UK Economy Grows 1.4% In 2019: NIESR

Trading 13 jan 2020 Commentaire »

The UK economy stagnated in the final three months of 2019 and grew 1.4 percent during the year, the National Institute of Economic and Social Research, or NIESR, said Monday.

The economy is on course to post zero growth in the fourth quarter of 2019, the think tank said in its monthly GDP tracker report.

The NIESR also tentatively forecast service sector-driven growth of 0.3 percent in the first quarter of 2020.

Earlier on Monday, data from the Office for National Statistics showed that the UK economy grew by 0.1 percent in the three months to November.

Citing recent surveys, the NIESR said that economic activity was likely "little changed in December, though there is some evidence of an improvement in business sentiment after the election."

"While there is some evidence of an improvement in business optimism following the general election, it is doubtful that this will do much to change the short-term economic outlook of further lackluster growth," Garry Young, director of macroeconomic modelling and forecasting at NIESR, said.


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*UK Economy On Course To Post Zero Growth In Q4; 1.4% Growth In 2019: NIESR

Trading 13 jan 2020 Commentaire »

UK Economy On Course To Post Zero Growth In Q4; 1.4% Growth In 2019: NIESR


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*Yen Slides To 9-month Low Of 84.27 Against Canadian Dollar

Trading 13 jan 2020 Commentaire »

Yen Slides To 9-month Low Of 84.27 Against Canadian Dollar


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*Yen Drops To More Than 1-year Low Of 113.08 Against Swiss Franc

Trading 13 jan 2020 Commentaire »

Yen Drops To More Than 1-year Low Of 113.08 Against Swiss Franc


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January 13, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 13 jan 2020 Commentaire »

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On December 13, the GBPUSD pair looked overpriced around the price levels of 1.3500 while exceeding the upper limit of the newly-established bullish channel.

On December 23, initial bearish breakout below 1.3000 was demonstrated on the H4 chart.

However, earlier signs of bullish recovery were manifested around 1.2900 denoting high probability of bullish breakout to be expected.

Thus, Intraday technical outlook turned into bullish after the GBP/USD has failed to maintain bearish persistence below the newly-established downtrend line.

That's why, bullish breakout above 1.3000 was anticipated. Thus, allowing the recent Intraday bullish pullback to pursue towards 1.3250 (the backside of the broken channel) where bearish rejection and another bearish swing were suggested for conservative traders in Last Week's previous articles.

Intraday bearish target remains projected towards 1.3000 and 1.2980 provided that the current bearish breakout below 1.3170 is maintained on the H4 chart.

Please also note that two descending highs are being demonstrated around 1.3120 and 1.3090 which enhances the bearish side of the market.

On the other hand, bearish breakdown below 1.2980 is mandatory to enhance further bearish decline towards 1.2900 and probably 1.2800 where the backside of the previously-broken downtrend is located.

Moreover, Intraday traders can watch any bullish pullback towards the depicted price zone (1.3170 - 1.3200) for bearish rejection and another valid SELL entry with intraday bearish targets projected towards 1.3000 and 1.2980.

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UK Economy Contracts In November

Trading 13 jan 2020 Commentaire »

The UK economy contracted in November ahead of the general election, due to the weakness in services and industrial output, data from the Office for National Statistics showed Monday.

Gross domestic product dropped 0.3 percent month-on-month after rising 0.1 percent each in September and October. Economists had forecast GDP to remain flat.

In the three months to November, the economy grew 0.1 percent sequentially, after rising by a revised 0.2 percent in the three months to October.

Overall, the economy grew slightly in the latest three months, with growth in construction pulled back by weakening services and another lacklustre performance from manufacturing, ONS Head of GDP Rob Kent-Smith said.

Long term, the economy continues to slow, with growth compared with the same time last year at its lowest since the spring of 2012, Kent-Smith added.

Services output dropped unexpectedly by 0.3 percent in November, offsetting October's 0.3 percent increase. This was the biggest fall since 2018. Output was forecast to grow 0.1 percent.

In November, industrial production declined 1.2 percent month-on-month after easing 0.4 percent in October. Manufacturing logged a monthly fall of 1.7 percent due to large falls in car production as plants shut their operations ahead of October 31 Brexit deadline.

Industrial output was forecast to remain flat and manufacturing to fall 0.1 percent in November.

On a yearly basis, industrial production was down 1.6 percent in November, faster than the 0.6 percent decrease a month ago. Likewise, the decline in manufacturing output deepened to 2 percent from 0.3 percent.

Construction output increased 1.9 percent from the previous month in November, in contrast to a 2.2 percent decline in October. This was the fastest monthly growth since January 2019. On a yearly basis, construction output slid 2 percent.

Another report from the ONS showed that the visible trade deficit narrowed sharply to GBP 5.26 billion from GBP 10.94 billion in October.

Consequently, the total trade balance showed a surplus of GBP 4.03 billion versus GBP 1.33 billion deficit seen in October. The surplus was driven by a GBP 3 billion increase in exports of unspecified goods.

The economy is on course to stagnate or contract by 0.1 percent sequentially in the fourth quarter as a whole, Andrew Wishart at Capital Economics said. At the margin, that makes an interest rate cut a bit more likely, the economist added.

More Bank of England policymakers started to support a rate cut as the economy showed signs of weakness.

"Personally, I think it's been a close call, therefore it doesn't take much data to swing it one way or the other," Gertjan Vlieghe told the Financial Times in an interview published over the weekend.

