Analyst Articles – Forex News 24 |
- Bullish Breakout Gathers Pace, Fed Opening Door to Rate Cut
- Crude Oil Prices May Fall Further on Trade Wars, Oversupply Fears
- Nikkei 225 Sinks With Mazda Stock, Wall Street Faces Volatility
- USD Aims Up as Trade Wars Fuel S&P 500 Volatility. Fed Cut Ahead?
- Dow Struggles for Follow Through on Key Break, Dollar’s Climb Defies Gravity
- BRL Eyeing Unemployment, Debt Data After GDP Boosts Local Stocks
- AUDUSD Slides As China Manufacturing PMI Returns To Contraction
- Crude Oil Price Sinks 4.5% as Bullish Conviction Ebbs
- China’s Next Trade Weapon in the Ongoing US-China Trade War
- USD/CAD Breakout Stalls- Loonie Levels
| Bullish Breakout Gathers Pace, Fed Opening Door to Rate Cut Posted: 31 May 2019 03:42 AM PDT Hits: 7 Gold Price Analysis and Talking Points:
See our quarterly gold forecast to learn what will drive prices throughout Q2! Gold Prices Elevated on Further Trade EscalationFollowing a surprise move by President Trump to impose 5% tariffs on all Mexican goods, risk sentiment has once again been rattled with equity markets taking a fresh leg lower, most notably auto stocks with exposure to Mexico. Alongside this, China had also stepped up their trade war rhetoric with reports further hinting that China could place an export ban of rare earth materials (full story). In turn, the uncertainty regarding trade wars has spilled into the real economy with Chinese Manufacturing PMI falling into contractionary territory overnight. As such, safe-haven assets have been on the front foot with gold prices edging higher once again and now at the highest level in 2-weeks. However, key resistance in the form of the 100DMA at $1296 has held firm for now. Consequently, with the deterioration in risk sentiment keeping gold prices elevated, eyes will be on for a push higher and a closing break above the May peak ($1303) to extend the current bullish momentum. Has the Fed Paved the Way for a Rate Cut?The current mantra from the Federal Reserve is that they will maintain interest rates and remain patient in doing so given that the US economy is still in a "good place". However, there seems to be a sizeable disconnect between the Fed's current stance and the bond market. The 3-month-10yr US yield curve is the most inverted since the financial crisis, while Fed Fund Futures are currently pricing in over 60bps worth of easing. To add to this, 5Y5Y inflation expectations have dropped to levels not seen since the beginning of the year (when Fed Chair Powell made his U-turn on policy), while trade war tensions have continued to escalate posing greater risks to the economic outlook. Subsequently, yesterday's statement by Fed Vice Chair Clarida may be the first notable sign that the Fed could mull an interest rate cut in the near term having noted that "the Fed are attuned to potential economic risks that could call for more accommodative policy". Consequently, as rate cut bet continue to rise, upside risks to gold prices may indeed persist, particularly as US yields post fresh multi-year lows. GOLD PRICE CHART: Daily Time-Frame (Oct 2018-May 2019) What You Need to Know About the Gold Market GOLD TRADING RESOURCES: — Written by Justin McQueen, Market Analyst To contact Justin, email him at Justin.mcqueen@ig.com Follow Justin on Twitter @JMcQueenFX http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| Crude Oil Prices May Fall Further on Trade Wars, Oversupply Fears Posted: 30 May 2019 11:40 PM PDT Hits: 13 CRUDE OIL & GOLD TALKING POINTS:
Crude oil prices put in the second-largest daily drop this year yesterday. The biggest drawdown came a mere four days earlier, hinting at acceleration lower. Worries about the negative impact of trade war escalation on global growth, and thereby demand, coupled with disappointing inventory flow data appeared to be the latest catalysts. The selloff continues in APAC trade after the US threatened new tariffs targeting Mexico. SOFT US INFLATION DATA UNLIKELY TO RESCUE BATTERED CRUDE OIL PRICESBellwether S&P 500 futures are pointing sharply lower, hinting at a risk-off tilt through the rest of the trading week. Soft US PCE inflation data may be something a salve for shell-shocked investors. The core rate is expected at 1.6 percent on-year in April, matching the two-year low set in the prior month. Leading survey data hints it may print lower still, boosting hopes that the Fed will dial up stimulus in the near term. The priced-in outlook reveals