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Americas Roundup: Dollar Gives up Gains As Jobs Data in Focus, Oil down on Glut, Gold Turns up from Near 5-Week Low-August

Market Roundup

•    Consumer spending rises 0.3% in July boosted by auto sales. •    US July personal income rises 0.4% vs forecast 0.4%; Jun 0.3%. •    US Core PCE price Index y/y 1.6% vs 1.6% previous. •    US PCE price Index y/y 0.8% vs 0.8% previous. •    US Dallas Fed manufacturing business Index -6.20 vs -1.30 previous. •    Atlanta Fed’s GDPNow model forecast Q3 GDP is 3.5% on Aug 29, up from 3.4% on Aug 25. •    White House says it sees a path to approval of Pacific trade deal (TPP). •    German trade group (BGA) slashes exports forecast as Brexit hit looms; cuts 2016 growth view to 1.8-2.0% from 4.5%. •    US assets gain, European shares dip on rising Fed rate hike bets; USD rallies, weighs on oil & gold. •    Oil down nearly 1.2% on surging OPEC output, strong USD; Iraq still set on expanding output, market share. •    Mexico hedges ‘17 oil export income at USD 42 per barrel, Mexico Finance Ministry bought puts at avg USD 38/bbl.
 
Looking Ahead – Economic Data (GMT)

•    22:45 New Zealand Building Consents Jul 16.3%-previous •    23:30 Japan All House Hold Spending YY Jul forecast -0.9%, -2.2%- previous •    23:30 Japan All House Hold Spending MM Jul forecast 1.1%, -1.1%- previous •    23:30 Japan Jobs/Applicants Ratio Jul forecast 1.38%, 1.37- previous •    23:30 Japan Unemployment Rate Jul forecast 3.1%, 3.1%- previous •    23:50 Japan Retail Sales YY Jul forecast -0.9%, -1.4%- previous •    01:30 Australia Building Approvals* Jul forecast 0%, -2.9%- previous •    01:30 Australia Private House Approvals Jul -2.3%- previous

Looking Ahead – Events, Other Releases (GMT)

