Short-term Ichimoku cloud indicator analysis of EURUSD

Trading 30 mai 2020 Commentaire »

EURUSD has broken out of the Kumo resistance and is making higher highs. Bulls have recaptured 1.11 as price is now turning daily trend to bullish. The weak bullish signal that we gave when the tenkan-sen crossed above the kijun-sen is now being strengthened.

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Price so far has respected both the tenkan-sen and kijun-sen indicators. Even at the recent pull back price held above them and bounced strongly back inside the cloud. Now that price has broken out and above the Kumo we have another bullish signal. It is important for bulls to keep price above the Kumo and above the tenkan-sen and kijun-sen indicators. Support by these two indicators is found at 1.10 and at 1.0935.

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

Weekly analysis of Gold

Trading 30 mai 2020 Commentaire »

Gold price started the week close to where it ended. Price pulled back below $1,700 critical support but until the end of the week price managed to reclaim the $1,700-$1,710 support area. Gold bulls remain in control of the trend and could try to push price to new higher highs once again.

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Black lines -bearish RSI divergence

The weekly RSI continues to provide a weekly bearish divergence. This does not mean that price cannot go towards $1,770-80. This is key resistance now. Support remains key at $1,700 and breaking below it will increase chances of a move towards $1,650-30. Currently I prefer to be neutral and look for shorting opportunities when and if price makes new highs close to $1,780.

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

Dollar Mostly Subdued Against Rivals

Trading 30 mai 2020 Commentaire »

The U.S. dollar recovered after exhibiting weakness in the Asian session, and was down marginally around late afternoon, after briefly moving above the flat line past noon.

The currency was reacting to a slew of economic data from across the globe. Traders were also reacting to updates on the coronavirus pandemic. Rising U.S.-China tensions on Beijing's decision to impose a new security legislation on Hong Hong and the Trump administration's warning to China also had an impact on dollar's movements.

The dollar index, which dropped to a low of 97.95 in the Asian session, rose to 98.55 and was last seen at 98.30, down marginally from previous close.

Against the Euro, the dollar was weaker at $1.1109, losing ground from $1.1077. Data from Eurostat showed eurozone inflation dropped to a four-year low of just 0.1% in May, the official Eurostat agency said.

The Pound Sterling firmed up to $1.2394, but gave up gains, easing to $1.2353, but was still up notably by over 25% from previous close, by late afternoon.

Against the Japanese currency, the dollar was fetching 107.78 yen, compared with 107.64 yen a dollar late Thursday.

The dollar was trading at $0.6668 against the Aussie, nearly 0.5% down from previous close.

The Swiss franc firmed up to CHF 0.9612 from CHF 0.9642, while the Loonie was down marginally at C$1.3775 a U.S. dollar.

In economic news, revised data released by the University of Michigan showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. Economists had expected the index to be upwardly revised to 74.0.

A report released by MNI Indicators showed its Chicago business barometer dropped to 32.3 in May from 35.4 in April. Economists had expected the barometer to rise to 40.0. With the unexpected decrease, the Chicago business barometer dropped to its lowest level since March of 1982.

Meanwhile, the Commerce Department's report showed an unexpected substantial increase in U.S. personal income in the month of April. The report said personal income spiked by 10.5% in April after tumbling by a revised 2.2% in March. Economists had expected income to plunge by 6.5% compared to the 2% slump originally reported for the previous month.


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Treasuries Move Notably Higher As Trump Holds Press Conference On China

Trading 30 mai 2020 Commentaire »

Treasuries showed a notable move to the upside during trading on Friday, more than offsetting the modest decrease seen in the previous session.

Bond prices reached new highs going into the close of trading, ending the day firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.7 basis points to 0.648 percent.

Treasuries moved higher late in the session as traders reacted to President Donald Trump's highly anticipated press conference about China.

Trump harshly criticized China's handling of the coronavirus, claiming Beijing instigated the "global pandemic" by allowing the disease to spread.

Following China's recent move to approve a controversial security law for Hong Kong, Trump also said he is directing his administration to remove special exemptions for the city.

