Gold Futures Rise For 3rd Session, Settle At 1-month High

Trading 25 mar 2019 Commentaire »

Gold futures ended notably higher on Monday, extending gains to a third successive session, as traders continued to seek the safe haven asset amid lingering worries about global economic slowdown.

The dollar's weakness, risks of a no-deal Brexit and uncertainty about U.S.-China trade talks also contributed to the increased interest in the commodity.

The dollar, which gained significant ground on Friday, faltered today, and was still down in negative territory despite recovering some lost ground as the day progressed. It was last seen hovering around 96.50, down 0.13% from previous close.

Gold futures for April ended up $10.30, or 0.8%, at $1,322.60 an ounce, the highest settlement since February 26, 2019.

On Friday, gold futures for April ended up $5.00, or 0.4%, at $1,312.30 an ounce.

Silver futures for May ended up $0.160, at $15.567 an ounce, while Copper futures for May settled at $2.8565, up $0.0140 from previous close.

With recent weak data from the euro zone and the U.S. raising concerns about global economic slowdown, and fears of U.S. going into a recession rising following the decline of 10-year treasury yields to below the three-month rate for the first time since 2007, investors appear keen on moving away from riskier assets.

The U.S. economy has fared relatively well amid a global economic slowdown. However, the Federal Reserve Chairman Jerome Powell has warned about the negative impact slowing growth in Europe and China will have on the U.S.


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March 25, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 25 mar 2019 Commentaire »

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On January 10th, the market initiated the depicted bearish channel around 1.1570.

The bearish channel's upper limit managed to push price towards 1.1290 then 1.1235 before the EUR/USD pair could come again to meet the channel's upper limit around 1.1420.

Shortly after, the recent bearish movement was demonstrated towards 1.1175 (channel's lower limit) where significant bullish recovery was demonstrated on March 7th.

Bullish persistence above 1.1270 enhanced further bullish advancement towards 1.1290-1.1315 (the Highlighted-Zone) which failed to provide adequate bearish pressure.

Last week, a bullish breakout attempt was executed above 1.1327 (the upper limit of the current demand zone). This enhanced further bullish movement towards 1.1450 demonstrating a false bullish breakout above the upper limit of the depicted movement channel.

On the other hand, On Thursday, significant bearish pressure was demonstrated around 1.1380 leading to the current bearish decline towards 1.1290.

The short term outlook for EURUSD pair remains bearish.

Quick bearish breakout below 1.1280 is mandatory to pursue towards the next bearish target around 1.1235 and 1.1180.

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Bitcoin analysis for March 25, 2019

Trading 25 mar 2019 Commentaire »

BTC has been trading downwards. The price tested the level of $3.935. More downside is expected.

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According to the H4 time – frame, there is the bearish divergence in the progress, which is sign that buying looks risky. Support levels are seen at the price of $3.882 and at the price of $3.861. Key resistance is set at the price of $4.048. The BTC is still in the long -term downward trend.

Trading recommendation: We are bearish on the BTC from $3.944 and targets are set at the price of $3.882 and at the price of $3.861. Protective stop is placed at $4.049.

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Analysis of Gold for March 25, 2019

Trading 25 mar 2019 Commentaire »

Gold has been trading upwards. The price tested the level of $1.322.36. We found strong bullish momentum.

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According to the H4 time – frame, there is the completed downward correction (expanded flat) in the background and the key support remains at the price of $1.280.00. Price is respecting the upward trendline and the Gold is heading towards the resistance at $1.345.75.

Trading recommendation: We are long on Gold from $1.320.00 and with target at $1.345.75. Protective stop is placed at $1.290.00.

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March 25, 2019 : GBP/USD demonstrating a Bullish Flag Pattern for Intraday traders.

Trading 25 mar 2019 Commentaire »
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On January 2nd, the market initiated the depicted uptrend line around 1.2380.

