Archive for Forex and Currency News

The Week Ahead: Friday 24th May 2019 – Currency Point – Just do it already, AUD

By Evan Lucas, FPMarkets.com

Currency Point – Just do it already, AUD

Currency Point – Just do it already, AUD

The RBA is killing me, I have long believed that it would eventually be forced to cut rates in 2019. However, the consistent message had been ‘wait and see’ and ‘employment will save the day’. Thus, I saw the first move in August as it would give the RBA a chance to ‘evaluate’ Q2 CPI and 2 months of employment data post the Federal election and realise it need to finally cut rates.

However, in his speech to the Economic Society of Australia titled: “The Economic Outlook and Monetary Policy”, his final paragraph blew that all up.

“[in] a scenario in which there was no further improvement in the labour market and the unemployment rate remained around the 5 per cent mark… we judged that inflation was likely to remain low relative to the target and that a decrease in the cash rate would likely be appropriate. A lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target. Given this assessment, at our meeting in two weeks’ time, we will consider the case for lower interest rates.”

This begs the question: Why wait? Do it now not in 2 weeks as the RBA governor has just told the market he and Co. will cut rates on June 4 and the market has now priced in a second 25 basis point (bps) rate cut in August too. (So, I might still be right, just that is will be the second round not the first.) It’s a forgone conclusion and the AUD has priced this scenario as fact.

What’s interesting now from a currency point of view is the AUD could be on track to become a carry trade FUNDING source rather than carry trade destination. The Aussie 10year US 10-year differential could be -125bps as early as August 7 that is attractive and a further AUD negative.

AUD/USD has already bolted in my opinion. The initial bounce back above 69c last week on the surprise re-election of the Morrison centre-right government gave the AUD a sugar hit nut was short lived, and the pair is now not at an entry point of interest.

What are looking like interesting trades is AUD crosses of CAD and JPY. Like AUD/CAD better

Idea: Short AUD/CAD

Looking for 0.90c, entry 0.935c or better, stop loss, 0.95c

Reasoning:

– Dovish RBA with expected 50bps of cuts coming in the next 3 months.
– Australian employment and construction markets to remain subdued
– Canadian Employment and Wage growth have been ahead of expectations
– BoC has moved back to a Hawkish stand point despite some weakness in oil

By FPMarkets.com

 

 

 

RoboForex Joins ARFIN

May 24th, 2019 – Belize City, Belize – RoboForex affiliated company in Belarus, which provides brokerage services on global financial markets under RoboForex brand, joins the Financial Market Development Association (ARFIN). Joining ARFIN, the Company is obliged to comply with the Rules of Market and Professional Conduct, which regulate corporate conduct for the Association members, as well as follow principles of transparency and fair practice.

It should be mentioned that in April 2019, the Company that is affiliated with RoboForex, an international broker, received the license of the National Bank of the Republic of Belarus (the certificate No.15 dated April 8th 2019). Residents of the Republic of Belarus, as well as of several other countries, will have an opportunity to register Cent, Standard, ECN, and Affiliate accounts. Clients will have access to 97 Forex trading instruments, Metals, Commodities, Indices, and CFDs on stocks. Trading operations will be available through the most popular trading terminal in the world, MetaTrader 4.

This is how Andrei Dziarnovich, CEO RoboForex BY, is commenting on the event: “A month ago, we received the license of the National Bank of the Republic of Belarus. Now, we’re joining ARFIN, the association, which protects interests of clients and expands civilized trading on the Forex market in the first place. All these steps are driven by our intentions to provide quality and competitive services on global financial markets.

About RoboForex

RoboForex Ltd is an international broker, which offers to trade 8 asset types and more than 9,400 instruments. RoboForex Ltd has been providing its services since 2009 and with the brokerage license IFSC/60/271/TS.

About the Association

The Financial Market Development Association is a non-commercial union of organizations that conduct their activities on the financial market of the Republic of Belarus. The Association was founded in 2013 and currently unites companies that operate on the OTC Forex market.

