Dollar Exhibits Mixed Trend Against Rivals

Trading 27 sept 2019 Commentaire »

The U.S. dollar moved in a somewhat tight band for much of the session on Friday, reacting to news on the trade front, economic data and the impeachment inquiry into President Donald Trump.

The dollar index, which declined to 98.99 a little before noon, recovered subsequently and was last seen at 99.10, down marginally from previous close.

The dollar weakened to $1.0959 against the euro, before recovering to $1.0943, but was still trailing its previous close by about 0.2%.

The British pound sterling weakened against major currencies after Bank of England policy maker Michael Saunders hinted at a possible U.K. rate cut if prolonged Brexit uncertainty drags down the economy.

Saunders said that the impact of Brexit uncertainties are akin to a "slow puncture" for the UK economy, leading underlying growth to slow to a crawl.

Persistently high Brexit uncertainty seems to continue to depress UK growth, even without a no-deal Brexit, he warned.

"If the UK avoids a no-deal Brexit, monetary policy also could go either way and I think it is quite plausible that the next move in Bank Rate would be down rather than up."

Against the dollar, the sterling was down 0.25% with a unit of sterling fetching $1.2293, compared to previous close of $1.2323.

The Japanese yen was down 0.1% at 107.93 a dollar.

Against the Aussie, the dollar shed about 0.27%, with the Aussie-Dollar pair at 0.6767.

The dollar was weak against the loonie and Swiss franc, at 1.3241 and 0.9912, respectively.

Data released by the Commerce Department said durable goods orders unexpectedly rose by 0.2% in August after jumping by 2% in July. The continued increase surprised economists, who had expected orders to pull back by 1%.

Another report from the Commerce Department showed U.S. personal income rose in line with economist estimates in the month of August, climbing by 0.4%, after ticking up by 0.1% a month earlier.

Meanwhile, the report said personal spending crept up by 0.1% in August after climbing by 0.5% in July. Spending had been expected to rise by 0.3%.

A report from the University of Michigan said consumer sentiment in the U.S. rebounded by more than initially estimated in the month of September, and showed a notable increase from a three-year low of 89.8 in August.

The report said the consumer sentiment index for September was upwardly revised to 93.2 from the preliminary reading of 92.0. Economists had expected the index to be unrevised.

On the trade front, optimism about a trade deal faded a bit after a report from Bloomberg News said Trump administration officials are discussing ways to limit U.S. investors' portfolio flows into China.

Citing people familiar with the internal deliberations, Bloomberg noted the move would have repercussions for billions of dollars in investment pegged to major indexes.

A source family with the matter confirmed to CNBC that the White House is weighing some curbs on U.S. investments in China but noted the discussions are in the preliminary stages and nothing has been decided.

The reports reflect the ever-changing landscape of U.S.-China relations that has kept traders reluctant to make significant bets.


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Treasuries Close Modestly Higher After Recovering From Initial Drop

Trading 27 sept 2019 Commentaire »

After recovering from an initial move to the downside, treasuries moved modestly higher over the course of the trading session on Friday.

Bond prices lingered near the unchanged line for much of the session before moving to the upside going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 1.675 percent.

The turnaround by treasuries came after a report from Bloomberg News said Trump administration officials are discussing ways to limit U.S. investors' portfolio flows into China.

Citing people familiar with the internal deliberations, Bloomberg noted the move would have repercussions for billions of dollars in investment pegged to major indexes.

A source family with the matter confirmed to CNBC that the White House is weighing some curbs on U.S. investments in China but noted the discussions are in the preliminary stages and nothing has been decided.

The reports reflect the ever-changing landscape of U.S.-China relations that has kept traders reluctant to make significant bets.

Earlier in the day, traders expressed some optimism about U.S.-China trade talks after a report from CNBC said negotiations are set to resume October 10th in Washington.

A person close to the talks said Chinese Vice Premier Liu He will be representing the delegation from Beijing at the meetings.

The U.S. and China held deputy-level trade talks last week, although Treasury Secretary Steven Mnuchin called off a trip by Chinese officials to U.S. farms.