Trump argued Hong Kong is "no longer sufficiently autonomous" to warrant preferential treatment by the U.S., claiming China has abandoned the idea of "one country, two systems."

The president also announced that he is suspending the entry of certain foreign nationals from China into the U.S. as well as instructing a presidential working group on financial markets to study Chinese companies listed on U.S. exchanges.

Trump also revealed that he is terminating the U.S.' relationship with the World Health Organization, claiming China has total control of the agency.

In U.S. economic news, the Commerce Department released a report unexpectedly showing a substantial increase in U.S. personal income in the month of April, reflecting the distribution of stimulus checks by the federal government.

The Commerce Department said personal income spiked by 10.5 percent in April after tumbling by a revised 2.2 percent in March.

The jump in personal income came as a surprise to economists, who had expected income to plunge by 6.5 percent compared to the 2.0 percent slump originally reported for the previous month.

Meanwhile, the report showed a steep drop in personal spending due to the impact of the coronavirus-induced lockdown.

The Commerce Department said personal spending plummeted by 13.6 percent in April after a revised 6.9 percent slump in March.

Economists had expected spending to tumble by 12.6 percent compared to the 7.5 percent nosedive originally reported for the previous month.

Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by slightly less initially estimated in the month of May.

The report showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. Economists had expected the index to be upwardly revised to 74.0.

Despite the unexpected downward revision, the consumer sentiment index is still slightly above the April reading of 71.8.

The monthly jobs report is likely to attract attention next week, with economists expecting the loss of about 10 million jobs in the month of May.

Traders are also likely to keep an eye on reports on manufacturing and service sector activity, the trade deficit, and weekly jobless claims.


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

Oil Futures Settle Sharply Higher

Trading 30 mai 2020 Commentaire »

Crude oil prices moved higher on Friday, on hopes of a pickup in energy demand and expectations that major oil producers will extend output cuts beyond June 2020.

Higher demand for gasoline following reopening of businesses in almost all states across the U.S., and easing lockdown restrictions in several countries across the world, pushed up oil prices.

The output cuts by OPEC and allied producers too contributed to oil's uptick.

West Texas Intermediate crude oil futures for July ended up $1.78, or about 5.3%, at $35.49 a barrel.

WTI Futures have now posted gains for five straight weeks. Oil prices surged as much as 88% in the month of May, the best monthly returns since the near 45% surge way back in September 1990.

Brent crude futures edged up $0.04 to $35.33 a barrel today.

According to the data released by Baker Hughes, the number of active U.S. rigs drilling for oil declined by 15 to 222 this week, falling for an eleventh straight week.

The total active U.S. rig count is now at 301, down 17 from previous week.


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Gold Futures Settle Notably Higher

Trading 30 mai 2020 Commentaire »

Gold prices moved higher on Friday on safe-haven demand as tensions between the U.S. and China escalated, and concerns about another wave of coronavirus resurfaced amid reopening of the economies.

Gold futures for August ended up $23.40, or about 1.4%, at $1,751.70 an ounce. Gold futures gained nearly 3.5% in the month.

Silver futures for July gained about 3%, or 0.53, at $18.499 an ounce, and took their gains for the month to almost 24%, the best monthly returns in more than 9 years.

Copper futures for July moved up by about 0.5% to $2.4255 per pound.

The Sino-U.S. rift deepened after China's parliament approved the controversial security law on Hong Kong, undermining the city's reputation as a financial hub with substantial autonomy.

Traders awaited U.S. President Donald Trump's news conference, due later in the day. It was being speculated that Trump may impose mild new sanctions on visas and Chinese access to the global financial system.

In economic news, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by slightly less initially estimated in the month of May. The report showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. Economists had expected the index to be upwardly revised to 74.0.

A report released by MNI Indicators showed its Chicago business barometer dropped to 32.3 in May from 35.4 in April, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the barometer to rise to 40.0. With the unexpected decrease, the Chicago business barometer dropped to its lowest level since March of 1982.