"I really need to see an imminent and significant improvement in the UK data to justify waiting a little bit longer."

BoE's outgoing chief Mark Carney last week said the central bank has enough room to cut interest rates by a total 250 basis points as well as to increase the size of its asset purchases.


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U.S. Dollar Climbs On Trade Optimism

Trading 13 jan 2020 Commentaire »

The U.S. dollar strengthened against its major counterparts in the European session on Monday, as investors awaited the signing of the Phase 1 trade deal between the U.S. and China due this week.

The deal due to be signed at the White House on Wednesday is likely to include a commitment from China to increase agricultural products and implement economic reforms as well as some relief to China's aquatic exports to the U.S.

Chinese delegation headed by Vice Premier Liu He will visit Washington from today to sign the deal.

The interim deal signals a de-escalation in a trade war that threatens to dampen global economic growth.

The looming U.S. corporate earnings season also remained on investors' radar, with the big banks scheduled to report results on Tuesday.

The currency showed mixed trading against its major counterparts in the Asian session. While it rose against the yen and the pound, it held steady against the franc. Versus the franc, it declined.

The greenback rose to 0.6895 against the aussie and 0.6622 against the kiwi, from its early 6-day low of 0.6920 and a 4-day low of 0.6653, respectively. The next possible resistance for the greenback is seen around 0.67 against the aussie and 0.64 against the kiwi.

The greenback bounced off to 1.3065 against the loonie, from an early low of 1.3045. If the currency rises further, it may locate resistance around the 1.33 level.

The U.S. currency appreciated to 1.2961 against the pound, its biggest since December 26. On the upside, 1.27 is possibly seen as the next resistance for the greenback.

Data from the Office for National Statistics showed that the UK economy shrank in November due to the weakness in services and industrial output.

Gross domestic product contracted 0.3 percent on month driven by the falls in services and production. GDP had advanced 0.1 percent in both September and October. Economists had forecast GDP to remain flat.

Nearing the key 110 level, the greenback touched 109.92 against the yen, which was its strongest since May 27, 2019. The greenback is likely to locate resistance around the 112.00 level.

The greenback reversed from an early 5-day low of 1.1136 against the euro, recovering to 1.1113. The greenback may locate resistance around the 1.10 area.

Data from Destatis showed that Germany's wholesale prices continued to decline in December.

Wholesale prices decreased 1.3 percent year-on-year in December but slower than the 2.5 percent decline seen in November. This was the sixth consecutive fall in wholesale prices.

In contrast, the greenback declined to a 4-day low of 0.9718 against the franc from Friday's closing value of 0.9723. Further decline may lead it to a support around the 0.96 level.

Looking ahead, the U.S. monthly budget statement for December will be released in the New York session.


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India's Inflation Accelerates On Food Prices

Trading 13 jan 2020 Commentaire »

India's consumer price inflation accelerated in December driven by higher food prices, data from the statistics ministry showed Monday.

Inflation increased notably to 7.35 percent from 5.54 percent in November. In the same period last year, inflation was 2.11 percent.

The consumer food price index advanced 14.12 percent annually, faster than the 10.01 percent in November. Prices had fallen 2.65 percent in December 2018.

Housing costs increased 4.3 percent and clothing and footwear prices were up 1.5 percent.

On a monthly basis, consumer prices gained 1.21 percent and the food price index climbed 2.37 percent.

At the December meeting, policymakers of the Reserve Bank of India revised up the CPI inflation projection to 5.1-4.7 percent for the second half of the financial year 2019-20 and 4.0-3.8 percent for the first half of fiscal 2020-21.


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*India Dec Consumer Prices Up 7.35% On Year Vs. 5.54% In November

Trading 13 jan 2020 Commentaire »

India Dec Consumer Prices Up 7.35% On Year Vs. 5.54% In November


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January 13, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 13 jan 2020 Commentaire »

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Since November 14, the price levels around 1.1000 has stood as a significant DEMAND-Level offering adequate bullish SUPPORT for the pair on two successive occasions.

During this Period, the EUR/USD pair has been trapped within a narrow consolidation range between the price levels of 1.1000 and 1.1085-1.1100 (where a cluster of supply levels and a Triple-Top pattern were located) until December 11.

On December 11, another bullish swing was initiated around 1.1040 allowing recent bullish breakout above 1.1110 to pursue towards 1.1175 within the depicted short-term bullish channel.

Initial Intraday bearish rejection was expected around the price levels of (1.1175).

Moreover, On December 20, bearish breakout of the depicted short-term channel was executed.

Thus, further bearish decline was demonstrated towards 1.1065 where significant bullish recovery has originated.

The recent bullish pullback towards 1.1235 (Previous Key-zone) was suggested to be watched for bearish rejection and another valid SELL entry.

Suggested bearish position has achieved its targets while approaching the price levels around 1.1110.

As expected, the Key-Level around 1.1110 has provided some bullish rejection. That's why, the current bullish pullback would be expected to pursue towards 1.1140 and probably 1.1175.

On the other hand, for the bearish side of the market, bearish persistence below 1.1110 is needed to enable further bearish decline towards 1.1060 and probably 1.1040.

Trade recommendations :

Conservative traders should wait for bullish pullback towards the price levels of (1.1140-1.1175) as another valid SELL signal.

Bearish projection target to be located around 1.1120 and probably 1.1060. Any bullish breakout above 1.1190 invalidates the mentioned bearish trading scenario.

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