EUR/USD: Powell in Congress, EU summit and the silent White House

Trading 15 juin 2020 Commentaire »

Last week, the euro-dollar pair updated its three-month price high at 1.1422 as part of a three-week almost recoilless upward trend. But EUR/USD buyers clearly overestimated their strength - many traders began to take profits after reaching the 14th figure, provoking a downward correction. Therefore, in the second half of last week an impressive price pullback followed, which was exacerbated by a sharp decline in the stock market amid growing concern about the second wave of the US epidemic. Statistical services reported an increase in the number of people infected in several states of the country, and this fact alarmed stock market participants. Stocks of airlines, non-food retailers, and tourism businesses plummeted, putting pressure on key Wall Street indices. Dollar bulls took advantage of panic: demand for the US currency (as a defensive asset) increased significantly, after which the dollar index went up.

But the euro-dollar pair, on the contrary, went below the 13th figure, closing weekly trading at 1.1255. Support for the bears was also provided by the US Treasury Secretary, who announced a new stimulus package. In other words, last Friday was clearly in favor of the US currency, so the downward correction for the pair looked absolutely logical. I repeat - for the time being we are only talking about correction, since sellers need to not only enter the 11th figure to break the trend, but also go below the 1.1150 mark (the middle line of the Bollinger Bands indicator on the daily chart). Meanwhile, Friday's downward momentum over the weekend has faded, and the current fundamental background does not yet allow dollar bulls to dominate the pair.

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First, the overall growth rate of infected people remains at the same level in the United States, an outbreak was recorded only in some states during the weekend (although large ones - in California and Texas). Secondly, Stephen Mnuchin's words about additional stimulation lost their "charm" - certain actions should have followed (the head of the Ministry of Finance promised to introduce a legislative initiative), but the White House is still silent.

Thirdly, the dollar is waiting for tomorrow's speech by the head of the Federal Reserve in Congress with a six-month report. The text of the report itself was published on Friday. In it, the Fed expresses concern about the state of small business in the United States, focusing on the possible bankruptcy of a large number of small enterprises. The regulator makes an obvious conclusion that this fact will negatively affect the pace of recovery in the US economy.

Given that the report itself has already been made public, the focus of traders will be riveted to Fed Chief Jerome Powell's additional comments. Earlier, he repeatedly stated the need for additional assistance from the state and, most likely, will raise this topic again tomorrow. Such rhetoric will support the US currency, especially if the Trump administration still presents the promised bill tomorrow.

Powell's dovish remarks are likely to be ignored by the market. The Fed chief is likely to repeat the main points that he had already voiced following the June meeting - that the central bank will maintain its current interest rate "at least until the end of 2023", and that the regulator will increase treasury purchases in the near future and mortgage-backed securities to support lending to households and enterprises. In this case, Powell either does not touch on the topic of negative bets, or refutes the likelihood of such a move. Thus, he will emphasize that the issue of raising the rate is only on the agenda, and that the estimated timeframe for this step is the subject of discussion. All this suggests that Powell's speech for tomorrow will most likely support the greenback.

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In turn, the European currency is also waiting at the moment. An online summit of EU leaders will be held on June 19 to discuss the anti-crisis 750-billion plan of the European Commission. This is an important stage in the process of general coordination of this plan, therefore, the euro is unlikely to show initiative against the dollar until the outcome of the meeting.

Thus, traders today are trading in anticipation of the key events of the week. And if the euro will "languish in anticipation" until Friday, then the dollar bulls will determine the greenback movement vector tomorrow. If Powell's rhetoric supports the dollar, the pair will resume the correction, in which case the price can test the support level of 1.1150 (the middle line of the Bollinger Bands indicator on the daily chart). The pair can leave the area below this mark only if the dollar receives additional support from the White House (that is, if the Trump administration presents the above-mentioned bill on financial assistance). If EUR/USD stands above the middle of the 11th figure by the end of tomorrow, then it will be possible to consider long positions in the pair, since from a technical point of view, the pair will retain the potential for its further growth in the medium term - at least to that achieved last week three-month high at 1.1422.