 

 

 

Applying Cross Triangulation To Basket Trading

By Orbex

One of the unfortunate realities that we know as retail traders is that we can’t practically access arbitrage.

Algos are so much faster in balancing triangular arbitrage. So, unless we make an investment in the hundreds of thousands of dollars, being an arbitrageur is likely not in the cards.

But, that doesn’t mean we can’t use it to analyze cross relationships to optimize hedging in basket trading.

Fair warning: math ahead

Reviewing the Underlying Logic

For the purpose of this article, let’s consider a simple basket of the three majors: USDJPY, EURJPY, and EURUSD.

Generally, we’d ignore the arbitrage aspect, because the algos are going to keep the three currency pairs’ relative values in line. In this case, though, we want to remember that arbitrage exists because the currency pair values are all relative.

If the EURUSD goes up, it could mean that either the euro got stronger, or the dollar got weaker. The move in the pair is determined by the relative value of each currency with respect to the other.

This then translates into fluctuations in the cross pairs. How much those other pairs move, however, is relative to the relative value of the base currencies.

The Moves Aren’t Always Consistent

In this example, you could say that if the euro got stronger, then the arbitrageurs are going to make the EURJPY also go up. The assumption might be that it will be the same number of pips, but because the currencies’ values are relative, it doesn’t always translate directly.

This is because the dollar and the euro have different relative values to the yen. So, in order to balance the exchange rates between the three pairs, one of the pairs has to move more or less than the other. This can be expressed mathematically.

Splitting the Pairs Into their Parts

If we use the notation EUR/USD, we can compose it into a recognizable algebraic formula: EUR/USD = 1.2000. What this means is that we can operate with the currencies as numerator, denominator, and factors in equations. That allows us to substitute currencies and calculate their cross values:

EUR/USD = 1.2000; EUR/JPY = 120; USD/JPY = 100

Is not all that different from: A/B = 1.2; A/C = 120; B/C = 100.

You can then use the currency pairs in the same way you’d use any other equation, with the currency names being used as variables instead of arbitrary letters.

If EUR/USD = 1.2000 then EUR = 1.2USD so EUR/JPY = 120 can also be written as 1.2USD/JPY = 120.

If you resolve that equation and don’t come to the same answer as the trading in the market (USDJPY at 100), then there is a difference.

That’s the arbitrage amount!

Leveraging Arbitrage Into your Basket Strategy

Of course, the algos are going to wipe out that difference before you can take advantage of it. That’s not the point: the idea is that by using this principle, you can calculate where the other pairs in your basket will be once certain levels (such as take profit and stop loss) are achieved.

This makes it easier for you to know precisely where to place your hedging stops and take profits.

So, if in our example basket, the EUR/USD went to 1.3000; we have two alternatives. Either the euro got stronger or the dollar got weaker. In the former case, the EURJPY would have gone up. In the latter case, the USDJPY would have gone down. But, the question is, how much?

Euro Strength v Dollar Weakness

To find out what happens to the EUR/JPY when the EUR/USD goes up 100 pips, we have to do the substitutions in the equations above, with USD/JPY staying consistent. The result is that EUR/JPY goes to 130.

We can do the same substitution in the equations to find out what happens to the USD/JPY if the EUR/USD goes up 100 pips (this time assuming that the dollar weakened, in other words, the EUR/JPY stays consistent). The result is that the USDJPY drops to 92.3.

The Differences Aren’t the Same

Note that if the EUR/USD moves 100 pips because of euro strength, then the EUR/JPY moves up 100 pips as well. But if the EUR/USD moves 100 pips because of USD weakness, then the USD/JPY moves down only 77 pips. This is because the values of the currencies are relative only to each other.

The practical application of this is that you can calculate much more precise levels, so you don’t have unnecessarily large stops. It also shows the size of your hedging position needs to be different depending on which direction and currency you are hedging against.

By Orbex

 

Gold Prices End The Week Higher On Soft USD & Weak Risk Appetite

By Orbex

Gold

The yellow metal has enjoyed a better week against the US dollar as the greenback has weakened once again. Following on from the prior FOMC meeting minutes, where some members raised the prospect of a rate hike in the remaining months of the year, bulls were quietly hoping for more of that discussion.