that traders put the probability of a rate cut before year-end at a near-certain 90.7 percent, with the adjustment expected some time in the fourth quarter. A dovish adjustment in this view might see an upshift in this timeline. While this might leave a bit more space for a second cut before 2019 runs its course, the possibility that it materializes seems slim at best. With that in mind, the US Dollar may hold up relatively well on a disappointing outcome, offsetting tepid selling pressure with robust haven demand as the broadly downbeat mood boosts the premium on its unrivaled liquidity. That might limit the data's ability to offset sentiment-driven crude oil weakness. It may also make for a staid reaction from gold prices, which might have otherwise soared thanks to lower bond yields. Did we get it right with our crude oil and gold forecasts? Get them here to find out! GOLD TECHNICAL ANALYSISGold prices are testing resistance capping gains since late February once again. A daily close above this barrier – now at 1293.92 – exposes the 1303.70-09.12 area next. Alternatively, a reversal through rising trend line support dating back to mid-August 2018 (1274.15) targets the 1260.80-63.76 zone. CRUDE OIL TECHNICAL ANALYSISCrude oil prices dropped to a three-month low, testing support in the 55.37-75 area. Breaking below that on a daily closing basis sets the stage for a test of the 50.31-51.33 zone. Alternatively, a move back above support-turned-resistance at 57.88 opens the door for another challenge of the 60.39-95 region.
COMMODITY TRADING RESOURCES— Written by Ilya Spivak, Currency Strategist for DailyFX.com To contact Ilya, use the comments section below or @IlyaSpivak on Twitter http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| Nikkei 225 Sinks With Mazda Stock, Wall Street Faces Volatility Posted: 30 May 2019 10:21 PM PDT Hits: 7 Asia Pacific Markets Talking Points
Find out what retail traders' equities buy and sell decisions say about the coming price trend! Asia Stocks NewsAsia Pacific equities traded mixed on Friday, with the worst-performing indexes in Japan. The Nikkei 225 dropped about 0.8% before Tokyo close, lead lower by automotive shares. Mazda Motor Corp was down over 6% as it flirted with closing at its lowest since 2013. Subpar performance there may have stemmed from the US threatening to raise tariffs on all Mexican imports. The risk of higher prices from North America could bode ill for Japanese carmakers such as Honda too, the nation imports vehicles from the region to sell domestically. Things were looking slightly better off in China and in Australia, where their benchmark indexes, the Shanghai Composite and ASX 200 respectively, traded relatively flat. South Korea's KOSPI fared slightly better, climbing about 0.2%. The Remaining 24 HoursS&P 500 futures are pointing notably lower, hinting that risk aversion may prevail in the remaining 24 hours. In fact, the index appears to be facing a similar scenario as during the panic selloff from Q4 2018. It could take a rate cut from the Fed to stem declines. US-China talks appeared to have stalled, with Beijing looking to potentially curb sales of rare-earth minerals to the United States. Meanwhile, Trump's threat of levies on Mexican products casts uncertainty over the ramification of the USMCA. Given the Fed's data-dependent approach, all eyes are on US core PCE to gauge inflationary pressures. At 12:30 GMT, this data, which is the Fed's preferred measure of inflation, will cross the wires. A softer-than-expected outcome may fuel rate cut bets, perhaps cooling risk aversion. Nikkei 225 Technical AnalysisTaking a closer look at Nikkei 225 futures to show afterhours trade, the index sits right on top of key support at 20680. If broken, this may open the door to extending the near-term downtrend. However, positive RSI divergence warns of fading downside momentum. Nikkei 225 Futures Daily ChartChart Created in TradingView FX Trading Resources— Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| USD Aims Up as Trade Wars Fuel S&P 500 Volatility. Fed Cut Ahead? Posted: 30 May 2019 08:54 PM PDT Hits: 10 Trade Wars, Volatility, S&P 500, US Dollar Talking Points
