Get started

Helenrush

US jobs data is a short-term risk for gold Gold looks set to post third straight week of gains, mainly due to a two-day rally after the Federal Reserve decision which sent the greenback lower across the board. However, the precious metal has yet to confirm its recovery above the $1,500 psychological handle, with the bullion shows some signs of weakness early on Friday. The Fed’s interest rate cut provided a fundamental support to the yellow metal but the positive reaction was limited as the central bank signaled a pause in its easing cycle after three cuts by 0.25 percent each. Also, traders continue to monitor developments on the US-China trade front, after Beijing admitted that it is doubting the long-term trade deal is possible with Trump. The headlines fueled risk aversion nearly across the board, which lifted gold prices to one-week highs around $1,514. In the short-term, the precious metal could be affected by dollar reaction to the upcoming US NFP employment data. The ADP report pointed to a healthy jobs growth and should the key release confirm the bullishness, including wages data, the greenback will shift to a widespread recovery mode. In this scenario, gold prices will have to retreat. Once below the $1,5000 handle, the billion will turn negative in the weekly charts.
TVC:GOLD
by HelenRush
The Fed hints signals pause in easing, what’s next? The Federal Reserve cut rates as expected and signaled a pause in its easing cycle. At the same time, Powell highlighted that the central bank would need to see a significant move up in inflation before they could consider raising rates. The dollar was hit hard by this statement and suffered losses across the board. As a result, EURUSD jumped to 1.1150 and extended gains to 1.1170 early on Thursday. Now, as investors have nearly digested a rather neutral message from FOMC, market attention shifts to fresh economic updates, both out of the Eurozone and the United States. As such, the European CPI and GDP data could affect the euro’s dynamics in the short term, while in the US, personal spending and income will be in focus. But the key release is the NFP employment report due on Friday. The ADP numbers were solid enough, and should the upcoming data come on the positive side as well, the greenback could receive a boost and stage a local recovery at the end of the week. EURUSD needs to clear the 1.1180 area which is standing on the way to the 1.12 psychological level, where the 200-DMA lies. This resistance area is fairly strong and could send the euro lower after four days of gains, which will depend on the above mentioned data. Should the USD demand pick up again, the pair could get back below the 100-DMA around 1.1120.
by HelenRush
Powell may move the markets today The Federal Reserve is widely expected to cut interest rates by a quarter point later today despite some of the arguments for a cut are now not so strong as earlier. But as this move has been priced in already, the central bank will likely ease the monetary policy further in order not to disappoint investors and avoid a sell-off in the stock market. The question is whether the Fed leaves the door open for further cuts in December and in 2020. Considering easing trade tensions between the US and China, as well as a much lower likelihood of a disorderly Brexit along with weaker dollar, the monetary authorities could signal a pause in easing with shifting to a wait-and-see mode in order to assess the impact from the three cuts this year. In short, is could be some sort of a “hawkish” easing. In this scenario, Powell may send the greenback higher across the board. EURUSD risks plunging below the 1.1070 intermediate support with the next target around 1.1030. However, if the Federal Reserve won’t dare to close the door to further cuts just yet, the dollar will have to extend recent losses. Anyway, the Fed’s verdict and Powell’s statement will likely trigger a pickup in market volatility.
by HelenRush
3
Oil market at a crossroads Brent crude extend the decline on Tuesday as risk sentiment looks mixed despite some positive headlines on the US-China trade deal. Traders express a cautious tone, fearing another rise in the US crude oil inventories. The American Petroleum Institute will release its stockpile numbers later today, with the Energy Information Administration follows it on Wednesday. Oil registered fresh highs around $62 on Monday but retreated quickly and got back below the 100-DMA. Brent is challenging the $61 handle today, threatening the $60.25 intermediate support that lies on the way to the $60 psychological level. Brent could retreat further in the short term should the US inventories show a decent spike, or the Federal Reserve sounds more hawkish on monetary policy that traders expect. On the other hand, the downside potential is limited due to the lingering hopes of additional measures from OPEC+ aimed at supporting global oil prices amid the record production numbers in the US shale fields. As such, the market is at a crossroads at this stage, with fresh trade-related or industry news could set a clearer tone for Brent.
