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  • Daily Market Reviews

    XAU/USD: gold is cheaper amid verbal interventions. Fundamental analysis for 22.08.2016


    Last week's statements of a number of Fed officials indicating that there is a high probability of raising interest rates in the US in the coming months, contribute to the strengthening of the dollar on the foreign exchange market and the weakening of prices for precious metals, including gold.

    After the release on Wednesday of the minutes of the July meeting of the Federal Open Market Committee (FOMC), the dollar dropped massively on the foreign exchange market. The minutes showed that there is no consensus between the leaders of the Fed about monetary tightening in the US in the coming months. The Fed did not take on the obligations regarding the rate increase, making it clear that it will depend on the incoming US economic indicators.

    However, on Friday, the US dollar regained some of the previously lost positions after the two representatives of the Fed's management made statements that strengthened expectations of an increase in key interest rate this year. On Tuesday, President of the Federal Reserve Bank of Atlanta Dennis Lockhart said he did not rule out a rate hike in September. "Next year we will raise rates twice or even more," said Dennis Lockhart. Also Tuesday, President of the Federal Reserve New York William Dudley said that the central bank is close to the point where it will have to hike the rates.

    The statements by President of the Federal Reserve Bank of San Francisco John Williams he had made on Thursday that the central bank should start raising interest rates "sooner rather than later", supported the dollar on Friday. December COMEX gold futures on Friday closed down 0.8% at 1346.20 dollars per troy ounce.

    Rising interest rates usually puts pressure on gold, because in this case interest earning assets are becoming more popular. A stronger dollar also makes gold, whose prices are denominated in US currency, less attractive for holders of other currencies as the cost of borrowings for its acquisition and storage grows.

    The Fed's Vice Chairman Stanley Fischer on Sunday was also optimistic about the short-term outlook, saying that the 2% inflation target is "at a stone's throw", and economic growth, according to his expectations, will "accelerate" over the next few quarters.

    Fisher's comments also led to increased expectations of the Fed Chairman Janet Yellen's speech to be held at the Fed conference in Jackson Hole this week. If J. Yellen gives a hint of the possibility of a rate hike in September, the dollar will strengthen sharply on the currency market.

    However, the remaining risk associated with the state of the global economy, as well as lower interest rates in a number of the world's central banks with the prospect of further easing of monetary policies will support the gold price.

  • #2
    Hello everyone, i am forex exchange marketer. Our specialists burrow into the financial data to understand the implications for currency trading, especially the impact on major currencies such as EUR/USD, USP/JPY and USD/CHF.

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    • #3
      Analytical review for International Business Machines Corporation's stock


      International Business Machines Corporation, #IBM [NYSE]
      Technologies, IT, USA

      Financial performance:

      Index DJIA, S&P 500; Beta 0.62;
      Capitalization - 177.42 В Assets profitability - 11.9%;
      Revenue - 13.19 B; Average volume 5.23 М;
      P/E - 12.95; ATR 3.21.

      Analytical review:

      The Company has the biggest capitalization in the IT technologies sector among the issuers listed on the US stock market.
      Its stock edged up over 5% over the past three months. In early August, the issuer formed key support and resistance levels: 158.25 USD, 160.15 USD and 163.05 USD. This week, the company has retained a support level of 158.25 USD. IBM's quotes may continue growing.
      The Company published a positive corporate report on the second quarter of the fiscal year 2016 in mid-July. The technological giant's results exceeded market expectations and encouraged investors. IBM's revenue amounted to 20.24 billion USD against a forecast of 20.08 billion USD. The Company announced a net profit of $2.95 per share, which exceeded analysts' expectation of $2.87 per share.
      Financial multipliers suggest that the issuer's global ascending trend may continue. IBM's P/E Ratio (12.95) is much lower than an average value in the industry (19.90) and in the sector (17.70).
      IBM would be appropriate for realization of long-term investment strategies. The company regularly pays out dividends to its shareholders. The company's dividend profitability (3.51%) is much higher than competitors' (1.88%).
      Summary:

      The latest report has consolidated investors' confidence in the company. The company's revenue and net profit exceeded analysts' expectations. IBM's growth potential is quite significant. Multipliers point out that a positive trend for the company may continue.
      Thus, we expect that the company's quotes will be rising in the nearest future.
      Trading recommendations for International Business Machines Corporation's CFDs

      Key levels:
      Support levels: 158.25 USD, 153.45 USD
      Resistance levels: 160.15 USD, 163.05 USD, 164.75 USD

      Medium-term trading, H1
      The issuer is currently trading near the demand zone of 158.25-159.00 USD. Once this zone steadies and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open long positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit below the signal line. We recommend that prospective profits should be fixed partly at the levels of 161.50 USD, 163.00 USD and 164.70 USD, with Trailing Stop applied

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      • #4
        Analytical review for USD/JPY





        Technical performance:




        Prev. closure: 102.99; Daily range: 102.86-103.25;

        Opening: 102.99; 52-week range: 99.08-123.69;

        Annual profit: -14.94%; Previous day's change (%): +1.03.




        Analytical review:




        Last week, USD/JPY retained a powerful support level at 100.00 and the safe heaven currency therefore depreciated against the USD by over 300 points. The dollar continued to rally at yesterday's trading session. The currency pair grew over 1%.

        The Conference Board, a marketing research group, reported yesterday that the US consumer confidence index had grown 4.5% to 101.1 in August, exceeding market expectations of 97.0;

        Important statistics on Japan's economy have been released today. According to Japan's Ministry of Economy, Trade and Industry, the country's industrial output remained the same in July. Analysts had predicted a 0.8% growth.

        The Commitments of Traders Report shows that important market operators have increased the number of their long positions by 946 contracts to 85440 contracts. The number of short positions amounts to 28470 contracts.

        A news factor is worth attention this week: pending home sales index (today) and US non-farm payrolls (Friday). These events may affect market volatility.

        Summary:




        The positive stats from the USA and Japan's weak data on industrial output put pressure on the dynamics of USD/JPY. According to the Commitments of Traders Report, important operators have increased their long positions.

        So, we expect that the yen will depreciate against the USD in the nearest future. We advise you to search for market entry points to open long positions.

        Trading tips for USD/JPY




        Key levels:

        Support levels: 102.20, 100.95

        Resistance levels: 103.15, 104.25, 105.90




        Medium-term trading, H4



        The currency is currently trading near a support level at 103.15. Once this level is broken and tested and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open long positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit below the signal line. We recommend that prospective profits should be fixed partly at the levels of 104.20, 105.00 and 105.85, with Trailing Stop applied.

        Comment


        • #5

          Analytical review:

          At Friday's trading session, August 26th, GBP/USD retained a resistance level of 1.3260 and the pound therefore lost over 150 points against the USD.
          Demand for the dollar grew significantly on Friday evening following the US Fed Head Janet Yellen's speech. Yellen hinted that over the past two months, the regulator had become more inclined to raise interest rates due to a positive forecast for the US economy;
          Technical analysis suggests that the downward trend for GBP/USD may continue. The price consolidated below a support level of 1.2905. The MACD histogram is in the negative zone and its volumes are continuing to decrease.
          The Commitments of Traders Report provides ambiguous data. Huge operators increased long positions by 642 contracts. Short positions were increased by 765 contracts.
          A news factor is worth attention this week: The UK's business activity index in the manufacturing sector (Thursday) and the US non-farm payrolls (Friday). These events may affect market volatility.
          Summary:

          Fed's eventual tightening of monetary policy supports demand for the USD. Technical analysis suggests that the bearish trend may continue for GBP/USD. According to COT report, huge operators are not definite about the pound.
          So, we expect that the pound will weaken against the USD in the nearest future. We advise you to search for market entry points to open short positions.
          Trading tips for GBP/USD

          Key levels:
          Support levels: 1.3035, 1.2995, 1.2945
          Resistance levels: 1.3085, 1.3130, 1.3170

          Medium-term trading, H1

          The currency is currently trading near a local support level at 1.3060. Once this level is broken and tested and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 1.2995, 1.2950 and 1.2910, with Trailing Stop applied.

          Comment

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