Trade all the major global economic data live as it populates in the economic calendar and follow the live coverage for key events listed in theDailyFX Webinars. We'd love to have you along. S&P 500 Faces Similar Scenario as in Late 2018, The BackgroundIn the fourth quarter of 2018, the S&P 500 plummeted over 20% as it entered correction territory. Equities around the world followed, Japan's and Germany's benchmark Nikkei 225 and DAX 30 dropped respectively. Demand for safe havens offered a generous boost to the world's most-liquid currency, the US Dollar. Local government bond prices rallied as traders flocked into what is essentially the world's "risk-free" asset. There was much to worry about for financial markets, such as an escalation in US-China trade wars, slowing global growth and the uncertainty over the future of Brexit. Meanwhile, the Federal Reserve unexpectedly raised rates four times by year-end. The central bank was partially driven to do so by the White House delivering on corporate tax cuts. What eventually lead to a recovery in the S&P 500 was arguably the Fed's dovish monetary policy shift, pictured below. It was evident by the beginning of 2019 that there was fading confidence from policymakers over the trajectory of interest rates. One thing lead to another and the central bank went from envisioning two hikes this year, to none at all. For most of this year, a relatively timid Fed and cooling fears of a US-China trade war helped the S&P 500 trim its losses from 2018. But this has since changed, and we may be facing a similar scenario to what markets witnessed last year. US-China trade war fears have been revived as of late, but the Fed is stressing the importance of a data-dependent approach. S&P 500 Versus US 2-Year Government Bond YieldsChart Created in TradingView Rising Fears of a US Recession, Will the Fed Step in?The S&P 500 finds itself falling alongside US front-end government bond yields again. This is a classic example of risk aversion as traders buy into Treasuries, pushing prices higher at the expense of yields. Last time, it took the Fed pausing rate hikes to bring an end to the panic, and markets are now expecting them to take it one step further. Fed funds futures are pricing in slightly better-than-even odds that the central bank will cut in September, with potentially more to come in 2020. This may be for good reason. On the next chart below is the difference between 10-year and 3-month bond yields. This key section of the US yield curve has inverted, meaning that short-term yields are above longer-term alternatives. While this is typically seen as a warning sign of a recession, whereby rate cuts in the future help support economic activity, it usually takes persistence in this signal to be confident in follow-through. Back in the summer of 2006, the same segment of the yield curve inverted and stayed so for about a year. US housing prices meanwhile decreased as the bubble burst, leading to the 2008 financial crisis. US 10-Year and 3-Month Bond Yield Spread
Chart Created in TradingView Demand for Havens Rise as Trade War Fears BrewRecent activity in US government bond auctions seems to show fading confidence in upbeat economic activity ahead. On May 28, we saw an uptick in demand for bonds closer towards the front end of the curve. This included 3-month, 6-month and 2-year Treasuries. However, demand for longer-dated paper – such as 5-year and 7-year notes – weakened In short, this means that markets could be expecting that rates start rising again in about 5-7 years. But the question comes back to how the Fed will respond with risks such as trade wars, with a new one potentially re-opening up on the North American front, and placing the fledgling USMCA deal in doubt. Worrying proliferation of CLOs compounds the risk of panic across financial markets. Looking at May's FOMC meeting minutes, we saw the central bank downplay external developments while stressing the importance of incoming economics news-flow. If the US economy chugs along solidly, we may not get a rate cut and this will likely add fuel to the selloff seen in equities, as this will probably disappoint the markets. The US Citi Economic Surprise Index is still negative however, hinting that analysts are overestimating the health and vigor of the economy. If this holds true, softer-than-expected data may compel the Fed to lower rates as it pauses the unwinding of its balance sheet. Impact on US DollarHowever, it is unclear if this will necessarily bode ill for the US Dollar judging by how well it performed this year despite a relatively dovish Fed. If the central bank resorts to cutting rates due to a downturn in the economy, that may fuel risk aversion, which bodes well for havens such as the Greenback. As mentioned earlier, a lack of follow-through on delivering cuts can also induce market pessimism. With that in mind, any near-term USD weakness may be limited. US Dollar Technical AnalysisFrom a technical standpoint, the DXY may find itself eventually taking out near-term resistance, which is a range between 98.15 and 98.37. If these are cleared, that would open the door to testing highs last seen in May 2017 between 99.63 and 99.89. In the event of declines in the US Dollar however, keep an eye on the rising trend line from September 2018. It may hold and keep the dominant uptrend intact. DXY Daily Chart
