Gold Is Way Too Much Affected By the USD

In late summer, Gold is consolidating. On August 28th, the Troy ounce of this precious metal is trading at 1215.80. It’s quite far from the August low at 1167.10, but still not enough to say that the risks of new sales have gone. Over the last week, Gold has added 4% and may continue moving upwards.

The basic risk for Gold is upcoming rate hikes by the US Federal Reserve. This factor supports the USD and, as a result, makes Gold weaker. Current market expectations on the rate increase during the regulator’s September meeting are 90%, the December meeting – about 60%. If the Fed rejected the idea of four hikes this year in favor of three as it was expected earlier, Gold would get stronger much faster.

Among fundamental news, which is positive to Gold, one should pay attention to the increased demand for the precious metal in India: in the second quarter 2018, the country’s jewelry industry bought 4 times more Gold than before. At the same time, one should admit that right now there aren’t enough fundamental indicators that may influence Gold behavior, such as demand, mining, or reserves, but too many speculations instead, which means that the USD price movement is still the major factor for Gold at the moment. The high volatility of the USD, in its turn, makes Gold more active asset than it was before.

The H4 chart shows an upward movement. By now, the pair has already got close to the resistance line of the upside projected channel. The main upside target is at 1216.50. This level may provide resistance to the uptrend and force a new pullback towards the support line at 1200.00. Assuming that the uptrend may continue after a short-term correction, the instrument may be rebound from the support line and break the resistance one, thus moving into the next projected channel. The closest upside target, in this case, will be at 1235.00.

Gold 4H Chart
Gold 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

EURUSD Is Calm Early In the Week

The basic fundamental catalyst for the major currency pair is the speech delivered by the US Federal Reserve Chairman Jerome Powell during the Jackson Hole symposium. Powell was pretty positive and optimistic and made a stand for the regulator’s current monetary policy relating to the key rate hike despite being criticized by the US President Donald Trump earlier last week.

Jerome Powell is in favor of “slow” tightening of the regulator’s monetary policy (in fact, he just continues the same policy as his predecessor, Janet Yellen), which is not a secret for investors. However, in this case, Powell is the person, who investors can obviously predict, but Trump is not. That’s why investors’ response to Powell’s speech wasn’t very clear.

The head of the US regulator said that the American economy remained strong and the macro statistics confirmed that. According to him, if the labor market remains strong and employment/income numbers continue growing, “slow” tightening of the monetary policy will be appropriate. However, the dynamic growth of income requires the same from the labor efficiency numbers.

EURUSD may remain quiet at the beginning of the last summer week due to the lack of significant macroeconomic reports. The numbers are expected on Wednesday-Friday, thus making the pair more active and volatile.

The H1 chart of EURUSD shows the uptrend. After updating the high, the price has started falling towards the support line at 1.1586. However, as long as this level isn’t broken, the instrument may yet resume growing to reach the resistance line at 1.1730. Still, if the pair breaks the above-mentioned support line, the price may fall into the downside projected channel and its support line at 1.1500.

EUR/USD 1H Chart
EUR/USD 1H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Euro Is Moving Upwards, Taking Advantage of the USD Weakness

The reason why the USD is falling this week is the President Donald Trump’s aggressive rhetoric towards the US Federal Reserve. Trump said that he was absolutely unhappy with the key rate hike and Jerome Powell himself.

In fact, it doesn’t mean anything: it was Trump who assigned Powell to the Fed Chairman position, hence he approved Powell’s views on the country’s monetary policy. One should remember that Powel supports the monetary policy pursued by his predecessor, Janet Yellen, which proved to be efficient many times in the past.

However, the market is against the USD right now, because some speculative investors believe that Trump may one way or another have an impact on the US monetary policy. Moreover, it isn’t the first time Donald Trump criticized the Federal Reserve in such an aggressive manner of his, and that also makes investors nervous.

Apart from this, the USD is responding to the upcoming talks between China and the USA on their trade relations, which are expected to take place in the nearest future – before the end of this trading week.

In the H1 chart, EURUSD is forming an ascending tendency. The current uptrend is a correction of the previous long-term downtrend. The technical picture shows that the price has broken the resistance line of the previous rising channel and right now is trading above it, which means that the instrument may continue growing to reach the resistance line at 1.1580. After that, the pair may fall towards the support line at 1.1535. However, there is another scenario, according to which the price may soon break the current support level at 1.1500 and then continue trading to the downside to reaching 1.1460.

