Comprehensive analysis of movement options for #USDX vs EUR/USD, GBP/USD, and USD/JPY (H4) on May 18, 2020

Trading 16 mai 2020 Commentaire »

Minuette operational scale (H4)

The second half of May - what will happen to the dollar index and the main currency instruments? Options for the development of the movement for #USDX vs EUR/USD, GBP/USD, and USD/JPY (H4) on May 18, 2020.

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US dollar index

The development of the movement of the dollar index (#USDX) from May 18, 2020 will be due to the development and direction of the breakdown of the range:

  • resistance level 100.56 - control line UTL of the Minuette operational scale forks;
  • support level 100.30 - the initial line of SSL of the Minuette operational scale forks.

The return of the dollar index below the initial line SSL of the Minuette operational scale forks - breakdown of the support level 100.30 - the option of developing the downward movement #USDX to the borders of the channel 1/2 Median Line (99.70-99.45-99.15) and equilibrium zone (99.15-98.75-98.30) of the Minuette operational scale forks.

The breakdown of the UTL control line of the Minuette operational scale forks - the resistance level of 100.56 will make it possible to continue the development of the upward movement #USDX to the goals:

  • local maximum 100.87;
  • UWL38.2 (101.90) warning line of the Minuette operational scale forks;
  • final Shiff Line Minute (102.00).

Details of the dollar index movement markup from May 18, 2020 are shown in the animated chart.

analytics5ebeb7b51b12d.jpg

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Euro vs US dollar

The development of the movement of the single European currency (EUR/USD) from May 18, 2020 will continue in the channel 1/2 Median Line (1.0865-1.0767-1.0680) of the Minuette operational scale forks taking into account the direction of the breakdown of the range:

  • resistance level 1.0810 - warning line LWL100. 0 of the Minuette operational scale forks;
  • support level 1.0790 - reference line LTL of the Minuette operational scale forks.

Details of the movement of EUR/USD in the channel 1/2 Median Line Minute are shown on the animated chart.

If the warning line LTL100.0 breaks through the Minuette operational scale forks - resistance level 1.0810 - the development of the movement of the single European currency will be directed to the goals:

  • upper limit of the channel 1/2 Median Line Minute (1.0865);
  • channel 1/2 Median Line (1.0900 - 1.0930 - 1.0960) of the Minuette operational scale forks;
  • with the prospect of reaching the local maximum 1.1018 and the lower limit of ISL38.2 (1.1050) of the balance zone of the Minuette operational scale forks.

If the support level of 1.0790 is consistently broken on the control line of the LTL of the Minuette operational scale forks and 1/2 Median Line Minute (1.0767), the downward movement of EUR/USD can be continued to the goals:

  • local minimum 1.0727;
  • lower border of the channel 1/2 Median Line Minute (1.0680);
  • with the ability to update the minimum 1.0636 and achieve the single European currency warning line LWL161.8 (1.0500) of the Minuette operational scale forks.

Details of the EUR/USD movement options from May 18, 2020 are shown on the animated chart.

analytics5ebeb7ce91c57.jpg

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Great Britain pound vs US dollar

The further development of Her Majesty's currency movement GBP/USD from May 18, 2020 will be determined by the development and direction of the breakdown of the boundaries of the equilibrium zone (1.2170-1.2090-1.2020) of the Minuette operational scale forks - detailing the movements within this zone of balance is shown in the animation chart.

The return of Her Majesty's currency above the upper limit of the ISL38.2 equilibrium zone of the Minuette operational scale forks - resistance level 1.2170 - an option for the development of the upward movement of this currency instrument to the goals:

  • final Shiff Line Minuette (1.2240);
  • starting line SSL Minuette (1.2360);
  • 1/2 Median Line Minuette channel (1.2390-1.2440-1.2485).

When breaking the lower border ISL61.8 equilibrium zone of the Minuette operational scale fork - support level 1.2020 - will be the actual continuation of the downward movement of GBP/USD to the borders of the channel 1/2 Median Line (1.1840-1.1640-1.1435) of the Minuette operational scale fork.

Details of the movement of GBP/USD since May 18, 2020 can be seen on the animated chart.

analytics5ebeb7ec9f525.jpg

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US dollar vs Japanese yen

Starting April 30, 2020, the movement of the currency of the "Land of the Rising Sun" USD/JPY will also be determined by mining and the direction of the breakdown of the boundaries of the equilibrium zone (106.95-107.20-107.50) of the Minuette operational scale fork - for details of movement inside the specified zone, see the animated chart.