*Charts Created in TradingView US Dollar Trading Resources— Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| Dow Struggles for Follow Through on Key Break, Dollar’s Climb Defies Gravity Posted: 30 May 2019 08:17 PM PDT Hits: 9 Reversal Talking Points:
See how retail traders are positioning in the Dow and S&P 500 following their tentative technical reversal along with the FX majors, other indices, gold and oil intraday using the DailyFX speculative positioning data on the sentiment page. The Very Familiar Case of a Critical Technical Break with No Follow ThroughOn Wednesday, the US indices raised the threat level to risk assets significantly with their unmistakable break of support on favorite textbook reversal patterns. Yet, primed with speculative intent just below the critical support levels at 28,250 and 2,800, the Dow and S&P 500 (respectively) were noticeably stoic this past session. Just as a key fundamental event can tip a systemic drive in the capital markets, a high-profile technical move can trigger a speculative avalanche. The operative word here is ‘can’. For those keeping tabs on the markets these past weeks and months, there have been far more instances of key developments – fundamental and technical – failing to produce critical traction than there have been occasions where the market’s response has lived up to the promise of the catalyst. It can be difficult to definitively establish whether an asset or the market-at-large is in a position that it will run versus stall or if it maintains a particular bullish or bearish bias, but evidence will add up over time. At present, it is clear that there is serious speculative inertia that needs to be overcome if we are to establish a full-scale trend. Chart of Dow Jones Industrial Average and 200-Day Average (Daily) As we await the financial system’s awakening, it is important to realize that there remains considerable jeopardy for a serious risk aversion should the market start to pay heed to the cumulative evidence on hand. The underlying fundamental issues of slower growth, hamstrung safety nets and fractures in global systems aide for a moment; there is obvious priced-based pressure showing through. The tentative H&S-style reversal patterns from the high-profile speculative leaders may give the impression that there isn’t a firm bearish view amongst the masses. However, US indices are the exception to the rule. Global equities continue to trade at a steep discount to their US counterparts – and are still sensitive to renewed selling pressure from the premium-laden category. Then there is the stark contrast in performance between the more speculatively-concentrated risk assets and the growth-sensitive markets like global government bond yields. Chart of S&P 500 and Aggregate 10-Year Yield of US, UK, German and Japan Gov't Bond (Daily)
There is even some contrast in intent that we can draw from speculative activity behind related assets. Looking to the IGCS speculative positioning data we host on DailyFX, a notable contrast is developing between retail exposure in the S&P 500 and Dow CFDs. The former is still net short at 60 percent of those holding positions while the latter has flipped to a long position after the ‘neckline’ break. It should be said that the correlation between these two indices is practically 1.0 – extremely strong and positive, as in they almost move in tandem. Why the contrast? The crowd. The Dow is the more popular index amongst ‘investors’ around the world who treat the US indices as global macro benchmarks. It reflects their belief of the market and its complacency. In contrast, the S&P 500 is a ‘trader’ favorite with heavy speculative activity through derivatives like emini futures, ETFs and CFDs. The more active and risk-leaning retail participants are willing to call the turn it seems.
