Loonie Falls After Canada Inflation Data

Trading 17 nov 2017 Commentaire »

The Canadian dollar weakened against its major rivals in the European session on Friday, after a data showed that the nation's consumer price inflation was unchanged from last month in October.

Data from Statistics Canada showed that the CPI rose 0.2 percent on a seasonally adjusted monthly basis, compared to forecasts for a 0.1 percent rise.

The index was unchanged from last month.

Core inflation, excluding food and energy, ticked up 0.2 percent on month in seasonally adjusted terms. The index was flat in September.

Meanwhile, Crude oil futures rose as the U.S. dollar weakened on political upheaval related to the Trump Administration.

Reports say investigators are demanding information from the Trump campaign for documents and emails related to Russia, a potential hurdle to the president's pro-growth economic agenda that includes major tax reforms.

Crude for January delivery rose $0.66 to $56.01 per barrel.

The loonie showed mixed performance in the Asian session. While the currency rose against the greenback and the aussie, it fell against the euro and the yen.

The loonie retreated to 0.9649 against the aussie, after having advanced to a 1-1/2-year high of 0.9612 at 6:30 am ET. Continuation of the loonie's downtrend may see it challenging support around the 0.98 region.

Data from the Australian Bureau of Statistics showed that Australia new motor vehicle sales were roughly flat in October, coming in at 98,922. That follows the 0.5 percent decline in September.

The loonie weakened to a 10-day low of 1.2813 against the greenback, off its early 2-day high of 1.2714. Further weakness may take the loonie to a support around the 1.30 mark.

Reversing from an early high of 88.71 against the yen, the loonie dropped to more than a 3-week low of 87.92. The next possible support for the loonie is seen around the 86.00 level.

The loonie fell to a 2-day low of 1.5099 against the euro from its early high of 1.5007. The loonie is seen finding support around the 1.52 mark.

Figures from the European Central Bank showed that the euro area current account surplus rose to a record high in September.

The seasonally adjusted current account surplus grew to EUR 37.8 billion in September from EUR 34.5 billion in August.


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U.S. Housing Starts Jump 13.7% In October, Much More Than Expected

Trading 17 nov 2017 Commentaire »

New residential construction in the U.S. jumped by much more than expected in the month of October, according to a report released by the Commerce Department on Friday.

The report said housing starts spiked by 13.7 percent to an annual rate of 1.290 million in October from a revised 1.135 million in September.

Economists had expected housing starts to climb to an annual rate of 1.185 million from the 1.127 million originally reported for the previous month.

Despite the significant monthly increase, the Commerce Department said housing starts in October were down by 2.9 percent compared to the same month a year ago.

The bigger than expected monthly increase in housing starts was partly due to a jump in multi-family starts, which soared by 36.8 percent to a rate of 413,000. Single-family starts also shot up by 5.3 percent to a rate of 877,000.

The Commerce Department said building permits, an indicator of future housing demand, also surged up by 5.9 percent to a rate of 1.297 million in October from a revised 1.225 million in September.

Building permits had been expected to rise to a rate of 1.247 million from the 1.215 million originally reported for the previous month.

Multi-family permits jumped by 13.9 percent to a rate of 458,000, while single-family permits climbed by 1.9 percent to a rate of 839,000.


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U.S. Housing Starts Jump More Than Expected In October

Trading 17 nov 2017 Commentaire »

New residential construction in the U.S. jumped by much more than expected in the month of October, according to a report released by the Commerce Department on Friday.

The report said housing starts spiked by 13.7 percent to an annual rate of 1.290 million in October from a revised 1.135 million in September.

Economists had expected housing starts to climb to an annual rate of 1.185 million from the 1.127 million originally reported for the previous month.

Building permits, an indicator of future housing demand, also surged up by 5.9 percent to a rate of 1.297 million in October from a revised 1.225 million in September.


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Dollar Mixed After U.S. Housing Starts

Trading 17 nov 2017 Commentaire »

Following the release of the U.S. housing starts for October at 8.30 am ET Friday, the greenback traded mixed against its major rivals. While the currency rose against the euro, it changed little against the rest of major rivals. The greenback was trading at 1.1786 against the euro, 112.63 against the yen, 1.3190 against the pound and 0.9920 against the franc around 8:33 am ET.


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Loonie Falls After Canada CPI

Trading 17 nov 2017 Commentaire »

Following the release of Canada consumer prices for October at 8:30 am ET Friday, the loonie fell against its major rivals. The loonie was trading at 1.5052 against the euro, 88.19 against the yen, 0.9636 against the aussie and 1.2772 against the greenback around 8:35 am ET.