Meanwhile, the Commerce Department's report showed an unexpected substantial increase in U.S. personal income in the month of April. The report said personal income spiked by 10.5% in April after tumbling by a revised 2.2% in March. Economists had expected income to plunge by 6.5% compared to the 2% slump originally reported for the previous month.


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

India Economic Growth Slows Sharply On Covid-19

Trading 29 mai 2020 Commentaire »

India's economic growth slowed sharply in the three months to March, partially reflecting the coronavirus-triggered country-wide lockdown that began towards the end of the quarter, official data showed on Friday.

Gross domestic product grew 3.1 percent year-on-year compared to 5.7 percent in the same quarter a year ago, figures from the statistics ministry showed.

The latest growth rate is reportedly the lowest in at least eight years, but was better than the 2.1 percent economists had forecast. The December quarter growth was revised lower to 4.1 percent from 4.7 percent.

The ministry also lowered its growth figure for the fiscal year 2019-20 to 4.2 percent from 5 percent estimated earlier. The latest growth is reportedly the weakest in 11 years. In the fiscal year 2018-19, the Indian economy had grown 6.1 percent. In the March quarter, manufacturing shrunk for a third straight quarter, down 1.4 percent year-on-year, and construction decreased 2.2 percent.

Farm production grew 5.9 percent and mining and quarrying output increased 5.2 percent. Utility sector output grew 4.5 percent after a decline in the previous quarter. In the services group, output grew 2.6 percent in the trade, hotels, transport and communication segment, and rose 2.4 percent in the financial services sector. India is still battling a severe spread of the coronavirus, or Covid-19, especially in its commercial capital Mumbai. The country went into a total lockdown, one of the most stringent, from March 25.

The government began easing the lockdown restrictions from May 18 in areas where the number of cases is less.

Household consumption and investment have been severely hurt as economic activity came to a standstill.

Economists are looking forward to significantly worse figures for the second quarter as the country remained in total lockdown throughout April and during the first half of May. The central bank has cut interest rates twice this year and the RBI governor has warned that growth is likely to be in negative territory in the 2020-21, which would be the first contraction in four decades.

The RBI expects some recovery in the second half of the fiscal year. The RBI maintained its accommodative stance after it cut the repo rate in a surprise move on May 22.

Goldman Sachs reportedly predicted a 5 percent GDP contraction for the 2020-21 fiscal year, which would be as deep as compared to the deepest recession India has witnessed since 1979.

"Further ahead, timely and large stimulus would have left households and firms in good shape when they emerged from the lockdown, which would have aided the economic recovery," Capital Economics economist Shilan Shah said.


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U.S. Consumer Sentiment Improves Slightly Less Than Initially Estimated

Trading 29 mai 2020 Commentaire »

Revised data released by the University of Michigan on Friday showed consumer sentiment in the U.S. improved by slightly less initially estimated in the month of May.

The report showed the consumer sentiment index for May was downwardly revised to 72.3 from the preliminary reading of 73.7. Economists had expected the index to be upwardly revised to 74.0.

Despite the unexpected downward revision, the consumer sentiment index is still above the April reading of 71.8.

"Consumer sentiment has remained largely unchanged during the past two months, with the final May estimate just a half index point above the April reading," said Surveys of Consumers chief economist Richard Curtin.

He added, "The CARES relief checks and higher unemployment payments have helped to stem economic hardship, but those programs have not acted to stimulate discretionary spending due to uncertainty about the future course of the pandemic."

The slight uptick by the consumer sentiment index came as the current economic conditions index jumped to 82.3 in May from 74.3 in April.

On the other hand, the report showed the index of consumer expectations slumped to 65.9 in May from 70.1 in the previous month.

One-year inflation expectations surged up to 3.2 percent in May from 2.1 percent in April, while five-year inflation expectations rose to 2.7 percent from 2.5 percent.


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

Do not miss the trend: USD ready to determine the direction

Trading 29 mai 2020 Commentaire »

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The weekend seems to be eventful. Hong Kong is preparing for new street protests, China is angry at the interference of other countries in the affairs of the autonomous region, and Donald Trump is preparing to answer China for Hong Kong. Everyone is interested in how far the president of the United States can go and whether he will go to level the preliminary trade deal with China in 2019 or noisily take some symbolic steps, such as sanctions and visas for Hong Kong citizens. This may affect the fate of further stock market rallies.