TVC:UKOIL
by HelenRush
Focus shifts to FOMC At the start of the week, positive comments from the US and China fueled positive market sentiment and put the greenback under some negative pressure. The two countries are getting closer to a deal but a lot of issues are yet to be resolved, which caps the risk-on sentiment. Apart from trade news, investors mulling prospects of another rate cut by the Federal Reserve during the two-day meeting which starts on Tuesday. The market has priced about 90% for a 25 basis point rate cut, so the central bank is unlikely to disappoint. At the same time, the dollar will show resilience should the committee indicate that it is done cutting for now. In other words, the greenback could even strengthen should the FOMC signal a pause in its easing cycle. On the whole, the argument to ease after the October meeting has weakened, as the country’s economy is broadly on rather firm footing, with household sector continues to show resilience. Moreover, the trade- and Brexit-relayed concerns have eased in recent weeks, which is also a positive development. So should the Federal Reserve signal a pause after a rate cut in the upcoming meeting, EURUSD could lose ground further and stay below the key moving averages. In the short term, the inability to get back above the 100-DMA around 1.1130 could lead to a break below 1.1070.
by HelenRush
Brent could slip back to $60 Crude oil prices struggle to keep the bullish momentum after three days of gains. Brent has encountered the 100-DMA which serves as the immediate local resistance around $61.50. The sentiment in the market looks cautiously positive, with the effect of US inventory decline gas faded already and economic growth worries continue to weigh. Today, economists in a Reuters poll said a steeper decline in global economic growth remains more likely than a synchronized recovery. On the other hand, the prospect of another round of production cuts in December and the expectations of the Federal Reserve rate cut next week are providing the market with some support now. However, this is not enough to fuel a more sustained rally, as uncertainty around Brexit and US-China trade talks persists. Technically, Brent remains above the previous bearish channel but gains this week failed to bring a meaningful breakout despite the prices have settled above the $60 handle. Also, demand worries continue to cap the upside momentum in the market. In the short term, the futures need to hold above the $61 figure as a break below this threshold will bring $60 back in focus.
TVC:UKOIL
by HelenRush
EURUSD: PMIs mixed, focus on ECB and Pence EURUSD briefly jumped to the 1.1160 area as traders cheered positive PMI numbers out of France. But the euro pared earlier gains quickly along with risk assets following German and Eurozone figures which knocked down the optimism as the numbers came in lower than expected and confirmed that the regional economy continues to struggle in October. In particular, the German services PMI hit a fresh three-year low, with the Eurozone composite index fell to the lowest level since June 2013. Now, focus shifts to the ECB meeting. However, this time, it will likely be a non-event as this is the last meeting for Draghi as the president. Besides, the central bank delivered additional stimulus measures at the previous meeting. Nevertheless, any dovish statements on the state of the European economy could hurt the common currency in the short term. Also, traders will closely monitor the upcoming US Vise-President Mike Pence speech on China. Should the policymaker criticize Beijing and its policy, risk sentiment could turn sour, which would be a negative signal for the euro as well. Technically, EURUSD needs to hold above the 1.11 handle and regain the 100-DMA in the immediate term in order to avoid a more intense selling pressure. US PMI data could affect the pair’s tone later in the day as well.