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

New York Manufacturing Activity Steadied In June

Trading 15 juin 2020 Commentaire »

Manufacturing activity in New York steadied in the month of June after seeing sharp contractions in April and May, according to a report released by the Federal Reserve Bank of New York on Monday.

The New York Fed said its general business conditions index spiked to negative 0.2 in June from negative 48.5 in May. A negative reading indicates a contraction in regional manufacturing activity.

The jump by the index far exceeded the estimates of economists, who had expected the index to surge up to negative 27.5.

The much bigger than expected increase by the headline index came as the shipments index returned to positive territory, jumping to 3.3 in June from negative 39.0 in May.

The new orders index also showed a substantial recovery, soaring to negative 0.6 in June from negative 42.4 in May, indicating new orders were nearly unchanged.

While the number of employees index also rose to negative 3.5 in June from negative 6.1 in May, a negative reading still indicates a loss of jobs.

The report also said the prices paid index climbed to 16.9 in June from 4.1 in May, while the prices received index increased to negative 0.6 from negative 7.4.

Looking ahead, the New York Fed said firms were notably more optimistic that conditions would be better in six months.

The index for future business conditions surged up to 56.5 in June from 29.1 in May, reaching its highest level in more than a decade.

"Manufacturing will slowly start recovering as states proceed with reopening, but significantly weaker demand, ongoing supply chain disruptions and heightened uncertainty make a V-shaped recovery doubtful," said a note from economists at Oxford Economics.

They added, "More likely, the rebound will be in two phases: a quick, but fairly short-lived, partial snap-back, followed by softer and protracted recovery."

On Thursday, the Philadelphia Federal Reserve is scheduled to release its report on regional manufacturing activity in the month of June.

Economists currently expect the Philly Fed Index to jump to negative 22.7 in June from negative 43.1 in May.


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New York Manufacturing Index Jumps Much More Than Expected In June

Trading 15 juin 2020 Commentaire »

Manufacturing activity in New York steadied in the month of June after seeing sharp contractions in April and May, according to a report released by the Federal Reserve Bank of New York on Monday.

The New York Fed said its general business conditions index spiked to negative 0.2 in June from negative 48.5 in April. A negative reading indicates a contraction in regional manufacturing activity.

The jump by the index far exceeded the estimates of economists, who had expected the index to surge up to negative 27.5.


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*Canadian Manufacturing Sales Plunge By Record 28.5% In April

Trading 15 juin 2020 Commentaire »

Canadian Manufacturing Sales Plunge By Record 28.5% In April


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*New York Manufacturing Index Spikes To -0.2 In June

Trading 15 juin 2020 Commentaire »

New York Manufacturing Index Spikes To -0.2 In June


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June 15, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 15 juin 2020 Commentaire »

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On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650.

Bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback towards 1.0980 and 1.1075 (Fibo Level 50%).

Shortly After, a bearish Head & Shoulders pattern was demonstrated around the price zone between (1.1075-1.1150).

Shortly after, a sideway consolidation range was established in the price range extending between 1.0770 1.1000.

The price zone of (1.0815 - 1.0775) has been standing as a prominent Demand Zone providing quite good bullish support for the pair so far.

On May 14, Evident signs of Bullish rejection have been manifested around this price zone.

Moreover, recent ascending bottom has been established around 1.0870 which enhances the bullish side of the market in the short-term.

Short-term technical bullish outlook remains valid as long as bullish persistence is maintained above the recently-established ascending bottom around 1.0850-1.0870.

Bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1175 (61.8% Fibonacci Level) then 1.1315 (78.6% Fibonacci Level) where bearish rejection was anticipated.

Although the EUR/USD pair was expressing a bullish breakout above 1.1315 (78.6% Fibonacci Level), negative divergence as well as recent bearish rejection were being expressed on the H4 chart.

