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Trump attacks Fed, UBS expects pound to riseUnfortunate week for oil buyers. Following the news about a possible increase in supply and weak demand growth in the future, as well as Morgan Stanley's forecasts about a 25-30% reduction in market prices. Another disappointing news. The agency’s World Energy Outlook (WEO), published that oil demand peaks within the next 10 years. Recall that this week Saudi Aramco gave the oil market 20 years. According to IEA analysts, the current growth in oil demand will last for 5 years maximum, and then we will see a significant slowdown. We are talking about long-term forecasts, so now oil may well ignore these estimates. But in general, the future of the oil market looks rather unsightly. As for yesterday’s oil growth, it was largely due to verbal interventions by the OPEC Secretary-General, who tried to smooth out the effect of the above-mentioned news. In particular, he said that in 2020 growth in oil demand could beat forecasts, oil supply from non-OPEC producers could decline sharply soon. Despite the growth of oil yesterday, taking into account current prices in the market, we continue to recommend selling the asset. Also, despite the strengthening over the last couple of weeks, we recommend selling the dollar. The further fate of the Fed rates is still in limbo, but the further decline will be a strong hit to the dollar. In this light, Trump's next attack on the Fed was quite remarkable. The US President accused the Central Bank and Powell of slowing down the economic development in the States. The Fed, unlike other leading central banks, did not want to divert rates into the negative zone, which harmed the US economy. Such information at a time of the impeachment procedure, Trump gives reasons for the sale of the dollar. Moreover, you can sell it against euro, pound or Japanese yen. Also, the Canadian dollar in the region of 1.33 seems to be a good candidate for buying USDCAD (we are talking about the sales of this pair). The British pound is another excellent candidate for purchases against the dollar. We have already noted that in conditions of an almost complete absence of risks of a “no-deal” exit, the current prices for the pound seem to us underestimated by at least 500-1000 points. According to the updated forecasts from UBS, our estimates are still very conservative. Since bank analysts see the pound paired with the dollar in the region of 1.54 over the next three years. Since we are interested in the time horizon in months, not years, the achievement of 1.40 with GBPUSD will completely satisfy us. Returning to the situation with the dollar, we note that yesterday's data on consumer inflation in the US as turned out to be rather neutral and did not change the existing situation in the foreign exchange market. Today we are waiting for GDP data in the Eurozone and Germany, as well as for retail sales in the UK. Besides, the attention of the markets will be riveted to the speech of Fed Chairman Jerome Powell to the US Congress.
Long
by Trade24Fx
Data helps the dollar, optimism in financial marketsIn our previous review, we noted that the publication of the ISM index of business activity in the US services sector will be the main event. The ISM index of business activity in the services sector reached 54.7 in October (analysts expected 53.5, before 52.6). As a result, the USD strengthened. “I think it’s a good time though to pause...and that’s what I am looking to do,” Barkin (non voter)told reporters following a speech to an economic outlook conference in Baltimore was another impulse. It seems that the majority of the Fed feels that way. According to the Chicago Mercantile Exchange, markets also expect a pause until September 2019, the probability that the rate will remain at the level of 1.50% -1.75% exceeds 50%. As for the USD, Tuesday turned out to be rich in bullish signals. Despite this and yesterday’s growth, we do believe that the potential for its further strengthening is limited. Therefore, we will continue to look for points for its sales across the entire spectrum of the foreign exchange market, both on the intraday basis and the medium term. China deal is likely to be signed in November so markets are optimistic about that. The confidence that by the end of this month we will see the first signed agreement is getting stronger, so safe-haven assets weaken and commodity markets grow. Take oil, for example. OPEC sees its oil market share shrinking, Forecasts are generally negative for oil prices - the Cartel expects a significant decrease in oil demand growth in the foreseeable future. However, oil strengthened yesterday at the end of the day - expectations of progress in trade negotiations overcame fears of a surplus in the oil market. So our recommendation to buy oil on the intraday basis remains relevant. As for the safe-haven assets, the downward pressure is increasing, and they are close to hitting the critical points, after that the further reduction in the price of gold and the Japanese yen is quite possible. On the other hand, their current prices look ideal for purchases. So today we will buy gold and the Japanese yen with small stops. Today, in terms of macroeconomic statistics, we are waiting for statistics from the Eurozone (a lot of business activity indices, as well as retail sales data) to come out.
