EURUSD remains in bullish trend but RSI provides us with the first warning

Trading 10 juin 2020 Commentaire »

EURUSD is making higher highs. Price remains inside the bullish channel and as long as price is above 1.1315-1.13 bulls will have the upper hand. The RSI is however not making higher highs and doesn't follow price. This is a bearish divergence.

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Blue lines - bullish channel

Black line - bearish divergence

As long as price is inside the bullish channel bulls have nothing to fear. The bearish divergence in the RSI is just a warning and not a reversal signal. EURUSD could continue making higher highs and higher lows, however traders need to be cautious as this divergence shows signs of a weakening bullish trend. Support is found at 1.13-1.1315 and next at 1.1275. Breaking below this support area will open the way for a move towards 1.1150. Until then we should not rule out a move above 1.14.

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Ichimoku cloud indicator analysis of Gold

Trading 10 juin 2020 Commentaire »

Gold price continues to make higher highs towards the June high. Price remains in a bullish trend and if we see a strong buy signal by the Ichimoku cloud indicators, we could expect price to reach $1,800 over the coming weeks.

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Gold price is above the tenkan-sen and the kijun-sen. This is a bullish sign. If we see the tenkan-sen (red line indicator) cross above the kijun-sen (yellow line indicator) then this would be a strong bullish signal. So far Gold price respects key support levels and bouncing off the cloud support was another bullish sign we noted early. Now bulls need to continue this upward move and eventually make a higher high towards $1,780-$1,800. Support is found at $1,717. Bulls do not want to see price break below that level.

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Evening review EURUSD 06/10/2020. Ahead of the Fed meeting

Trading 10 juin 2020 Commentaire »

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The most important news from the Federal Reserve: everyone understands that the Fed rate will remain at the level of 0-0.25%

However, it is very important how the Fed assesses the state and prospects of the US economy now - when the most negative months are behind April and May, when the economies of Europe and the US have opened significantly.

The Fed will issue a statement - but, in addition, it will issue a forecast on key indicators.

EURUSD: I expect a sharp increase in the euro - in the direction of 1.1480.

I keep purchases from 1.1320.

Stop at 1.1275.

Alternative: sell from 1.1240.

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*U.S. Crude Oil Inventories Jump 5.7 Million Barrels In Week Ended 6/5

Trading 10 juin 2020 Commentaire »

U.S. Crude Oil Inventories Jump 5.7 Million Barrels In Week Ended 6/5


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U.S. Consumer Prices Show Modest Decrease In May

Trading 10 juin 2020 Commentaire »

After reporting the biggest drop in U.S. consumer prices in over a decade in the previous month, the Labor Department released a report on Wednesday showing a modest decrease in consumer prices in the month of May.

The Labor Department said its consumer price index edged down by 0.1 percent in May after slumping by 0.8 percent in April. Economists had expected consumer prices to come in unchanged.

The dip in consumer prices came amid a continued decrease in energy prices, which tumbled by 1.8 percent in May after plunging by 10.1 percent in the previous month. Prices for gasoline and fuel oil showed notable declines.

Meanwhile, the report said food prices increased by 0.7 percent in May following a 1.5 percent jump in April. The continued growth was driven by higher prices for meats, poultry, fish, and eggs, with the beef index showing its largest ever monthly increase.

Excluding food and energy prices, core consumer prices also slipped by 0.1 percent in May after falling by 0.4 percent in April. Core prices were also expected to come in unchanged.

The modest drop in core prices reflected significant decreases in prices for motor vehicle insurance and apparel as well as lower prices for airline fares and used cars and trucks.

Higher prices for shelter, recreation, medical care, household furnishings and operations, and new vehicles helped limit the downside.

Compared to the same month a year ago, consumer prices in May were up by just 0.1 percent following the 0.3 percent increase in April.

The annual rate of growth in core consumer prices also slowed to 1.2 percent in May from 1.4 percent in April.

"Overall, there is little evidence that the pandemic is resulting in widespread downward pressure on prices and, with the initial impact of the earlier plunge in demand now fading, we doubt core inflation will fall further from here," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "Nevertheless, with inflation likely to remain well below the Fed's target, that is another reason to expect policy to remain ultra-loose for the foreseeable future."

On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of May.

Producer prices are expected to inch up by 0.1 percent in May after tumbling by 1.3 percent in April, while core prices are expected to edge down by 0.1 percent after falling by 0.3 percent in the previous month.


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OECD Says Global Economy Faces Deepest Recession Since Great Depression

Trading 10 juin 2020 Commentaire »

The Organisation for Economic Cooperation and Development said the global economy is undergoing the deepest recession since the Great Depression in the 1930s due to the coronavirus, or Covid-19, pandemic.