This uptrend line managed to push price towards 1.3200 before the GBP/USD pair came to meet the uptrend again around 1.2775 on February 14.

Another bullish wave was demonstrated towards 1.3350 before the bearish pullback brought the pair towards the uptrend again on March 11.

A weekly bearish gap pushed the pair slightly below the trend line (almost reaching 1.2960) before the bullish breakout above short-term bearish channel was achieved on March 11.

Bullish persistence above 1.3060 allowed the GBPUSD pair to pursue the bullish momentum towards 1.3130, 1.3200 then 1.3360 where the recent bearish pullback was initiated.

Bullish persistence above 1.3250 ( 50% Fibonacci expansion level ) was needed for confirmation of a bullish Flag pattern. However, significant bearish pressure was demonstrated below 1.3250.

Hence, the short term outlook turned to become bearish towards 1.3120 - 1.3100 where the depicted uptrend line failed to provide any immediate bullish support.

Bearish breakout below 1.3100 (23.6% Fibonacci level) allowed quick bearish decline towards 1.3000 where the current bullish momentum that brought the pair back above 1.3200 was initiated (False bearish breakout).

Today, The price level around 1.3250 ( 50% Fibonacci expansion level) stands as an Intraday resistance/supply level that needs to be broken to the upside for confirmation of the depicted flag pattern.

On the other hand, bearish rejection around 1.3250 may initiate bearish decline towards 1.3180 then 1.3100 thus remainin within the current consoliation range.

Trade Recommendations:

Intraday traders should wait for a bullish breakout above (1.3250) on H1 chart. Bullish projection target levels to be located around 1.3320 then 1.3420.

SL to be placed above 1.3180.

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Pound Climbs Amid Reports Of Another Vote On Brexit Deal

Trading 25 mar 2019 Commentaire »

The pound strengthened against its major counterparts in the European session on Monday, following media reports that U.K. Prime Minister Theresa May would hold a third meaningful vote on her Brexit deal tomorrow.

Over the weekend, the PM had offer her resignation to pass the deal.

Tory MPs are openly plotting to oust May, urging to set out a clear timetable for her departure, to secure their support for the withdrawal agreement.

If the deal is defeated, the U.K. should decide on next steps or consider a no-deal Brexit by April 12.

The currency dropped against its major counterparts in the Asian session, as investors weighed the risk of Britain leaving the European Union without a deal.

The pound climbed to a 5-day high of 1.3246 against the greenback, from a low of 1.3160 hit at 3:30 am ET. The pound is seen finding resistance around the 1.34 region.

Following a decline to 1.3081 against the franc at 6:15 am ET, the pound reversed direction and spiked up to a 5-day peak of 1.3150. If the pound strengthens further, 1.33 is possibly seen as its next resistance level.

The pound firmed to a 4-day high of 145.80 against the yen, after declining to 144.67 at 9:00 pm ET. The pound is poised to find resistance around the 147.00 level.

The U.K. currency bounced off to 0.8547 against the euro, from a low of 0.8599 touched at 6:15 am ET. Next key resistance for the pound is seen around the 0.84 level.

Survey data from the Munich-based Ifo Institute showed that German business confidence index rose to 99.6, while economists' had expected the reading to remain unchanged at February's score of 98.5.

The index rose for the first time since August 2018.


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Citigroup: What are the prospects for oil in 2019?

Trading 25 mar 2019 Commentaire »

Today, Citigroup investment bank analysts have released updated forecasts regarding the prospects for oil prices in the current year.

From the updated material, it follows that on average this year the barrel of oil of the Brent reference grade will be valued at $70. According to the results of the second quarter, Brent is expected to cost $69 per barrel, which is $9 more than the previous assumption.

Based on the forecast, the barrel will cost $74 in the third quarter and above the previous expectation by 11 dollars.

In Q4, the price is expected to decline to $72 and the forecast is $5 above the previous estimate.

According to the results of Q1 2020, Brent will be valued at $ 65 per barrel.