EUR/USD 1H Chart
EUR/USD 1H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The Japanese Yen is Leveling Out

After a phase of heavy growth in the middle of July, the USD has finally given Yen a chance to reassert itself. It looks like now the market is almost not interested in safe assets as Yen, for example, and is calmly assessing external risk levels.

Now, investors are paying more attention to statistics. On Monday, Japan issued an interesting release on June retail sales which allows one to assume the positive economic impulse will be restored in the II quarter of 2018. The report has demonstrated the growth of the index to 1.5% m/m after a 1.7% m/m fall in May. On a year-on-year basis the statistics are also positive: here we can see a 1.8% rise, while the forecast predicted only a 1.7% rise, with the previous value being 0.6%.

However, one cannot fully assume that it will be definitely the retail sector that will reboot the economic growth. Nevertheless, one can assume that, together with the other main fundamental reports, demonstrating the stabilization in the economic system after the decline at the beginning of the year, the retail sales indicator will lay the groundwork for the further improvement of the situation.

According to different estimates, there is a risk now for Japan to get involved in the trade wars between the US and China. As of yet, there are no compelling reasons to be afraid of it, but in theory, such possibility really exists. If the American partners again demand Japan to reduce the trade balance surplus, the economic system of the Land of the rising Sun will again find itself in the risk zone.

This week a sufficient number of Japanese statistics will be issued – on Tuesday, the July session of the Bank of Japan will be finished. More objective estimates of the further interventions of the regulator may be made following the results of this session. This is very important of the behavior of Yen.

In order to understand the current market status of the USDJPY currency pair, we have to analyze the long-term technical picture. If we evaluate the general situation by looking at the graphical analysis, we will see that the Market is slowly but surely entering a downtrend. We can interpret the current local situation as a correction in relation to the first down impulse. On the other hand, the Market is trying to secure itself below the surpassed support line, by testing it from below. In the short run, the pullback can be directed towards the levels of 111.58 and 111.88. By understanding that the downtrend is developing in the “impulse-correction-impulse” mode, we can expect the next down impulse to be directed towards the levels of 108.90 and 107.92, which corresponds to 50.0% and 61.8% according to Fibonacci, in relation to the previous uptrend.

USD/JPY 4H Chart
USD/JPY 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

EUR/USD – Trump Makes the Greenback Retreat

On Friday, Donald Trump said the Fed and other central banks were manipulating the EUR exchange rate. According to the US President, monetary policy tightening is spoiling everything the White House managed to achieve. Trump attached the Fed policy both in his CNBC interview and on his Twitter account.

In his Twitter post, Trump says the EU, China, and other countries are manipulating their currencies rates, keeping the key interest rates low in the lights of the US rate hikes. The President’s words are quite reasonable, as such ‘manipulation’ leads to the greenback getting stronger, which in its turn makes the US financial system less competitive.

Trump’s criticism is unlikely to provoke any reactions in the market, apart from the immediate ones. Anyway, the Fed is now governed by Jerome Powell, who was actually appointed by Trump; thus, the White House is most likely okay with Powell’s strategy, while this ‘verbal interference’ is hardly anything else that just a formality. This is all very in line with overall Trump’s behavior, though.

Among other things, the ECB meeting is scheduled for this week, while in the US the durable goods data are being released. Overall, there will be not many fundamentals, as it often happens at the end of a month.

Technically, the EURUSD is correcting in the midterm after the previous downtrend. In the short term, meanwhile, the downtrend may end with the resistance breakout. If the price goes higher, it may reach the new ascending channel resistance at 1.1830; after this resistance has been tested, the price may pull back to the support at 1.1680.

EUR/USD 4H Chart
EUR/USD 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Pound Unable to Go up

The pound sterling has been trying to strengthen over the last few days but has not succeeded so far. The major fear of the pound traders lies in Brexit negotiations which are paused or disputed every now and then. Besides, the market has not yet fully recovered after Donald Trump’s speech, where he said that too mild Brexit may damage the relations between the UK and the US.

Now, investors’ attention is driven to the fundamentals. Today’s job market data were quite neutral, so the pound is still uncertain and waiting for more news to come.

