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Being too open means too harmful for BoESome insight on NFP and Fed meeting The Federal Reserve's meeting on Wednesday did not stirred much attention among investors, NFP is likely to face the same fate. After the natural disasters, it became clear that the US economic picture is distorted and blurred in the medium term, and the "data-dependence" rule in the Fed's policy will be temporarily unpopular.The market calmly shrugged when payrolls collapsed to -40K last month and is likely just as calmly react to the jump over 300K in October. Why did this happen? If you look at the structure of changes in the NFP in September, the greatest decrease in employment (-127K) was in Florida, where jobs with low qualifications (restaurant industry, construction) prevail. Labor in these sectors is considered to be elastic to external shocks, i.e. quickly recover. In turn, the calculation methods of the US Department of Labor exclude the influence of short-term factors, that’s why unemployment last month fell to 4.2%. Assuming that the labor market will compensate for declines in October and November, the significance of the NFP report will probably be lower than usual. Now regarding the Fed. Against the backdrop of a prosperous economy and coming change of the management of the regulator, the market responded to November meeting with quite modest enthusiasm. Here are the most interesting points in wording of the statement and Yellen's speech: According to the report, the inflation rate remains soft, but expectations for reaching the target level have not changed. The rate of economic growth has been changed from "moderate" to "solid", despite economic damage from hurricanes. The labor market continues to grow in the Fed opinion, which could be a sign of a high employment growth in October. Wage growth in the range of 0.2-0.3% is likely to provoke an upward spike in US dollar, as an indirect sign of improving inflationary dynamics. The probability of the rate increase in December, the third for this year, increased to 98%. In her speech, Yellen refrained from giving forecasts for 2018, as her powers expire in February. On Thursday, Trump will have to announce a new head of the Fed and the most likely candidate is Jeremy Powell, a proponent of gradualism in policy implementation. This also means an all-too-cautious rise in rates, sticking to data-dependence from inflation front in shaping the policy, i.e. the most dovish case of monetary policy. For the US currency, this is undoubtedly a bearish signal or at least will restrain the optimism associated with the economic recovery. The House of Representatives is expected to present today a bill on tax reform, containing tax breaks of 6 trillion dollars for 10 years for companies and individuals. Will this be a bullish or bearish signal for the dollar depends on whether simultaneous or gradual introduction of tax breaks will be chosen. The main US stock indices are in high spirits and closed the last session in positive territory. Forced action The Bank of England raised the interest rate to 0.5% as an emergency measure to protect purchasing power in response to accelerating inflation. The decision was widely expected by investors largely due to the fact that the bank "threw out the white flag" at the last meeting, deciding that a bad action is better than complete inaction. Accordingly, therefore, the pound collapsed on the decision, since the bank does not have to wait for a clear continuation of the aggressive actions and the fate of the pound goes to the power of political factors, in particular Brexit. In the absence of progress on the negotiations (it is virtually non-existent), the probability is high that the pound may once again go below the level of 1.30. Arthur Idiatulin
Short
by Tickmill
Fed is about to step into new "hawkish Era"ECB European stock markets and the euro stood still in anticipation of the results of ECB meeting, while in the fixed income market there is a slight rush and the price of bonds is moderately growing. The yield of US Treasuries also fell after a rise to a seven-month peak on speculation about a new Fed head, likely to be a candidate with a more aggressive policy than Yellen. The ECB plans to announce a reduction in the asset purchase program at today's meeting and any deviation from the most likely scenario (€ 30bn, 9 months) could potentially cause volatility in the markets, particularly affecting the European currency and German bonds. Draghi will probably choose the most cautious approach to the changes of emergency stimulus begun in 2014, as inflationary pressures remain weak and depend on external factors, such as oil prices and global growth in general. In September, prices rose by 1.5% and internal drivers of inflation still did not show themselves in the opinion of ECB officials. Obviously, Draghi does not want to repeat the mistakes of his predecessor Jean-Claude Trichet, who