However, USD was sold sharply as the meeting minutes failed to provide any indication that a rate hike will be coming in 2019. The minutes showed that “In light of recent, softer inflation readings, some viewed the downside risks to inflation as having increased”.  In terms of the outlook for future rate adjustments, the minutes concluded that “a patient approach to determining future adjustments to the target range for the federal funds rate would likely remain appropriate for some time.”

On the other hand, the minutes were good news for gold buyers. It looks as though unless things dramatically improve, we are unlikely to see a rate hike in the coming months. Furthermore, looking further out towards October, the market is increasing its pricing for a rate cut.

Technical Perspective

xauusd technical perspective

After breaking out above the short term bearish channel top at the start of the week, gold prices have since reversed lower. Prices are trading back inside the bear channel and back beneath the key 1280.58 level. However, into the final sessions of the week, we are once again sitting just atop 1280.58. This level continues to be a key pivot for gold.

While above here, the focus remains on an eventual break higher as the current bear channel can be viewed as a bull flag to the initial drive higher at the start of the year. If we break back below the 1280.58 level, however, we are looking to 1265.96 which has capped the recent sell-off. A break of that region will put focus on a run down to 1250.58 next.

Silver

Silver prices have been much stronger this week also. This comes following three straight weeks of declines, as a weaker US dollar and softer risk appetite have helped lift demand. Risk assets traded heavily lower this week. Concerns around the escalating US/China trade war once again came back into central focus.

Following China’s retaliatory 25% tariffs on $60 billion of US goods, the market this week reacted to news of the US banning US companies from dealing with Chinese tech firm Huawei.  While the two sides continue to try and deliver a trade deal, the market is not displaying much optimism. Both equity and oil prices have collapsed lower, allowing gold and silver to trade higher on safe haven flows.

Technical Perspective

xauusd

Silver is now sitting just above the 14.3321 support, having broken down fully through the 14.9161 level. This level now offers resistance should the market retest. Ahead of that level, we also have bearish trend line resistance from recent highs which has been framing the move lower. Below the 14.3321 level, the next key support will be the 14.0352 zone. This is a major long term level for silver and poses the risk of a much deeper move lower if broken.

By Orbex

 

Forex Technical Analysis & Forecast 24.05.2019 (EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDRUB, GOLD, BRENT)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD has tested 1.1182 from below; right now, it is consolidating around this level. Possibly, the pair may expand the range towards 1.1190 and then form a new descending structure to break 1.1150. After that, the instrument may continue trading inside the downtrend with the target at 1.1100.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD has completed the correction and returned to 1.2680. Possibly, today the pair may resume trading inside the downtrend with the short-term target at 1.2550.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDCHF, “US Dollar vs Swiss Franc”

USDCHF has finished another correctional structure at 1.0025; right now, it is trading upwards with the target at 1.0050. Later, the market may start another decline towards 1.0035 and then form one more ascending structure with the first target at 1.0076.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has reached the short-term target at 109.55; right now, it is consolidating around this level. Today, the pair may start a new growth to reach 109.95 and then continue falling towards 109.26. After that, the instrument may be corrected with the target at 109.95.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD has completed the correction at 0.6896; right now, it is moving downwards. Possibly, the pair may beach 0.6863. After that, the instrument may break it and then continue trading inside the downtrend with the target at 0.6800.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has completed the correctional structure at 64.80 and formed a new consolidation range around it. Today, the pair may form a new descending structure to break 64.56 and then continue trading inside the downtrend with the first target at 63.94.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

XAUUSD, “Gold vs US Dollar”

Gold has finished another correctional structure and returned to 1285.70. Possibly, today the pair may consolidate near the current highs. If later the price breaks this range to the downside, the instrument may resume trading inside the downtrend with the target at 1267.60.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

BRENT

After breaking 70.70, Brent completed another correctional structure at 67.10; it has already formed another consolidation range and broken it to the upside. Possibly, the pair may start another growth to reach the first target at 69.13. Later, the market may form a new descending structure towards 68.06 and then resume trading upwards with the target at 71.30.

