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Helenrush

Davos will set the tone for gold Gold prices rose on Tuesday due to a widespread risk aversion amid the lingering concerns over global growth. The incoming economic data continue to signal that the global GDP is losing steam, which fuels demand for the precious metal since December. The decline in 10-year US Treasury yields was the largest since early January played into the bullion’s hands as well. The additional fears came from the reports that Washington rejected the offer to hold a meeting with the Chinese officials ahead of next week’s crucial trade talks. The move sparked doubts among investors that the two countries will be able to strike a deal finally. As a reminder, Trump threatened to increase tariffs to 25% from the current levels of 10% without a trade agreement. Meanwhile, Russia and Saudi Arabia Energy Ministers canceled their planned meeting where they were supposed to discuss the recent OPEC+ agreement, which doesn’t add optimism as well. Looking ahead, the World Economic Forum in Davos will set the direction for gold in the days to come. Considering further bearish signals from the economy around the globe, the remaining trade issues, Brexit-related uncertainty, unstable oil market and a number of political risks, the forum attendees may express concerns and even raise alarm bells, which could fuel demand for safe havens. This scenario will benefit the yellow metal that could regain the $1,290 resistance and retarget the key $1,300 barrier.
TVC:GOLD
by HelenRush
AUD/USD fears signals from China The AUD/USD recovery after the flash-crash from January 3 has stalled above 0.72, where the pair encountered a local resistance area. The price was rejected from a mid-December top and dropped to two-week low of 0.7120 on Tuesday. By the way, the move down is rather measured and gradual due to a muted USD demand amid the ongoing US government shutdown and a more cautious tone by the Federal Reserve. One of the key risks for AUD/USD is the slowing Chinese economy that grew at its slowest rate in almost three decades in 2018 and lost more steam in the fourth quarter. The latest IMF forecast has fuelled concerns over the global economy, which according to the Fund’s estimates will grow by 3.5% in 2019, the slowest in three years. In this context, another source of potential risk for aussie is the three-day World Economic Forum set to begin today in Davos, Switzerland. The attendees will discuss the outlook for global economy in 2019 and could express concern over the signs of weakness. The possible downbeat comments during the event could put the Australian currency under the additional selling pressure. As a result, AUD/USD may challenge the 0.71 support in the days to come. On the other hand, still weak USD demand will cap the downside impetus in the currency pair.
by HelenRush
Oil: longer-term prospects look bullish After three weeks of gains, Brent is trading directionless on Monday. The official Chinese data confirmed that the country’s economy has slowed in 2018 to 6.6%, which was the lowest growth rate in 28 years. But the numbers failed to spook investors as the expectations were even more bearish. In general, the risk sentiment looks subdued which prevents oil prices from further ascent at the start of the trading week. In January the oil market sentiment has improved and prices have switched to a recovery mode, in many ways due to some progress in the US-China trade relations. Meanwhile, the drilling activity in the US declined dramatically last week, with Baker Hughes reported that the number of active rigs drilling for oil dropped by 21 to 852. It was the third straight weekly decline, which signals the potential stagnation or even decrease in shale oil production in the weeks to come. In the longer term, there are some other factors that could support the bullish tone in the markets. First, a potential trade deal between the US and China may boost general risk-on trades in general. Second, lets’ not forget about the geopolitical risks in Iraq, Iran, Libya, Nigeria and Venezuela. Third, the waivers that the Washington gave to eight buyers of Iranian oil expire in May, and the US Administration will hardly expend the measures which could result in supply deficit later this year. Against this backdrop, Brent has a chance to recover above $70 from the current levels around $60.
OANDA:BCOUSD
by HelenRush
Euro: bearish risks limited The euro turned marginally higher on Friday but in weekly charts, the EURUSD remains firmly in the red. The common currency continues its efforts to break above the 1.14 handle which is in focus these days. The pair still lacks the directional impetus amid lack of meaningful drivers. Traders continue to digest a more cautious ECB stance. Investors are now pricing out hike expectations, citing the slowdown in the Eurozone economy. According to the official data, German GDP posted the weakest growth in five years in 2018, while the regional CPI fell to an eight-month low led by slower rise in energy prices. As a result, the economic picture in the Eurozone looks really worrisome and further signs of weakness could push the euro down. But we should remember that there are three factors that could curb the potential selling pressure on the common currency. First, most negative signals have been priced in already and the euro is ready for delaying in hiking rates. Second, the dollar itself faces a softening stance by the Fed. Third, signs of progress in the US-China trade relations cap the dollar’s upside potential and support the euro as a high-yielding currency at the same time. In the short term, EURUSD will likely proceed with a consolidation around the 1.14 handle. On the upside, the important resistance comes at 1.15, while the potential bearish pressure will be capped in the 1.340 region.