before his departure in 2011 raised rates only so that Draghi again cut them back. The central banks of other European regions, in particular Sweden and Norway, kept rates at the same level and Riksbank said that until mid-2018, monetary policy will remain untouched. The ECB will probably retain the option of reinvesting the income received from bonds that have reached maturity, which will be a stable feed on the supply side of debt market. The amount of debt purchases through this option can reach 15 billion euros in addition to the main program. Draghi probably also worries about the problem of appreciation of the euro against the background of recovery, therefore, as a deterrent in any changes, it may manifest itself today. The European currency is also being pressured by the struggle for independence of Catalonia. Separatists are given 48 hours to decide whether they will surrender to the authorities or will fight further. Who's next to take the helm of Fed? The director of the National Economic Council Gary Cohn seems to have dropped out from the short list of candidates, said sources familiar with the situation. Speculation before the announcement of the new Fed chief on November 3 will tickle investors nerves and keep trading unrest in US currency. Oil market Oil prices sank after the release of the EIA report, which showed an increase in commercial crude oil reserves by 856K barrels last week, while gasoline inventories declined by 5.47M barrels. This shows the process of restoring the balance of supply and demand in the US gasoline market and indicates a gradual slowdown in the pace of refinery. Saudi Arabia continues to support the markets with hints of extending the oil pact until the end of 2018, but investors are in no hurry to price in his comments. Arthur Idiatulin
Short
by Tickmill
GBPUSD Short - Pennant There is a Pennant forming on the GBPUSD 15min Chart. There was a strong Downtrend that started late last night. It has since consolidated and forming the pennant. This pennant is in the form of a right triangle. The top of the triangle being the 1.3155 resistance level. Fundamentally, it makes sense to be short this pair as well. USD has been strong with the talk of a tax plan that will be business friendly. However, there has been talk that that could fail. There is still hope. There is also talk that Yellen will not be brought back as FED chairman. USD will more than likely be bullish on an anybody but Yellen selection.
Short
by basquefxb1
The Democrats seems to be losing the gripTrump tax reform Predicting the failure of the Trump tax reform because of its scale and unclear double-side backwash, skeptics apparently understated the president's negotiation skills. Despite initial skepticism, the number of supporters of the tax cuts is growing rapidly among Republicans. On Monday, it was clear that the level of approval allows for rolling out of a budget scheme as early as in October, opening the way for reform through Congress without Democrats’ support. If the budget estimate is not adopted, the bill can be approved only if there are at least 60 votes in the Senate, where the Republicans hold 52-48 majority. Fiscal stimulus, which costs are estimated at 6 trillion dollars in 5 years, is aimed at boosting consumption and investment activity. According to Keynesian ideas, in conditions of excess monetary supply (and hence, low sensitivity of investments to interest rates), fiscal stimulus of the economy works most efficiently. If tax cuts sufficiently "cover" the poor layers of the population, whose propensity to consume is higher, then we can speak about a very noticeable stimulating effect on consumer demand. Speaking about investments, the higher the rationality of the agent's expectations, the lower the effectiveness of state intervention in the economy. Firms and the financial market are agents with fairly rational expectations, so the effect of fiscal shock on the investment component is very controversial. The relationship at which the markets are now trying to speculate on is the accelerated pace of rate normalization in case of successful tax reform. Progress in this direction means a bullish signal for the dollar in the medium term. Positive feedback from the Republicans on Monday caused a sharp collapse of gold to $1,290. As a non-interest asset, the cost of its possession is expressed in the cost of borrowing of the US currency, so its price reflects the expectation of markets for future rate increases. Another candidate for the head of the Fed was John Taylor known for his "Taylor rule" in increasing the money supply. Trump held an interview with him, however, who will take the place of Yellen is not yet clear. His appointment to the post promises much higher interest rates in the future than the long-term target of 2.75% assumed by the current management. EU data The ECB's divergence from the Fed in reducing money supply again became the subject of speculation after release of economic sentiment and inflation in the euro area. In September, the price increase remained at the same level of 1.5%, the core indicator increased to 1.3% from 1.1%. Nevertheless, the ZEW survey in Germany indicated a decrease in confidence in the future for firms, the key figure did not meet expectations (17.6 with a forecast of 20 points). The EURUSD fell by 0.25%. Arthur Idiatulin