BRENT

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2019.05.24

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.11501
  • Open: 1.11812
  • % chg. over the last day: -0.28
  • Day’s range: 1.11726 – 1.12056
  • 52 wk range: 1.1111 – 1.2009

EUR/USD started to recover and updated the local maximums. The investors began to fix positions after a long rally. The escalation of the trade war between Washington and Beijing increased the expectation for the FRS to lower the interest rates this year. An additional pressure is cause by the negative trends in the US Treasury bonds’ yield. The market participants are watching the EU Parliament elections. The quotes are consolidating around 1.11800-1.12000. You should open positions from these levels. EUR has prospects for further recovery.

The Economic News Feed for 24.05.2019:

  • – Report on the Orders of Durable Goods (US) – 15:30 (GMT+3:00);
EUR/USD

The price fixed above 200 MA which points towards the power of the buyers.

The MACD histogram is in the positive zone and keeps rising which points towards a further correction of the EUR/USD quotes.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.11800, 1.11500, 1.11300
  • Resistance levels: 1.12000, 1.12200, 1.12450

If the price fixes above 1.12000, expect further descend towards 1.12300-1.12500.

Alternatively, the quotes can descend towards 1.11500-1.11300.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.26516
  • Open: 1.26525
  • % chg. over the last day: +0.01
  • Day’s range: 1.26477 – 1.26879
  • 52 wk range: 1.2438 – 1.3631

GBP/USD stabilized after a long descend. The GBP is consolidating. The local support and resistance levels are 1.26500 and 1.27000. The market participants are waiting for the relevant info regarding Brexit. A technical correction remains possible. You should open positions from the key levels.

At 11:30 (GMT+3:00) the UK will publish a retail sales report.

GBP/USD

The indicators do not provide precise signals, the price has crossed 50 MA.

The MACD histogram has moved into a positive zone which points towards a correction of GBP/USD.

The Stochastic Oscillator is in the neutral zone, the %K line started to cross the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.26500, 1.26000
  • Resistance levels: 1.27000, 1.27550, 1.28000

If the price fixes above 1.27000, expect further correction towards 1.27500-1.27800.

Alternatively, the quotes can fall towards 1.26200-1.26000.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.34356
  • Open: 1.34721
  • % chg. over the last day: +0.33
  • Day’s range: 1.34459 – 1.34824
  • 52 wk range: 1.2727 – 1.3664

USD/CAD started to descend after a sharp growth. The trading instrument updated the local minimums. The key support and resistance levels are 1.34450 and 1.34700. The demand for USD weakens. Keep an eye on the oil quotes dynamics and open positions from the key levels.

The Economic News Feed for 24.05.2019 is calm.

USD/CAD

The indicators do not provide precise signals: 50 MA has crossed 200 MA.

The MACD histogram is close to 0.

The Stochastic Oscillator is in the oversold zone, the %K line started to cross the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 1.34450, 1.34200, 1.34000
  • Resistance levels: 1.34700, 1.34900, 1.35100

If the price fixes below 1.34450, epxect a correction towards 1.34000.

Alternatively, the quotes can grow towards 1.34800-1.35000.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 110.333
  • Open: 109.594
  • % chg. over the last day: -0.73
  • Day’s range: 109.456 – 109.745
  • 52 wk range: 104.97 – 114.56

USD/JPY is showing an agressive bearish trend. The quotes have descended by 70 points. The demand for the safe assets has grown since the trade negotiations between the US and China seem to have reached a dead end. Right now the quotes are consolidating around 109.500-109.750. Keep an eye on the US economic reports. The currency pair has a tendency to descend.

The national basis consumer price index in Japan for April confirmed the market expectations and reached 0.9%.

USD/JPY

The price fixed below 200 MA which points towards the power of the sellers.

The MACD histogram is in the negative zone but above the signal line which gives a weak signal to sell USD/JPY.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations
  • Support levels: 109.500, 109.150, 109.000
  • Resistance levels: 109.750, 110.100, 110.350

If the price fixes below 109.500, expect further descend towards 109.150-109.000.