Jobless claims in the UK rose by 7,800 against the expectations at 2,300 and the previous number of 7,700. It looks like this summer is not the best season for British business, which is quite a strange thing. Meanwhile, the unemployment rate remained unchanged at 4.2$, quite in line with the expectations, while the average wages per three months rose by 2.5%, also meeting the expectations.

Thus, the fundamentals are just okay, without being able to act as a driver. At the same time, investors watch the Brexit closely, and all those news are rather fearsome or just negative. The UK has about 6 months left to arrive to an agreement with the EU; after March 2019, the transitional period will start, and while May and her advocates want it mild, some criticize this approach. Nobody knows what will happen next, and this is what the pound traders are scared of.

Technically, GBPUSD is uptrending, perhaps this is a reversal after a long fall. After breaking out the latest descending channel, the price formed an initial ascending channel. Then, the price hit the new channel’s support and went down to the projection channel, but there it failed to make a new low, just testing the broken out resistance area. Currently, there’s an ascending impulse forming inside a wide uptrend channel, with the support at 1.3110. The target could be at the major channel resistance, which is $1.3420.

GBP/USD 4H Chart
GBP/USD 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The Coming Oil Market Storm

In the nearest future, the oil market will become more and more dramatic. At least, the current fundamental background, which is more favorable for the bulls but not the bears, is pointing at that.

This time, investors barely noticed the statistics on the Oil Rig Count from Baker Hughes over the last week. The indicator improved by 5 units after it had been going down for two previous weeks. This is due to the fact that the reports on the API Crude Oil Stock Change and the EIA Crude Oil Stocks Change offered rather mixed numbers: the first one showed that the indicator continued falling, the second one indicated a rebound.

However, all eyes of investors are focused not on numbers, but the fundamental background. If to be more specific, on the relations between the USA and Iran, which become more intense. The USA demands Iran to stop importing oil and appeals to global buyers not to acquire “black gold” of the Iran origin. The point of all of this is an economic warfare against Iran and this plan actually might work, because most of the buyers wouldn’t want to disagree with the USA and Donald Trump.

In the future, this might reduce the world oil stock to such a level, when any piece of news, even the least significant one, will be enough to make oil prices extremely volatile.

The “epoch date” for the USA is November 4th, which means that the burst of activity with oil prices may occur from September to November.

As we can see in the H4 chart of Brent, after breaking the resistance level, the instrument has started a new uptrend. The main upside target is the current resistance line and 83.00. The short-term scenario indicates that the downtrend is nothing but a correction of the previous rising impulse. If the pair breaks the local resistance line at 78.58, it may continue growing towards the next one at 79.80. However, one can’t exclude a possibility that the downtrend may yet continue. The local support level is at 76.37. If the price breaks it, the instrument may continue falling towards 75.00.

Brent 4H Chart
Brent 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Pound Still Afraid of Brexit

The United Kingdom and the European Union are less than 6 months away from the moment when they have to wrap up the Brexit talks. In fact, in the nearest future politicians of both parties should become more active. Right now, the British financial sector is starting to assess what is going on in the country’s economy in a fresh new way and it seems that the future is scaring them.

According to the survey conducted by the Confederation of British Industry, the third of those surveyed aren’t sure that the Brexit procedure will start within the time specified, i.e in March 2019. Most of all, they are worried about trans-border contacts and transfers, which may really “glitch” during the transition period, which will last until the end of 2020.

British companies, including financial ones, still don’t know within which legal domains they will operate during the transition period. The conditions haven’t been ratified yet and the parties may spend really much time on final agreements. Another thing, which is still not quite clear, is how the United Kingdom and the European Union will continue trading. Right now, British companies believe that the transition period may become some kind of “the Time of Troubles”, when they may face a lot of obstacles. Of course, such things don’t make the Pound more optimistic.

Later in the afternoon, the United Kingdom will report on the Construction PMI, but investors aren’t likely to respond to these numbers, because after that they will be presented the FPC Meeting Minutes, which seems much more interesting.

The current descending tendency is keeping GBPUSD inside the long-term channel. If one takes a closer look at the channel, it can be seen that the pair has failed to reach the support line while updating the lows, which means that the tendency is getting weaker. The same can be told about the short-term downtrend. However, the main “event“ is the price’s testing the resistance lines of both short-term and long-term channels. If the pair fixes above the resistance line, it may start a new rising impulse towards the resistance line of the projected channel at 1.3330. Still, if the instrument breaks the support line at 1.3095, it may continue falling towards the psychologically-crucial level at 1.3000. But the main target of the short-term downtrend may be the support level at 1.2870.