Long
by Tickmill
The mystery of US economyStrong US GDP The data on US economy released on Tuesday was yet another proof that the Fed needs to raise rates in December. US GDP grew at a higher pace in the second quarter than expected. Inventories rose in August by 1 percent, reflecting the confidence of producers in improving consumer demand outlook. Curiously, GDP was resistant to a drop in inflationary pressures in the second quarter, but remained dependent on the labor market, which appeared to be the locomotive of growth this year. The Fed realizes that "safe mode” of inflation targeting after years of massive quantitative easing means lack of tools during next recession that's why there is an urgent need to trust current GDP figures and normalize rates to get federal funds rate back to work. In October, the Central Bank planned to start getting out of the debt holdings, normalizing the overloaded balance sheet and conducting a small hike of 0.25% in December, as the economy allows it to be done. The Fed lowered long-term rates to 2.75%, so if the dynamics are good, the arrival to normal rates is likely to be done by the end of next year - mid-2019. Congress approval of Trump's tax plan will mean that the government will take away part of the Fed's work to stimulate the economy on its own, and a high level of consumer sentiment and confidence will guarantee a push in consumer demand from tax breaks. The subject of concern is the scale of impact on the economy from two natural disasters - Hurricanes Harvey and Irma. In the next couple of months, inflation can easily exceed 2% due to the state help aimed at repairing affected regions. Sharply rising energy prices due to the shutdown of the refineries have made a significant contribution to the acceleration of inflation. There could be backlash after that and it is important that the Fed feel this moment and do not worsen the situation by policy tightening. Therefore, despite the accompanying wind in the form of growth in key indicators, the Fed may be cautious in December and smoothly translate market expectations into the February decision. Japan’s moderate growth The Japanese economy does not lag behind its leading world colleagues. CPI accelerated to 0.7% in August, industrial production is experiencing a rise due to the growth of foreign orders. Domestic consumption is still far from healthy shape - retail sales rose by only 1.7% in annual term. The dollar has slightly advanced against the yen but is not in a hurry yet, breaking through the July high of 113.00 allows hope for a further USDJPY rally providing that there is geopolitical calm. From levels above 113.0 it will be even easier for yen to bounce off on the news from North Korea. Eurozone inflation On Friday, data on inflation in the eurozone for September came out and unfortunately do not allow to build confident forecasts for the Draghi meeting in October. The target retreated by 0.1% to 1.5%, but consumer and investment sentiments suggest that the slowdown is temporary and that Draghi is about to cut back stimulus. EURUSD walks in aimless range, after going into a steep decline to 1.17 the pair quickly recovered from the hawkish Fed and returned to 1.18. Uncertainty is rising, but it's worth understanding that the ECB has to go a long way to tighten its policy while the Fed is almost halfway through, so the euro's room of growth is undoubtedly greater. Arthur Idiatulin
FX:XAUUSDLong
by Tickmill
FED makes U-turn setting ground for USD reversalThe Fed's sudden warning to prepare for December rate hike and the early release of Trump's tax plan seem to have urged the bears to call off their plans for greenback for a long time. The yield on US Treasuries posted a sharp jump in inflation expectations on Tuesday after the Fed chief literally hurried the markets to change expectations on monetary policy. For a long time, calling for caution, Janet Yellen suddenly stated that it may be “imprudent” to delay tightening of the policy waiting for inflation to reach the target level. It is curious that “imprudence” has been revealed about the same time as it became known about the imminent release of Trump's large-scale tax plan and the relative breakthrough of the bearish blockade in the oil market. Anticipating his first serious bill since the beginning of the presidency, Trump promised a “tremendous" tax cut for the middle class. This will lead to an increase in the money supply to the economy and that it will logically require higher rates to control inflation, which the Federal Reserve hastened to warn about. Such