by Trade24Fx
ORBEX: WTI, GOLD: China Wants US to Roll Back Sept's Tariffs!In today’s #marketinsights video recording, I talk about #crude #oil and #gold. Flows seem to have been affecting the two assets in different ways; potential oil production cuts were somewhat offset with #tradear narratives as China is asking the US to roll back September's tariffs, and gold slid lower on the back of a stronger dollar owed to positive #ISM data and weaker majors such as the #euro and #pound. From a technical perspective, #wti's correction seems exhausted, whereas #xauusd's slide could have either ended (or ending currently) or we might see another downside leg to complete minor 4 lower. Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
FX_IDC:XAUUSD
by Orbex
DXY, SPX: Hang on Fed & GeopoliticsIn today's #marketinsights video recording I analyse DXY and SXP! Equities look bullish and the US index bearish, from a technical perspective. On the (geo)-political front their prices are and could remain being affected by: - A somewhat dovish?! Fed - BoE and Brexit (BoJo visits EU today for talks!) - SA attack and expectations on reduced oil production - Weakening Chinese data - US-Sino tradewar optimism On the other hand, don't forget that policy-pessimism is going to matter most?! Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
OANDA:SPX500USD
by Orbex
UK, oil news and gold forecastsWhen leading economies stably show statistics worse than analysts' forecasts and signal a slowdown in economic development, Britain continues to surprise with industrial production and GDP outcome on Monday, then on Tuesday, the statistics on the labor market turned out to be better than forecasts. In particular, the unemployment rate went below the forecast, and the average salary, on the contrary, exceeded experts' expectations. As the British Parliament temporary is not working, Johnson is in charge. After a series of humiliating defeats in the Parliament, the Prime Minister is seriously preparing for negotiations with the EU and a new deal. Although nothing has been decided yet, we continue to recommend buying British pound with stops. At least for now when the fundamental background is that favourable. The dollar strengthening in the foreign exchange market this week, in our opinion, is an excellent opportunity for selling the dollar when the price is high. The reason - the Fed will lower the rate next Wednesday, and this will be a powerful signal for dollar sales. Citigroup analysts, meanwhile, are predicting a bright future for gold, + $ 2,000 an ounce. The argumentation of the new historical lows: the growing risks of the global recession, the easing of the monetary policy of the Fed and the zero interest rates of other central banks, geopolitical instability, as well as overheating of leading stock markets. In this light, we want to recall our basic recommendation to buy gold on the intraday basis. However, bears have temporarily are in charge, we do not see any serious changes in the fundamental background, which means that gold purchases remain relevant. Another favourite position is that oil sales are becoming more and more relevant every day. But this week we want to wait for the OPEC meeting outcome before offering to open short positions. The fact is that a change in the Minister of Oil of Saudi Arabia could lead to a temporary artificial increase in market prices. This will be due to the need to provide better conditions for the initial public offering of Aramco.