Alternatively, the quotes can grow towards 110.000-110.200.

by JustForex

Clouds of uncertainty continue for Sterling as Theresa May announces resignation

By Lukman Otunuga, Research Analyst, ForexTime

Theresa May’s decision to step down as Prime Minister is hardly surprising, given her inability to get a Brexit deal through parliament as well as the speculated losses her party are thought to have incurred during the ongoing European Parliament elections.

Markets had already priced in the likelihood of a change at 10 Downing Street, which has contributed to the dismal performance of Sterling this week, earning the distinction of the worst performing G10 currency this month with suffered losses at 3%.

The growing uncertainty over who will next steer the Brexit process further complicates Sterling’s outlook. The October 31 deadline to leave the European Union is slowly approaching. There is speculation in the air over May potentially being succeeded by a Eurosceptic leader, which is seen raising the prospects of a no-deal Brexit. Something that would appear to be another warning light for Sterling.

Another key question to bear in mind is whether there will be enough time to prepare a suitable deal after the leadership contest concludes. The UK may be forced to ask for another extension from the European Union in such a scenario, which has the potential to face rejection given the constant back and forth around Brexit talks. Today’s development has certainly opened another can of worms and added to the chronic uncertainty over Brexit.

Although the Pound offered a mixed reaction after May announced her resignation date, investors should fasten their seat belts as the new round of drama ahead is just starting.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

The Dollar Index Has Moved Away from Two-Year Highs

by JustForex

During yesterday’s trading, the greenback weakened against a basket of world currencies. The dollar index (#DX) moved away from two-year highs and closed the trading session in the negative zone (-0.16%). Investors began to partially fix positions after a continuous rally of the US currency. The threat of economic consequences from the trade war with China raised expectations for the Fed to cut interest rates this year. The US currency is under pressure due to a fall in the 10-year US government bonds yield.

Elections to the European Parliament, as well as the situation concerning Brexit, are still in the focus of attention. The resignation of the leader of the House of Commons, Andrea Leadsom, raises the pressure on the British Prime Minister. At the moment, most experts agree that Theresa May may announce her resignation in the near future. Today, financial market participants will assess important economic releases from the UK and the US.

The “black gold” prices have been recovering after a sharp collapse the day before (more than 5%). At the moment, futures for the WTI crude oil are testing $58.50 per barrel.

Market Indicators

Yesterday, the major US stock indices closed in the negative zone again: #SPY (-1.22%), #DIA (-1.10%), #QQQ (-1.53%).

The 10-year US government bonds yield continues to show negative dynamics. Currently, the indicator is at the level of 2.31-2.32%.

The news feed on 2019.05.24:

– Report on retail sales in the UK at 11:30 (GMT+3:00);
– Core durable goods orders in the US at 15:30 (GMT+3:00).

by JustForex

Risk Off Sentiment Sends Gold And Yen Higher

By Orbex

Investors continued to shun risk assets on Thursday amid a mix of global themes. The stalemate in the US and China talks alongside rumors that the US could blacklist more Chinese firms set the tone for the day. On the economic front, US flash manufacturing and services PMI from Markit came out weaker while new home sales grew just 673,000 from a revised print of 723,000 previously.

Sterling Holds Declines as PM May Stands on Shaky Ground

Developments in the UK related to Brexit saw Prime minister May inching closer to a potential resignation. This follows the latest Brexit plans tabled in the Parliament. The new set of Brexit plans raised more criticism. Lawmakers demanded that May clarifies by today on when she will resign as the Prime Minister.

GBPUSD Bounces Off Lower Support

The currency pair posted a modest rebound as price tested the lows of 1.2606. However, GBPUSD will need to clear the upper resistance as 1.2716 in order to confirm the upside shift in the bias. For the moment, we expect the cable to maintain a sideways range within these levels. Consolidation at the current range could mean that the bias could shift in any direction leading to the next leg of the trend.

gbpusd

Crude Oil Slips as Inventories Rise

WTI crude oil prices fell over 5% on the day on Thursday. The declines came after the US Energy Information Administration’s weekly inventory report. US stockpiles of crude oil rose to the highest levels since July 2017. The US crude oil production grew by 100,000 barrels, rising close to the record levels of 12.3 million.