prospects really convince that the dollar is "ripe" for medium-term purchases, at least with the current stock of enthusiasm. What is interesting is that a month ago the chances for a rate hike were only 20%, while today they have grown to almost 80%. Such "volatility" in the position of the Fed makes it difficult for the long-term forecast of the dollar's movement. The US currency stopped the monthly drop, trading above 93.00 against the basket of major currencies on Tuesday. The surge in gold on the Korean crisis has rapidly faded, as the Fed's rate hike factor outweighs geopolitical threats. Despite all the aggressive rhetoric of the United States, there is a reluctance to get involved in a direct military conflict and preference to search for a diplomatic settlement to the crisis. UK retail sales data The pound sterling is down for the fourth day in a row, as the broad intentions of the dollar to regain lost ground touched also the British currency. Investors cut long positions before the release of data on retail sales in the UK, an important consumption indicator, which will determine the rate of increase in rates by the Bank of England. Having jumped to a 15-month high of $1.3650 on BoE officials' comments on the need to raise rates, the pound went into correction, on fears that the fundamental data might not correspond to the hints of the regulator. It is interesting that pound may strengthen on a weak retail sales reading, as the decline in household consumption was in response to the gap between rising prices and wages, which the Bank of England wants to fix. On Wednesday, the British currency was at a two-week low, trading near $ 1.34. A new high Turkey's closure of its border for oil from Kurdistan, a region in northern Iraq, has become an excellent opportunity for traders to feel the resistance at $60, the highest level since June 2015. On Tuesday and Wednesday prices retreated as the decrease in US stocks by 760K barrels indicated an increase in the load of the refineries. Until oil refining volumes recover to their natural level (about 92-93%), the output of American shale companies will probably work to cover the deficit and their response to the recent price increase above $ 55 is difficult to predict. Last week, as the report showed, the workload was 83.2%. Arthur Idiatulin
TVC:DXYLong
by Tickmill
Fed-driven dollar jump winds as long-term Fed stance is unclearThe situation on Korean peninsula remains one of the most high-quality and coherent dollar signals, especially paired with the yen. USDJPY lost half a percentage point in the course of trading on Friday after Kim Jong-un again threatened to conduct a nuclear test in response to Trump's statement to destroy North Korea. In the medium term, USDJPY buyers remain the dominant force due to the growing divergence of policies of the two central banks. The North Korean foreign minister promised investors a very hectic weekend saying that testing the bomb in the Pacific Ocean would have “unprecedented scale." The Korean Kospi index closed Friday at a loss of 0.74%, the Nikkei 225 interrupted the weekly growth losing 0.25%, as investors decided to cut risk exposure before the end of the week. Despite the proximity of Japan to a source of trouble, the yen continues to be in demand in moments of instability due to the country's status of a "net lender.” The Fed this week has portrayed itself as much optimist as possible, but even this was not enough to reverse the trend for the dollar. After correction above 92.00 level, the dollar index is inferior to virtually on all fronts against the main opponents. The hint of a rate hike in December allowed the US currency to only breathe in before the next dive, as the Fed's long-term position, with the end of the Yellen period in February, looks very uncertain. Gold continues to struggle for a level of $ 1,300 and will probably end the week with minimal changes, the oil market can maintain its outlook for growth closing the week above $50 per barrel. Arthur Idiatulin
TVC:DXYShort
by Tickmill
Hawkish Fed shores up Dollar as inflation slide seen temporaryThe Federal Reserve left interest rate unchanged at the meeting on Wednesday, but surprisingly saw December hike appropriate despite persisting slack on inflation front. As expected, the Fed set a green light to balance sheet cut, amounted 4.2 trillion. dollars, most of which has been amassed after the 2008 mortgage crisis. According to new economic forecasts, 11 out of 16 polled officials suddenly nodded for another small rate hike by the end of this year. The chances for the Fed shift in December rose sharply to 70.5% according to the CME. In the Fed statement, a surprise for the markets was a satisfactory assessment of the dynamics of the labor market, inflation and business investment. Durability of growth was highlighted as sufficient condition for keeping up with policy normalization while matching with the forecasts appeared to be not so crucial for