FX:XAUUSDLong
by Trade24Fx
The best deal of the second half of the yearToday we are writing about the best deal of the second half of 2019. While many believed that this is the pound purchases (this is potentially the best deal in the foreign exchange market, but not in the financial markets as a whole), but no, the best deal is natural gas purchases. Its current price looks extremely attractive for several reasons. let's start off with the fact that over the last 9 months, natural gas prices of international markets have fallen from $ 5 to $ 2 per MMBTU, that is, almost 2.5 times (!). There were a lot of reasons for, but the main ones were the sharp increase in gas production in the USA due to the shale revolution and the intensified struggle in the gas market for a share, where price became the main weapon. The unexpectedly warm winter, especially in the USA, as well as the trade war escalation, led to increased fears about the demand growth for natural gas. What is happening is very similar to what we observed in the oil market in 2014, when Saudi Arabia announced that it would increase production to increase its share in the oil market. As a result, oil prices for half a year fell by about 2.5 times. But after that, oil prices rose by 2.5 times. how the situation on the oil market was straightened out. - the collusion of a number of oil producers within the OPEC + framework and the artificial reduction of supply on the oil market. Could this happen on the gas market? The answer is unequivocal: yes. Moreover, it is much easier to do on the gas market, rather than on the oil market. If OPEC controls less than 40% of the market and therefore additional participants were needed such as Russia and a number of other countries, then the GECF gas cartel controls more than 50% of the market. And the top 5 countries in gas production hold a market share of over 65%. All you need is 5 countries to change the balance of power in the market. Recall, in order to organize an OPEC + agreement in the oil market, 25 (!) Countries were needed. However, such a deal in the gas market may not be needed. US production growth is rapidly falling (from 50% to 10%). And according to the Energy Information Administration (EIA) forecasts, in the first quarter of 2020 gas production will begin to decline. Natural gas today is the main source of energy generation: According to British Petroleum estimates, global energy demand will increase by a third by 2040. As a result, the growth in demand for natural gas will be about 50%. That is, you really should not worry about. A potential positive force majeure for the gas market could be the dollar devaluation. Whether it happens as a result of US currency interventions or would be associated with an easing monetary policy by the Fed, we do believe that there is a chance of a decline in the U.S. dollar value. And since gas prices are denominated in dollars, its fall will automatically mean an increase in gas prices. The minimum goals in case of correction development are growth by $ 2.7, which is equivalent to 35% excluding leverage (with a leverage of 1 to 10, which is about 350 (!)%). As for the medium-term goals, it is appropriate to expect the achievement of the $ 3.3 mark. Profitability, in this case, will be unrealistic 65%. Unrealistic because taking into account the leverage 1 to 10, this is equivalent to 650% of the profitability of the deal.
FX:NGASLong
by Trade24Fx
Crude remains in bearish territoryThe first potential bearish flag I analyzed has played out though with a delay, and since price has managed to reach the first target to the lower diagonal support. With overall negative sentiment around the trader war and demand for Oil, I will be expecting the price to breach the support for a move lower towards 50.58 price level zone. The zone has proven to be a strong support level, so I'll be expecting some bounce from there before the price to continue lower.
TVC:USOILShort
by DailyChartist
WTI turns bullishWith yesterday's weekly API inventories, oil turned bullish. Data showed that the inventories are lower, which leads to a heighten demand for oil. Thus the price jumped into positive territory, breaking our previous bearish scenario and the flag is no more. Current projection is for a rise in price of WTI towards the 59.66 price zone, where it may meet some resistance for a move down towards 52.79 zone. Alternatively, the price may extend its gains towards 61-62 price range. Current bias has changed towards bullish because the fundamentals has changed.
TVC:USOILLong
by DailyChartist
1
WTI (USOIL) Might Target $70 Amid Iran Tension & Supply Jitters!The 3 horizontal lines visible in the main weekly chart of WTI are concrete support and resistance levels taken from monthly TF. Currently the price is at 60.00 and there is a descending trendline preventing the price from climbing further. From a technical perspective, once this trendline breaks, the price on the monthly charts must close above 63.00 concrete resistance. This is just to add gain further confluence and confidence in our potential trade. Once the monthly candle closes above 63.00 we could wait for the price to retrace slightly before executing a LONG trade to target 70.00! On a fundamental perspective there are 2 factors in our favor. First one is the IRAN tensions with the US and now potentially U.K. US putting sanctions on iranian OIL is bullish for the WTI and the tensions is just further strengthening this aspect. Secondly, the storm in the gulf is limiting the drilling activities which is also bullish for the OIL. Lastly the the deal that is binding OPEC & NON-OPEC countries seem to be going okay so far as they all want the price of OIL to rise. One thing that is bearish for the WTI at the moment seems the ongoing tradewar which if no deal could be made, the demand for OIL would decrease! So it remains to be seen in the coming weeks how the situation develops. Shall there be a trade entry i will post in a new post.
