Forex Review: EUR/USD. EUR still falling

Trading 14 mar 2020 Commentaire »

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The Germany government is pledging 500 billion euros to help companies affected by the coronavirus.

On March 12th, the US stock market showed a slump by 9%. The New York Fed provided massive liquidity of $500 billion to calm markets.

At the same time, the ECB offered additional net asset purchases of 120 billion euros until the end of 2020.

EUR/USD: the euro is slowly moving down.

Buy positions can be opened from the level of 1.1495.

Sell positions can be opened from 1.077.

Market participants are waiting for closer levels.

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

Dollar Scores Strong Gains Against Peers

Trading 14 mar 2020 Commentaire »

The U.S. dollar firmed up against most major currencies on Friday amid expectations the U.S. government will announce an aid package to fight the impact of the coronavirus outbreak and boost economic growth.

Towards the end of the session, the U.S. President Donald Trump declared the coronavirus outbreak a national emergency, paving way for freeing up as much as $50 billion in additional funding to combat the outbreak and allow officials to waive certain regulations to accelerate testing and care for coronavirus patients.

Trump said during a press conference in the White House Rose Garden that he expects the U.S. to have 1.4 million coronavirus test kits available within a week and a total of 5 million kits within the next month.

The president said he is also working with private sector companies to develop "drive thru" testing facilities across the country.

However, Trump said he does not want everybody running out and taking the test, saying only people with certain symptoms should be tested.

The dollar index rose to 98.81, and despite paring some gains later on, stayed firmly in positive territory at 98.60, up 1.16% from previous close. The dollar has gained nearly 3.5% in the week.

Against the Euro, the dollar strengthened to $1.1098 from $1.1185, gaining about 0.8%.

Against Pound Sterling, it firmed up to $1.2327, gaining nearly 2% from Thursday's close of $1.2569.

The dollar rallied 3.28% to 108.07 yen from Thursday's close of 104.63 yen.

With the AUD-USD pair at 0.6192, the dollar gained more than 0.7% against the Aussie.

Against Swiss franc, the dollar gained more than 1% at 0.9534, while against the loonie, it was down nearly 0.6% at 1.3844.

In economic news, according to a report from the University of Michigan, U.S. consumer sentiment showed a relatively modest deterioration in the month of March.

The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, although the index still came in above economist estimates for a reading of 95.0.

The pullback by the headline index primarily reflected a notable decrease by the index of consumer expectations, which tumbled to 85.3 in March from 92.1 in February.

The current economic conditions index showed a more modest drop, slipping to 112.5 in March from 114.8 in February.

According to the data released by the Labor Department, U.S. import prices fell by 0.5% in February after inching up by a revised 0.1% in January. Economists had expected import prices to slump by 0.8% compared to the unchanged reading originally reported for the previous month.

The drop in import prices came as prices for fuel imports plummeted by 7.7% in February after falling by 0.6% in January, with petroleum prices leading the way lower.

Excluding fuel prices, import prices rose by 0.3% in February after edging up by 0.2% in the previous month.


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Oil Ends Session Modestly Higher, But Posts Weekly Loss Of 22%

Trading 14 mar 2020 Commentaire »

Crude oil futures pared most of their intraday gains and settled just modestly higher on Friday as traders weighed global crude supply position and the prospects for fresh incentives from the U.S. government to boost economic growth.

Oil prices rose sharply early on in the session, rebounding from recent losses amid hopes the U.S. government would pass a coronavirus economic aid package.

Reports that U.S. energy companies are planning to cut investment and drilling plans helped as well in pushing up prices.

West Texas Intermediate crude oil futures for April ended up $0.23, or about 0.7%, at $31.73 a barrel, after rising to a high of $33.87 in the session.

On Thursday, WTI crude oil futures tumbled 4.5% to $31.50 a barrel, after having shed about 4% a session earlier.

Crude oil futures lost more than 22% in the week, the biggest weekly loss in more than 11 years.

According to a report from Baker Hughes, oil drilling rig count in the U.S. rose for a second week in a row despite a massive drop in both oil and natural gas prices this week, despite forecasts from analysts that the number of rigs will fall as producers deepen their spending cuts on new drilling.

The report said companies added one oil rig in the week to March 13, bringing the total count to 683, their highest since December.

Oil futures failed to sustain gains due to expectations that energy demand will drop significantly for at least a short duration due to the coronavirus spread and due to the decision of Russia and Saudi Arabia to increase crude production.