the policymakers. The head of Federal Reserve Janet Yellen questioned the recent lull in inflation as evidence of the economy slack, saying that this issue needs additional research. Short-term risks in the opinion of the regulator remained “roughly balanced", but the conclusions for reasons of inflation slowdown can significantly change the course of policy, the head of the regulator said. Although the main attention of investors was focused on the fate of the December rate hike, long-term change in the regulator’s goals towards downgrade was also important for the markets. Long-term rate, the end target of policy normalization, was reduced to 2.75%, although before the 2008 crisis, Federal Reserve considered the borrowing rate as comfortable for the economy at 5.0%. Now, the long-term yield curve looks even more appealing, potentially giving a signal for continued growth in the debt and equity markets, as soft credit conditions in the economy will favor an investment outflow from the money market to corporate debt and emerging markets with high interest rates, for example, Russia. Therefore, the reaction of USDRUB pair to the bullish ending of the year in the US has become less noticeable, since it is clear that mixed signals have arrived.The dollar index returned to the level of 92.00, the main opponents of the dollar responded with an abrupt fall, but the momentum quickly died down and Thursday passes quite calmly for the foreign exchange market. The decision of the Fed revealed overbought gold, both due to unstable geopolitics, as well as underestimation of the chances of a third rate hike. The asset collapsed by $15 and continues to struggle for the $ 1,300 level while remaining in search of fundamental factors for maintaining positions. Draghi's public appearances this week. For European investors closely watching the actions of the ECB, the end of the week can become very saturated. President Mario Draghi will appear three times in public on Thursday and next week, while his ECB colleagues will also perform at various events throughout Europe. Speeches are not about monetary policy, but officials can use them to adjust market sentiment before the ECB meeting in October. According to Draghi's statements in September, the next meeting will be very productive embracing several policy decisions economic forecasts and guidance on the future policy. Oil market A strong dollar held back the rise in oil prices, while the EIA report was ignored for a second consecutive week by the market due to imbalances in consumption and supplies in the US market, hazing rebalance prospects. The EIA report showed that gasoline stocks fell for the third week in a row to a minimum since November 2015, the value of stocks of distillates due to increased demand has fallen to the lowest since 2011. The positive aspects of the report were offset by the growth of oil reserves by 4.6M barrels, 700K barrels higher than were anticipated. Arthur Idiatulin
FX:XAUUSDLong
by Tickmill
Dollar has no grounds to rise. At all.September FED meeting US fixed income and stock markets are preparing to lose cushion as Fed may announce the onset of balance-sheet cut at the meeting on Wednesday. Termination of reinvestment policy and a smooth shedding of securities means a complete switching off of the "rescue mode” which has been regulator’s state for about a decade. The market practically rules out the possibility of a rate change in September, but the chances of a rise in December rose to 52% last week. The initial rate of liquidity withdrawal from the economy is estimated at $ 10 billion / month, each quarter volume will increase until the monthly sales volume reaches $ 50 billion. At such rates in the first twelve months, the Fed will offer $ 300 billion in bonds to the market and about $ 500 billion in second year. Bonds with what maturity date will go first is still unclear. In its program, the Fed will undoubtedly take into account past failures of its colleagues, where QE withdrawal aftermath was a rough going. For example, the five-year incentive program in Japan ended in 2001 to 2006, which forced the Bank of Japan to restore purchases, and after a two-fold increase in the ECB rates in 2011, they were followed by a rollback, with the QE announcement in 2015. The growth of inflation due to the devaluation of the dollar over the past few months helped the US currency to spend a week on a positive note, but the situation with the primary drivers of growth was disappointing. Retail sales slowed in August, so optimism on the US currency quickly came to naught. There are no data that underline the strong growth of consumption, so the revelations of the Federal Reserve on the decision in December should not be expected in the absence of clear signals. Too early to enjoy The revival of shale drilling in the United States, together with restart of the main refineries pose a major threat to oil prices. The growth of WTI last week to $50 per barrel