India GDP Falls At Record Pace Due To Covid-19 Pandemic

Trading 31 août 2020 Commentaire »

India's economy contracted at a record rate in the April to June quarter as the lockdown restrictions imposed to battle the coronavirus pandemic hurt consumer spending and investments, preliminary data from the statistics ministry showed on Monday.

Gross domestic product decreased 23.9 percent year-on-year after a 3.1 percent increase in the January to March quarter. Economists had forecast an 18.3 percent decline.

The fall was the biggest since quarterly GDP data collection began in the 1990s.

In the same quarter of 2019, the economy had expanded 5.2 percent.

Manufacturing contracted a massive 39.3 percent in the April to June quarter and construction shrank 50.3 percent. Consumption decreased around 27 percent and investment slumped nearly 47 percent.

Government spending increased relatively modestly as the government announced several stimulus measures to support the battered economy.

While the April to June quarter is likely marked the bottom, economists expect any rebound in the economy, following the relaxation of the lockdown restrictions, to be slow over the coming quarters.

Recent purchasing managers' survey results failed to give any evidence of a strong recovery. Official data released on Thursday showed that core infrastructure output tumbled nearly 10 percent year-on-year in July.

Meanwhile, there is no sign of the pandemic abating. India's daily number of Covid-19 infections on Sunday was the highest for any country in the world.

"The underwhelming fiscal response to the crisis will guarantee a legacy of higher unemployment, firm failures and an impaired banking sector that will weigh heavily on investment and consumption," Capital Economics economist Shilan Shah said.

Capital Economics expect the country's real GDP to be 10 percent below its pre-virus trend at the end of 2022. "The dire economic outlook means that, despite rising concerns over inflation,?the RBI?will continue its easing cycle in the coming months," Shah said.

The firm forecast a further 50 basis points of interest rate cuts in this cycle, which would take the repo rate down to a new record low of 3.50 percent. Shah said the RBI will likely keep policy looser for longer than investors are pricing in.


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

Analytics and trading signals for beginners. How to trade EUR/USD on September 1? Getting ready for Tuesday session

Trading 31 août 2020 Commentaire »

Hourly chart of the EUR/USD pair

analytics5f4d623890f73.jpg

The EUR/USD pair resumed its upward movement on Monday, August 31, without any noticeable correction after a fairly strong growth on Thursday and Friday. The MACD indicator turned up, but it turned back when the upward movement was almost over. This happens when the indicator turns too far from the zero mark. Thus, a formal buy signal had formed today, but it was extremely inconvenient and impractical to work it out, especially for novice traders. Moreover, there are still no patterns or graphical figures that identify the current trend as an upward trend and support it. That is, in fact, we have an upward movement, but this movement is not supported by a trend line or channel, which again complicates the trading process. By the end of the trading day, the euro/dollar pair rose to the 1.1967 level, which is the previous local high. Both price peaks are connected by a red horizontal line and now form a resistance line. Formally, we can build an upward trend line through the lows of August 27 and 31, but in this case we will get a trend line that is excessively directed up. The first noticeable correction will lead to the fact that the quotes will settle below such a trend line, which may not mean the end of the upward movement. In general, the technical picture is now ambiguous and complex.

There were almost no macroeconomic events on Monday. As we wrote in this morning's article, market participants were not interested in consumer price indices in Spain, Italy and Germany, as well as Italian GDP for the second quarter. Although inflation in Germany was below forecasts, as well as GDP in Italy, nevertheless, the European currency became more expensive during the day. When it would be much more logical to see a correction. But what can we do if the demand for the US dollar remains almost zero...

September 1, Tuesday, will be more interesting in terms of macroeconomic statistics. First, the European Union will publish inflation for August (preliminary value). Second, the European Union will publish the unemployment rate for July. Third, the US will release a fairly important index of business activity in the manufacturing sector ISM. We believe that traders will not pay much attention to the inflation data, since this is only a preliminary value, and the inflation indicator itself is not important at this time. The unemployment rate will only attract attention if it is radically different from the forecast(8%). Therefore, we recommend paying attention to the ISM index, which may significantly decrease compared to the July value.