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by HelenRush
Dollar seeks direction The US dollar is trading in a mixed mode on Thursday, appreciating against the euro and declining against the Japanese yen. The dynamics reflects the lack of risk appetite in the global financial markets as investors continue to worry about slowing global growth, the US government shutdown, and political and economic issues in Europe. The greenback is moving mostly directionless recently in absence of clear drivers. On the one hand, the currency feels the pressure from the political crisis in Washington.  As there are no any movements in settling record-long shutdown, there are few chances that the buck could appreciate substantially in the foreseeable future. On the other hand, Brexit turmoil, signs of slowing growth in Europe, and the reducing probability of raising rates by the ECB and Bank of England cap the downside potential in the USD. As for the USDJPY pair, the downside risks continue to prevail as risk aversion could resume and intensify due to a number of global risks that remain unresolved, including the US-China trade war. Technically, the pair struggles to stay above the 109.00 figure since the start of the month and will hardly make a decisive break above this level in the days to come due to investor cautious behavior. On the downside, the immediate important support comes at 108.00.
by HelenRush
Gold may have formed a local top Gold, along with other safe-haven assets, failed to receive a boost from a parliamentary vote in the UK where Theresa May suffered the worst defeatof a government in the history of the House of Commons. Now, investors bet on a ‘softer’ Brexit, which in turn supports high-yielding assets, while the Japanese yen and gold turned lower on Tuesday. Today, the yellow metal makes some recovery attempts but the bullion obviously lacks the impetus at this stage as the current investor sentiment in the global financial markets looks neutral-to-positive. Besides, gold struggles to attract more buyers as the price has encountered a strong psychological resistance of $1.300 and struggles to overcome this barrier amid lack of catalysts. All this makes traders suppose that the precious metal has reached a local top and will likely get down from the current levels in the short term. Fed’s Beige book due today could serve as a confirmation of forming a short-term top if the report shows that the central bank is not as pessimistic on the US economy as the markets are. Any signs of positive assessment could encourage dollar bulls at the expense of gold. In this scenario, the bullion may challenge the intermediate support around $1,284 should investor sentiment remain relatively elevated. Otherwise, the metal will settle above the $1,290 level. In the longer gold could yet receive a boost against the backdrop of a number of global risks.
TVC:GOLD
by HelenRush
Euro needs signals from the ECB Euro is trading little changed from the early January levels, demonstrating a neutral dynamics. On the weekly charts, EURUSD is stuck between the 100- and 200-SMAs and continues to trade within a limited range. But the general dollar weakness suggests the common currency could resume the rally after the current retreat. To make a new bullish breakthrough, the pair needs to settle firmly above the 1.15 handle – as long as the price is below this level, the risk of challenging the key immediate support at 1.14 persists. On the one hand, dollar safe-haven demand is getting weaker due to a political chaos in the US and the aggres-sive Trump’s internal and foreign policy. There is some progress in the trade talks with China, but lack of details and official arrangements makes investors nervous. However, this factor is not able to bring buying impetus for the greenback as the currency is focused on a more ‘dovish’ Federal Reserve rhetoric. Now, when the Fed has put its cards on the table, it is interesting to see how the ECB will react to the incoming bearish signals from the regional and global economy. The central bank’s assessment of economic risks is the key for the euro now, and any hints at a delay in the first rate hike could derail the euro’s bullishness in the me-dium term.
