Dollar Steady Ahead Of Trade Talks, Fed Minutes

Trading 07 oct 2019 Commentaire »

The U.S. dollar suffered a setback of sort in early trades Monday, but started edging higher post noon as traders looked ahead to the upcoming trade talks and the release of the minutes of the Federal Reserve's recent policy meeting.

Uncertainty about the trade talks between the U.S. and China making any significant progress weighed on equities and helped the dollar's modest uptick.

The minutes of the Federal Reserve's monetary policy meeting held on September 17 and 18, is due on Wednesday. Investors will be looking for clues about the central bank's outlook for further rate cuts in the near future.

The dollar index, which edged down 98.74 around mid morning, rose to 99.01 later on in the session and stayed firm thereafter. It was last seen at 98.97, up 0.16% from previous close.

Against the euro, the dollar recovered after weakening to 1.1001 and was up marginally in late afternoon trades with a unit of euro fetching $1.0972.

In economic news from Europe, Germany's factory orders declined at a slower pace of 0.6% in August, after having declined 2.1% in July. Economists had forecast a 0.4% drop.

Eurozone investor confidence weakened to its lowest since early 2013 in October on fears of recession despite stimulus measures announced by the European Central Bank, survey results from the behavioral research institute Sentix showed on Monday.

The pound sterling was weaker by about 0.3% with a single unit fetching $1.2298, as compared to $1.2334 on Friday.

The Japanese yen traded weak as well against the dollar, at 107.28 a dollar, down more than 0.3%, from late Friday's level of 106.93 yen a dollar.

The dollar was down marginally against the loonie and Swiss franc, with the respective pairs trading at 1.3307 and 0.9949, respectively.

Against the Aussie, the dollar was up by about 0.6% with the AUD-USD pair at 0.6730.

In U.S. economic news today, U.S. consumer credit climbed by $17.9 billion in August after surging up by a revised $23.0 billion in July, a report from the Federal Reserve showed.

Economists had expected credit to increase by $15.5 billion compared to the $23.3 billion spike originally reported for the previous month.

On the trade front, U.S. President Donald Trump said on Friday his administration had a "very good chance" of agreeing a trade deal.

Meanwhile, a report in Bloomberg, citing some people familiar with the discussions, said Chinese officials are reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump.

Specifically, Premier Liu He is said to be ruling out commitments to reform Chinese government subsidies or industrial reform.


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Treasuries Give Back Ground Following Recent Strength

Trading 07 oct 2019 Commentaire »

After moving sharply higher over the past several sessions, treasuries gave back some ground during trading on Monday.

Bond prices came under pressure in early trading and remained firmly negative throughout the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.8 basis points to 1.553 percent.

Profit taking contributed to the pullback by treasuries, with the ten-year yield bouncing off its lowest closing level in a month.

Traders may have been wary of having too much money in bonds ahead of the next round of high-level trade talks in Washington later this week.

Ahead of the talks, scheduled to begin on Thursday, a report from Bloomberg News said Chinese officials are signaling they're increasingly reluctant to agree to the broad trade deal being pursued by President Donald Trump.

Citing people familiar with the discussions, Bloomberg said senior Chinese officials have indicated the range of topics they're willing to discuss has narrowed considerably.

An offer from Chinese Vice Premier Liu He would purportedly not include reforming Chinese industrial policy or government subsidies.

The negotiations come as the trade war continues to hang over the economy, with a survey by the National Association for Business Economics showing 53 percent of economists see trade policy as the key downside risk to the economy.

The NABE said four out of five panelists believe that risks to the economic outlook are weighted to the downside, an increase from the 60 percent who held this view in June.

"The panel turned decidedly more pessimistic about the outlook over the summer, with 80% of participants viewing risks to the outlook as tilted to the downside," said Survey Chair Gregory Daco, chief U.S. economist at Oxford Economics.

He added, "The rise in protectionism, pervasive trade policy uncertainty, and slower global growth are considered key downside risks to U.S. economic activity."

A report on producer price inflation may attract attention on Tuesday along with remarks by Federal Reserve Chairman Jerome Powell.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of $38 billion worth of three-year notes.


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U.S. Consumer Credit Climbs More Than Expected In August

Trading 07 oct 2019 Commentaire »

After reporting a sharp jump in U.S. consumer credit in the previous month, the Federal Reserve released a report on Monday showing another bigger than expected increase in consumer credit in the month of August.

The Fed said consumer credit climbed by $17.9 billion in August after surging up by a revised $23.0 billion in July.

Economists had expected credit to increase by $15.5 billion compared to the $23.3 billion spike originally reported for the previous month.

Non-revolving credit, such as student loans and car loans, led the way higher, jumping by $19.9 billion in August after climbing by $13.7 billion in July.

On the other hand, the report said revolving credit, which largely reflects credit card debt, dipped by $2.0 billion in August after rising by $9.4 billion in the previous month.

The report said total consumer credit was up by 5.2 percent compared to the same month a year ago, as a 7.8 percent jump in non-revolving credit more than offset a 2.2 percent slump in revolving credit.


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Oil Futures Pare Early Gains, Settle Slightly Lower

Trading 07 oct 2019 Commentaire »

Crude oil futures failed to hold early gains and ended slightly weak on Monday.

Prices rose higher earlier in the day as traders shifted their attention to U.S.-China trade negotiations, due to resume on Thursday.

Chinese Vice-Premier Liu is scheduled to meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington.

Data showing a drop in OPEC output in the month of September supported oil's uptick in morning trades.

West Texas Intermediate Crude oil futures for November ended down $0.06 at $52.75 a barrel, after having surged to $54.06 earlier in the day.