was obviously dependent on short-term factors, which will gradually disappear. The forecasts of OPEC and the IEA on increasing demand improved the information background but nothing more. The alarm signal came from CFTC data, which showed that the net position of hedge funds in the week ending Dec. 12 declined. Further dynamics will depend on the news about rebound of the refineries’ operation. The long-awaited sign of stabilization Housing prices in China have grown at a minimum pace for seven months due to effective efforts of the Chinese government which cooled the economy. Despite tough measures to reduce credit dependence of the economy real estate market surprisingly shows signs of stability without major prices pullback. Leveling off of prices allows expecting that tightening of the credit policy by authorities will pass less intensively, which is a good signal for local stock markets and for the rest of the world, perceiving the situation in China as a significant external risk. Arthur Idiatulin
TVC:DXYShort
by Tickmill
PPC/USD analysisroadmap for the next four months or so keep crankin those rates yellen! if the fed starts reducing the balance sheet faster than expected, the markets would capitulate. in any case crypto seems a good bet given draghi and kuroda literally cannot stop printing money. inflation will hit us eventually, probably 2019-2020. then we'll have transitioned to an era of pure fiat, which money has historically been within consensual communities. only a matter of time until the fed has to do a 180 and provide helicopter money to the economy, bitcoin/gold's price action seem to predicate such an event.
PLong
by pjlbtv
XAU/USD in preparation for Jackson HoleGold’s technical charts show how the financial markets are preparing for the Friday’s fundamental events. The picture is even considered by the Dukascopy analysts a proper example of educational material for the books. The rate recently reached the upper trend line of a massive long term ascending channel, where it was guided by a medium term ascending channel. That occurred at the end of last week. This week market participants saw the scheduled speech of Janet Yellen at 16:00 GMT on Friday. Pressure began building up, which can be observed in the descending triangle pattern. Moreover, the triangle lines meet exactly at the support of the medium term pattern. Depending on the text of the speech the rate will jump upwards or plummet downwards.
FX_IDC:XAUUSD
by UnknownUnicorn890690
LONG EURUSD - MONPOL/ MACRO CONVERGENCE & TECHNICAL BREAKOUTEUR$ LONG: 1. Daily support base formed ABOVE previous channel highs at 1.17 2. Fundamentally driven breakout on Friday (draghi vs yellen sentiment) should provide continued bullish EUR within the supply/demand complex. 3. Broadly eurozone crisis discounting contoinues to be faded out of the market. I expect RM names to begin pricing the ECB/FED convergence NOW given its around 12-18m away from ECB official monpol tightening (this is the same time the market priced FED hiking back in 2014). RISKS: 1. DXY support - WATCH 92 handle closely. ADD EURUSD LONGS IF we get a good breakout below 91.7
Long
by QuantumLogicTrading
Brief overview before the Jackson Hole meetingThe German economy has revealed signs of slowdown, despite the widespread economic pickup in the euro area and the concomitant strengthening of the euro. A number of data released on Friday pointed to a slowdown in exports and imports in the second quarter. Investment optimism also declined, probably due to the strengthening of the euro, overshadowing the favorable outlook for exporters. As a leading indicator, a slowdown in investment in the leading euro-zone economy could undermine both the economic expectations that until recently were close to buoyancy and to harm inflation expectations struggling for their place in the positive macroeconomic background. The assessment of the current economic situation according to the IFO report turned out to be several points worse than the forecasts, but still quite optimistic. Nevertheless, the European currency remains almost immune to economic statistics, fully focusing on the event in Jackson Hole. Despite the fact that the topic of the speech of the heads of the Central Bank sounds like “Fostering the growth of the global economy," it is likely that officials will dwell in detail on assessing the economic situation of countries, as well as instructions on how the money supply in the economy will be regulated. Investors expect that Draghi will usher in the ECB meeting in September, saying that the economic momentum gained by the Eurozone allows the ECB to retire, but the current state of affairs is clearly not in favor of this version. Inflation targeting is taking place with very modest success despite huge injections, the European currency surpasses its fundamental growth rates, and the gap in the region's leading economies with laggards is very sensitive. Stock indexes on historical