On the U.S. economic front, the Commerce Department released a report unexpectedly showing a modest increase in U.S. durable goods orders in the month of August.

The Commerce Department said durable goods orders rose by 0.2 percent in August after jumping by 2.0 percent in July. The continued increase surprised economists, who had expected orders to pull back by 1.0 percent.

Excluding a drop in orders for transportation equipment, durable goods orders increased by 0.5 percent in August after falling by 0.5 percent in July. Economists had expected ex-transportation orders to rise by 0.2 percent.

However, the report also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, edged down by 0.2 percent in August after coming in unchanged in July.

A separate Commerce Department report showed U.S. personal income rose in line with economist estimates in the month of August, although personal spending inched up by less than expected.

The Commerce Department said personal income climbed by 0.4 percent in August after ticking up by 0.1 percent in July. The increase in income matched economist estimates.

Meanwhile, the report said personal spending crept up by 0.1 percent in August after climbing by 0.5 percent in July. Spending had been expected to rise by 0.3 percent.

Economic data may move back into the spotlight next week, with the Labor Department due to release its closely watched monthly jobs report next Friday.

Reports on manufacturing and service sector activity, private sector employment, and the U.S. trade deficit are also likely to attract some attention.


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Oil Futures Settle Lower For The Day, Shed Nearly 4% In The Week

Trading 27 sept 2019 Commentaire »

Crude oil futures ended notably lower on Friday and posted a sharp weekly loss as well, as an increase in U.S. crude inventories and concerns about the outlook for energy demand continued to weigh on the commodity.

Traders also took note of a report from Baker Hughes that said the number of active oil rigs in the U.S. declined to 860, the lowest level in nearly 30 months.

West Texas Intermediate Crude oil futures for November ended down $0.50, or about 0.9%, at $55.91 a barrel.

On Thursday, WTI crude oil futures for November ended down $0.08, or less than 0.1%, at $56.41 a barrel.

For the week, crude oil futures shed about 3.8%.

Data showing a drop in China's industrial profits in August amid the trade disputes with the United States raised concerns about energy demand from the world's second largest economy.

China's industrial profits declined by 2% year-on-year in August, against a 2.6% jump in July. In January - August, industrial profits dropped 1.7% annually.

The recent Energy Information Administration's report showing a surprise buildup in U.S. crude stockpile last week and reports saying Saudi Arabia has restored its oil production much faster than expected weighed on oil prices.

A report from the International Energy Agency indicated a likely cut in growth estimates for global oil demand for 2019 and 2020 in the event of the global economy weakening further.


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Gold Futures Settle Lower On Strong Economic Data, Steady Dollar

Trading 27 sept 2019 Commentaire »

Gold prices drifted lower on Friday, as the dollar remained fairly steady despite not making any significant progress above the flat line.

However, with U.S. stocks losing ground amid slightly fading optimism about trade after reports said the Trump administration officials are discussing ways to limit U.S. investors' portfolio flows into China, gold prices came off the day's lows.

The dollar index, which eased to 98.99, recovered to 99.13 as the session progressed.

Gold futures for December ended down $8.80, or about 0.6%, at $1,506.40 an ounce, after having slipped to a low of $1,493.30 earlier in the session.

On Thursday, gold futures for December ended up $2.90, or about 0.2%, at $1,515.20 an ounce, after having plunged 1.8% a session earlier.

For the week, gold futures shed 0.6%.

Silver futures for December ended down $0.260, at $17.652 an ounce, while Copper futures for December settled at $2.5975 per pound, gaining $0.0200 in the session.

In U.S. economic news, a report released by the Commerce Department said durable goods orders unexpectedly rose by 0.2% in August after jumping by 2% in July. The continued increase surprised economists, who had expected orders to pull back by 1%.

Another report from the Commerce Department showed U.S. personal income rose in line with economist estimates in the month of August, climbing by 0.4%, after ticking up by 0.1% a month earlier.

Meanwhile, the report said personal spending crept up by 0.1% in August after climbing by 0.5% in July. Spending had been expected to rise by 0.3%.

A report from the University of Michigan said consumer sentiment in the U.S. rebounded by more than initially estimated in the month of September, and showed a notable increase from a three-year low of 89.8 in August.