TVC:USOILLong
by FX618Analysis
Contradictory forecasts for oil & the Bank of Canada decisionThe dollar we recommend to sell against the main currencies duo to reasons absence (we still see no reasons for the Dollar Index new highs ).With the exception of the Canadian dollar. Extremely weak data on the labor market in Canada, published on Friday, amid excellent statistics on NFP from the United States, together with today's meeting of the Bank of Canada, can create ideal conditions for the pair to grow. Tightening monetary policy followed by the Bank of Canada however the gradual economic slowdown multiplied by the Fed's intentions to lower the rate, provide serious prerequisites for changing the vector of monetary policy. Well, today the rate is unlikely to be lowered, but there is a chance for this. This will harm the Canadian dollar, so today we will buy USDCAD. with, at least, 200-300 points, and stops set below 1.3050. Against the rest of the "major" currencies, we will sell the dollar. It is primarily about the Japanese yen, as well as the euro and the pound. Do not forget about Testimony of Fed Chairman Powell in Congress, which is quite possibly accompanied by important statements for the dollar. Future of oil price, that is a good thing to think about, therefore analysts have divided into several groups with a different view of the situation. Some (for example, analysts at JP Morgan) say that OPEC + creates prerequisites for the redistribution of market shares: OPEC + countries essentially “give” some part of their market share to the US and other countries that are not participating in the agreement. So, the oil team from the United States receives carte blanche for further rapid development. As a result, the total supply in the oil market does not fall. At the end, when the OPEC + participants start to engage in their market share and decide to “unscrew the tap”, this will only lead to a decrease in oil prices. That is a new reality is currently being formed on the oil market, in which the fair oil price is not $ 100- $ 120, but $ 60- $ 70. And it is likely that in the foreseeable future, this ceiling will fall to $ 30- $ 40. However, there is an alternative point of view. For example, the Saudi Minister of Energy believes that the situation will evolve according to the classical theory of cycles, which means that the current cycle will soon reach a peak, then change to stagnation, and then come down. In Geopolitics Central, they recall the threat of a military conflict between the US and Iran, which could lead to Iran blocking the Strait of Hormuz. And this will provoke a strong shortage in the oil market and, as a consequence, sharp rise oil prices rise. We are of the opinion that was voiced by analysts J.P. Morgan. The world has changed and it needs to be accepted. The shale revolution (from the supply side and the transition to alternative energy sources from the demand side ) have radically changed the balance of power in the oil market. And the attempts to “measure it” by the out-of-date methods are largely doomed. So we continue to recommend oil sales. Our other trading recommendations are unchanged: we sell the Russian ruble, and for gold, we work without any special preferences - buy from hourly oversold zones and selling from overbought.