Meanwhile, data on employment in the non-agricultural sector for May will be released next Friday. This will probably be another gloomy indicator. Despite some encouraging signs in the employment picture in recent weeks, these changes are unlikely to be reflected in the May data. Investors striving to seize on signs of economic recovery after a pandemic will meet with any positive stormy standing ovation.

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According to a Reuters poll, US employers cut 7.45 million jobs in May compared with a record 20.5 million in April.

As for the dollar, today it missed the US macrostatistics. According to the Ministry of Trade, consumer spending fell by 13.6% in April compared to March instead of the expected decline of 12.6%. At the same time, income unexpectedly increased by 10.5%. Analysts had forecast a drop of 6.5%.

The University of Michigan consumer sentiment index rose by a final estimate to 72.3 points in May, not reaching expectations. Experts announced an indicator of 74 points.

The dollar has other concerns now - the uncertainty in relations between the US and China and the possible reduction in rates deep into the negative area. Jerome Powell today must hint at this or refute market guesses.

Traders are trying to figure out an important question for them: how the reduction in interest rates will affect the status of the dollar as a world reserve currency and a safe-haven asset. This explains why they cannot decide on the movement. And if we add here short-term and long-term economic risks, an increase in the number of initial applications for unemployment benefits? According to Goldman Sachs, high unemployment in the United States will continue for two years, and maybe more. This will slow down a rising economy. Forbes believes that "millions of jobs are lost forever." It is not surprising why the greenback rushes from side to side in search of the right direction.

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So, on Thursday, the dollar passed the lower border of the trading range of March 27. Traders were not sure how to proceed. There was a lull in the market on Friday, as both buyers and sellers took a wait-and-see attitude. New drivers may appear over the weekend.

At the moment, the US currency really offers a favorable risk/reward ratio. This is due to finding it as at the lower limit of the trading range, and near a possible level of resistance with a subsequent decrease.

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

#SPX stock markets, trading signals, feast during the plague and the cure for it #GILD

Trading 29 mai 2020 Commentaire »

Dear colleagues. What is currently happening on the stock markets gives me a strong sense of deja vu, because we already saw something similar in 2011-2012, only to a much lesser extent. Although it seemed unbelievable then, the essence of what is happening with stock markets around the world was akin to insanity and was described by the phrase "the worse, the better." Then the worse the data on the US economy came out, the more the US stock market grew in anticipation of new injections from the Federal Reserve. Today we see something similar, only in much larger - global volumes.

The unemployment data all over the world comes out horrific, hundreds of millions of people all over the world lost their jobs overnight, the number of unemployed in the US alone reached 36 million. Many sectors of the economy, such as air travel and tourism, have been thrown back decades. The leader of the "free" world can not cope with the epidemic of the COVID-19 virus for the third month, and the number of victims has already exceeded 100,000. However, stock markets have almost recovered their losses by 2/3 of the February record highs and continue to grow.

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The leaders with exceeding the previous highs of March 4 were the Information Technology Sector (INFO TECH), where AMD (#AMD), which has Wtd Alpha +141.80, and Apple (#AAPL), which possesses the strongest growth indicators, Wtd Alpha +73.00.

Also, following the results of two months of the second quarter, the Health Care sector emerged as the leader, where the company Gilead Sciences Inc (#GILD), available for trading in the InstaFOREX terminal, which has Wtd Alpha +20.50, showed a very worthy result. Since this company has developed an interesting technical model at the moment, I will consider it in more detail.

Gilead Sciences, Inc. is a biopharmaceutical research and development company that seeks, develops and commercializes innovative medicines in the fields of unmet medical needs. The company seeks to change and simplify the care of people with life-threatening diseases around the world. Gilead's product portfolio and range of products includes treatments for HIV/AIDS, liver disease, cancer, inflammatory and respiratory diseases, and cardiovascular diseases. The company is included in the Nasdaq 100 and S&P 100 indices. At the same time, for a long time, the company's shares have brought investors income below these indices. However, everything changed in 2020, when the company's shares began to grow rapidly.