Explaining the upward revision of the forecast, the experts identified among the reasons for the further decline in oil supply from Iran, Nigeria, Algeria, and Venezuela, as well as the continuing reduction in stocks of raw materials in consuming countries. In Venezuela, where recently a large-scale blackout paralyzed the country's economy, the risks of a repeated power outage remain. In addition, the United States can tighten sanctions on oil exports from Iran.

As a result, the cost of futures for May on Brent crude oil sank by 0.18%, amounting to 68.92 dollars per barrel at around 10:25 London time.

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EUR: Reports on German business community improved sentiment

Trading 25 mar 2019 Commentaire »

The euro managed to strengthen its position in tandem with the US dollar after positive data on business sentiment in Germany, which began to gradually improve in March of this year after more than six months of deterioration.

According to the Ifo research institute, the German business sentiment index in March 2019 was 99.6 points against the February figure of 98.7 points. The data significantly exceeded the forecast of economists, who expected the index to be 98.3 points.

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The index was well supported by investors' expectations, while the business climate index for the manufacturing sector continued to decline. Ifo noted that the prospects for the production sphere in March were estimated to be more pessimistic.

Considering that the release of more important fundamental statistics is no longer provided today, traders are closely watching the speeches of representatives of the Federal Reserve System.

Charles Evans said that the Fed's interest rates may rise, fall or remain unchanged today. Hence, caution on the part of the Fed seems justified and the policy now comes down to risk management.

The head of the Federal Reserve Bank of Chicago also noted that the Fed's policy will depend on the data, as downside risks are now felt more than positive. Evans predicts GDP growth of 1.75% -2% in 2019 due to the fact that fundamental US macroeconomic indicators remain good.

An interview with Federal Reserve Bank of Philadelphia Patrick Harker also took place today, who said that the outlook for the US economy is still quite good, but the balance of risks is a bit biased in a negative way.

Harker predicts one rate hike in 2019 and another one in 2020. Let me remind you that in the last meeting of the committee, they said that they did not plan to raise interest rates this year. The representative of the Fed predicts that US GDP growth will slightly exceed 2% in 2019 and slow down in 2020.

As for the technical picture of the EUR/USD pair, it remained unchanged. The trading instrument keeps the intermediate level of 1.1295 from further falling, a breakthrough of which will increase the pressure on risky assets. At the same time, it will lead to the updating of last week's lows in the areas of 1.1270 and 1.1225. With an upward correction, the growth of the euro was already limited by the level of 1.1330. However, a repeated test may lead to a larger upward movement in the area of resistance 1.1355.

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German Business Confidence Rises For First Time In 7 Months

Trading 25 mar 2019 Commentaire »

Germany's business confidence strengthened in March, after weakening in the previous six months, as businesses were more optimistic regarding the future and the economy's resilience, results of a key survey showed on Monday.

The ifo business confidence index rose to 99.6 from a revised 98.7 in February, data from the Munich-based Ifo Institute revealed.

Economists had expected the reading to remain unchanged at February's original score of 98.5.

The ifo index rose for the first time since August 2018.

"The companies are somewhat more satisfied with their current business situation, and they are decidedly more optimistic regarding business in the coming six months," the ifo Institute President Clemens Fuest said.

"The German economy is showing resilience."

The expectations measure of the survey climbed to 95.6 from 93.8 in February. Economists had forecast a score of 94.

The current assessment index edged up to 103.8 from 103.4 in February. Economists had expected the index to ease to 102.9.

Meanwhile, the survey showed that the German manufacturing was not yet out of the woods, suggesting that the activity in the automotive sector is yet to gain momentum.

The factory sector confidence weakened again and expectations were dull, falling to its weakest level since November 2012.

In contrast, the morale in the services sector improved markedly, thanks mainly to more optimistic expectations that were boosted by a more positive assessment of the already favorable business situation.

The assessment of the current situation was the strongest since May 2018 in the trade sector. Consequently, business expectations improved.