GBP/USD 4H Chart
GBP/USD 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The OPEC and other Decisions Made Oil Decrease

So, after receiving recommendations from the technical committee and having the summing-up meeting, the OPEC+ has decided to increase the daily output by approximately 1 million barrels. The organization says that the real increase will be about 600-800 barrels per day. In the comments that followed the decision, the OPEC+ noticed that earlier the market supply was increasing ahead of schedule mostly due to some particular countries, such as Venezuela, and now it’s necessary to revise the output parameters in order to balance supply and demand.

The output will increase very soon, starting the third quarter this year, if to be more specific. However, oil prices are reducing at this very moment, because a lot of investors act under “sell-on-facts” principle. Later, after emotions on the market die down, the Brent price will reach stability inside a new trading range, which will support a new long-term channel.

In this case, the lobby of two countries, Russia and Saudi Arabia, was very efficient. Probably, these very two counties will provide the biggest volume of the output increase. Among other countries to increase the output will be the United Arab Emirates, Kuwait, and Algeria.

One should note that not all countries within the organization will contribute because some they just don’t have enough production facilities for that.

The oil market will remain influenced by the OPEC+ decision for several more days, but after that, the tension will slowly reduce. Investors are tired of commodity prices volatility over the last several weeks, so the time has come to make a pause

Looking at the H4 chart, one should notice that the current tendency is steadily heading downwards. Analyzing how wide the current tendency’s channel is, the amount of time this trend continues, and how often the price “touches” support and resistance lines, one may assume that the instrument may break the resistance level near 75.60 and trade inside the upside projected channel towards 80.00. However, if the price tests the resistance line and rebounds from it, Brent may start a new descending impulse to reach the support level at 69.70. If later this level is broken as well, the instrument may trade towards the downside projected channel. The main target after breaking the current support level may be at 63.50.

Brent Oil 4H Chart
Brent Oil 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Investors Prefer Safe USD to Avoid Risks

“Trade wars” issue was quite calm in June until the US President Donald Trump announced new import duties on Chinese goods, from different equipment and technics to highly-specialized products. In total, the effect of this decision is expected to be 50 billion USD. It is known that duties will be increased in two stages, the first of which is scheduled to start on July 6th. China immediately responded and said that it would make it up to the USA and do the same, but also include soy and meat (pork) to the list.

Not long time ago it seemed that “trade wars” between the USA and China slowed down, in words at least. However, Trump was again speaking about low competitiveness of American goods due to a great number of Chinese replacements available on the market. This is what forced the USA to be aggressive in its commercial relations because there was no other way to “reboot” the production and economic affairs inside the American economy. Well, no other way that is less complicated and expensive.

Another reason why the USD is feeling confident is the European Central Banks’ decision to expand the QE program until the end of December 2018 instead of closing it in September, like was planned earlier. In addition to that, the European regulator is planning to keep the key interest rate unchanged at least until the next summer. By the way, on Monday evening, the ECB Governor Mario Draghi is scheduled to deliver his speech and investors should pay attention to the things he is going to say.

The USD will remain strong as long as market players have to “dodge” a lot of risks, such as the OPEC, “trade wars”, and the difference in benchmark rates.

At the moment, it’s better to analyze EURUSD on weekly and daily charts in order to understand market sentiment better on different timeframes. In the weekly chart, the pair broke the support line of the long-term uptrend not long times ago and started a new descending phase. After breaking the line, the price quickly moved into the downside projected channel and reached the target support area. Right now, we can see the instrument testing this area to break it. However, according to the other scenario, the price may rebound from it. If the price does break the current support area, it may continue falling towards 1.1080. Otherwise, in case the correction continues, the instrument will continue moving between support and resistance levels at 1.1510 and 1.1830 respectively.

EUR/USD Weekly Chart
EUR/USD Weekly Chart

The daily chart shows the downtrend. After testing the resistance line, the current rising impulse hasn’t been able to break the previous low, which means that it is not ready to continue the decline. Only after breaking 1.1537, the pair may fall towards 1.1220. In case the price breaks the current resistance line and 1.1800, the instrument may move into the upside projected channel and head towards its resistance line and 1.2160 in particular.