by HelenRush
Safe-haven yen remains attractive A fresh flurry of bearish news renewed safe-haven demand at the start of a new trading week, with the Japanese yen is back on the offensive after two days of a limited correction. USDJPY failed to break above 109.00 last week and now threatens the 108.00 figure again on Monday. In another sign that US-China trade war hurts the global economy, the huge China’s export industry entered the negative territory in December. In particular, exports fell by more than 4%, which is the biggest decline in two years. Such a disappointing number reignited concerns over the health of the second-world’s largest economy and fuelled demand for such save assets as the yen and gold. The news that the New-York based Viacom is in talks to sell majority stake in China business added to the negative pressure on riskier assets. It is reported that the company has had talks about a sale with at least one Chinese entity. Add to this the uncertainty over Brexit, the longest US government shutdown in history, a other signs of slowing global growth, and the Japanese yen still looks attractive for buying. In the medium term, the USDJPY pair may challenge the March 2018 lows below the 105.00 figure registered in late-December.
by HelenRush
Gold fears US-China warming relations Gold prices climbed to fresh six-month highs a week ago as the rally was capped by the psychological barrier at $1,300. The precious metal failed to regain the sustainable traction since then and goes through a consolidation mode in anticipation of fresh drivers. On Friday, the prices resumed the upside move, challenging the $1,295 handle. In the weekly and monthly charts, the general picture looks far more distinct – the bullion is steadily recovering from August lows and looks set for further gains. Technically, the immediate upside target comes at the $1,300 level, a sustained break of which is needed for entering another bullish phase. The weak dollar plays into the metal’s hands and could support the prices further as a more ‘dovish’ Fed policy is not yet fully priced in by investors. On the other hand, the downside risk for the precious metal as a safe haven comes from the US-China trade relations. The two countries assessed the recent talks as deep and positive. The next negotiations will take place later this month, the Chinese officials reported. So stock markets could proceed with recovery amid trade optimism, which in turn will derail demand for gold at some point. In a wider picture, the downside risks for the global economy may support gold in 2019. After a break above $1,300, the prices will target the $1,303 that could be tough to overcome.
TVC:GOLD
by HelenRush
Dollar bulls lack arguments The greenback outperformed its major rivals in 2018, though felt much worse towards the end of the year. Since the start of January, the US currency faces an even stronger selling pressure as the Federal Reserve is sending clearer signals about a pause in further tightening due to slowing growth in the US and globally, trade wars, and the increasing political pressure from the Trump administration. The FOMC meeting minutes published yesterday revealed that the central bank will take a more cautious position in terms of managing its monetary policy amid the increasing uncertainty. Earlier this week, some Fed officials also expressed their ‘dovish’ tone on policy tightening. The Fed emphasizes that the decision-making will depend on the incoming economic data. In this context, the greenback could be more volatile in the months to come as any strong report could revive rate hike expectations and send the buck north. Anyway, as the monetary policy divergence factor is fading away, the dollar will lack bullish arguments and could derail the upside trend should the economy confirm the fears expressed by the Fed and by investors lately. So, after a break above 1.15, EURUSD may target even higher, but the potential way up won’t be easy and straightforward for the common currency as there are still many risks in Europe, from weaker economic data to Brexit and its consequences.
by HelenRush
Arguments for euro gains The common currency resumed the rise on Wednesday after a brief retreat yesterday. EURUSD is still stuck in a range limited by the 1.14 barrier on the upside as bulls lack the incentive to make a clear break above the 100-DMA that caps the momentum since late-September. However, there are some arguments for euro gains in the medium term. First, the dollar continues to lose its appeal amid signs of slowing growth, signals of Fed’s ‘flexibility’, and pos-itive developments in US-China trade talks. Progress in negotiations fuels demand for riskier assets, discourag-ing USD safe-haven buying, while the continuing government shutdown over border funding adds to the down-side pressure on the American currency. Second, the euro shook off yesterday’s German industrial production data that was really bad. Production fell 1.9% in November versus +0.3% expected. Moreover, the previous reading was revised down to -0.8% from -0.5%. Interestingly, the EURUSD pair hardly reacted to the poor numbers, which could be a sign that the euro is getting more resilient and has found a cyclical bottom in November. But it doesn’t mean that the euro will rally strongly from here as there are some downside risks as well, including Brexit developments, slowing growth in euro area, and the potential deterioration of risk sentiment. So it’s better to wait until the economic situation in the region and Fed’s position on tightening get clearer before buying the euro. Anyway, the single currency feels more comfortable at this stage and could challenge the 1.14 barrier in the short term.