by HelenRush
EURUSD turns sour ahead of ECB meeting EURUSD extends the pullback from monthly highs around 1.1180 registered at the start of the week. The pair retreated below the 100-DMA and now threatens the 1.11 handle as the greenback gradually regains strength against the European currencies amid the prevailing risk-off sentiment. Also, traders are getting more cautious ahead of the ECB meeting due tomorrow. It is widely expected that the central bank will retain the current monetary policy but will emphasize that it stands ready to adjust its policy instruments after a raft of easing measures implemented at the last meeting, including lower rates and the reintroduction of quantitative easing. Besides, it will be Draghi’s last meeting as the president, so he is not expected to announce any new measures. As such, the potential downside pressure for the common currency from this event will likely be limited. On the other hand, further Brexit developments could negatively affect the euro in the short term. According to the latest reports, Labour MP Richard Burgon said the party will back a general election if the EU agrees to extension. Technically, the inability to hold above the 1.11 support in the near term could lead to further losses to the 1.1070 area. On the upside, the pair needs to regain the 100-DMA in order to challenge fresh highs should the ECB’s tone come as neutral.
by HelenRush
1
Gold lacks impetus amid US-China trade hopes Gold prices remain in a consolidative mode for over a week already, with bullish attempts are capped by signs of progress in the US-China trade talks and prospects of approving the Brexit deal. The bullion failed to challenge the $1,500 figure last week and struggles for direction since then. On Monday, the yellow metal was rejected from the $1,495 intermediate resistance and slipped back to $1,484. In early trading on Tuesday, gold prices are making shallow recovery attempts as investors cheer positive developments on the trade front, with both the US and China made encouraging statements which lifted hopes that further progress could be made in negotiations before the meeting of the Asia-Pacific Economic Cooperation countries due in mid-November. Also, let’s not forget that the prospect of lower US interest rates at the end of October remain alive, which could increase the appeal of the precious metal at the expense of weaker dollar. Besides, risk sentiment could deteriorate at any moment should Brexit developments turn negative. Technically, gold needs to get back above the $1,500 handle in order to see a more pronounced upside momentum down the road.
TVC:GOLD
by HelenRush
Oil prices: upside potential limited Oil prices failed to confirm a break above the $60 handle and slipped back below $59 on Friday. Today, the prices are making some recovery attempts but the selling pressure still persists as investors show a cautious tone amid the ongoing Brexit turmoil, US-China trade frictions and weak economic data. As such, the British parliament delayed a crucial vote on a Brexit withdrawal deal. In the latest news, the UK Chief Treasury Secretary Rishi Sunak noted that the government will introduce Brexit legislation shortly. As such, uncertainty on this front remains elevated despite the risk of a no-deal exit has declined substantially. In other news, Chinese Vice-Premier Liu He said the US and China made concrete progress in resolving their trade issues. On the data front, Japan’s exports fell in September for the tenth straight month, while South Korea’s exports for the first twenty days of October declined by nearly 20% year-on-year. The figures highlighted the risks stemming from the trade war and capped investor optimism. Against this backdrop, Brent will hardly be able to stage a decent and sustainable recovery any time soon, and bullish attempts may further attract sellers. Technically, the downside risks could recede partially in case of a decisive break above the $60 psychological handle.
TVC:UKOIL
by HelenRush
GBPUSD in limbo In less than a week, GBPUSD gained nearly 6% against the greenback. Yesterday, the pair refreshed five-month highs around the 1.30 psychological level which served as a resistance. On Friday, the pound retreats marginally and has settled around 1.2850, awaiting further development surrounding Brexit. The recent rally came as the EU and UK agreed on a Brexit deal. Still uncertainty remains. As such, DUP leader Foster reaffirms that they will oppose Johnson's Brexit deal while Wilson, another DUP official, said they will encourage Tory lawmakers to oppose Johnson's deal. Now, traders are bracing themselves for a crunch vote in the UK Parliament tomorrow, with the outcome of the vote will trigger a significant market reaction early next week. Should the Parliament vote against the deal, the pair could decline dramatically from the current levels and get back below the key moving averages. In the immediate term, GBPUSD may stay afloat, with sterling derives some support from recent comments by Bank of England’s Ramdsen who said that smooth Brexit would put rate hikes on the table.