EUR/USD Daily Chart
EUR/USD Daily Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Cryptocurrency Trading: Exchange vs Brokerage

Nowadays, everyone who knows at least something about finance has heard of cryptocurrencies. In 2017, this industry exploded in popularity, and the crypto market began attracting the attention of more and more traders throughout the world. With extreme volatility and virtually unlimited profit potential, people started going absolutely crazy about it. As a result, a lot of tools, products, and services appeared in the market that opened the door to earning with cryptocurrencies.

There are however two ways of trading cryptocurrencies: over an exchange or with a broker. These two do have some differences, which are not very clear to the general public. The following will look into the basic things a trader has to deal with when trading cryptos over an exchange or on the online broker trading platform. This will help you to finally understand which kind of trading is better: with an exchange or with a broker.

Signing up and Verification

Exchange

In some of the largest crypto exchanges the signup process is closed, but where it’s still available, the process is as simple as registration on other websites. What you need to do is to provide your email, create a password, confirm your email address, and that’s it! You are signed up. After you have signed up you need to go through the verification process in order to enable depositing and withdrawing funds from your account. To get this done, you will have to upload or send your photo ID colored copy and provide a photo of you with your ID near you. The exchanges respond to such verification request within between a few hours and a few days. There are some cases when you don’t have to get verified once signed up. For example, with Binance, one of the most popular crypto exchanges out there, you can deposit to and withdraw from your account right away, although only 2 BTC per 24 hours. With your transactions growing bigger, you will still have to get verified.

Broker

Signing up with a broker is not a very difficult thing either, it is mostly the same as on an exchange. However, in order to deposit funds and start trading, verifying your account is mandatory. As a rule, you will be required to submit scan copies of one or two docs, those being your ID and proof of address. Different requirements can be in place for different jurisdictions. The verification process as such runs quite faster than on an exchange, being complete within just 30 minutes or even without verification (15-days period of verification). After your account has been successfully verified and your trading account open, you can easily deposit funds and start trading.

Deposits and Withdrawals

Exchange

Depositing fiat money to crypto exchanges is often a hassle. As such, you cannot deposit USD or EUR on Binance, and must use cryptocurrencies instead, which means you have to buy some crypto first before that. There are many ways to buy digital currencies out there, but such transactions are often paired with high fees and commissions. If you need to run multiple transactions when making a deposit, you should bear in mind that you will have to pay a fee each and every time; this way, you may lose up to 15% when depositing.

Withdrawing funds from exchanges in fiat currencies is again a piece of hassle. Of course, you can use e-wallets and online exchanges, but this again involves commissions. Withdrawing to a bank account can be an issue, too, as not all banks accept money from crypto exchanges because of the origin of such money and transactions.

Broker

Unlike currency exchanges, depositing with a broker is a breeze. A broker’s client has a large number of ways to make a deposit, including credit cards, popular e-wallets, etc. You can deposit US dollars, euros, and sometimes other currencies. This simplifies the whole process a lot, while, as a rule, there are no deposit fees whatsoever.

As for withdrawals, broker terms are usually still much more attractive than those of a crypto exchange. Instead of paying 5% or 6%, you just have to pay a fee of between 0% and 3%, which depends on your withdrawal method.

Trading

Exchange

Trading on a crypto exchange is not rocket science. You just need to select the desired trading instrument, open your trade and watch the price chart. You can place by and sell orders, as well as stop limit orders. In this aspect, crypto exchange features are somewhat limited compared to those of a broker platform.

One of the advantages of an exchange is that you can choose among a lot of different digital coins to trade. Binance, for instance, offers 120 cryptocurrencies for trading, which gives you a nice set of diversification options when selecting your trading strategy.

Broker

Using a broker platform, you get extensive feature set that will help you to work out your strategies and risks more precisely. As such, you will be able to put additional indications on the chart and use the in-built tech analysis tools. However, the broker platform will not offer you such an impressive number of cryptos to trade as an exchange. Each broker has different cryptocurrency offerings, but, most likely, you will find only the most popular cryptos out there.