Trade Wars Needs a Shakeup While Growth Concerns are Gathering SteamFor fundamental sway, the trade wars remain the most potent threat for volatility and trend. The actions from the United States and China have ebbed following the Fed’s increase to the tariff rate and China’s subsequent retaliation, but the warning shots have been relatively steady. We have yet to see to see China match the Trump administration’s ban of telecommunications company Huawei with the country instead seeking to reverse the move through the courts (US and WTO). A retaliation against Apple has not come crashing down and the movement on rare earth materials has been slow. China – not exactly intent to capitulate – has been slow to raise the stakes as it seems keen on keeping open an avenue for its trade partner to reverse course while not losing face. This past session, the US delivered a jolt with US Vice President Mike Pence stating they could “more than double” tariffs on China if necessary. Before these remarks, China was a charm offensive with the Ministry of Commerce reporting another 38 foreign companies committing to 49 billion yuan investment into the country. None of this seemed to tip a clear drive for USDCNH – or AUDUSD – one way or the other. An unexpected avenue for trade wars in the afterhours trade was via the North American standoff. With VP Pence visiting Canada’s Trudeau to speak on trade, it seemed the mood was positive on the USCMA. Yet, early Thursday, there were reports from the Washington Post that the President was considering new tariffs on Mexico in a bid to force the country to stem illegal immigration into the United States. That warning was ignored until Trump tweeted in the evening hours US that he would impose a 5 percent tariff on all Mexican imports starting June 10th and keep the levy in place until the country stemmed the tide of immigrants. Mexico stated its readiness to respond, but the threats of retaliation didn’t seem to carry the same weight as the initial move. It is hard to see how the USMCA (the NAFTA replacement) will pass by all three players under this cloud. Keep an eye on the US open Friday to see how much influence this theme will exert over the resilient course of systemic risk trends. Chart of USDMXN and 1-Day Rate of Change (Daily)
Another theme that has revived some attention recently – and is facing much more charge in the week ahead – is the state of global growth. Though there have been a number of updates to regional forecasts this week, the return of the Treasury yield curve inversion seemed to draw the speculators’ attention in earnest. This past session’s updates were more tangible between the final reading of the US 1Q update which issued a 3.1 percent annualized reading (only a 0.1 percent step down versus 0.2 percentage points expected) and Brazil (the ninth largest economy) registering an actual contraction of -0.2 percent. Ahead, we are expecting 1Q growth readings from Canada and India. The theme will carry forward into next week as we await a host of direct readings like Australian 1Q GDP, more timely readings such as PMIs and related reports like Friday’s US NFPs. As Euro, Pound and Aussie Await Their Fundamental Cues, Dollar’s Climb Ignores Its Economic BackdropAmongst the majors, there remains a status of wait-and-see more than there is any commitment to trend development. Amongst the majors, the Euro is still groping for its motivation. Italy is an internal systemic threat, but the country’s budget fight doesn’t start in true form until next week when the European Commission is due to review its budget. In the meantime, watch the FTSE MIB relative to Euro-area benchmarks and the Italian 10-year yield spread to its German counterpart. The Fitch rating agency warned this past session that Prime Minister May’s resignation and the EU elections were evidence that a ‘no deal’ Brexit outcome was a significantly higher probability, but we don’t even have Parliament off recess until next week and we won’t have a key date to work with on the progress of this divorce court until the end of October. From the Australian Dollar, we have a leveraged technical appeal with an overstretched bearish move with recent technical congestion. A break and follow through is unlikely until we find a clear drive on the US-China trade war or the RBA rate decision (heavily expected to end with a cut) is passed. Chart of AUDUSD (Daily)