When sharing the breakdown of the support level of 106.95 on the lower border ISL38.2 equilibrium zone of the Minuette operational scale fork and the line of control LTL (106.80) of the Minuette operational scale fork will be a possible continuation of the downward movement of USD/JPY to the channel borders 1/2 Median Line Minuette (106.35-106.20-106.05) with the prospect of achieving precautionary - LWL38.2 (105.65) and control LTL (105.55) lines of the Minuette operational scale fork.

And if there is a break of the top border ISL61.8 equilibrium zone of the Minuette operational scale fork - resistance level of 107.50 - then the development of the upward movement the USD/JPY may continue to order:

  • local maximum 107.78.
  • SSL start line (108.15) of the Minuette operational scale fork;
  • ultimate line FSL Minuette 108.35.

For the details of the USD/JPY movement since May 18, 2020, look at the animated chart.

analytics5ebeb80719d16.jpg

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The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers, and is not a guide to action (placing "sell" or "buy" orders).

Formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

Where the power coefficients correspond to the weights of currencies in the basket:

Euro - 57.6 %;

Yen - 13.6 %;

Pound - 11.9 %;

Canadian dollar - 9.1 %;

Swedish Krona - 4.2 %;

Swiss franc - 3.6 %.

The first coefficient in the formula brings the index value to 100 on the starting date - March 1973 when the main currencies began to be freely quoted relative to each other.

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

Dollar Exhibits Weakness As Dismal Economic Data, Trade Tensions Weigh

Trading 16 mai 2020 Commentaire »

The U.S. dollar stayed stayed weak right through Friday's session, weighed down by dismal economic data and rising U.S.-China trade tensions.

On the trade front, the U.S. government has changed rules to block shipments of semiconductors to Chinese tech giant Huawei Technologies.

The Commerce Department said in a release that it was changing an export rule to "strategically target Huawei's acquisition of semiconductors that are the direct product of certain U.S. software and technology."

The data from the Commerce Department showed retail sales in the U.S. plunged 16.4% in April, after falling by a revised 8.3% in March. The fall in April was significantly sharper than an expected 12% drop.

A Federal Reserve report showed a record drop in U.S. industrial production in the month of April, as the COVID-19 pandemic led many factories to slow or suspend operations throughout the month.

The Fed said industrial production plummeted by 11.2% in April after tumbling by a revised 4.5% in March.

Economists had expected production to plunge by 11.5% compared to the 5.4% nosedive originally reported for the previous month.

The dollar index, which dropped to a low of 100.08 around mid morning, recovered to 100.40 later on in the day, cutting down its loss to just 0.08%.

Against the Euro, the dollar weakened to $1.0821, from $1.0806 Thursday evening.

The Pound Sterling shed more than 1% against the dollar, weakening to $1.2106, from $1.2231. The British currency slipped after EU's Brexit negotiator Michel Barnier commented the third EU-UK negotiating round was "disappointing." Meanwhile, the British cabinet has stated that it would not be extending the Brexit transition deadline beyond December..

The Japanese Yen turned weak after staying firm early on against the dollar, but recovered some lost ground late afternoon. The Yen was last seen trading at 107.14 a dollar, after having slipped to 107.43 a dollar.

Against the Aussie, the dollar strengthened to 0.6417, firming up by about 0.7% from Thursday's close of 0.6462.

The Swiss franc was stronger at 0.9719 a dollar, while the Loonie dropped to 1.4112 a dollar from Thursday's 1.4050 a dollar.


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

Oil Futures Settle Sharply Higher For The Day, Gains 19% In Week

Trading 16 mai 2020 Commentaire »

Crude oil futures ended sharply higher on Friday, extending recent gains, amid hopes on some improvement in energy demand following reopening of businesses in several parts across the globe, and on hopes the output cuts from major producers will support prices.

West Texas Intermediate Crude oil futures for June ended up $1.87, or about 6.8%, at $29.43 a barrel.

Brent Crude futures were gaining about $1.1 or about 3.6% at $32.23 a barrel.

On Thursday, WTI Crude oil futures for June ended up $2.27, or 9%, at $27.56 a barrel.

WTI Crude oil futures gained about 19% in the week.

According to Baker Hughes, the number of active U.S. rigs drilling for oil dropped by 34 to 258 this week, falling for a ninth straight week.

The total active U.S. rig count also fell, dropping by 35 to 339, according to the report from Baker Hughes.