As restrictions begin to ease, the path to economic recovery remains highly uncertain and vulnerable to a second wave of infections, the Paris-based think tank said in its latest Economic Outlook, published on Wednesday.

Given the high uncertainty, the OECD has provided two equally possible economic scenarios. Global economic activity is expected to fall 6 percent in 2020 if a second wave of infections is avoided. The world economy will expand 5.2 percent in 2021.

The unemployment rate in the OECD is forecast to rise to 9.2 percent from 5.4 percent in 2019.

But global GDP will fall more sharply by 7.6 percent this year before rising 2.8 percent next year in case of a second outbreak of virus triggering a return to lockdowns.

In the United States, the Covid-19 has brought the longest growth on record to a juddering halt, the OECD said. If there is another virus outbreak later in the year, GDP is expected to fall by over 8 percent in 2020.

In the single-hit scenario, the U.S. GDP would shrink 7.3 percent this year before rising 4.1 percent in 2021.

Eurozone GDP is expected to plunge by 11.5 percent this year if a second wave breaks out, and by over 9 percent even if a second hit is avoided.

Germany's GDP will decline 8.8 percent in 2020 if a second Covid-19 outbreak requires further containment measures or prolongs uncertainty. At the same time, the fall in GDP is estimated at 6.6 percent if the virus subsides by the summer.

If the pandemic is contained by the summer, France GDP will contract about 11.4 percent this year and rebound by 7.7 percent in 2021. Yet, if there is a second outbreak, GDP is projected to decrease 14.1 percent in 2020 and to recover by 5.2 percent in 2021.

Italy's GDP will fall by 14 percent in 2020 before recovering by 5.3 percent next year if there is another virus outbreak later this year. If further outbreaks are avoided, GDP is projected to drop 11.3 percent in 2020 and to recover by 7.7 percent in 2021.

The UK GDP is projected to fall sharply by 14 percent in 2020 if there is a second virus outbreak later in the year. An equally likely single-hit scenario would still see GDP fall sharply by 11.5 percent.

According to OECD, China's and India's GDPs will be relatively less affected, with a decrease of 3.7 percent and 7.3 percent respectively in case of a double hit and 2.6 percent and 3.7 percent in case of a single hit.

The agency said the recovery will take a long time to bring output back to pre-pandemic levels and the crisis will leave long-lasting scars.

OECD Secretary-General Angel Gurr?a said,"Uncertainty is clearly extreme in the current context, but the implications of that for macroeconomic policies are not symmetric."

"Policy-makers were right not to be too slow to introduce emergency measures, and they should now guard against being too quick to withdraw them," said Gurr?a.

OECD Chief Economist Laurence Boone said, "Extraordinary policies will be needed to walk the tightrope towards recovery. Restarting economic activity while avoiding a second outbreak requires flexible and agile policymaking."

The OECD observed that strong fiscal support is warranted but it has consequences. The think tank called for well-targeted public spending to support the most vulnerable and provide the investment needed for a sustainable recovery.


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U.S. Consumer Prices Edge Down 0.1% In May

Trading 10 juin 2020 Commentaire »

After reporting the biggest drop in U.S. consumer prices in over a decade in the previous month, the Labor Department released a report on Wednesday showing a modest decrease in consumer prices in the month of May.

The Labor Department said its consumer price index edged down by 0.1 percent in May after slumping by 0.8 percent in April. Economists had expected consumer prices to come in unchanged.

The dip in consumer prices came as lower prices for motor vehicle insurance, energy, and apparel more than offset increases in prices for food and shelter.

The report said core consumer prices, which exclude food and energy prices, also slipped by 0.1 percent in May after falling by 0.4 percent in April. Core prices were also expected to come in unchanged.


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Dollar Little Changed Following U.S. CPI

Trading 10 juin 2020 Commentaire »

After the release of U.S. consumer price index for May at 8:30 am ET Wednesday, the greenback changed little against its major counterparts.

The greenback was trading at 107.42 against the yen, 0.9463 against the franc, 1.2779 against the pound and 1.1372 against the euro around 8:32 am ET.


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*U.S. Consumer Prices Edge Down 0.1% In May, Core Prices Dip 0.1%

Trading 10 juin 2020 Commentaire »

U.S. Consumer Prices Edge Down 0.1% In May, Core Prices Dip 0.1%


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Dollar Sharply Down Ahead Of U.S. CPI

Trading 10 juin 2020 Commentaire »

The U.S. Labour Department will release consumer price index for May at 8:30 am ET Wednesday. Ahead of the data, the greenback fell sharply against its major counterparts.

The greenback was worth 107.42 against the yen, 0.9463 against the franc, 1.2780 against the pound and 1.1373 against the euro as of 8:25 am ET.


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