Drawing its direction from these uncommitted counterparts, the US Dollar is still managing to produce gains through the general struggle from the Euro, Pound and Yen in particular. Though the Trump administration’s pursuit of trade wars and the government’s allowance of ballooning deficits is detrimental to the long-term strength of the Greenback, the currency still holds as the most liquid player (by a wide margin). This role is proving crucial, as we find more traditional measures of lift for the USD are clearly heading lower. Consider the interest rate forecast which has a rate cut priced through year’s end and two-to-three moves lower out through the end of 2020. The safe haven appeal of the Greenback is something that may find legitimate backing in the near future, but the traditional measures of risk (like the VIX) are currently deflated. Even the baseline for growth forecast is trending in the wrong direction. Consider the situation we are facing whereby the growth outlook is fading, there are multiple rate cuts priced in by the market and sentiment seems detached, yet the Dollar seems to hold firm. That is very unusual and thereby very unlikely to persist. We discuss all of this and more in today’s Trading Video. Chart of DXY Dollar Index and Implied Yield from Dec 2020 Fed Fund Futures (Daily)
If you want to download my Manic-Crisis calendar, you can find the updated file here. 2019-05-31 02:27:00 Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| BRL Eyeing Unemployment, Debt Data After GDP Boosts Local Stocks Posted: 30 May 2019 07:01 PM PDT Hits: 9 TALKING POINTS – BRAZIL GDP, UNEMPLOYMENT RATE DATA, IBOVESPA
See our free guide to learn how to use economic news in your trading strategy! Brazilian stock markets rose after local GDP data came in at exactly what analysts had forecasted. Quarter-on-quarter growth confirmed that the economy did indeed contract in the early breaths of 2019. As outlined by the most recent meeting at the Brazilian central bank, weaker growth from the latter half of the year made its way into the early stages of 2019. Ibovespa futures recovering… but for how long?
Ibovespa futures closed over one percent higher for the day and above the June 2018 rising support, signaling that perhaps investors were not quite ready to continue with the selloff in May. BRL, on the other hand struggled to gain, and actually closed lower against the US Dollar. This may have been due to weak FGV inflation data that in turn cooled expectations that the central bank may tilt from neutral to more hawkish. The next local event risk traders with exposure to Brazilian assets will be watching for is government debt and unemployment data. The latter is expected to show a 12.5 percent print – slightly lower than the previous reading at 12.7 percent – while net debt as a percent of GDP is forecasted to be at 54.0 percent. The Brazilian government's generous pension system is the primary culprit behind the bloating. If government debt data is higher than expected, it could make holders of Brazilian assets nervous against the backdrop of souring global growth conditions. Brazilian sovereign bond markets may face increasing pressure if the domestic outlook also appears unfavorable against the backdrop of inhospitable global growth prospects. This in turn may fuel concerns about solvency issues and could lead to capital flight from Brazil. Looking ahead, monitoring progress on President Jair Bolsonaro's pension reform will be crucial in understanding price action in Brazilian assets. Externally, the US-China trade along with growing concerns about the prospect of slower global growth. These fears are compounded after US President Donald Trump threatened to impose tariffs against Mexico in an effort to curb immigration into the US. BRL TRADING RESOURCES— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter
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| AUDUSD Slides As China Manufacturing PMI Returns To Contraction Posted: 30 May 2019 06:14 PM PDT Hits: 10 Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| Crude Oil Price Sinks 4.5% as Bullish Conviction Ebbs Posted: 30 May 2019 03:47 PM PDT Hits: 14 OIL PRICE – TALKING POINTS
Crude oil price swooned on Thursday to $56.46/bbl – its lowest level since March 11. The selloff was sparked after the latest DoE crude oil inventory data showed a stockpile reduction of 282K barrels, which compares to an estimate of a 1,360K barrel drawdown and a previous build of 4,740K barrels. CRUDE OIL PRICE CHART: DAILY TIME FRAME (DECEMBER 18, 2018 TO MAY 30, 2019)Today's sharp drop in crude oil marks the 6th decline in excess of 1 percent this month as oil bulls begin to lose conviction. The aggressive selling in crude has now pushed oil prices below key technical support around the 38.2 percent Fibonacci retracement level drawn from the December 24 low to the most recent high printed on April 23. The 50 percent retracement level near $55/bbl could be a probable downside target as oil bears gain momentum. Also, recent selling pressure threatens to accelerate with oil prices hinging on global growth risks and if speculative traders further unwind long bets. CRUDE OIL TRADER SENTIMENT
