U.S. Construction Spending Climbs More Than Expected In September

Trading 01 nov 2019 Commentaire »

Partly reflecting a jump in spending on public construction, the Commerce Department released a report on Friday showing a bigger than expected increase in U.S. construction spending in the month of September.

The Commerce Department said construction spending climbed by 0.5 percent to an annual rate of $1.294 trillion in September after falling by 0.3 percent to a revised rate of $1.287 trillion in August.

Economists had expected construction spending to edge up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The bigger than expected increase in construction spending came as spending on public construction surged up by 1.5 percent to an annual rate of $331.9 billion in September from the revised August estimate of $327.2 billion.

Spending on educational construction spiked by 3.1 percent to a rate of $78.9 billion, while spending on highway construction shot up by 2.6 percent to a rate of $98.0 billion.

The report said spending on private construction also rose by 0.2 percent to an annual rate of $961.7 billion in September from the revised August estimate of $959.9 billion.

A 0.6 percent increase in spending on residential construction to a rate of $511.4 billion more than offset a 0.3 percent drop in spending on non-residential construction to a rate of $450.3 billion.

Compared to the same month a year ago, total construction spending in September was down by 2.0 percent, with a 4.6 percent slump in spending on private construction more than offsetting a 6.6 percent spike in spending on public construction.


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U.S. Manufacturing Activity Contracts At Slightly Slower Pace In October

Trading 01 nov 2019 Commentaire »

Manufacturing activity in the U.S. continued to contract in the month of October but at a slightly slower pace, according to a report released by the Institute for Supply Management on Friday.

The ISM said its purchasing managers index crept up 48.3 in October from 47.8 in September, although a reading below 50 still indicates a contraction in manufacturing activity. Economists had expected the index to rise to 48.9.

In the previous month, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

"Comments from the panel reflect an improvement from the prior month, but sentiment remains more cautious than optimistic," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee. "Global trade remains the most significant cross-industry issue."

The uptick by the headline index came as the new orders index climbed to 49.1 in October from 47.3 in September but still indicates a contraction.

The employment index also rose to 47.7 in October from 46.3 in September, indicating employment in the manufacturing sector contracted at a slower rate.

The Labor Department's monthly jobs report said the manufacturing sector lost 36,000 jobs in October, partly reflecting the strike at General Motors (GM).

Meanwhile, the ISM said the production index dropped to 46.2 in October from 47.3 in September, pointing to a faster rate of contraction.

The prices index also tumbled to 45.5 in October from 49.7 in September, indicating raw materials prices decreased for the fifth consecutive month.

"With most of the regional manufacturing surveys stabilizing and the alternative national Markit PMI seeing a rebound over the past couple of months, there are tentative signs that the manufacturing sector could be turning a corner, particularly when some of the global manufacturing surveys have also improved," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "With a sustained rebound in global growth still looking unlikely, and the very real prospect that trade negotiations with China once again break down, however, we still expect manufacturing conditions to remain unusually weak over the coming months."

Next Tuesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of October.


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USDJPY remains inside bullish channel despite end of the week pull back

Trading 01 nov 2019 Commentaire »

USDJPY is holding above 108 respecting the medium-term bullish channel since the end of August. Price should continue higher as long as we trade above last week's lows. This is still considered as a buying opportunity and a corrective pull back inside a bullish trend.

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Green lines - bullish channel

Blue line - long-term resistance trend line

USDJPY is bouncing off the lower channel boundary. Support is key at 108 area and as long as price is above we remain bullish looking for a move closer to the long-term resistance trend line at 110.50. Important resistance level that must be broken in order to push closer to 110.50 is at 109.10.

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Green rectangle - major support area

Green line - support trend line

Red arrows - reversal points in time inside the green rectangle

Blue line - long-term resistance

USDJPY has formed a major low and important support area around 104. Price as expected has moved towards 108.50 since then and back at that time we were targeting the blue downward sloping trend line. We continue to see the blue trend line as the most probable target. Price continues to make higher highs and higher lows. This week's low is very important for bulls as they do not want to see a weekly close below it, in order to remain in control of the short-term trend.

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USDCAD back tests broken long-term channel

Trading 01 nov 2019 Commentaire »

USDCAD has bounced from 1.3050 to 1.3150 but I believe that most probably this is just a back test of the break down area. I expect prices to get rejected at current levels and I continue to be bearish USDCAD looking for a move below 1.30.

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Red line - major long-term support

Orange rectangle - resistance (previous support)

USDCAD has pulled back towards the broken red trend line support, now resistance. Price has also entered the orange area which was once support and now resistance. Price has retraced 50% of the last move down and now we see some signs of rejection.

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Red line -long-term support trend line

The breaking below this long-term weekly trend line support is big news for USDCAD. This back test is also very important because it will clear things up. A rejection will increase the chances that the break down is real and not a fake one. Price moving below 1.3050 will also increase chances of a move towards 1.28 and lower as this is where the next major support area is found.

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EURUSD reverses short-term trend as expected respecting support at 1.11-1.1070.

Trading 01 nov 2019 Commentaire »

EURUSD was expected to move higher from the key support of 1.1070. Price has managed to recapture 1.11 and is now trading above 1.1150. EURUSD remains inside the short-term bullish channel targeting 1.12 to 1.1250.

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Black line - support trend line

Red line -RSI resistance

EURUSD continues to make higher highs and higher lows in the 4 hour chart. the RSI has broken its resistance trend line. We find support at 1.1130 which was short-term resistance and next at 1.1073 this week's lows.

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Green lines - bullish channel

As EURUSD continues to trade inside the bullish short-term channel we focus on the next Fibonacci resistance at 1.12 (61.8% retracement) and at 1.1250-1.1260 (upper channel boundary). As long as price is inside the channel we remain bullish. Price reversed to the upside from 1.1070 and this is where bulls should protect their profits.