Oil Needs a Firm Test of 57.50 Support

Oil prices briefly tested the 57.50 level of support on Thursday. But price quickly retraced to pullback modestly on the day. We could expect to see the bounce offering some near term gains. However, the price will need to establish firm support near the 57.50 level. As long as this support holds, WTI crude oil prices could drift sideways with the recently breached support at 60.33 likely to turn to resistance.

forex wti

Gold Briefly Gains on Risk off Sentiment

The precious metal rose 0.77% on the day as the risk-off sentiment in the markets saw investors rushing to safe haven assets. Equity markets fell with the Dow Jones easing 1.6% during trading. Tech stocks fell, dragging the NASDAQ lower as more and more companies backed away from Huawei.

Is XAUUSD Turning Bearish?

The rally in the gold prices stalled at the 1285 handle as the resistance level is being tested currently. The Stochastics oscillator is pointing to a bearish divergence. This also coincides with a potential right shoulder being formed off the head and shoulders pattern. A successful retracement off the 1285 handle will see XAUUSD testing the support at 1270 which marks the neckline support. A subsequent breakdown below this level will trigger declines to the 124 – 1250 handle.

xauusd

By Orbex

 

Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses

By Lukman Otunuga, Research Analyst, ForexTime

Stock markets across the globe have been treated without mercy this week as fears over prolonged US-China trade tensions weighed on market sentiment over global economic growth and stability.

The gut-wrenching selloff witnessed this month suggests that markets are adapting to the reality that US-China trade tensions are here to stay, especially following both sides ramping up their rhetoric on trade tensions throughout. It is becoming evident that global equity markets are facing the perfect storm of headwinds in the form of persistent US-China trade drama, concerns over plateauing global growth and tumbling commodity prices. For as long as these themes remain in play, investor appetite for stocks is poised to evaporate – ultimately bringing equity bears back into the game.

Asian stocks flashed red on Friday morning. This followed a painful session on Wall Street overnight. European shares are at threat of trading lower this morning and will likely be further at risk to volatility depending on the newsflow coming out of the European elections.

Dollar not so mighty after US data disappoints

Investors who were looking for an appropriate opportunity to attack the Dollar were given the thumbs up yesterday after official reports showed that the IHS Markit US manufacturing PMI hit a 9-year low this month.

Rising concerns over the prolonged US-China trade disputes negatively impacting the US economy are at threat of playing a leading role in the sudden USD selloff. Markets still expecting the Federal Reserve to cut US interest rates later this year, highlighting that the unexpected Dollar upside in 2019 risks running on borrowed time.

While the perception that the US remains in a far better condition than everyone else could continue supporting the Greenback, and a sudden spell of bad data would threaten this sentiment falling over like a house of cards.

Oil crumbles on surging US stockpiles; trade tensions weigh

There are few doubts that yesterday should unofficially be declared as the seller’s market for Oil prices after the commodity tumbled more than 5%, the steepest drop for Oil in 2019.

The dangerous combination of surging US crude inventories, weak demand from refineries and rising concerns over US-China trade tensions impacting economic health is creating a recipe for disaster in Oil markets.

It must be kept in mind that concerns over supply shocks following the resumption of economic sanctions on Iran could only push Oil prices to a certain level and this has been baked into the market months ago.

Commodity spotlight – Gold

Gold flickered back to life yesterday as ongoing US-China trade tensions and Brexit drama accelerated the flight to safety. A depreciating Dollar supported upside gains with prices punching back above the stubborn $1280 resistance level. With speculation in the air of the Fed cutting interest rates this year and persistent concerns over slowing global growth weighing on risk sentiment, Gold’s medium to longer-term outlook remains tilted to the upside.

Taking a look at the technical picture, bulls seem to be back in the driving seat after prices pushed back above $1280. The daily close above this point is likely to signal a move higher towards $1300.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com