Dollar Stays Weak As Disappointing Economic Data Weigh

Trading 03 oct 2019 Commentaire »

The U.S. dollar saw a weak session on Thursday with slowing economic growth raising prospects for another rate cut by the Federal Reserve.

After the recent data showing a continued contraction in the country's manufacturing activity in the month of September and a report showing a less than expected increase in private sector jobs, a report from the Institute for Supply Management today showed growth in the U.S. service sector slowed by more than anticipated in September.

With a trade agreement between the U.S. and China unlikely to happen anytime in the foreseeable future, it is feared that unless there is more monetary easing by the central bank, growth will stagnate and the economy might even slip into a recession.

The dollar index, which rose to a 29-month high of 99.67 a couple of days ago, declined to 98.64 around late morning today, and was last seen hovering around 98.90, down 0.12% from previous close.

A report released by the Institute for Supply Management Thursday morning showed growth in the U.S. service sector to have slowed by more than anticpated in the month of September.

The ISM said its non-manufacturing index dropped to 52.6 in September after climbing to 56.4 in August. The index had been expected to show a more modest dip to 55.0.

With the much bigger than expected decrease, the non-manufacturing slumped to its lowest level since hitting 51.8 in August of 2016.

Data released by the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended September 28th. The data said initial jobless claims rose to 219,000, an increase of 4,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.

Meanwhile, a report from the Commerce Department said factory orders edged down by 0.1% in August after surging up 1.4% in July. Economists had expected orders to dip by 0.2%.

Against the euro, the dollar weakened to 1.1000 before recovering to 1.0970, but was still languishing in negative territory, albeit with a marginal loss.

The pound sterling was stronger by more than 0.3% with a unit of sterling fetching $1.2338, up from previous close of $1.2298.

The dollar was weak against the Japanese yen as well, with a unit of the greenback getting 106.87 yen, nearly 0.3% less than 107.17 yen on Wednesday.

The dollar shed more than 0.5% against the Aussie with the Aussie-Dollar pair at 0.6742.

However, against the loonie and Swiss franc, the U.S. currency held the upper hand, gaining modestly, at 1.3337 and 0.9984, respectively.

While weak crude oil prices contributed to the loonie's weakness, recent disappointing Swiss economic data weighed on franc.


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Crude Oil Futures Settle Lower For 8th Straight Day

Trading 03 oct 2019 Commentaire »

Crude oil futures settled lower on Thursday, extending losses to an eighth straight session, amid rising possibilities of a drop in near term energy demand.

Despite geopolitical concerns and OPEC-led production cuts, crude oil supply has not been any significantly hit. Meanwhile, rising fears of a recession after recent data suggested continued contraction in manufacturing activity in the U.S. and Europe have raised concerns about the outlook for energy demand.

West Texas Intermediate crude oil futures for November ended down $0.19, or about 0.4%, at $52.45 a barrel, the lowest settlement in nearly two months.

With prices falling for an eighth day, oil futures have suffered their longest losing streak, since posting losses for 12 straight sessions in the first half of November last year.

On Wednesday, WTI crude oil futures for November ended down $0.98, or 1.8%, at $52.64 a barrel.

Data from the Energy Information Administration on Wednesday showed crude oil stockpiles in the U.S. to have risen by 3.1 million barrels last week, nearly twice the expected jump.

A report from the Institute for Supply Management that showed the U.S. service sector to have slowed more than anticipated in the month of September added to concerns about growth in the world's largest economy.

The ISM said its non-manufacturing index dropped to 52.6 in September after climbing to 56.4 in August. While a reading above 50 still indicates service sector growth, the index has been expected to show a more modest dip to 55.0.

With the much bigger than expected decrease, the non-manufacturing slumped to its lowest level since hitting 51.8 in August of 2016.


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Treasuries Extend Rally On Weaker Than Expected Service Sector Data

Trading 03 oct 2019 Commentaire »

Extending the strong upward move seen over the two previous sessions, treasuries showed another notable move to the upside during trading on Thursday.

Bond prices gave back some ground after spiking in mid-morning trading but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6 basis points to 1.536 percent.

Treasuries jumped following the release of a report from the Institute for Supply Management showing U.S. service growth slowed by more than expected in the month of September.

The ISM said its non-manufacturing index dropped to 52.6 in September after climbing to 56.4 in August. While a reading above 50 still indicates service sector growth, the index has been expected to show a more modest dip to 55.0.

With the much bigger than expected decrease, the non-manufacturing slumped to its lowest level since hitting 51.8 in August of 2016.

"The respondents are mostly concerned about tariffs, labor resources and the direction of the economy," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

On the heels of disappointing manufacturing and private sector jobs data released earlier this week, the report has led to renewed concerns about the economic outlook and inspired confidence the Federal Reserve will continue to cut interest rates.