On Friday, WTI crude oil futures for November ended up $0.36, or about 0.7%, at $52.81 a barrel, snapping an eight-day losing streak.

On Friday, U.S. President Donald Trump said his administration had a "very good chance" of agreeing a trade deal.

Meanwhile, a Bloomberg report, citing people familiar with the discussions, said that Chinese officials are reluctant to agree to a broad trade deal pursued by Trump.

Specifically, Premier Liu He is said to be ruling out commitments to reform Chinese government subsidies or industrial reform.

Traders also reacted to reports about the protest in Iraq where over 100 protesters have been killed and more than 6,000 wounded as the government scrambles to contain the popular anger that has racked Baghdad and several southern cities since last Tuesday.

According to a survey from S&P Global Platts, OPEC crude output dropped by 1.48 million barrels a day to 28.45 million barrels a day in September. That was the biggest drop month-on-month in about 17 years.


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*U.S. Consumer Credit Climbs $17.6 Billion In August

Trading 07 oct 2019 Commentaire »

U.S. Consumer Credit Climbs $17.6 Billion In August


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Gold Settles Lower As Dollar Rises Ahead Of Trade Talks, Fed Minutes

Trading 07 oct 2019 Commentaire »

Gold prices drifted lower on Monday, as the dollar firmed up and traders looked to pick up equities ahead of resumption of trade talks between the U.S. and Chinese officials.

Traders were also looking ahead to the minutes of the Federal Reserve's recent policy meeting to know the central bank's outlook about future interest rate cuts.

The dollar recovered after recent losses. The dollar index rose to 99.01, and was last seen hovering around 98.95, up 0.15% from previous close.

Gold futures for December ended down $8.50, or about 0.6%, at $1,504.40 an ounce.

On Friday, gold futures for December ended down $0.90, or nearly 0.1%, at $1,512.90 an ounce, after having moved up 0.4% a session earlier.

Silver futures for December ended down $0.085, at $17.540 an ounce, while Copper futures for December settled at $2.5770 per pound, gaining $0.0145.

On the trade front, U.S. President Donald Trump said on Friday his administration had a "very good chance" of agreeing a trade deal.

Meanwhile, a report in Bloomberg, citing some people familiar with the discussions, said Chinese officials are reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump.

Specifically, Premier Liu He is said to be ruling out commitments to reform Chinese government subsidies or industrial reform.


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

October 7, 2019 : EUR/USD invalidates its recent bearish channel. Thus, more bullish advancement is anticipated.

Trading 07 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 were recently demonstrated (Inverted Head & Shoulders Pattern).

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

In the Long-Term, the EUR/USD is demonstrating atypical Head & Shoulders continuation pattern extending between (1.0930 - 1.1080) with neckline located around 1.0940.

If bearish persistence below 1.0920 (100% Fibonacci Expansion) is re-established, the long-term Pattern projection target would remain projected towards 1.0840 (Low Probability).

Trade recommendations :

Intraday traders were advised to consider the recent bullish breakout above 1.0960 as a valid BUY signal. Initial bullish target level was already reached around 1.1000.

Another Intraday BUY entry can be considered upon a bearish pullback towards 1.0920-1.0940 (Backside of the broken bearish channel).

S/L should be placed below 1.0870. T/P levels to be located at 1.0960, 1.1000 and 1.1029.

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October 7, 2019 : GBP/USD recent bullish channel was invalidated. Hence, upcoming bearish decline is anticipated.

Trading 07 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 on September 23 supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

On September 25, the depicted bullish channel was finally terminated with significant full-body bearish candlesticks which managed to achieve bearish closure below 1.2395.

The Short-term outlook remains bearish as long as the most recent top established around 1.2400 remains defended by the GBP/USD bears.

Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where recent bullish pullback towards 1.2400 was originated on October 2.

This week, the price level of 1.2400 remains a significant SUPPLY level to be watched for SELL entries if any bullish pullback occurs.

On the other hand, bearish persistence below 1.2220 is mandatory to allow further bearish decline towards 1.2160 and 1.2120.

Trade Recommendations:

Conservative traders are advised to consider any bullish pullback towards the neckline of the confirmed reversal pattern (Anywhere around 1.2400-1.2450) as a valid SELL entry.

T/P levels to be placed around 1.2330, 1.2280, 1.2240 and 1.2160 while S/L should be placed above 1.2450.

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EUR/USD for October 10,2019 – Buyers in control, more potential upside incoming

Trading 07 oct 2019 Commentaire »

EUR/USD has been trading upwards. The price is testing important resistance at 1.1000 (round number). The potential upside breakout of 1.1000 may lead us towards 1.1020 and 1.1070. The short-term trend is still upside.

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Red rectangle – Important resistance levels

Rising purple line – Expected path

I found strong rejection of the rising trend line in the background, which is sign that buyers are still in control. I do see potential test of 1.1020 and 1.1070. In the background there is the breakout of the falling wedge pattern, which is another sign that buyers are in control. Watch for buying opportunities.

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Gold 10.07.2019 – Support of the trading range on the test, watch for potential long entry

Trading 07 oct 2019 Commentaire »

Gold has been trading in consolidation zone between the price of $1,495 (support) and $1,519 (resistance). The support is on the test today and I do expect potential rally back to the $1,514.

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Red rectangle – Important support

Green rectangles – Trading range

Gold did test and reject of the important support at $1,495, which is sign that there is still upward pressure potential. There is an chance that Gold try to trade towards $1,514. MACD looks neutral with the bar divergence in the background. As long as the level of $1,519 is holding, watch for long entries. In case of the downward breakout of the trading range, watch for selling with the target at $1,481.

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