by HelenRush
Gold may gain in the short-term Gold prices have been trading with a bearish bias since September, with the bullion had to retreat from long-term highs just below $1,557, down to the current levels below the $1,500 handle which now stands as the immediate resistance. Once above, the yellow metal could try to regain a more robust momentum. In the short term, gold may resume the upside move after yesterday’s rebound should risk sentiment in the global financial markets continue to deteriorate amid uncertainty over Britain’s exit from the European Union and over further progress in the US-China trade relations. Also, investors are nervous ahead of a much-anticipated EU leaders’ summit, which could bring more Brexit news. As the DUP party said it will not support the deal, market participants will likely be cautious ahead of a major event. Technically, downside risks prevail as long as gold remains below the mentioned $1,500 handle, with the chance of a break above this hurdle remains high. On the downside, the yellow metal needs to hold above the $1,475 figure in order to avoid further losses down the road. Meanwhile, in the weekly charts, there is a scope for further decline, probably to $1,440, where long-term buyers could reemerge.
TVC:GOLD
by HelenRush
Oil prices: downside risks persist Brent crude extends losses for a third day in a row. Trade-related optimism has waned quickly and investors show a limited demand for risky assets. Moreover, tensions between the world’s two largest economies could reemerge as recent developments demonstrate. In particular, China vowed to take countermeasures against the U.S. in response to a bill that favors the Hong Kong protesters. This could be followed by a respective reaction from Washington which could trigger an even more cautious tone in the markets. Another bearish factor for Brent is another downbeat growth outlook from the IMF which soured expectations for global demand. The Fund has downgraded growth estimates to 3.0%, which is the weakest rate since the 2008 financial crisis. Also, Brexit-related headlines affect the market these days. Today, hopes of a Brexit deal got dented as the UK government is downbeat on chances of a Brexit deal. In these conditions, oil prices will likely remain under pressure in the short-term, with traders focus now gradually shifts to US oil stockpiles data from API and the EIA due today and tomorrow respectively. Technically, Brent may remain below the $60 handle in the near term and will continue to threaten the $58 level which stands as a local support area.
TVC:UKOIL
by HelenRush
EURUSD lacks a directional bias EURUSD finished marginally lower on Monday, and the upside bias resumed earlier today, with the pair continues to hold above the 1.10 handle. In general, the common currency continues to fluctuate in a limited range, with bulls remain cautious ahead of German ZEW survey. The economic sentiment index is anticipated to fall further to -27.3 in October from -22.5 in the previous month. Should another economic report confirm the rising recession risks in the Eurozone’s largest economy, the selling pressure could reemerge. In this scenario, EURUSD will get back below the 1.10 figure in the short term. In a wider picture, downside risks persist, with market participants remain cautious as the latest US-China trade negotiations lack details and make investors doubt in a significant progress towards a full-scale trade deal some time later. On the other hand, the pair could receive a boost from positive developments on Brexit front, but this boost will likely be a short-lived one. Technically, EURUSD could target the 1.0960 area once again should the pair fail to hold above the 1.10 support again.
by HelenRush
Trade optimism hurts gold but risks limited Gold prices dipped to early-October lows on Friday as investors were cheering a partial US-China trade deal. As a result, Washington decided not to raise tariffs on $250 billion worth of Chinese imports from 25% to 30%, which brought some relief to global markets. The bullion registered a weekly low just below the $1,474 figure and finished at $1,488 on Friday. Today, the precious metal is making some recovery attempts, though the downside risks persist as long as the prices remain below the $1,500 handle. At the same time, investor optimism over the trade truce seems to be abating gradually, with risk sentiment has deteriorated already. It looks like investors prefer not to get over excited as there is a tough road ahead to the US-China trade negotiators to cut the deal, with key issues still not resolved. Against this backdrop, the immediate downside risks for gold prices are limited at the moment, with rising bets for another rate cut by the Federal Reserve will likely support the bullion in the short term. Technically, the yellow metal needs to hold above the mentioned lows and get back above the $1,500 key barrier as soon as possible to avoid a more bearish scenario.