Data showing a notable rebound in China's daily crude oil use in April amid increased activity supported oil's uptick.

According to International Energy Agency, (IEA), crude inventories are expected to fall by about 5.5 million barrels per day (bpd) in the second half this year.

The IEA estimates that global oil supply is set to fall by a spectacular 12 mb/d to a nine-year low of 88 mb/d in May, as the OPEC+ agreement takes effect and global production declines.


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

Treasuries Turn Lower After Seeing Initial Strength

Trading 16 mai 2020 Commentaire »

After initially extending the upward move seen over the three previous sessions, treasuries turned lower over the course of the trading day on Friday.

Bond prices pulled back well off their early highs and firmly into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.1 basis points to 0.640 percent.

The downturn by treasuries came as traders shrugged off the release of some dismal U.S. economic data, including reports showing record decreases in retail sales and industrial production in the month of April.

The Commerce Department said retail sales cratered by 16.4 percent in April after tumbling by a revised 8.3 percent in March.

Economists had expected retail sales to plummet by 12.0 percent compared to the 8.7 percent slump originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales plunged by an even steeper 17.2 percent in April after falling by a revised 4.0 percent in March.

Ex-auto sales were expected to tumble by 8.6 percent compared to the 4.5 percent nosedive originally reported for the previous month.

A separate report from the Federal Reserve showed industrial production plummeted by 11.2 percent in April after tumbling by a revised 4.5 percent in March.

Economists had expected production to plunge by 11.5 percent compared to the 5.4 percent nosedive originally reported for the previous month.

Concerns about the economy may have been offset by a report from the University of Michigan showing an unexpected improvement in consumer sentiment in the month of May.

The report said the consumer sentiment index rose to 73.7 in May after plummeting to 71.8 in April. The rebound surprised economists, who had expected the index to slip to 68.0.

Another report released by the New York Federal Reserve showed regional manufacturing activity continued to deteriorate significantly in the month of May, although the pace of contraction slowed considerably from the previous month.

The New York Fed said its general business conditions index jumped nearly thirty points to a negative 48.5 in May from a negative 78.2 in April.

While a negative reading indicates a continued contraction in regional manufacturing activity, the index came in well above economist estimates for a reading of negative 63.5.

News on the coronavirus front is likely to remain in the spotlight next week, although traders are also likely to keep an eye on reports on homebuilder confidence, housing starts, and existing home sales as well as Congressional testimony by Federal Reserve Chair Jerome Powell.


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

Gold Futures Extends Winning Streak To 4th Session

Trading 16 mai 2020 Commentaire »

Gold prices surged higher on Friday, extending gains to a fourth straight session, amid continued worries about U.S.-China trade tensions and the impact of the coronavirus pandemic on the economy.

Gold futures for June ended up $15.40, or about 0.9%, at $1,75630 an ounce, the highest close since April 14.

Silver futures for July ended up $0.914, or 5.7%, at $17.070 an ounce, while Copper futures for July settled at $2.3305 per pound, losing about 0.7% from previous close.

The report said industrial production plummeted by 11.2% in April after tumbling by a revised 4.5% in March.

Comments from U.S. President Donald Trump about China aggravated trade tensions. In an interview with Fox Business news, Trump threatened to cut off the whole relationship with China over coronavirus pandemic and said he was in no mood to talk to Xi Jinping.

Chinese state media Global Times responded with an editorial titled "Trump turns up election strategy nonsense with China 'cut-off' threat".

In economic news, the Federal Reserve's report showed a record drop in U.S. industrial production in the month of April, as the COVID-19 pandemic led many factories to slow or suspend operations throughout the month.

Economists had expected production to plunge by 11.5% compared to the 5.4% nosedive originally reported for the previous month.

According to the data from the Commerce Department, U.S. retail sales cratered by 16.4% in April after tumbling by a revised 8.3% in March. Economists had expected retail sales to plummet by 12% compared to the 8.7% slump originally reported for the previous month.

A report from the the Commerce Department said business inventories edged down by 0.2% in March after falling by a revised 0.5% in February.

Meanwhile, a report released by the New York Federal Reserve showed regional manufacturing activity continued to deteriorate significantly in the month of May, although the pace of contraction slowed considerably from the previous month.

The New York Fed said its general business conditions index jumped nearly thirty points to a negative 48.5 in May from a negative 78.2 in April. It was well above economist estimates for a reading of negative 63.5.


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