FX:USOILShort
by Trade24Fx
Results of the week, dollar, gold, ruble and oilLet’s summarize the previous week. It began with the G20 summit outcome announcement, namely, Trump and discussed possible resolutions to the trade war that's dragged on between the world's two largest economies. The OPEC extends production cuts for 9 months, The non-farm payroll (NFP) released surprisingly positive figures in its report. But to say that, clarity reigns in the financial markets we cannot. The US and China negotiations do not guarantee anything, Trump still institutes a dollar devaluation policy. Actually, watching the gold dynamics last week, it is easy to understand that the markets are not sure about anything. Daily spikes in gold price ( 30-40 dollars ) is a testament to that. Well, the maximum daily maximum increase over the past three years shows that nothing has been decided yet. As a result, many analysts continue to “bet” on the gold growth in the future. Considering the strongest uncertainty, we still adhere to neutrality in matters of gold trading. Today we tend to buy gold on the intraday basis - its current price seems too attractive. The OPEC influence is mitigated, but oil production in the United States continues to set new records, changing the layouts on the oil market and forming a new market reality. Our position on oil - look for points for its sales, we set positions with fairly rigid stops. We were pleasantly surprised by the United States Non-Farm Payrolls + 244K. beating market expectations of 160 thousand. The markets still believe in a rate cut, but after Friday, a few people bet on 0.5% rate cut, right away. Weak figures would be the final verdict to the dollar. Against the background of such statistics, the Central Bank has many options. So, We look forward to hearing the Jerome Paella. We are waiting for another major event Bank of Canada meeting results. In general, the markets do not expect any surprises, but comments with instructions on changing the vector of monetary policy are possible. So in pair with the Canadian dollar might be volatile on Wednesday Russia's Central Bank head Elvira Nabiullina said that Bank of Russia will reduce the rate by 0.5% The ruble naturally experienced weakness and declined in the foreign exchange market. We recommend its sales. We will continue to look for points for dollar sales. Gold price falling on Friday, we will use it as an opportunity for its purchases. We sell USDJPY. Medium-term pounds purchases look attractive. we will begin to build up a long-term position with EURUSD. In addition, we will sell the Russian ruble, as well as oil.
Long
by Trade24Fx
WTI: Newton's Third LawHi Guys, ANY ACTION LEAD TO A REACTION. The basic principles of Newton's Third Law applied to WTI following Khashoggi's assassination on Oct 2, 2018. Please also refer to the following post: For additional infos about WTI please refer to the related ideas linked at the end of this post. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
FX:USOIL
by cozzamara
WTI Crude Oil - Some infosHi Guys, allegations of Human Rights violations are, IMHO, playing an important strategic role for the dynamics of supply and demand and the management of oil price control. Saudi Arabia was placed under unprecedented scrutiny, and economic and political pressure from the international community because of this. A lot of European Countries have stopped the sale of arms to Saudi Arabia over the incident. Canada is still considering freezing its arms deal. U.S. lawmakers too are considering to take action against the crown prince for his role in the murder of journalist Jamal Khashoggi. Senator Lindsey Graham said in an interview on Jan 19 to Bloomberg :“Congress will send a very clear signal to the world and Saudi Arabia that we would not be doing business as usual. There’s strong bipartisan support not only to condemn the actions of Saudi, MBS, but actually do something about it.” The heir to Saudi Arabia’s monarchy has so far largely dodged any reprisals against himself, with President Donald Trump opting in November to impose sanctions against 17 lower-level Saudis implicated in the murder following global outrage. Critics in Congress have said that was only an initial step, with a bipartisan group proposing stronger penalties including suspending the sale of arms to the Riyadh government in a challenge to the Trump administration. The recovery period following the low in 2016 was stopped on Oct.2nd, 2018 by the assassination of Jamal Khashoggi. Such event triggered a bearish impulse that helped breakout the distrubutive channel (pink). The fall was supported at $42,30 where it found support 4 times in the past (1234 in red). From $42,30 price re-tested the lower trendline of the upper channel (pink) right when Saudia Arabia executed 37 people on terrorism charges. Below some screeshots providing infos: Thank you for your support and for sharing your ideas. Don't forget to put a like if you appreciate the post and to follow me if you want to receive notifications on new and updated ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities.
