading 26 sept 2019 Commentaire »

Pending home sales in the U.S. showed a bigger than expected rebound in the month of August, according to a report released by the National Association of Realtors on Thursday.

NAR said its pending home sales index surged up by 1.6 percent to 107.3 in August after plunging by 2.5 percent to 105.6 in July. Economists had expected pending home sales to climb by 0.9 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the notable monthly increase, pending home sales in August were up by 2.5 percent compared to the same month a year ago, reflecting a turnaround from the 0.3 percent year-over-year drop in July.

"It is very encouraging that buyers are responding to exceptionally low interest rates," said NAR chief economist Lawrence Yun. "The notable sales slump in the West region over recent years appears to be over. Rising demand will reaccelerate home price appreciation in the absence of more supply."

Pending home sales in the West region led the rebound, spiking by 3.1 percent in August after tumbling by 3.4 percent in July.

The report said pending home sales jumped by 1.4 percent in both the Northeast and South and rose by 0.6 percent in the Midwest.

"With interest rates expected to remain low, home sales are forecasted to rise in the coming months and into 2020," said Yun. "Unfortunately, so far in 2019, new home construction is down 2.0%."

"The hope is that housing starts quickly move into higher gear to meet the higher demand," he added. "Moreover, broader economic growth will strengthen from increased housing activity."

NAR forecasts home sales to climb by 0.6 percent in 2019 before surging up by 3.4 percent in the 2020. Housing starts are predicted to increase by 2.0 percent in 2019 and jump an additional 10.6 percent in 2020.


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Dollar Little Changed After U.S. Pending Home Sales

Trading 26 sept 2019 Commentaire »

Following the release of U.S. pending home sales data for August at 10:00 am ET Thursday, the greenback changed little against its major counterparts.

The greenback was trading at 107.52 against the yen, 1.0961 against the euro, 1.2359 against the pound and 0.9917 against the franc around 10:01 am ET.


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*U.S. Pending Home Sales Jump 1.6% In August

Trading 26 sept 2019 Commentaire »

U.S. Pending Home Sales Jump 1.6% In August


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U.S. GDP Growth Unrevised At 2.0% In Q2

Trading 26 sept 2019 Commentaire »

The Commerce Department released its final report on U.S. gross domestic product in the second quarter on Thursday, showing the pace of GDP growth was unrevised from the previous estimate.

The report said real GDP increased at an annual rate of 2.0 in the second quarter, unchanged from the previous estimate and in line with economist estimates.

The unrevised 2.0 percent GDP growth in the second quarter still reflects a notable slowdown compared to the 3.1 percent jump in the first quarter.

The spike in consumer spending in the second quarter was downwardly revised to 4.6 percent from 4.7 percent but still reflects a substantial acceleration from the 1.1 percent increase in the first quarter.

The Commerce Department said downward revisions to consumer spending and non-residential fixed investment were primarily offset by upward revisions to state and local government spending and exports

The report also showed a downward revision to imports, which are a subtraction in the calculation of GDP.

On the inflation front, core consumer price growth in the second quarter was upwardly revised to 1.9 percent from 1.7 percent. Core prices, which exclude food and energy prices, rose by 1.1 percent in the first quarter.

"Looking ahead, the weight of policy uncertainty, trade tensions, weaker global growth and tightening financial conditions will certainly make for a bumpy landing," said a note from economists at Oxford Economics.

The economists added, "However, despite spreading recession fears, we foresee sub-potential GDP growth of 1.6% in 2020, rather than an outright downturn."


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4 hour Ichimoku cloud indicator analysis of USDJPY

Trading 26 sept 2019 Commentaire »

USDJPY has bounced off the 107 price level as expected and we now have a weak bullish signal by the Ichimoku cloud indicator as the tenkan-sen has crossed the kijun-sen. Recapturing 108 will give us another bullish signal with a cloud break out.

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Red line - tenkan-sen

Yellow line- Kijun-sen

Green line - Chikou span

In the 4 hour chart we have a weak bullish signal by tenkan-sen crossing above the kijun-sen. It is a weak signal because price is still below the cloud and the Chikou span is below price and inside the cloud. A break above 108 will strengthen the bullish scenario for the 4 hour chart. Support is at 107.50 and bulls need to hold prices above it. Otherwise we could see prices move towards 106 specially if price breaks below 107.

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U.S. Dollar Mixed After U.S. GDP Growth Unrevised

Trading 26 sept 2019 Commentaire »

The U.S. dollar showed mixed mixed trading against its major counterparts in the European session on Thursday, after the release of a data that showed the U.S. economy expanded in line with the previous estimate in the second quarter.

Data from the Commerce Department showed that said real GDP increased at an annual rate of 2.0 in the second quarter, unchanged from the previous estimate and in line with economist estimates.

The unrevised 2.0 percent GDP growth in the second quarter still reflects a notable slowdown compared to the 3.1 percent jump in the first quarter.

A separate report from the Labor Department showed first-time claims for U.S. unemployment benefits crept slightly higher in the week ended September 21st.

The report said initial jobless claims inched up to 213,000, an increase of 3,000 from the previous week's revised level of 210,000.

Economists had expected initial jobless claims to tick up 212,000 from the 208,000 originally reported for the previous week.

At 10:00 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of August. Pending home sales are expected to climb by 0.9 percent in August after tumbling by 2.5 percent in July.

The currency was lower against its most major counterparts in the previous session.

The greenback pulled back to 1.2363 against the pound, from a 2-week high of 1.2303 seen at 5:30 am ET. The currency is likely to find support around the 1.25 level.

Data from the Society of Motor Manufacturers and Traders showed that UK car production increased for the first time in 15 months in August.

Car production grew 3.3 percent on a yearly basis in August as factories kept production lines rolling throughout the month after they brought forward planned summer shutdowns to April in preparation for the original Brexit deadline.

The greenback held steady against the yen, after reaching as low as 107.55 at 6:35 am ET. At yesterday's close, the pair was worth 107.77.

Bank of Japan Governor Tohiko Kuroda said that the bank will conduct monetary policy without any prejudice in mind.

The momentum towards price stability target may be impaired and downside risks likely increased, Kuroda noted. With this situation in mind, the board will reexamine economic and price trends at the next policy meeting, he said.

The greenback retreated to 1.0956 against the euro, from more than a 2-year low of 1.0923 hit at 6:30 am ET. If the greenback slides further, 1.12 is likely seen as its next support level.

Data from the European Central Bank showed that Eurozone money supply grew at a faster pace in August and growth in private sector credit accelerated.

The broad monetary aggregate M3 climbed 5.7 percent year-on-year in August, faster than the 5.1 percent increase logged in July.

Following a 1-week high of 0.9948 hit at 6:00 am ET, the greenback reversed direction against the franc, with the pair trading at 0.9923. The greenback is seen finding support around the 0.96 region.

The U.S. pending home sales for August are scheduled for release shortly.


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U.S. Weekly Jobless Claims Show Modest Uptick To 213,000

Trading 26 sept 2019 Commentaire »

First-time claims for U.S. unemployment benefits crept slightly higher in the week ended September 21st, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims inched up to 213,000, an increase of 3,000 from the previous week's revised level of 210,000.

Economists had expected initial jobless claims to tick up 212,000 from the 208,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average edged down to 212,000, a decrease of 750 from the previous week's revised average of 212,750.

The report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also fell by 15,000 to 1.650 million in the week ended September 14th.

The four-week moving average of continuing claims dropped to 1,665,750, a decrease of 12,750 from the previous week's revised average of 1,678,500.

Next Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for September.


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