by HelenRush
Gold shows commitment to rise further After a brief pause that was just a short-term bounce within a bullish trend, gold prices resumed the ascent on Thursday, though failed to challenge the six-month highs close to $1280 reached the day before. On Friday, the price has refreshed a six-month high above $1281 and looks set to target the key $1300 barrier. The yellow met-al continues to attract demand on correction attempts, which confirms its strong commitment to rise further. The precious metal finds the buying momentum from a combination of weaker dollar and falling stock markets. Investor concerns over the economy add to the upside pressure on the bullion. By the way, as the U.S. Confer-ence Board report showed, consumer confidence index fell more than expected in December, down to 128.1 from November's multi-year high at 135.7. More importantly, the expectations index dropped below the 100 mark from 112.3 earlier, which shows that US consumers are getting more concerned about future economic growth. All this play’s into gold’s hands and could continue to fuel safe haven demand in 2019 should the global econ-omy lose momentum further. But at the same time, the major central banks could at some stage delay monetary policy tightening, which in turn may cap the downside pressure on risky assets and limit the metal’s bullish po-tential some time later.
TVC:GOLD
by HelenRush
Fresh harbingers of recession The US stock markets shifted to a recovery mode on Wednesday after an aggressive pre-Christmas sell-off. S&P 500 gained by nearly 5%, with most sectors turned green. However, the rebound was more like a dead cat bounce and a sign that the selling was overdone rather than an improvement in investor sentiment. By the way, risk trends looked less robust in Asia on Thursday, while the European stock markets opened mixed amid a tepid risk sentiment and failed to follow up from the gains posted in Wall Street. This is partly due to fresh signs of the potential slowing growth globally. In particular, the Federal Reserve Bank of Richmond's manufacturing gauge fell by a record, to -8, missing all estimates projecting an increase to 15. This was due to weakening in new orders and shipments – another sign that the trade war with China is starting to hurt the US economy. By the way, it is the fourth regional bank factory index that reflected a drop in Decem-ber. In another sign of the impending recession, China published another bearish report. In November, the industrial profit dropped for the first time in three years. The rate declined by 1.8 y/y versus -3.6% in the previous month. The fall in profits reflects slowing growth in producer prices and sales along with rising costs. Moreover, the earnings are expected to contract further in 2019 amid the cooling demand. As such, markets have fresh evidence that the global economy is losing its momentum. As long as such sig-nals continue to emerge, investor sentiment will remain fragile and will hardly recover substantially.
AMEX:USD
by HelenRush
Dollar could have an even tougher time The greenback has been losing ground aggressively at the end of the year. The US currency fails to resist the fundamental bearish drivers threatening to derail the already vulnerable upside trend in the USD. These drivers are the widespread rout in the US stock markets, concerns over the economic growth, Trump’s aggressive for-eign policy and political disputes, raising political uncertainty in the country. Add the President’s criticism of the Fed’s policy, and it’s not surprising that the dollar is rapidly losing its appeal both as a reserve currency and as a safe-haven asset. Next year, the situation may get even worse should the US economy shows more vivid signs of slowing along with the global GDP. In this case, the Federal Reserve that is under an intense pressure from the White House will have to give up and take a pause in hiking rates, which will make the dollar even less attractive for bulls. On the other hand, the potential global growth slowdown suggests that other major central banks will refrain from tightening as well. So in this context, the greenback will still have the advantage as the Fed hikes rates since late-2016. The markets will also continue to closely monitor developments in foreign and domestic policy. The political ucertainty Trump’s disputed even with the Republicans, and staff reshuffles could fuel a full-fledged crisis on Wall Street, which will inevitable affect the US currency.
AMEX:USD
by HelenRush
Trump deprives the dollar of safe-haven appeal After a short-lived corrective rally on Friday, the greenback is back under the selling pressure at the start of the last trading week on the year. The market liquidity is getting thinner ahead of Christmas holidays, and the trad-ing activity will be rather subdued in the days to come. The buck finishes the month on a weaker note, while the government shutdown in the US doesn’t bode well for the currency as well. Market positioning ahead of month- quarter- and year end could distort the moves in the market, but the politi-cal events in the US make the dollar lose its appeal further. Apart from the situation in the federal government, there are rising concerns over the Trump’s criticism of the Fed and its current policy that damages the markets, according to the US President. Against this backdrop, the buck loses its appeal as a safe haven, while positive developments in Italy only increase the pressure. On Friday, the US releases the key labor market data that could affect the short-term dynamics in the dollar pairs but will hardly change the market sentiment dramatically. Strong numbers may lift the USD across the board but there is a risk of profit-taking in this scenario as traders get disappointed in the US currency as a safe haven bet.