Confidence rebounded in the construction sector in March, due to a clearly improved current business situation, and the outlook was largely unchanged.

The upbeat Ifo survey results came after a run of weak data for the biggest euro area economy in the past few days.

The IHS Markit purchasing managers' survey results showed on Friday that the German private sector grew at its slowest pace in nearly six years, led by a sharp decline in manufacturing. A slump in new export orders led the sharp contraction in manufacturing order books. Delayed decision-making among clients due to uncertainty, as well as weaker demand in the automotive sector contributed to the fall in demand.

Earlier in the month, a panel of economic advisers to the German government known as the "wise men" slashed the growth projection for this year to 0.8 percent from 1.5 percent predicted in November. However, a recession is unlikely, the panel said.

The Ifo Institute also trimmed its German growth projection for this year to 0.6 percent from 1.1 percent. The think tank cited the troubles in the industrial sector and the weakening demand for German exports as reasons for the downgrade.

However, the outlook for next year was raised to 1.8 percent from 1.6 percent as Ifo expects the production difficulties to be gradually overcome and private consumption to remain robust.

The Bundesbank said in its monthly report that the German economy is unlikely to rebound in the first quarter as the manufacturing slowdown continued.


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Yen returns to the game

Trading 25 mar 2019 Commentaire »

In the background of trade wars and the slowdown of the global economy, there is an increased risk of the American recession in the market. It concerns the development of a correction in global stock indices and rumors about the resignation of Theresa May from the post of British Prime Minister, which heightened the demand for safe-haven assets. Currencies such as the Japanese yen, gold, and the Swiss franc feel like a fish in the water amid a sharp rise in volatility and a deterioration in the global risk appetite. But just a week ago, the positions of these assets seemed very fragile.

Dynamics of volatility

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In 2019, the currency of the Land of the Rising Sun has already managed both to amuse and upset its fans. The flash accident allowed her to execute annual targets within a few minutes, but the following implementation of the bearish forecasts for the USD/JPY pair had to be postponed. The de-escalation of the US-Chinese trade conflict, as well as the change in the Fed's worldview, allowed the "bulls" on the analyzed pair to return its quotes to maximum levels from December 20. Meanwhile, stock indices were rapidly recovering, the cost of borrowing was falling, and interest in developing countries' monetary units and carry trade operations grew by leaps and bounds. Under such conditions, funding currencies fall into disgrace and the yen is no exception.

By the end of March, investors began to suspect that both the Fed and Donald Trump are going too far. The US president claims that the duties on $250 billion Chinese imports will remain in force after the conclusion of an agreement with China but Beijing is making concessions in order to cancel them. The inconsistency of interests can be a serious obstacle to the contract signing. At the same time, the yen is likely to benefit more from the escalation of the conflict than in 2018. Last year, all the cream went to the US dollar as the strength of the US economy allowed investors to direct capital to the New World. In 2019, the US is slowing down and the inversion of the yield curve signals growing recession risks. As a result, just as the dollar took the status of a safe-haven from the yen and gold last year, they can return it in the present.

The rhetoric of the Fed is becoming more and more "dovish". If the Central Bank is confident of a further slowdown in GDP and is doing everything possible to avoid a recession then the option of lowering the federal funds rate should not be off the table. The derivatives market estimates the chances of such an outcome in 2019 to be more than 50%, which is a strong argument in favor of completing the cycle of normalizing monetary policy and sales of the US dollar.

Considering the next stage of trade negotiations between Washington and Beijing, the economic calendar saturated for the United States (including the release of fourth-quarter GDP data and the exacerbation of the political crisis in Britain), these allow the yen to claim the title as the most interesting currency in the last week of March.

Technically, the transformation of the Shark pattern is continuing at 5-0 on the daily chart of the USD/JPY pair. A break of support at 109.65 (50% of the CD wave) will increase the risks of continuing the pair's downward rally.

USD / JPY daily graph

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