The report said the consumer sentiment index for September was upwardly revised to 93.2 from the preliminary reading of 92.0. Economists had expected the index to be unrevised.


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

AUD/USD. Aussie’s southern outlook: weak reports ahead of RBA meeting

Trading 27 sept 2019 Commentaire »

The Australian dollar paired with the US currency behaves cautiously, trading within the 100-point range without leaving the 67th figure. High-profile political events in the US only indirectly affected the "Aussie" – the pair fell by 70 points against the background of the overall strengthening of the US dollar. But in general, the situation remained the same: after the completion of the corrective growth (which lasted for almost two weeks), the pair settled in the range of 0.6740 – 0.6800.

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Uncertain steps of both bears and bulls of the pair indicate that traders cannot determine the vector of further movement of AUD/USD. On the one hand, the Reserve Bank of Australia at the last meeting showed a neutral and wait-and-see position, while relations between Beijing and Washington have warmed. On the other hand, the minutes of the September RBA published later were rather "dovish-like" in nature, and the negative consequences of the global trade conflict continue to remind themselves in the form of weak macroeconomic reports. In conditions of such uncertainty, the flat movement of the pair is quite justified, especially in anticipation of the October meeting of the RBA, which will be held early next week.

It is worth recalling that at the end of the previous meeting, the regulator voiced a rather restrained position – according to the text of the accompanying statement, the RBA will only "if necessary" resort to reducing the interest rate to maintain sustainable economic growth. Reacting to this rhetoric, the AUD/USD pair demonstrated a fairly large-scale correction, rising by 150 points – from the base of the 67th figure to the middle of the 68th level. However, the minutes of this meeting published last week cooled the ardor of AUD/USD bulls. The document allowed a more detailed "decipher" the intentions of the members of the regulator – and they were very "dovish". The Central Bank did not rule out a further rate cut before the end of this year if the main indicators of the economy show a slowdown again. In the context of this formulation, the pair's traders switched to key macroeconomic releases, which in turn continue to disappoint.

In particular, the data on the Australian labor market published at the end of last week did not impress the members of the Australian regulator at all. First, contrary to the expectations of most experts, the unemployment rate rose to 5.3%, while the consensus forecast assumed the preservation of the indicator at 5.2%. The increase in the number of employees, on the one hand, showed a positive trend: the forecast growth of 15 thousand, the figure jumped to 34 thousand. However, the structure of this indicator suggests that optimistic conclusions are premature. The fact is that the increase in employment in August was entirely due to part-time employment. But full employment collapsed into a negative area, resuming a negative trend. This indicator in the last month of summer decreased by 15 thousand. This factor has an extremely negative impact on the dynamics of wage growth, as full-time positions offer a higher level of wages and a higher level of social security. It is not surprising that the level of consumer confidence in Australia has a persistent downward trend, against the backdrop of weak wage growth.

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Also, previously published data on GDP growth in Australia. The negative trend is most pronounced. The indicator has been declining for four quarters – in the first quarter of last year, this indicator came out at the level of 3.2%, in the first quarter of this year, the indicator grew by only 1.8%. The week before last, data for the second quarter of 2019 were published: contrary to the weak hopes of some optimists, they came out at the level of forecasts: the key indicator continued its downward trend, falling to the level of 1.4%.

Thus, given the latest releases, members of the Australian regulator are unlikely to change their position on the prospects for monetary policy. Moreover, they can more clearly signal a possible rate cut before the end of this year or early next year. This fact will certainly put pressure on the "Aussie". At the same time, we can express confidence that at the October meeting the Central Bank will certainly retain the parameters of monetary policy. In anticipation of the US-Chinese talks (which, as it became known today, will be held October 10-11), the members of the RBA will certainly not rush things by taking any steps.

In terms of technology, the situation is as follows. On D1, W1 and MN timeframes, the AUD/USD pair are on the lower line of the Bollinger Bands indicator under all the lines of the Ichimoku Kinko Hyo indicator, which formed a strong bearish signal "Parade of Lines". This suggests a clear advantage of the southern movement. The main target of the southern movement is located on the lower line of the Bollinger Bands indicator, which corresponds to the price of 0.6650.