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Weekly Gold analysis

Trading 01 nov 2019 Commentaire »

Gold price started the week on a negative note reaching $1,483 but reversing its trend and recapturing the key pivot level of $1,500. Gold price has been moving around $1,500 since late July but so far it has not managed to break out of the $1,530-$1,480 trading range.

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The weekly chart shows how price is supported each time it moves below $1,500. This time we might also have a new weekly high relative to the past 4 weekly closing prices. This could be a positive signal for the next couple of weeks and a rally to $1,600 could be seen. Key support remains at $1,500-$1,490.

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Surge In U.S. Payrolls Underpins Dollar

Trading 01 nov 2019 Commentaire »

The U.S. dollar outperformed against its key counterparts in the European session on Friday, after the economy created more jobs than forecast in October, helping to reduce fears about an economic slowdown, following this week's signal of a pause in the easing cycle in the near term.

Data from the Labor Department showed that job growth beat forecasts in the month of October.

The Labor Department said non-farm payroll employment climbed by 128,000 jobs in October compared to economist estimates for an increase of about 89,000 jobs.

The report said the unemployment rate inched up to 3.6 percent in September from 3.5 percent in August. The uptick matched economist estimates.

Strong data came on the heels of this week's FOMC decision signaling a halt in its rate cutting spree in the near term.

The Institute for Supply Management is due to release manufacturing purchasing managers' index for October at 10:00 am ET. The index is expected to rise to 49 from 47.8 in September.

The Commerce Department is also set to publish construction spending data for September at the same time. Economists expect an increase of 0.2 percent from 0.1 percent in the previous month.

Federal Reserve Vice Chairman Richard Clarida will deliver a speech at a luncheon hosted by the Japan Society in New York at 1 pm.

Traders await developments in US-China trade front as China expressed doubts about striking a long-term trade deal with the U.S.

The currency fell against its most major counterparts in the Asian session, as upbeat data from China triggered a sell-off in safe-haven assets.

The greenback appreciated to a 2-day high of 0.9895 against the franc, up by 0.4 percent from a 10-day low of 0.9855 it recorded at 2:30 am ET. At yesterday's trading close, the pair was quoted at 0.9864. The currency is likely to face resistance around the 1.00 region, if it gains again.

Data from the Federal Statistical Office showed that Swiss consumer prices declined for the first time since late 2016 in October. Consumer prices decreased 0.3 percent on a yearly basis in October reversing a 0.1 percent rise in September.

Having declined to a 3-week low of 107.89 against the yen at 9:00 pm ET, the greenback bounced off to 108.26 after the data. The pair was worth 108.03 at Thursday's close. Further uptrend may take the greenback to a resistance around the 111.00 area.

Data from the Ministry of Internal Affairs and Communications showed that the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in September. That exceeded expectations for 2.2 percent, which would have been unchanged from the August reading.

The greenback was up by 0.4 percent at a 2-day high of 1.1128 against the euro, rebounding from a low of 1.1169 seen at 4:00 am ET. The greenback was trading at 1.1151 against the euro when it closed deals on Thursday. Continuation of the greenback's uptrend may lead it to a resistance around the 1.09 region.

After a decline to 1.2972 against the pound at 4:15 am ET, the greenback recouped some of its losses with the pair trading at 1.2935. The greenback is poised to challenge resistance around the 1.27 mark.

Survey data from IHS Markit showed that UK's manufacturing activity decreased at the slowest pace in six months in October.

The seasonally adjusted IHS Markit/CIPS Purchasing Managers' Index, or PMI, rose to a six-month high of 49.6 in October from 48.3 in September. Economists had forecast a modest improvement to 48.1.

The USD/CAD pair hit a 2-day high of 1.3196, marking a rise of 0.4 percent from a low of 1.3141 set at 4:00 am ET. The pair had finished Thursday's deals at 1.3164. If the greenback rallies further, it is likely to test resistance around the 1.33 region.

The greenback rose back to 0.6890 against the aussie, coming off from a low of 0.6912 hit at 4:00 am ET. Next immediate resistance for the greenback is likely seen around the 0.67 level.

Data from the Australian Bureau of Statistics showed that Australia producer prices rose 0.4 percent on quarter in the third quarter of 2019 - matching expectations and unchanged from the three months prior.

On a yearly basis, producer prices were up 1.6 percent - shy of expectations for 2.0 percent, which would have been unchanged.

In contrast, the greenback was trading lower at 0.6438 against the kiwi, just few pips short of near a 2-month low of 0.6442 it touched 10:00 pm ET. The kiwi-greenback pair was quoted at 0.6413 at yesterday's close. The greenback is seen finding support around the 0.66 mark.


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Norway Jobless Rate Steady In October: NAV

Trading 01 nov 2019 Commentaire »

Norway's unemployment rate was unchanged in October, figures from the Norwegian Labor and Welfare Administration, or NAV, showed on Friday.

The seasonally adjusted unemployment rate was 2.2 percent in October, same as in August and September.

The seasonally adjusted number of unemployed fell to 76,620 from 76,637 persons in the previous month.

The non adjusted jobless rate fell to a four-month low of 2.1 percent in October from 2.2 percent in September.

The non adjusted number of unemployed dropped to 59,549 persons from 61,314 in September.


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*ISM U.S. Manufacturing Index Inches Up To 48.3 In October

Trading 01 nov 2019 Commentaire »

ISM U.S. Manufacturing Index Inches Up To 48.3 In October


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*U.S. Construction Spending Climbs 0.5% In September

Trading 01 nov 2019 Commentaire »

U.S. Construction Spending Climbs 0.5% In September


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