peaks suggest that asset buying has become a bottomless source of financing for European companies, a sort of "symbol of stability" for stock investors. It is possible to trace the relationship of incentives with the growth of hiring, the increase in employment, but consumer demand remains weak, as soft credit conditions have hardly affected such a macroeconomic agent as households. In my opinion, the need for fresh solutions will push Draghi to announce radical changes. Including the reduction of buying bonds, since it is obvious that the ECB is feeding completely different sectors on which stable inflationary pressures depend. For Janet Yellen it's all a bit easier. Despite some slippage with the December rate hike, which is still in doubt, the head of the Fed needs to once again plant the idea of safe QE cuts in minds of investors. In order for it to pass most painlessly without explosive growth in yield on the debt market and the release of inflation out of control. There is a possibility that she will again mention the pause in inflation and will report that the economy will withstand another increase, then a bullish correction is inevitable. The Fed Chairman's confident tone is the outcome on which the markets are oriented, since the dollar is ripe for correction, you just need to pull the trigger. Therefore, I believe that Yellen speech will be examined with a slight tinge of bullish bias and wagers on dollar rally in this case are make sense a lot. Arthur Idiatulin, Tickmill analyst
FX_IDC:XAUUSD
by Tickmill
Eur-Usd - Forex Market Analysis Today Trader should be careful at the time of FED chair yellen and Ecb president Mario Draghi speech. There may be a chance of big bullish or bearish waves in forex market let me discuss about Eur-usd which is long term bullish but yellen words may change its direction. There is a good opportunity to buy Eur-usd around 1.1750 area with stop loss at 1.1650 and take profit at 1.1850 then 1.1940 any down wave will provide a great opportunity to open your buy trade. Eur-usd is overbought and there is a room to touch 1.2 area but be careful if yellen talk about to increase the interest rate on December then it will make usd strong and then usd will get investors focus.
Long
by FOREXACCOUNTMANAGER
Yellen surprises and US Military action push safe heavens higherUS joint military exercises in South Korea which risked to run across ultimately response from North Korean leader, has been set off. It may be a new reserve for exacerbation of the geopolitical situation on Korean peninsula. The market so far does not lend itself to provocations, the VIX index is in negative territory, gold is showing sluggish attempts to return to the growth phase, but the confrontation for the $ 1,300 level is expected to have a more complex outcome, as the fundamental picture promises to be replenished both by the Fed statements and the potential response of North Korea. There is a high probability that the risk aversion will outweigh and trade in defense assets will take place in the green zone. ECB President Mario Draghi unfortunately refrains from discussing monetary policy on the speech in Jackson Hole on Friday, but from Janet Yellen markets expect seminal comments that will allow to adjust expectations on the timeframe of money supply cuts. In the light of slowing inflation in developed countries, the markets will be able to take a stock of assumptions about why the Phillips curve does not work, whether the relationship between employment and price increases is still alive (and in what degree) and what happens with labor productivity. Gloom or optimism will either pave the way to guessing the degree of participation of central banks in supporting the economy, and hence the dynamics of rates, stimulus, etc. On the positive side for oil traders there was news about production outage at the Libyan field of Sharar. The decline in production was 280 thousand barrels, the timing of the return to operation is still unknown. Last week, the reduction in US inventories exceeded expectations, but given the increased demand for gasoline due to the travel season, it has mild effect on prices.US rig count shrunk by 5 according to Baker Hughes, but stabilization of drilling activity near 760 rigs together with oil prices swaying near $50 per barrel clearly shows that further growth in oil prices rests on a fundamental factor in the absence of radical OPEC decisions. Spreads in the futures market declined, which also suppresses the activity of American producers that hedge profits maintaining high supplies. Arthur Idiatulin, Tickmill Market Watcher
FOREXCOM:XAUUSDLong
by Tickmill