Check outthis real-time Client Positioning Sentiment Tracker to see the bullish and bearish biases of EURUSD, GBPUSD, USDJPY, Gold, Bitcoin, and S&P500 traders. According to IG client positioning data, 58.0 percent of crude oil traders remain net-long with the ratio of longs-to-shorts at 1.38. Although, bulls are beginning to show fading conviction considering the number of traders net-long crude oil is 1.4 percent lower relative to last week. Moreover, short interest is climbing quickly seeing that the number of traders net-short crude oil is 7.7 percent higher than yesterday. – Written by Rich Dvorak, Junior Analyst for DailyFX – Follow @RichDvorakFX on Twitter http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| China’s Next Trade Weapon in the Ongoing US-China Trade War Posted: 30 May 2019 10:38 AM PDT Hits: 10 US-China Trade war Talking Points:
China May Look to Impose Export Quotas on Rare Earths Relations between China and the US have been deteriorating since they failed to sign a trade agreement in early May. And after Donald Trump placed Chinese telecommunications firm Huawei on the country's "blacklist"reports that Chinese president Xi Jinping visited a rare earths magnets firm seemed to suggest that the Asian country may use exports of rare materials as their leverage in the ongoing US-China trade war dispute. China dominates the world supply of rare earths, a group of 17 earths with a wide range of high-tech applications used in the production of camera lenses, military equipment and mobile and cars parts among others. China accounts for 80% of US rare earth imports and if export restrictions were enforced other suppliers outside of China would struggle to meet US demands for rare earths, those include Australian firm Lynas. Reactions from the market Although no measures have been announced, stocks of Chinese producers of rare material have jumped following the speculation, pushing the benchmark CSI 300 higher. Shares in JL Mag Rare-Earth, the plant Xi Jinping was seen visiting in Jiangxi last week, rose to their daily 10% limit for a seventh time in the last eight trading sessions on Wednesday. Shares in China Rare Earth Holdings Ltd soared up to 109% before closing 83% higher on the day on May 20th after the Chinese President was seen visiting the plant in Jiangxi. As can be seen in the graph below, the company's shares have soared more than 112% since the speculation began last week. China Rare Earths Holdings Ltd Price Chart: Daily Time Frame (Feb 10 – May 29, 2019) Spill over effects saw shares in Australian rare earths company Lynas rise to 8-year highs on May 29th, further signalling that investors believe China will use the materials to retaliate against the US. If export bans are imposed on Chinese companies, we could see shares in Lynas soar higher as they are one of the only miners of rare earths outside of China. There are two sides of the coin The main threat to the US is not the rare earth itself, but the products that result from these materials. As the US buys these finished or semi-finished products from countries that have a strong trade relationship with China, like Japan, imposing trade restrictions with the US would have a disrupting effect on their supply chains with other countries by, which in turn will have a damaging effect on China's trade relationships. The question really is if China is willing to go to such extent to get back to the US. Although, no action has been confirmed yet, it is unlikely that China will impose a total ban of rare earths to the US. As an alternative it can limit the amount of local production and impose export quotas to drive the prices of these rare earths higher. Despite their name, rare earths are quite common, but they are seldom mined elsewhere because the processing equipment needed to separate them from the ore is expensive and there is a high risk of radioactive leakage. Because their supply is limited, and the production capacity of foreign producers other than China is weak, the demand of rare earths will not be greatly impacted as the US will have no choice but to pay the higher prices to ensure they receive the materials which are irreplaceable in some high-tech industries. China Banning Rare Earths In 2010 