"The latest developments should add a sense of urgency to talks seeking a resolution to the US-China trade dispute and will keep the pressure on the Fed to ease monetary policy further," said ING Chief International Economist James Knightley.

He added, "We continue to look for a December rate cut and a further move in 1Q20, but the risks are increasingly skewed towards more aggressive action."

On Friday, trading is likely to be driven by reaction to the Labor Department's closely watched monthly employment report.

Employment is expected to increase by 145,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.


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Gold Futures Settle Higher For 3rd Straight Session

Trading 03 oct 2019 Commentaire »

Gold prices edged higher on Thursday as worries about global economic slowdown, and the dollar's weakness amid prospects for a rate cut by the Federal Reserve supported the safe-haven commodity.

The dollar index, which declined to a low of 98.64 around mid-morning, was down $0.22, or 0.22%, at 98.90 around mid afternoon.

Gold futures started off on a sluggish note, but moved higher around mid morning after data showed a slowdown in U.S. service sector growth, and eventually settled with modest gain.

Gold futures for December ended up $5.90, or about 0.4%, at $1,513.80, after hitting a high of $1,525.80 intraday.

On Wednesday, gold futures for December ended up $18.90, or 1.3%, at $1,507.90 an ounce, after having climbed up 1.1% a session earlier.

Silver futures for December ended down $0.007, at $17.676 an ounce, while Copper futures for December settled at $2.5535 per pound, down $0.0170 from previous close.

A report released by the Institute for Supply Management Thursday morning showed growth in the U.S. service sector to have slowed by more than anticipated in the month of September.

The ISM said its non-manufacturing index dropped to 52.6 in September after climbing to 56.4 in August. The index had been expected to show a more modest dip to 55.0.

With the much bigger than expected decrease, the non-manufacturing slumped to its lowest level since hitting 51.8 in August of 2016.

Data released by the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended September 28th. The data said initial jobless claims rose to 219,000, an increase of 4,000 from the previous week's revised level of 215,000.

Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.

Meanwhile, a report from the Commerce Department showed factory orders edged down by 0.1% in August, after surging up 1.4% a month earlier.


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EURUSD continues higher reaching our short-term target

Trading 03 oct 2019 Commentaire »

EURUSD is making higher highs and higher lows in the near term. Price broke above the 1.0940 resistance and has easily reached our first target and then some more. Price is now trading 1.0980 after reaching the 50% Fibonacci retracement of the last leg down.

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Red rectangle - resistance (broken) now support

EURUSD is making higher highs and higher lows in the 1 hour chart as shown above. Price should continue higher as long as price is above the red rectangle area which is now support. Next target is the 61.8% Fibonacci retracement level and if we see it broken we should expect price to move towards the next important Fibonacci level of 78.6%. In case price breaks below support (red rectangle) we should expect to see bears challenge the 2019 lows.

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

Ichimoku cloud indicator analysis of USDJPY

Trading 03 oct 2019 Commentaire »

USDJPY has pulled back towards the Daily cloud support. This is also important Fibonacci support area. In order for bulls to regain control of the short-term trend, we should see prices bounce from current levels and recapture 107.70.

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USDJPY is challenging the upper Kumo (cloud) boundary. This is also the 38% Fibonacci retracement of the move up from 104.44. USDJPY bulls must recapture at least 107.15 fast in order to hope for more upside tomorrow above the next short-term resistance at 107.47. As long as bulls are unable to recapture those two levels, bears will remain in control and this pair vulnerable for a move towards 106.22 at least.The material has been provided by InstaForex Company - www.instaforex.com

Treasury Announces Details Of Long-Term Securities Auctions

Trading 03 oct 2019 Commentaire »

On Thursday, the Treasury Department announced the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury revealed it plans to sell $38 billion worth of three-year notes, $24 billion worth of ten-year notes and $16 billion worth of thirty-year bonds. The results of the auctions will be announced next week.

Last month, the Treasury also sold $38 billion worth of three-year notes, $24 billion worth of ten-year notes and $16 billion worth of thirty-year bonds.

The three-year note auction attracted below average demand, the ten-year note auction attracted above average demand and thirty-year bond auctions attracted average demand.


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October 3, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 03 oct 2019 Commentaire »

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On September 13, the EUR/USD pair was testing the backside of both broken trends around 1.1060-1.1080 where significant bearish pressure was demonstrated.

Shortly-After, Few DESCENDING-Tops were established around 1.1075 and 1.1060.

This rendered the recent bullish spike as a bullish trap.

Since then, the EURUSD has been trending-down within the depicted short-term bearish channel.

Bearish persistence below 1.0965 (recent daily bottom) enhanced more bearish decline towards 1.0943 and 1.0920 (Fibonacci Expansion 78.6% and 100% Levels) where recent signs of bullish recovery was recently demonstrated (Inverted Head & Shoulders Pattern).