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

Treasuries Extend Recent Pullback Amid Rebound On Wall Street

Trading 14 mar 2020 Commentaire »

Treasuries extended the sharp pullback seen over the past few sessions on Friday, pushing the yield on the benchmark ten-year note back toward 1 percent.

Bond prices fluctuated after an early move to the downside but largely remained in negative territory. As a result, the ten-year yield, which moves opposite of its price, jumped by 10.2 basis points to 0.951 percent.

With the increase on the day, the ten-year yield closed higher for the fourth straight session after ending Monday's trading at a record closing low.

The continued weakness among treasuries came as some traders moved their money out of the safe haven of bonds amid a rebound on Wall Street.

Stocks showed a strong move back to the upside on the day as traders went bargain hunting after the Dow suffered its biggest one-day percentage drop since the stock market crash of 1987 on Thursday.

A report from the University of Michigan showing consumer sentiment has held up relatively well in March despite the rampant fear over the coronavirus outbreak also reduced the appeal of bonds.

The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, but the index still came in above economist estimates for a reading of 95.0.

"Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession," said Surveys of Consumers chief economist Richard Curtin.

He added, "Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate."

News on the coronavirus front is likely to remain in focus next week, although traders are also likely to keep a close eye on the Federal Reserve's monetary policy decision next Wednesday.

CME Group's FedWatch Tool currently indicates a 69.0 percent chance the Fed will slash rates to zero to 0.25 percent after lowering rates to 1 to 1.25 percent in an emergency rate cut earlier this month.

Reports on retail sales, industrial production, housing starts, and existing home sales are also due to be released next week but may be viewed as old news due to the intensification of the coronavirus outbreak.


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

Gold Futures Settle Sharply Lower Again, Shed 9.3% In Week

Trading 14 mar 2020 Commentaire »

Gold prices tumbled on Friday with traders liquidating their positions in the commodity, presumably to raise funds in order to fulfill other commitments, including meeting margin calls.

A rebound in global stock markets and the dollar's rise contributed as well for gold's decline.

The dollar index rose to 98.78 and was last seen at 98.71, up 1.27% from Thursday's close.

Gold futures for April ended down $73.60, or about 4.6%, at $1,516.70 an ounce.

On Thursday, gold futures for April plunged $52.00 to settle at $1,590.30 an ounce, after giving up $18.00 and $15.40 on Wednesday and Tuesday, respectively.

The contract lost about 9.3% in the week, the biggest weekly loss in more than eight years.

Silver futures for May ended down $1.505 at $14.500 an ounce, while Copper futures for May settled at $2.4640 per pound, down $0.0085 from previous close.

According to a report from the University of Michigan, U.S. consumer sentiment showed a relatively modest deterioration in the month of March.

The report showed the consumer sentiment index slid to 95.9 in March after rising to 101.0 in February, although the index still came in above economist estimates for a reading of 95.0.

"Importantly, the initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession," said Surveys of Consumers chief economist Richard Curtin.

He added, "Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate."

The pullback by the headline index primarily reflected a notable decrease by the index of consumer expectations, which tumbled to 85.3 in March from 92.1 in February.

The current economic conditions index showed a more modest drop, slipping to 112.5 in March from 114.8 in February.

According to the data released by the Labor Department, U.S. import prices fell by 0.5% in February after inching up by a revised 0.1% in January. Economists had expected import prices to slump by 0.8% compared to the unchanged reading originally reported for the previous month.

The drop in import prices came as prices for fuel imports plummeted by 7.7% in February after falling by 0.6% in January, with petroleum prices leading the way lower.

Excluding fuel prices, import prices rose by 0.3% in February after edging up by 0.2% in the previous month.


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

Gold price reached channel support

Trading 14 mar 2020 Commentaire »

In our previous analysis we mentioned that Gold price was showing bearish reversal signs and that a rejection at the $1,700 combined with a bearish divergence in RSI, increased the chances of a deep pull back in Gold.

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Red lines - bullish channel

In our analysis we also explained that a break below short-term support at $1,625-30 area would increase the chances of a move below $1,600 and towards the lower channel boundary. Today's sharp decline has pushed price towards the channel boundary and so far support holds. The RSI is moving lower towards oversold territory but I would not be surprised to see Gold make a new lower low at the beginning of next week. So far there is not indication of a reversal to the upside. Trend remains bearish.

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