It wouldn't be the first time that China used export bans of rare earths as a retaliation. In response to Japan detaining a Chinese fishing trawler captain whose vessel collided with two Japanese patrol vessels near the dispute Senkaku islands back in 2010, the Chinese government announced that it would ban the export of rare earths to Japan, to the point where custom officials where preventing the earths from being boarded on ships bound for Japan. In reaction to this, rare earth prices had soared as the Chinese government cut export quotas by 72 per cent with rare earth exposed stocks also benefitting. However, China's retaliation had later been deemed to be in violation of trade rules in 2014 by the World Trade Organization. The incident highlighted the need for geographic diversity of supply of rare earths. Recommended Reading Chinese Yuan at 7.00 Barrier: The Most Important Level for Currency Markets CNH vs CNY: Differences Between the Two Yuan KEY TRADING RESOURCES: — Written by Daniela Sabin Hathorn, Junior Analyst 2019-05-30 17:30:00 Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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| USD/CAD Breakout Stalls- Loonie Levels Posted: 30 May 2019 08:43 AM PDT Hits: 11 The Canadian Dollar is down more than 0.55% against the US Dollar with a breach of the monthly opening-range taking USD/CAD to levels not seen since January. These are the updated targets and invalidation levels that matter on the USD/CAD charts heading into the close of the week/month. Review my latest Strategy Webinar for an in-depth breakdown of this setup and more. New to Forex Trading? Get started with this Free Beginners Guide USD/CAD Daily Price ChartTechnical Outlook: In last week's USD/CAD analyst pick we noted to, "Look for support ahead of the 1.3435/37 confluence zone IF price is heading higher on this stretch with near-term topside objectives at the May high at 1.3514 and 1.3537– a breach / close there would be needed to validate a breakout of the monthly range." Price briefly registered a low at 1.3430 early in the week before rallying sharply with the advance failing at the 1.3537 confluence resistance zone yesterday (high registered at 1.3546) – note that daily momentum halted precisely at the 60-threshold and highlights the risk to the near-term breakout. Why does the average trader lose? Avoid these Mistakes in your trading USD/CAD 120min Price Chart
Notes: A closer look at price action shows USD/CAD trading within the confines of a near-term ascending pitchfork formation extending off the monthly lows. Note that price found resistance at the 75% line for the second time on this last stretch with the pullback now probing back below the median-line. Initial support rests with the 5/22 trendline backed closely by the 38.2% retracement at 1.3474– weakness beyond this threshold would risk a larger setback towards the lower 25% line and the 1.3435/37 support pivot- look for a bigger reaction there if reached. Resistance steady at 1.3537 with a breach above the upper parallel / monthly high at ~1.3546 needed to validate the breakout targeting 1.3574 & 1.3599. Learn how to Trade with Confidence in our Free Trading Guide Bottom line: USD/CAD has broken above the monthly opening-range highs and IF this breakout is legit, losses should be limited to the lower parallel (currently ~1.3450s) for now. From a trading standpoint, a good place to reduce short-exposure – be on the lookout for possible near-term exhaustion down here. Ultimately, a breach / close above the median-line is needed to keep the long-bias viable. Keep in mind Canada GDP data is slated for Friday morning. Review my latest USD/CAD Weekly Price Outlook for a longer-term look at the technical picture on the Loonie. For a complete breakdown of Michael's trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy USD/CAD Trader Sentiment
See how shifts in USD/CAD retail positioning are impacting trend- Learn more about sentiment! — Relevant US / Canada Economic Data Releases
Economic Calendar – latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide! Active Trade Setups– Written by Michael Boutros, Currency Strategist with DailyFX Follow Michael on Twitter @MBForex http://platform.twitter.com/widgets.js Can you get luxurious from fx trading? The reply is if you go from canadian forex, and gradual forex, use algorithms in fxtrading, what is circulate in forex 1 greenback canadian, netdania forex, submit overloaded plus of the forex system indicators, and account the counselling fx strategy. We present win win all.
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