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

Trading 27 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.

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.

The Long-term outlook remains bearish as long as the most recent top established around 1.2500 remains defended by the GBP/USD bears.

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 1.2400-1.2450) 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.

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

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

Trading 27 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, TWO DESCENDING-Tops were established around 1.1080 and 1.1050.

This renders the recent bullish spike as a bullish trap. Since then, the EURUSD has been trending-down within the depicted short-term bearish channel.

Shortly After, a recent bullish pullback towards the price level of 1.1020 was obviously rejected by the end of Tuesday's consolidations.

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

Bearish persistence below 1.0940 confirms this continuation pattern.

Pattern projection target would be located around 1.0840.

In the short-term, Bearish persistence below the price level of 1.0965 (recent daily bottom) is mandatory to enhance more bearish decline towards 1.0930 and 1.0890 (Fibonacci Expansion 161.8%).

Trade recommendations :

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

Conservative traders should look for a valid SELL entry anywhere around the price zone of 1.0960-1.0980 (upper limit of the depicted movement channel).

Initial Target levels should be located at 1.0900, 1.0850 and 1.0840.

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

BoE's Saunders Signals Rate Cut If Brexit Uncertainty Persists

Trading 27 sept 2019 Commentaire »

The Bank of England may have to cut interest rates even if the UK avoids a no-deal Brexit as the high uncertainty linked to the event is likely to persist, the bank's policymaker Michael Saunders said in a speech on Friday. "I think it is quite plausible that the next move in Bank Rate would be down rather than up," Saunders said in a speech to the Barnsley & Rotherham Chamber of Commerce & Institute of Chartered Accountants.

The UK is set to exit the European Union on October 31 and Prime Minister Boris Johnson has vowed no delay even if a deal is not reached with the EU regarding future relations. He is fighting opponents in the Parliament who are trying to avert a no-deal Brexit. The rate-setter said it is more likely that the high Brexit uncertainty would prolong even without a no-deal event actually occurring.

"In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing," the policymaker said.

Saunders pointed out that the effect of Brexit uncertainties is akin to the economy developing a "slow puncture" that causes growth to just a crawl.

The rate-setter expects the UK to face further cliff edge situations even if it avoids a no-deal Brexit, thus retaining the persistently high uncertainty.

Under such a scenario, the economic outlook would probably be considerably weaker than the central forecast in the August Inflation Report, though significantly less adverse than a no-deal Brexit, Saunders said.

After maintaining status quo this month, the Bank of England said the Brexit-related developments are making UK economic data more volatile. ?Political events could lead to a further period of entrenched uncertainty, the central bank said. The bank forecast 0.2 percent growth in the third quarter and expects inflation to remain slightly below the 2 percent target in the near term.


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

BoE's Saunders Signals Rate Cut If Brexit Uncertainty Persists

Trading 27 sept 2019 Commentaire »

The Bank of England may have to cut interest rates even if the UK avoids a no-deal Brexit as the high uncertainty linked to the event is likely to persist, the bank's policymaker Michael Saunders said in a speech on Friday. "I think it is quite plausible that the next move in Bank Rate would be down rather than up," Saunders said in a speech to the Barnsley & Rotherham Chamber of Commerce & Institute of Chartered Accountants.

The UK is set to exit the European Union on October 31 and Prime Minister Boris Johnson has vowed no delay even if there is a deal is not reached with EU regarding future relations. He is fighting opponents in the Parliament who are trying to avert a no-deal Brexit. The rate-setter said it is more likely that the high Brexit uncertainty would prolong even without a no-deal event actually occurring.

"In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing," the policymaker said.

Saunders pointed out that the effect of Brexit uncertainties is akin to the economy developing a "slow puncture" that causes growth to just a crawl.

The rate-setter expects the UK to face further cliff edge situations even if it avoids a no-deal Brexit, thus retaining the persistently high uncertainty.

Under such a scenario, the economic outlook would probably be considerably weaker than the central forecast in the August Inflation Report, though significantly less adverse than a no-deal Brexit, Saunders said.