TVC:GOLD
by HelenRush
EURUSD heeds to hold above 1.10 Since the beginning of this month, EURUSD has been recovering gradually, after two weeks of steep losses in the second half of September. Yesterday, the euro has finally broken above the 1.10 handle amid a broad-based weakness in the greenback. Risk sentiment improved dramatically due to positive developments in Washington, with Trump said trade talks between the US and China were “going very well”. As a result, trade deal hopes lifted the markets and the positive momentum remains on Friday. EURUSD holds marginally above the 1.10 level and keeps the bullish bias intact. German CPI figures came in line with market expectations and thus failed to affect the common currency. In the short-term, traders will continue to follow trade developments, with focus now shifts to the upcoming negotiations between Trump and Chinese Vice Premier Liu He. Apart from trade talks, traders will monitor signals from major central banks. The statements from ECB’s Draghi could somehow temper euro’s bullishness should he express a dovish tone on the economy or monetary policy. Also, Fed’s Rosengren and Kaplan are to deliver a speech later today, with their comments could also affect EURUSD.
by HelenRush
USDJPY driven by trade headlines The USDJPY pair is getting more volatile as signals from the trade front are rather contradictory. In Asia, the greenback briefly jumped above the 100-DMA to register one-week highs around 107.77 after an earlier dip to 107.00. The pair has settled around opening levels since then. Such dynamics confirms a heightened uncertainty around the upcoming trade talks, with investors express some hopes for a progress after a report that the US is considering a currency pact with China. Also, investors are mulling the news that the US government plans to issue licenses to American companies to sell certain goods to Chinese technology giant Huawei, which could also smooth over tensions in a new round of trade talks. Technically, USDJPY may lose the 107.00 handle once again should risk aversion reemerge any time soon. In a negative scenario, the pair may receive support just below the 106.50 area. On the upside, the greenback needs to clear the 107.80 figure which is standing on the way to 108.00. Any sign of failure of the negotiations will drive the pair lower.
by HelenRush
What to expect from FOMC minutes The upcoming US-China trade talks are in market focus now, with the two countries continue to flex muscles. In the latest move, Washington imposed visa restrictions on Chinese officials accused of involvement in repression of Muslim populations. In turn, Beijing said the US was using the excuse of human rights to interfere in the China’s internal affairs. As such, the uncertainty ahead of negotiations remains high, which unnerves investors. Meanwhile, markets shift focus to the FOMC meeting minutes due later today. As a reminder, the Federal Reserve delivered a so-called hawkish rate cut in September, Investors assessed this step as a sign that it might be done cutting rates. However, considering the latest developments in economy and trade, the central bank could express a more dovish tone and hint at further cuts, as Powell did yesterday. In such scenario, the greenback may turn even lower but the potential downside pressure will be limited as the greenback derives support from its safe haven status amid the latest escalation in the US-China trade relations.
FWB:FOMC
by HelenRush
USDJPY could reverse gains USDJPY is gaining bullish momentum since the start of the week. The pair climbed back above the 107.00 handle and clings to the levels just below the 107.50 intermediate resistance. Once above, the dollar will encounter the 100-DMA which now comes at 107.63. The upside impetus however looks unsustainable as risk aversion could reemerge at any point. On Tuesday, global stocks show a bullish bias as US-China trade hopes endure. China is reportedly reluctant to agree a broad trade deal, so many investors doubt that the two countries will be able to strike a solid agreement. So, should the upcoming negotiations disappoint, safe-haven yen demand could resurface. By the way, the US Commerce Department on Monday put 28 Chinese companies on its trade blacklist over Beijing’s treatment of Uighur Muslims. Against this backdrop, the likelihood of resolution of the trade dispute is decreasing. In a negative scenario, the pair may suffer heave losses and get back to the lows around 106.50, with the target comes around 106.20.