•    No Significant Events

Currency Summaries EUR/USD is likely to find support at 1.1130 levels and currently trading at 1.1187 levels. The pair has made session high at 1.1193 and hit lows at 1.1157 levels. Euro traded flat against the greenback on Monday as the pair rebounded to erase earlier losses as investors looked ahead to jobs data this week that Federal Reserve Vice Chair Stanley Fischer has said will be important to whether the U.S. central bank raises interest rates soon. Fed Chair Janet Yellen said on Friday the case for a rate increase was strengthening, but provided little detail on when the Fed would next move. A report from the U.S. Commerce Department showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose for a fourth month in July reinforcing bets of a rate rise soon. Against a basket of major currencies, the dollar hit its highest in two weeks at 95.834, before falling back to 95.607. The euro was little changed at $1.1189 after earlier falling to $1.1159. GBP/USD is supported in the range of 1.3018 currently trading at 1.3107 levels. It reached session high at 1.3120 and hit low at 1.3058 levels. Sterling initially declined against the dollar on Monday as expectations that U.S. interest rates would be raised soon added selling pressure on the currency pair, but the pair recovered most of the ground as investors continued to digest comments from U.S. Federal Reserve officials on Friday.  Fed Chair Janet Yellen said the case for a rate hike before the end of the year was strengthening, Vice Chair Stanley Fischer seemed to indicate not only the possibility of a tightening move in September but a second one in December. Monday's market remained light with fewer volumes as many UK investors were out for a bank holiday and many in the U.S. out ahead of next week's Labor Day holiday. Others meanwhile remained caution ahead of Friday's U.S. non-farm payrolls report. Sterling hit low at $1.3057 after the consumer spending data was released. But recovered to trade at 1.3104 in the late US session. USD/CAD is supported at 1.2970 levels and is trading at 1.3019 levels. It has made session high at 1.3047 and lows at 1.3000 levels. The Canadian dollar declined against its U.S. counterpart on Monday as positive U.S. economic data and increased expectations of a U.S. interest rate hike as soon as September weighted on the loonie. Speaking in Jackson Hole, Wyoming, on Friday, Fed Chair Janet Yellen said the case for raising U.S. interest rates has strengthened in recent months. Fed Vice Chair Stanley Fischer later reinforced that message. Oil prices fell, pressured by high output from Middle East OPEC members and as a stronger U.S. dollar weighed on commodities. U.S. crude oil futures were down 74 cents at $47.64 a barrel. On the data front, Canada's gross domestic product data for the second quarter is due for release on Wednesday. The economy is forecast to have contracted at a 1.5 percent annualized pace as growth was shaken by wildfires in northern Alberta that disrupted oil production. AUD/USD is supported around 0.7500 levels and currently trading at 0.7573 levels. It hit session high at 0.7581 and made session lows at 0.7523 levels. The Australian dollar initially fell to its lowest level in nearly a month after speculation on U.S.  rate hike following Federal Reserve Chair Janet Yellen's upbeat assessment of the economy. However, the Aussie recovered most of the losses later in the US session and was  trading higher at $0.7575. Earlier, it touched $0.7525, its lowest level since Aug. 2. The Australian dollar has been resilient in the face of domestic interest rate cuts this year due to carry trades, where investors borrow at low rates in yen, pounds or euros to buy higher-yielding Australian dollar. Meanwhile, now the focus will shift to a speech by assistant Reserve Bank governor Guy Debelle on Wednesday. Capital expenditure and retail sales numbers both market sensitive releases are due on Thursday. Equities Recap European shares fell on Monday as top Federal Reserve official’s bolstered expectations for a U.S. rate hike this year, while Alstom bucked the weaker trend after a contract win. The pan-European FTSEurofirst 300 ended the day down by 0.19 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.3 percent. Financial and commodity-sector stocks led the S&P 500 higher in a low-volume session on Monday after consumer spending rose for a fourth straight month, pointing to a pick-up in U.S. economic growth. Dow Jones closed up by 0.59 percent, S&P 500 ended down by 0.53 percent, Nasdaq finished the day up by 0.23 percent. Treasuries Recap U.S. Treasury prices rose on Monday as foreign investors swooped in and bought Treasuries following a market selloff Friday that took yields on benchmark 10-year notes to their highest since Britain's surprise vote to exit the European Union in late June. Benchmark 10-year U.S. Treasury prices rose 20/32 in price to yield 1.566 percent. The 30-year Treasury bond rose 1-23/32 to yield 2.216 percent. Commodities Recap Gold rebounded from a near five-week low as the dollar dropped on Monday, shrugging off earlier pressure by top Federal Reserve officials' comments fuelling speculation that U.S. interest rates would rise sooner rather than later. Spot gold touched its lowest since July 26 at $1,314.70, and was up 0.3 percent at $1,324.41 an ounce by 2:49 p.m. EDT (1849 GMT), after falling for the past six sessions straight. U.S. gold futures  for December delivery settled up 0.09 percent at $1,327.10. Oil prices settled down more than 1 percent on Monday, snapping two consecutive days of gains, on caution over galloping Middle East crude output and a firmer dollar boosted by speculation of a U.S. rate hike by year-end. Brent crude settled down 66 cents, or 1.3 percent, at $49.26 a barrel. U.S. West Texas Intermediate (WTI) crude also finished down 66 cents, or 1.4 percent, at $46.98.

The material has been provided by InstaForex Company – www.instaforex.com

Daily analysis of GBP/USD for August 30, 2016

The H1 chart shows us more declines on GBP/USD, which is trying to find support at the 1.3085 level. Below the 200 SMA on this timeframe, we should expect further decline across the board, with the first target at the 1.3003 level. According to the upside scenario, if the cable manages to consolidate above the 1.3170 price zone, then a rally towards the 1.3258 level can be expected.

1472500224_GBPUSDH1.png

H1 chart’s resistance levels: 1.3170 / 1.3258

H1 chart’s support levels: 1.3085 / 1.3003

Trading recommendations for today: Based on the H1 chart, place buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3170, take profit is at 1.3258 and stop loss is at 1.3085.