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*Canadian Consumer Price Index Was Up 0.2% In October

Trading 17 nov 2017 Commentaire »

Canadian Consumer Price Index Was Up 0.2% In October


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Technical analysis of USDX for November 17, 2017

Trading 17 nov 2017 Commentaire »

The Dollar index got rejected and reversed from our 95 target as expected. Price is in a bearish short-term trend making lower lows and lower highs. Price could soon start a bounce that could unfold into a bigger move as explained by our alternative wave scenarios yesterday.

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Blue lines - bearish channel

The Dollar index is trading below the 4-hour Ichimoku cloud. Trend is bearish as price remains inside the bearish channel. Price has stopped the decline at the 38% Fibonacci retracement. The Dollar index could make another new low towards the 93 level however bulls should be very cautious as there are bullish alternative wave scenarios we talked about yesterday that should not be ignored.

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On a weekly basis, the Dollar index is in a bearish trend. Price got rejected at the kijun-sen and the 38% Fibonacci retracement. Price remains now above the tenkan-sen. There are many chances the Dollar index bounces from current levels or a bit lower towards the weekly Kumo and the 61.8% Fibonacci retracement. So bears need to be cautious.

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Global macro overview for 17/11/2017

Trading 17 nov 2017 Commentaire »

The US Industrial Production jumped a solid 0.9% in October as factory activity recovered from the impact of Hurricanes Harvey and Irma (consensus: 0.5%). New light for the expected growth rate for the fourth quarter threw a massive jump in factory production (1.3% m/m, consensus: 0.6%) which was recorded at its seven-year high. Mining activity slipped 1.3% in October as Hurricane Nate caused a brief decline in oil and gas drilling. Production at utilities rose 2.0%.

Maintaining these trends will lead to an increase of the US economy by 3.5% annualized GDP growth. Over the past 12 months, manufacturers have added 156,000 jobs. That's the strongest annual growth since the middle of 2015.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market violated the golden trend line and it is currently trading below it at the level of 93.67. The nearest technical resistance is seen at the level of 94.07 and the nearest technical support is seen at the level of 93.39. It is worth to notice, that the sequence of the higher lowe had been terminated as the low at the level of 93.39 is lower than the previous low at 93.50.

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Global macro overview for 17/11/2017

Trading 17 nov 2017 Commentaire »

Interesting comments from Mario Draghi has hit the newswires.

Mario Draghi, the president of the ECB, points out in his speech at the Frankfurt European Banking Congress "Europe into a New Era – How to Seize the Opportunities" that a change in the pace of buying-in is signaling an inevitable end to European slack. In his opinion, the economies of the euro area countries are entering a robust recovery phase, which implies greater resistance to new asymmetric shocks. According to Draghi, the objective of stability in the medium term is a priority, which should be linked to maintaining a relatively loose monetary policy. The head of the ECB points out that a clear rebound in inflation expectations now allows the members of the Governing Council to look with optimism to extinguish the effects of price pressures in Eurozone.

The economic recovery in the Eurozone is continuing as the last series of data showed, but inflation developments remain subdued. The European economy is not yet at a point where the recovery of inflation can be self-sustained without ECB accommodative policy. A key motor of the recovery remains the very favorable financing conditions facing firms and households, which are in turn heavily contingent on ECB policy measures. An ample degree of monetary stimulus remains necessary for underlying inflation pressures to build up and support headline inflation over the medium term.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. Draghi's comments slightly raise the volatility of Euro currency pairs and crosses. At present EUR/USD returns to the level of 1.1800 and still trades above the golden trend line support. The key level to the upside is still the technical resistance zone between the levels of 1.1856 - 1.1880.

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Bitcoin analysis for November 17, 2017

Trading 17 nov 2017 Commentaire »

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The Bitcoin (BTC) has been trading upwards. As I expected, the price tested the level of $7.987. A major Japanese bitcoin exchange is looking to enter the Russian cryptocurrency market and is seeking a local partner. The exchange's CEO says "demand is huge" and urges Russia to look at Japan as a model for cryptocurrency regulations. Technical picture looks bullish.

Trading recommendations:

According to the 15M time frame, I found that price is trading above the pivot level ($7.621), which is sign that buyers are in control. I also found broken supply trendline, which is another sign of strength. My advice is to watch for potential buying opportunities. The upwaard targets are set at the price of $8.126 (pivot resistance 1) and at the price of $8.395 (pivot resistance 2, extreme target).

Support/Resistance

$7.621 – Pivot level

$8.131 – Pivot resistance 1

$8.395 – Pivot resistance 2

$7.357 – Pivot support 1

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