AMEX:USD
by HelenRush
USD hopes to remain in a bullish trend The greenback remains on the defensive against major currencies on Friday, though the downside pressure has eased somehow after an aggressive sell-off yesterday. Due to a widespread USD weakness, EURUSD reached a 1.5-month high at 1.1485, where the 100-DMA lies. This area capped the upside potential on Thursday but the upside risks are still there. So the key 1.15 barrier could be challenged in the short-term. The euro received a relief as Italy reached a deal with the EU over its 2019 budget. The easing political risks in the European region coupled with dollar sell-off across the board played into the euro’s hands. In the short term, the pair could remain elevated and even try to erode the local resistance in the form of the mentioned 100-DMA, should the US GDP and personal consumption expenditures data disappoint. Meanwhile, in the longer term, the single currency could lose its appeal. The problem is that market participants downplay the general political and economic risks in Europe. At the same time, investor concerns over the im-minent recession in the US look exacerbated. As such, markets may start to reassess the situation in 2019, which could help the greenback to stay within the bullish trend.
by HelenRush
No relief for battered USDJPY USDJPY tumbled to nearly two-month lows below the 112.00 handle on Thursday, continuing to march south for a fifth day in a row. The dollar struggled to get a relief from the Fed’s unexpectedly ‘hawkish’ tone as the safe-haven demand has surged after the central bank meeting. Such a behavior in the market shows that the risk trends set the tone for investors rather than the signals from FOMC that turned out to be rather optimistic as the Federal Reserve now expects two hikes instead of three next year, while markets have nearly prices out even a single hike, citing stress in global financial markets, heightened volatility, slowing global growth, a plunge in the oil market and the lingering risks from the US-China trade war, despite the recent progress in talks. In the short term charts, the oversold conditions warrant some corrective recovery or at least a consolidation. The next major driver for the pair is the US NFP employment report due tomorrow. Should the numbers disap-point, the dollar could extend the decline. A break below the 111.70 support will open the way to the 111.35 area. Once below this level, the greenback will target September lows marginally above the 111.00 threshold.
by HelenRush
Gold is shining again The recovery in gold prices from August lows is gaining momentum. On Wednesday, the precious metal has extended weekly gains to fresh mid-July highs marginally above $1,251 and holds in the positive territory, ex-pecting fresh short-term drivers. It looks like gold is shining again, after a break of the aggressive bearish trend. The bullion’s appeal is rising due to a sell-off in the greenback as the American currency is on the defensive across the board amid the grow-ing doubts in the Fed’s ability to proceed with monetary tightening in 2019. In this context, today’s FOMC meet-ing will define further direction for the greenback, gold and global financial markets in general. A potentially ‘dovish’ hike will depress the dollar even further. In this scenario, the precious metal could attract a more robust demand. However, the possible upside impetus will likely be limited against the backdrop of a positive reaction in stock markets. As such, the bullion may not make a clear break above the mentioned $1,250 barrier but in the longer term, it could further regain its attractiveness amid the increasing signs of slowing glob-al growth.
TVC:GOLD
by HelenRush
Oil market can’t stop bleeding After several failed attempts to settle above the $60 figure, Brent crude has accelerated its decline and made fresh 14-month lows marginally above $57 on Tuesday. The current environment in the markets confirms that not only oil remains attractive for selling on rallies, but traders tend to open short positions and don’t believe in the efficiency of a new OPEC+ deal. Apart from that, the crude oil prices are getting more sensitive to global risks. Investors are getting more wor-ried about the potential slowdown in the global growth, which fuels concerns over a weaker demand in 2019 amid the ongoing rise in the US shale oil production. By the way, as US Energy Information Agency reported on Monday, the oil production in the country is expected to rise to 8.166 million next year. Should the market remains under pressure in the short term, the next downside target is expected at $55, where October 2017 lows lie. Brent needs to get back above the $61 barrier shift to a recovery mode, but there are no signs that the bullish drivers will come to the rescue, at least, so far. On the other hand, further sell-off could make major OPEC exporters come out with verbal interventions.