by HelenRush
Another busy week for investors Late last week, investor sentiment has improved somehow due to generally positive US jobs data which curbed concerns over a potential recession in the world’s largest economy after dismal manufacturing and services PMIs. This week is going to be busy as well, with a new round of US-China trade talks will be in focus. The reports that Chinese officials have narrowed the scope of issues they will discuss at the upcoming trade talks makes investors worried about a chance for a broad agreement between the two countries. As such, market participants will likely be cautious in the days to come, and some negative reaction from Trump may follow. Apart from trade talks, investors will pay attention to the ECB and FOMC meeting minutes this week. The Federal Reserve will shed the light on its decision to cut rates in September and probably will indicate how the October meeting may play out. Should the central bank hint at another rate cut this month, the greenback will get a hit across the board. However, the general market sentiment will still depend on the trade talks, with lack of progress will hurt risky assets.
FWB:FOMC
by HelenRush
All eyes on NFP and Powell After a series of dismal economic data from the US this week, the dollar continues to lose ground against major counterparts. EURUSD saw a short-term rally on Thursday, with the 1.10 handle served as a local resistance. Today, the common currency preserves a bullish bias amid a broadly weaker greenback. Now, market focus shifts to the upcoming US NFP jobs data which could paint a clearer picture of the US economy amid the increasing signs of a recession. Should employment growth come in lower that 145-150K, traders will be disappointed once again, with wages data will also be important. Bleak data will increase the odds of a rate cut by the Federal Reserve in October. In this scenario, risk aversion will reemerge and the greenback will extend the decline. EURUSD thus could get back above the 1.10 handle and target the immediate local resistance around 1.1025. Also, the Fed’s Powell will deliver a speech later in the day and his tone could affect the dollar as well. A potentially dovish rhetoric will increase the selling pressure on the USD.
by HelenRush
Oil could fall further on growth risks Crude oil prices declined aggressively on Wednesday, with Brent has registered fresh nearly one-month lows around $57.20. Today, the prices are making some recovery attempts but struggle to get back above the $58 handle and remain under pressure in general. The market took a hit from a series of dismal economic data from the US, which spurred concerns over the outlook for global oil demand amid the rising risk of a recession. In this context, the US service PMI due later today will be in the spotlight, with another disappointing figure could prompt another sell-off in risky assets including oil. Meanwhile, the EIA report showed that US crude oil stockpiles increased by 3.1 million barrels last week, which added to the negative sentiment in the market after the API report pointed to a decline in inventories by nearly 6 million barrels. Technically, Brent needs to get back above the $60 handle in order to stage a more robust recovery. However, at this stage, the downside risks prevail, with the prices could challenge the $57 level in the short term. Once below this handle, Brent could target the lows just below $56.
TVC:UKOIL
by HelenRush
1
EURUSD has a chance to recover After EURUSD made fresh two-year lows at 1.0878 amid a stronger dollar and dismal Eurozone data. The manufacturing PMI came in at 45.7 beating forecasts of 45.6 in September, registering the lowest level since October 2012. Later in the day, the pair reversed and closed around 1.0930 as the greenback turned lower across the board. The US manufacturing PMI ISM came in at 47.8% in September, the lowest since June 2009. It was the second consecutive month of contraction and reinforced worries about a recession amid the ongoing trade war with China, which starts to hurt the US economy itself. Meanwhile, Trump blamed high interest rates and a strong dollar for the weakness in manufacturing, which added to the negative pressure on the dollar. Now, as the country’s economy shows further signs of weakening, the upcoming employment data due on Friday will be of high importance for the US currency as disappointing jobs and wages figures could further increase the odds of another rate cut by the Federal Reserve in October. As such, EURUSD has a chance to recover by the end of the week as the greenback may suffer further losses. On the other hand, as the common currency remains generally week, it may need additional catalysts to stage a sustainable recovery.
by HelenRush