The material has been provided by InstaForex Company – www.instaforex.com

Daily analysis of USDX for August 30, 2016

The greenback started to retreat during Monday’s session, following last Friday’s gains obtained thanks to Yellen’s speech. Currently, a breakout above the resistance zone of 95.79 should
expose the index to the the next key interest area for sellers at the 96.14 level. If
the correction on the USDX goes deeper, then it can decline to the
95.00 level which coincides with the 200 SMA.

1472500256_USDXH1.png

H1 chart’s resistance
levels: 95.79 / 96.14

H1 chart’s support levels: 95.49
/ 95.00

Trading recommendations for today:
Based on the H1 chart, place
buy
(long)
orders only if the USD Index
breaks with
a bullish
candlestick;
the resistance
level is at
95.79,
take profit lies at
96.14
and stop loss is at 95.45.

The material has been provided by InstaForex Company – www.instaforex.com

Crude Oil Drifts Below $47

Crude oil futures were lower Monday as a stronger U.S. dollar dented commodity prices.

Last week’s brief rally ran out of steam amid uncertainty over OPEC’s upcoming meeting in Algeria.

Markets await clues about whether Saudi Arabia will agree to curb supplies in an effort to put a floor under oil prices.

Oct. WTI oil was down 66 cents, or 1.4%, to settle at $46.98/bbl. It was the first decline in three sessions.

In economic news, the Commerce Department said that income and spending rose in line with economist estimates in the month of July.

The report said personal income climbed by 0.4 percent in July after rising by 0.3 percent in June. The increase in income matched economist estimates.

The material has been provided by InstaForex Company – www.instaforex.com

Dollar Nearly Flat After Early Gains Erode

The dollar is holding onto slight gains against all of its major rivals Monday afternoon, but is little changed overall. The buck got off to a good start early Monday, but has pared its gains over the course of the session.

Many traders are reluctant to make any major moves ahead of Friday’s highly anticipated U.S. jobs report for August. After the hawkish comments coming out of Fed officials at the Jackson Hole summit at the end of the previous week, the jobs report could be the deciding factor on whether the Fed chooses to raise interest rates in September or holds off. The statements from Fed Chair Janet Yellen on Friday suggest that a rate hike is on the way in the coming months.

Global economic data has been on the light side at the start of the new trading week. On the U.S. economic front, personal income and spending data was as expected.

Personal income and spending in the U.S. rose in line with economist estimates in the month of July, according to a report released by the Commerce Department on Monday.

The Commerce Department said personal income climbed by 0.4 percent in July after rising by 0.3 percent in June. The increase in income matched economist estimates.

The report also said personal spending rose by 0.3 percent in July following a 0.5 percent increase in June. The spending growth also met expectations.

The dollar climbed to an early high of $1.1157 against the Euro Monday, but has since retreated to around $1.1190.

Italy’s consumer confidence fell to its lowest level in over a year and business sentiment reached an 18-month low in August, preliminary data from ISTAT showed Monday.

The consumer confidence index decreased to 109.2 from 111.2 in July, which was revised from 111.3. Economists had forecast a score of 110.3. The reading was the lowest since July last year, when it was 107. All sub-indexes declined and fears of unemployment rose.

The manufacturing sentiment index fell to 101.1 from 102.9 in July, revised from 103.1. Economists were looking for a score of 102.4.

Greece’s economy expanded in the second quarter at a slightly slower pace than estimated earlier, latest figures from the Hellenic Statistical Authority showed Monday. Gross domestic product grew a seasonally adjusted 0.2 percent sequentially, which was slightly slower than the 0.3 percent estimated earlier. In the first quarter, the economy contracted 0.2 percent.

The buck reached a high of $1.3058 against the pound sterling Monday morning, but has since eased back to around $1.3110.

Markets in the U.K. are closed today for a local bank holiday.

The greenback rose to an early high of Y102.390 against the Japanese Yen, but has since pulled back to around Y101.950.

The material has been provided by InstaForex Company – www.instaforex.com