Thus, a bullish breakout above 1.0960 confirmed the mentioned Pattern which opened the way for further bullish advancement towards 1.1000 where another episode of bearish rejection should be expected.

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

If bearish persistence below 1.0940 (Neckline) is re-established, the long-term Pattern projection target would remain projected towards 1.0840.

Trade recommendations :

Risky traders were advised to consider the recent bullish breakout above 1.0960 as a valid BUY signal. It's already running in profits.

Another Intraday BUY entry can be considered upon any bearish pullback towards 1.0920-1.0940 (Backside of the broken bearish channel). S/L should be placed below 1.0870.

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

Fractal analysis of cryptocurrencies on October 3

Trading 03 oct 2019 Commentaire »

Hello, dear colleagues.

Dear colleagues, due to the fairly widespread on cryptocurrencies, the trading strategy for the cycle in them will change depending on the expansion and narrowing of volatility in hourly prices. When there is no possibility of trading in the adjustment zones of the cycle, where the price range is narrow enough, we will proceed from the initial conditions for the development of the main trend and trade from them according to the trend. If the spread is narrow, then trading signals will be indicated taking into account the trade in the correction. Most likely, we will almost always trade on the #Bitcoin tool according to the trend from the initial conditions, and on the BCHUSD tool, we will also capture correction zones as the main trend develops, since the spread allows this to be done. In this analytics, you can always find out information when we trade by the trend, and when the tool allows you to work in narrow price ranges.

Forecast for October 3:

Analytical review of cryptocurrency on the H1 scale:

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For the #bitcoin instrument, the key levels on the H1 scale are 8950.76, 8787.51, 8548.62, 8453.06, 7999.16, 7847.85, and 7676.65. Attention! This instrument is characterized by medium-term trend trading. At the moment, we are following the formation of the initial conditions for the upward cycle of September 30. Now, there is a good opportunity to enter the market from the correction zone from this structure, thus, the range for entering the purchase is 8073.00 – 8548.00. We expect the upward trend to develop after the price passes the range of 8453.06 – 8548.62. In this case, the first target is 8787.51 and near this level is the price consolidation. We consider the level of 8950.76 as a potential value, upon reaching which you can transfer the stop to the level of 8453.00 or higher, and continue trading according to the trend, the goals for which will be determined later.

The range of 7999.16 – 7847.85 is the key support for this structure. Its passage by the price will lead to the abolition of the upward structure and will have to form local initial conditions for the subsequent development of the downward cycle. The first potential target is 7676.65. However, you can only trade down when the price leaves the zone of initial conditions for the top of September 30.

The main trend is the formation of initial conditions for the upward cycle from September 30.

Trading recommendations:

Buy: 8073.20 – 8548.60 Stop Loss: 7847.85 Take profit: 8950.76

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For the BCHUSD instrument, the key levels on the H1 scale are 257.44, 250.28, 240.03, 231.41, 216.12, 209.45, and 202.94. Attention! At the moment, this instrument can carry out short-term transactions, as well as trade-in correction zones from the main trend. At the moment, the price is in equilibrium, and we do not observe the expressed initial conditions for any particular direction, but the correlation of this instrument with bitcoin makes it more likely to move upwards. The breakdown of the level of 231.41 will lead to the formation of an upward structure. In this case, the first potential target is 240.03 and the breakdown of which, in turn, should be accompanied by a pronounced upward movement to the level of 250.28. The potential value for the top is the level of 257.44, near which we expect consolidation.

The short-term downward movement is possible in the area of 216.12 – 209.45, hence there is a high probability of a reversal in the upward movement. The breakdown of the level of 209.45 will have to form a local structure for the subsequent development of the downward trend.

The main trend is the equilibrium situation, mainly we expect upward movement.

Trading recommendations:

Buy: 231.41 Stop Loss: 216.12 Take Profit: 240.00

Buy: 240.05 Stop Loss: 227.30 Take Profit: 250.25

Sell: 216.12 Stop Loss: 227.30 Take Profit: 209.45

Sell: 209.45 Stop Loss: 216.12 Take Profit: 202.95

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

October 3, 2019 : GBP/USD Intraday technical outlook and trade recommendations.

Trading 03 oct 2019 Commentaire »

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Since August 9, 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 Last week on Monday's consolidations supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

On September 24, 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.

Moreover, the recent bullish channel (established on August 9) has been invalidated on September 25. Thus, the short-term outlook turned into bearish as well.

Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where the current bullish pullback towards 1.2400 was originated on Tuesday.

Trade Recommendations:

Conservative traders can consider the current bullish pullback towards the neckline of the confirmed Head & Shoulders reversal pattern (Anywhere around 1.2400-1.2450) as a valid SELL entry.

T/P level to be placed around 1.2360, 1.2330, 1.2280 and 1.2240 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