Possible scenarios for September 1:

1) Novice traders are not recommended to buy the pair at this time, since there are currently no new patterns that support the upward movement. Thus, to buy the pair, you need to wait for a trend line to form as well as the corresponding buy signals from the MACD. Even overcoming the 1.1967 level does not guarantee that the upward movement will continue, but in this case, novice traders, if there is a signal to buy from the MACD, can still try to open longs while aiming for 1.2054 (to be clarified in the morning). The problem is that the MACD indicator should be sufficiently discharged and also fall to the zero level area to form a good buy signal. And at the same time, a rebound from the 1.1967 level will mean the possible end of the upward movement.

2) We also do not recommend considering sales right now, because there are currently no patterns that support the downward movement either. Theoretically, a rebound from the 1.1967 level can trigger a downward movement, but you can not be completely certain about this. Thus, we recommend that novice traders behave very carefully in the next few days.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

Germany's Consumer Prices Remain Flat In August

Trading 31 août 2020 Commentaire »

Germany's consumer prices remained flat in August, preliminary data from Destatis revealed Monday.

The consumer price index was unchanged from last year, following a 0.1 percent drop in July. Economists had forecast consumer prices to climb 0.1 percent.

On a monthly basis, consumer prices fell 0.1 percent, which was slightly slower than the 0.2 percent drop economists' had forecast.

The EU measure, the harmonized index of consumer prices dropped 0.1 percent annually in August, confounding expectations for an increase of 0.1 percent. The index had remained flat in July.

Month-on-month, the HICP slid 0.2 percent, in line with economists' expectations.

The negative base effect from low energy prices is keeping headline inflation low but there is more: the VAT cut of July is most visible in prices for food and clothing, Carsten Brzeski, an ING economist said.

Today's German inflation data suggest that for the time being the deflationary threat is clearly more pressing than any inflationary one, the economist added.


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

Loonie Little Changed After Canada Building Permits

Trading 31 août 2020 Commentaire »

At 8:30 am ET Monday, Canada building permits for July have been released. After the data, the loonie changed little against its major counterparts.

The loonie was trading at 81.09 against the yen, 0.9614 against the aussie, 1.5590 against the euro and 1.3066 against the greenback around 8:35 am ET.


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

Loonie Mixed Ahead Of Canada Building Permits

Trading 31 août 2020 Commentaire »

Canada building permits for July are due at 8:30 am ET Monday. The loonie traded mixed against its major counterparts ahead of the data. While the loonie fell against the euro, it held steady against the rest of major rivals.

The loonie was worth 81.06 against the yen, 0.9619 against the aussie, 1.5601 against the euro and 1.3067 against the greenback as of 8:25 am ET.


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

*India April-June GDP Falls Record 23.9% Y/Y Vs. +3.1% In Jan-Mar, Consensus -18.3%

Trading 31 août 2020 Commentaire »

India April-June GDP Falls Record 23.9% Y/Y Vs. +3.1% In Jan-Mar, Consensus -18.3%


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

*Germany Aug Flash HICP Falls 0.2% On Month, Consensus -0.2%

Trading 31 août 2020 Commentaire »

Germany Aug Flash HICP Falls 0.2% On Month, Consensus -0.2%


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

Euro Little Changed After German CPI

Trading 31 août 2020 Commentaire »

German preliminary consumer inflation for August has been released at 8:00 am ET Monday. The euro changed little against its major counterparts after the data.

The euro was trading at 126.49 against the yen, 1.0771 against the franc, 0.8959 against the pound and 1.1939 against the greenback around 8:02 am ET.


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

*Germany Aug Flash HICP Drops 0.1% On Year, Consensus +0.1%

Trading 31 août 2020 Commentaire »

Germany Aug Flash HICP Drops 0.1% On Year, Consensus +0.1%


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

*Germany Aug Flash Consumer Prices Flat On Year Vs. -0.1% In Jul, Consensus +0.1%

Trading 31 août 2020 Commentaire »

Germany Aug Flash Consumer Prices Flat On Year Vs. -0.1% In Jul, Consensus +0.1%


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