After maintaining status quo this month, the Bank of England said the Brexit-related developments are making UK economic data more volatile. ?Political events could lead to a further period of entrenched uncertainty, the central bank said. The bank forecast 0.2 percent growth in the third quarter and expects inflation to remain slightly below the 2 percent target in the near term.


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

EURUSD and GBPUSD: Is it time to buy the pound after a major fall? The upward correction of the euro is unlikely to be long

Trading 27 sept 2019 Commentaire »

Although sentiment in the eurozone industry was at its worst in six years, the eurozone consumer confidence index remained unchanged in September.

According to the report of the European Commission, the confidence index in the eurozone industry in September 2019 fell to -8.8 points from -5.8 points in August. Not surprisingly, the export orders of eurozone companies fell to the lowest level since August 2013.

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But the eurozone services confidence index rose slightly to 9.5 points in September from 9.2 points in August. However, many experts believe that the problems in the industrial sector will sooner or later spread to other industries, including the service sector.

The eurozone consumer confidence index also recovered slightly in September from August and rose to -6.5 points against -7.1 points. The low level of interest rates and the availability of credit along with a good labor market had a positive impact on the index. The data completely coincided with the forecasts of economists.

As a result of the overall assessment, the European Commission's index of sentiment in the eurozone economy in September fell to 101.7 points against 103.1 points in August.

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The measures are taken by the European Central Bank to reduce interest rates (it is about deposits) during the September meeting, as well as a return to the asset buyback program will certainly protect a significant part of the eurozone economy from the problems of the manufacturing sector, but this will not save from a recession in the coming years.

Today, data on the preliminary consumer price index in France were released. The report shows that inflation in September decreased by 0.3% compared to August and increased by only 0.9% year-on-year. Economists had forecast inflation to fall by 0.2% and rise to 1.0%, respectively. The preliminary harmonized by EU standards consumer price index in France in September strengthened by 1.1% per annum. Weak inflation remains a key problem of the European Central Bank, and the released data once again convinced traders of the need for more drastic measures.

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A weak report on consumer spending cuts in France will harm economic growth by the end of the year. According to the data, spending in France in August remained unchanged compared to July and decreased by 0.4% compared to August 2018. The decline in spending is directly linked to a more cautious approach by households given the slowing global economy and the impending recession. Economists had forecast spending growth of 0.5% for August and a decline of only 0.1%, respectively.

As for the technical picture of the EURUSD pair, the situation has not changed dramatically compared to the morning forecast, but the market took the side of buyers of risky assets, which allowed it to stay above the annual minimum in the area of 1.0900 and approach yesterday's resistance in the area of 1.0940. A breakthrough in this range will lead to the demolition of stop orders of sellers and a larger upward correction to the area of 1.0970 and 1.1000.

GBPUSD

The British pound fell against the US dollar today after comments by Michael Saunders, member of the Bank of England's Monetary Policy Committee.

Saunders said that no matter what the Brexit scenario is, it will not lead to a sharp growth of the UK economy, even if one can avoid a hard Brexit, the uncertainties surrounding the details of the divorce from the EU, as well as the global slowdown, will put pressure on the Bank of England decisions interest rates.

In this scenario, the regulator will continue to maintain a soft monetary policy and may further soften it, but only in case of a deterioration of the situation in the economy, as the current level of inflation allows this to be done.

As for the technical picture of GBPUSD, the rebound from the level of 1.2280 was not associated with the return of bulls to the market, but with profit-taking on short positions at the end of the week. However, the first "call" for the bears sounded. It is unlikely that the demand for the trading instrument will continue above the resistance of 1.2350, however, larger players will consider the market to continue the downward movement only after the new benchmarks from the UK Parliament, as the downward movement of the pair in the last few days has become a serious reason to think about opening long positions by institutional players. The lower the pound, the more attention it will attract, as the scenario of extending the term of the UK's exit from the EU so far seems more realistic than a disordered exit. If Parliament wanted a sharp break in relations, it would have done it a couple of years ago. Few people believe that Prime Minister Boris Johnson will be able to negotiate with the EU and conclude a deal in the remaining time until October 31.

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