Oil bulls may start to reap profit as OPEC steps back The common currency has trimmed down losses against the dollar after a weak start on Tuesday, as investors continue to get rid of dollar positions while waiting for the cautious tone of Fed Chairman Janet Yellen at tomorrow's meeting. Interest rate futures rule out possibility of the rate increase on Wednesday meeting, as consumer inflation, according to official estimates, has not yet acquired sufficient momentum and continues to depend on monetary support. Much more attention will be pinned to the fate of Fed's balance sheet, which has been maintained at $4.5 trillion through maturing debt reinvestments. A handful part of bank’s portfolio consists of Treasuries and MBS. At two previous meetings, the Fed has made it clear that the reduction in the balance sheet will begin this year, but did not specify a specific month. Investors expect that such a significant shift in monetary policy will be held till September following the example of the ECB. Taking a stock of Yellen's speech investors probably should pay attention to such points as slowing pace inflation, external risks, as well as the turmoil in the White House, which calls into question the fiscal stimulation promised by POTUS Trump. Futures for the US dollar continued to decline towards the 15-month low at 93.50 and after a minor correction will probably continue to move on the slope touching the bottom before the FOMC decision near level of 93.00 The way up was opened for oil prices, as the OPEC meeting in St. Petersburg ended with a logical sacrifice: Saudi Arabia agreed to limit oil exports by 1 million barrels in August, dropping it to 6.6 M barrels. Nigeria also made concessions: the country agreed to limit production at the level of 1.8M barrels, but has not yet reached this level. Production in Libya remained unlimited, as the country needs funds to recover from the civil war. Oil prices have been rising for the second day in a row, both benchmarks have added about 2 percent at the time of writing the article and are preparing to break through an important psychological level of $50 per barrel. Asian stocks fell together with the dollar, European stock markets in positive territory due to the growth of the oil market, as well as the prospects for the recovery of the eurozone. Gold and the Japanese yen are in negative territory, as the possible “dovish tone" of the Federal Reserve at the next meeting aroused the risk appetite. Cryptocurrencies are in a slight drawdown, Ethereum lost more than 10%.
TVC:USOILLong
by Tickmill
EURUSD bounce is around the cornerOil prices break into green area expecting that the OPEC meeting will not be spent in vain and the participants will find ways to pare their production capacities The weekly report of Baker Hughes showed that the drilling activity rested on some ceiling, as the growth of active drilling rigs ceased. Last week, their number fell from 765 to 764 units. After US oil producers switched from long-term outlooks to immediate profitability of the barrel, additional capacity utilization occurred only if it was not unprofitable. Slowdown in drilling activity suggests that at current prices below $50, the US supply may have reached its peak. There has been a little bit upset with the message from Bloomberg stating that the restriction of production in Nigeria and Libya is not on the agenda of the OPEC meeting on Monday. Given that the two above-mentioned cartel participants, freed from quotas, are the two main culprits of oversaturation in the market, closing eyes to their uncontrolled production will become a rather discouraging news for investors. Significant downside risks for the oil market are not currently observed, taking into account the flight from the dollar, the growth of net positions in futures contracts (from 358.0K to 396.5K in the week ending July 21).Strong growth of prices will strengthen the chances for a transition to the ECB's more aggressive rhetoric in September, as president M. Draghi has repeatedly expressed concern about the low oil prices hindering the inflationary process. Asian stocks started a week with growth, European stock markets are traded in the red, as the beginning of the week will probably take place under the sign of caution and risk aversion before the Fed's meeting on Wednesday. The European currency retreated after the contradictory growth last week, as despite the lack of specific instructions and terms, the markets took Draghi's comments positively. Today's reports of PMI activity in Germany and the Eurozone turned out to be worse than expectations, which, coupled with sluggish inflation in the euro area and a rather illogical rise after the ECB meeting gives grounds to believe that the European currency is overvalued and expects correction. However, the rollback is hampered by the presence of downward risks in the US currency, among which are new details in the investigation of the president's relations with Russia, as well as the Fed's uncertain position regarding the reduction of monetary support and massive MBS and Treasuries portfolio. However, amid vague and cautious Draghi speech its likely that any logical in this situation rhetoric of the Fed will look more aggressive that will help the dollar recover.
Short
by Tickmill