TVC:UKOIL
by HelenRush
FOMC meeting is a major test for USD The dollar turned negative on Monday following a widespread rally at the end of last week. The USD demand ebbs even as the risk sentiment remains subdued as investors still prefer a cautious approach due to the linger-ing global risks. The EURUSD pair has switched to a recovery mode and trades around the 1.1350 area. Interestingly, the euro is rising despite the latest data confirmed that the euro zone economy is slowing. In particular, the final November CPI came in at 1.9% YoY versus the flash estimate of 2.0%. On a monthly basis, the consumer price index de-clined by 0.2% versus +0.2% previously. Moreover, the core CPI came in at -0.3% from +0.1% in October. Such a behavior in the market shows that traders are shifting focus to the upcoming FOMC meeting, and the expectations ahead of the key event of the week are driving the markets. As there are expectations that the Federal Reserve will turn more ‘dovish’ the dollar feels uncomfortable, and further profit-taking could be ex-pected in the near term even as the central bank is to deliver the forth rate hike. Technically, the EURUSD may challenge the 1.1350 region but the upside potential is limited as long as the is-sues with Italy’s budget remain unresolved. The immediate support levels come at 1.13 and 1.1270.
by HelenRush
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USDJPY: longer term outlook is negative The Japanese yen is trading marginally higher on Friday as risk sentiment turned sour after two days of rising market optimism. USDJPY still struggles to regain the 114.00 hurdle as investor sentiment is unstable and the greenback lacks the upside impetus. In the weekly charts however the pair is firmly in the positive territory after a deep slide during the previous week.  In the longer term, the safe-haven yen demand could rise due to increasing concerns over the slowing global growth. The Chinese economic reports have disappointed today as retail sales and industrial production data came in lower than expected. The figures stoke worries about the potential global slowdown next year. As such, should the incoming data from major economies continue to send bearish signals, global financial markets could face a more profound downside pressure which in turn will play into safe-haven assets’ hands.  This week the yen demand was low due to some progress in US-China trade talks and fresh positive developments on this front will likely cap the bullish potential in the Japanese currency so far. But the longer term outlook points to upside risks for the yen. 
LSE:LAND
by HelenRush
Gold depends on the Fed In the weekly charts, gold prices are trading in the negative territory but the overall dynamics continues to im-prove. Earlier this week, the bullion reached the $1,250 handle for the first time since July, which is another con-firmation of reaching a bottom at $1,160 in August. Further dynamics in the yellow metal will depend on the fate of the dollar’s bullish trend. In the short term, the American currency looks rather robust despite the mounting doubts that the Fed will proceed with its monetary tightening next year. In this context, the next week’s FOMC meeting – the last one this year – will be crucial both for the greenback and for gold prices. The probability of a rate hike in December is high, while market expectations surrounding further tightening will depend on the central bank’s rhetoric. Any ‘dovish’ hints could send the buck lower. In this scenario, the bullion could derail the $1,250 resistance and target the next important area $1,255. In the short term, the precious metal will likely continue to swing between gains and losses as the dollar trading still looks mixed. On Friday, the US retail sales data could support the bullion should the figures disappoint USD bulls.
TVC:GOLD
by HelenRush
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Euro shifts focus to ECB Ahead of tomorrow’s ECB meeting, EURUSD has settled marginally above the 1.13 threshold and doesn’t dare to challenge the 1.14 barrier since the start of the week. After two days of declines, the euro makes some recovery attempts on Wednesday but the overall demand looks very limited due to growing concerns over the spreading political crisis across the EU. On Thursday, the European central bank will end itsasset purchasing program and leave rates unchanged. This is priced in already so won’t have a significant impact on the euro and markets in general. Investors will pay more attention to Draghi’s tone as traders are trying to determine, when the regulator start hiking rates. Against the backdrop of developments in Italy, and now also in France, the central bank could push back market expectations, citing growing political risks in the region as well as signs of slowing economic growth. Should the ‘dovish’ notes prevail in the ECB rhetoric, the euro could slip and derail the 1.13 figure. In the short term however, the EURUSD pair may gain support from the potential dollar weakness, if the US CPI disappoints. Technically, the price needs to overcome the 1.14 hurdle to target 1.15 again. The longer the pair stays below this important resistance, the more aggressive bearish risks could become.
TVC:GOLD
by HelenRush
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