Consider some of the fundamental indicators of Gilead Sciences Corporation and conduct its general fundamental analysis. Earlier, I mentioned the Weighted Alpha indicator, which characterizes the strength of the company's growth over the past year. This indicator is #GILD low, but not low. The leader in the Health Care sector is Regeneron Pharmaceuticals, which has a Wtd Alpha of +108.90. However, companies with high weighted alpha are usually very overbought, and, in my opinion, buying stocks of these companies is like trying to catch up with an outgoing train.

Gilead Sciences, Inc. refers to the mastodons of financial markets and has a capitalization level of over 90 billion dollars. Annual sales are at $20 billion. Earnings before tax for EBITDA in 2019 amounted to $ 12.486 billion. Forecast for profit for 2020 is 11.514 billion. The company is relatively cheap, the earnings per share Price/Earnings ttm is 12.18, according to some estimates, 25.5, which in any case is acceptable for the performance of a company in this sector. Indicators of debt on equity are 1.02. Profitability is estimated at 23.99%. An excellent bonus for a long-term investor is the high, by the standards of the United States and the sector, dividends of 3.61%. The growth in the value of shares over the past year is 18.66%. An important positive factor is the fact that the Beta indicator for 60 months is at 0.70. This suggests that #GILD shares are dependent on changes in the Nasdaq 100 and S&P 100 base indices by 70% or less volatile.

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We have more or less sorted out the indicators of fundamental analysis, and, as we can see, Gilead Sciences is quite attractive to the investor. But maybe it is not very attractive to the trader? However, I have good news for you, I do not do fundamental analysis without technical background.

As follows from the daily chart (Fig. 1), in January 2020, the company's shares moved into an upward trend and in mid-March, against the backdrop of the development of the COVID-19 epidemic, peaked at $85.86, after which they began to decline. Unsuccessful recovery attempts were made in April and May, after which the company's shares gradually fell to the level of the semi-annual moving average line, while remaining in an upward trend, as evidenced by the established April low at $71.30. The closing of the price of the week below the level of 120 MA also did not occur. At the same time, the indicators of the RSI indicator (5) exceeded the indicators of the RSI indicator (20), which in my trading system implies a signal to buy #GILD shares.

However, when deciding on the purchase of #GILD shares, traders should be guided by the signals of their own trading systems, observing the rules of money management and proceeding from the principle: the movement will continue until we get the opposite.

Values of 85.60, 89.15 and 94.50 can be selected as targets. In case the company's shares decrease, losses must be recorded when the week price is closed below the 71 level, when the target is selected at a value of 85.60, or when the day price is closed below the level of 64, if the values 89.15 and 94.50 are selected as targets. Choosing a target at the level of 85.60 and setting a loss fixing point at level 64 will be the wrong decision, because profit should be greater than possible losses, which, however, does not prohibit early closure of positions in case the situation changes, unless, of course, the signals of the trading system indicate this, not the trader's intuition.

The National People's Congress of China approved the National Security Act on Thursday, May 28, aimed at curbing separatist and subversive activities in Hong Kong. In response to the passage of the law, US Secretary of State Mike Pompeo said that Washington can no longer treat the former British colony as independent from Beijing, which violates its trade and financial status. Donald Trump's press conference is expected on Friday evening, and it is possible that the US president will announce new sanctions and tariffs on China. This could trigger a new round of trade war and a wave of decline in stocks across all global stock exchanges. However, despite concerns, investors are at a stage of optimism, primarily due to the actions of the US Federal Reserve and other central banks, which are taking measures to unprecedentedly pump markets with liquidity.

On Wednesday, the European Commission adopted a package of incentive measures worth 750 billion euros, investors expect a similar step from the European Central Bank, a meeting of which should be held next week, June 4. Be careful and careful, let the coronavirus pass us.

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