Moreover, after such a quick bullish movement, the EURUSD pair looks oversold. This suggests a probable bearish reversal around the current Price Zone (1.1270-1.1315) to be watched by Intraday traders.

That's why, Bearish breakout below 1.1250 (double-top neckline) is needed to confirm the depicted reversal pattern to enhance further bearish decline towards 1.1150.

Trade recommendations :

Any bullish pullback towards the price Zone around 1.1270 ( backside of the broken trend) should be considered as a valid SELL Signal.T/P levels to be located around 1.1175 then 1.1100 while S/L to be located above 1.1390.

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

Swiss Producer And Import Prices Fall Most Since 2016

Trading 15 juin 2020 Commentaire »

Switzerland's producer and import prices declined at the fastest pace in over four years in May, the Federal Statistical Office reported Monday.

Producer and import prices fell 4.5 percent year-on-year in May, following a 4.0 percent decline in April.

This was the lowest decline since March 2016, when it was 4.7 percent.

The producer price index fell 2.4 percent annually in May and import prices dropped 8.0 percent.

On a monthly basis, producer and import prices declined 0.5 percent in May, following a 1.3 percent fall in the previous month. Producer prices dropped 0.4 percent and import prices decreased 0.8 percent.

The latest decline was due to lower prices for pharmaceutical and chemical products as well as for petroleum products, the agency said.


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UK House Prices Rise As Covid-19 Restrictions Ease

Trading 15 juin 2020 Commentaire »

UK house prices increased in June as coronavirus containment measures were eased, data from property website Rightmove showed Monday.

Average asking price of property coming to market in England increased 1.9 percent in June compared to March before the housing market was put on hold.

On a yearly basis, house prices advanced 2.9 percent in June after rising 3.5 percent in March.

Releasing flood of pent-up demand, 40,000 new sales were agreed since market re-opened on May 13.

Data showed that number of sales agreed recovered, to a daily rate of decline to just 3 percent from a year ago.

There are no signs of panic selling or even a price dip, Rightmove director Miles Shipside said. Buyers may now be trying to exchange quickly, as there are signs of high pent-up demand and upwards price pressure, rather than downwards.

Shipside noted that figures at present show an activity boosting and price under-pinning dynamic between supply and demand, driven by low mortgage rates and pent-up housing needs.


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Slovakia Inflation Eases In May

Trading 15 juin 2020 Commentaire »

Slovakia's consumer price inflation eased in May, figures from the Statistical Office of the Slovak Republic showed on Monday.

The consumer price index rose 2.0 percent year-on-year in May, slower than 2.1 percent increase in April. Economists had expected a 1.8 percent rise.

Prices for education grew 5.0 percent annually in May. Prices for food and non-alcoholic beverages and miscellaneous goods and services increased by 4.8 percent and 3.8 percent, respectively.

On a month-on-month basis, consumer prices rose 0.3 percent in May, after remaining unchanged in the previous month.

The core CPI rose 2.0 percent annually in May and the index increased 0.3 percent from the previous month.

In May, the consumer price index calculation was significantly affected by the measures adopted in connection with the COVID-19 crisis and the cessation of field surveys, the agency said.


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India Wholesale Prices Fall In May

Trading 15 juin 2020 Commentaire »

India's wholesale prices declined in May, data from the Ministry of Commerce & Industry showed on Monday.

The wholesale price index dropped 3.21 percent year-on-year in May, after a 0.42 percent increase in March. Economists had expected a 1.05 percent fall.

The figures of May is compared with the final figures of March due to limited information available for the month of April.

The primary articles price index declined 2.92 percent annually in May, reversing a 2.16 percent rise in the previous month.

Food price inflation increased to 1.13 percent in May, while prices for non-food articles declined 3.53 percent.

Fuel and power prices decreased 19.83 percent in May, following a 2.93 percent fall in the prior month.

Prices of manufactured products dropped 0.42 percent after 0.25 percent rise in the previous month.

On a monthly basis, the wholesale prices fell 2.24 percent in May.


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