TVC:USOIL
by cozzamara
2
US record, OPEC decision, Australian dollar under threatOn Monday, the markets continued to try to incorporate with the prices the G20 summit results. What Trump declared to be the victory in a trade war but is actually not. So, yesterday we observed the appearance of inefficiencies in financial markets that could be used to make money. In particular, we are talking about the gold falls into the bottoms of 1380-s, which can and should be used for asset purchases and earnings, as well as the growth of the Australian dollar above 0.70, which should be used to sell AUDUSD. About the Australian dollar. Today, the Reserve Bank of Australia cut the rate for the second time in a row (this time from 1.25% to 1%). We believe that this is quite a serious signal to sell AUDUSD. Ideal prices for opening short sales are in the area of 0.7000-0.7020. In this case, stops can be placed above 0.7040, and profits - in the area of 0.6870. Yesterday could be decisive for the dynamics of oil over the next few months. But the outcome of the OPEC meeting was too obvious. The cartel decided to extend the OPEC + No. 2 contract for 9 months until March 2020. Current progress in a trade war is a positive sign for oil. Well, all points are in favor of asset purchases. However, there might be a trap. Given the current consensus, oil growth will need something more than just an extension. For example, an increase in the volume of reductions or some additional conditions that narrow the supply on the oil market. But these conditions remained unchanged. In addition, a potential uncertainty factor is a participation in deal countries outside the cartel. Today, Russia and other countries must agree on their decision and position. At best, they will agree with the OPEC deal, which is already taken into account in the price, at worst they can announce their particular position, which can be an unpleasant surprise for buyers. Total, while oil is below $ 60 (WTI brand), we recommend selling it. We put small stops in this case (above $ 60.40), but profits can be set fairly solid, up to the bottom $ 50. Meanwhile, the United States recorded a new record: 121 months of continuous economic growth. This is a record in the entire history since 1854. Given the potential easing of monetary policy by the Fed, the United States has good chances to extend this series, as evidenced by yesterday's data on US business activity. The ISM index in the non-production sector in June was 51.7 points (forecast: 51.0), which testifies in favor of the growth of economic activity in the country. What cannot be said about the Eurozone, where the PMI index in the manufacturing sector in June was significantly lower than 50 (47.6, with the forecast of 47.8) and was the lowest since 2013. Unpleasantly surprised China, whose PMI in the manufacturing sector was also below 50 (49.4). Our trading preferences for today are as follows: we will continue to look for convenient sales opportunities for the dollar and the Russian ruble. In addition, we will continue to sell AUDUSD. We are selling oil today, but we are closely following the outcome of the OPEC meeting. As for gold, we will continue to work without obvious preferences, selling from overbought and buying from oversold.
FX:USOILShort
by Trade24Fx
G20 meeting results, OPEC & tough weekThe G20 meeting was the main even however the markets were not so much interested in the summit as in one particular meeting Trump - Xi. At stake was the fate of trade negotiations between countries. Markets have been waiting for the end of the trade war. As we expected the leaders Trump and Xi agreed to resume trade negotiations on Saturday, June 29. The main surprise was the decision to allow US companies to sell Huawei products. Against the background, safe haven assets have naturally undergone sales. However, returning to the negotiating table is not the end of the trade war. So today we will and buy gold, as well as the yen. For instance, sell USDJPY around $108.50 mark, and buy gold around $1385 mark. While the markets are preparing for the OPEC meeting and the extension of OPEC + №2 (95% of the polled experts believe that the contract will be extended), and even its expansion, the US continues to take advantage of the moment and increase oil production. Oil production in the United States in April exceeded 12 million barrels per day, thus setting a new record. And the number of active oil installations in the United States has increased again. This time, according to Baker Hughes, it has increased by 4 pieces. OPEC members will meet later on Monday. On Tuesday, the Reserve Bank of Australia may reduce the rate (in this light, we recommend paying attention to AUDUSD sales). In addition, data on business activity in the US will be published and data on the NFP will end up the week. Our trading preferences this week are as follows: we will look for points for sales of the dollar and the Russian ruble. Sell USDJPY, in addition from now on we will build up a short position in the AUDUSD pair. Oil is still paused until the OPEC meeting results announcement. As for gold, this week we will work without obvious preferences, selling from overbought and buying from overselling areas.
Short
by Trade24Fx