Among the absolutely positive things about the brokers are the relatively tight spreads. The spreads in the cryptocurrency market may reach a few hundreds of dollars, but on the trading platforms, you will get the tightest spreads possible. As such, the BTC/USD spread is as low as 0.1 pips in R Trader, which is one of the tightest in the industry.

Another advantage is that the broker platforms have much more features to offer. Unlike the exchanges, you can put multiple charts in your window, track the quote flow, use indicator sets and other extensions, etc.

As such, there is a strategy builder feature in R Trader, which allows creating automatic trading strategies without any coding background. Using strategy builder, you will be able to create trading robots that could drastically raise your performance.

Safety & Security

Exchange

Crypto exchanges are relatively unsafe. You can, of course, create a very strong password and even enable 2-factor authentication, but, unluckily, this cannot guarantee 100% safety of funds. Besides, each crypto exchange security level is different, and one can’t tell what is going to happen going forward. Lately, news on hacking and robbing client funds appear everywhere. This year, in the course, if BitGrail and Coincheck (both very large exchanges) hack the investors lost around $700M. There are even some cases when the crypto exchange owners do frauds and then try to get away with the client money. In this light, crypto trading is overall riskier than other types of trading, as the crypto market is not regulated and, thus, is very vulnerable.

Broker

Trading cryptocurrencies with a regulated broker guarantee some degree of safety to the clients. First, if a broker is regulated with a reliable authority, such as CySEC, FCA, SEC, etc, this means the company is at least not a scam. Second, a regulated broker’s business is strictly audited, and the client has a right to file a complaint whenever the broker is thought to breach the rules. Third, regulated brokers, as a rule, are members of investor compensation schemes, the object of which is to secure claims of clients against brokerage houses that are unable to meet obligations due to financial circumstances or bankruptcy. Finally, unlike exchanges, brokers keep the client money on the bank accounts, which works as an additional guarantee.

In conclusion, one should say that cryptocurrencies are high risk and very volatile assets, which can bring both quick profits and quick losses. When choosing a trading method for cryptos, one should study all pros and cons carefully. You have to understand very well which companies or exchanges you are going to use when trading cryptocurrencies. Both broker and exchange trading have their advantages and disadvantages, so your final decision will depend upon your goals and personal preferences.

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The Oil Market is Focused on The OPEC Meeting

According to the research from Bloomberg, most market players believe that the OPEC’s daily output will be increased by 500,000 barrels. Most probably, the output increase may be proposed by Russia and Saudi Arabia. The major point here might be the necessity to compensate for the oil supply due to the decline in output in Iran and Venezuela.

In general, everything looks fine. Only if one takes a closer look at the matter, it can be seen that there is a third party, the USA. Earlier in May, there were speculations that the Americans and the Saudis had discussed the daily output increase “behind the scenes” – the number is believed to be 1 million barrels. High oil prices are not profitable for the USA right now as they require some particular balance, more expensive than 60$, but cheaper than 80$. These numbers would be perfect for American oil producers, so one can’t exclude a possibility of the oil lobby.

According to the latest data from the OPEC, outlooks for the second half of 2018 are quite cloudy. On one hand, there is a risk of the oil demand contraction in China and the USA, but on the other hand, there are reasons for the output increase in Saudi Arabia, Algeria, and other countries. The predicted oil demand for this year remains at 32.75M per day; the oil market is still experiencing the excess of supply.

On Wednesday, June 13th, a barrel of Brent costs 75.55$ and it is going down. The spread between WTI and Brent is decreasing: right now, it is 9$ against 11$ last week.

Analyzing the current movement of Brent, one can see that the price continues testing the support line of the mid-term rising channel. Despite incompletion of the reverse, the instrument has formed the descending structure. In this light, one may assume that the price is getting ready to break the long-term uptrend and start a new long-term decline. However, the current uptrend may yet continue. The resistance line for the current movement is at 77.00. After breaking this level, the instrument may be heading to reach 85.00.

The mid-term scenario for Brent is to move downwards inside the current channel. The first significant downside target will be the support line of the projected channel and 72.00. If the price breaks it, the instrument may continue falling towards the psychologically-crucial level at 70.00.

Brent Oil 4h Chart
Brent Oil 4h Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The Dollar Slowed Down Its Attack

The statistics from the USA published last Friday turned out to be more positive than everyone could have expected. The Unemployment Rate went from 3.9% in April to 3.8% in May, although it wasn’t expected to change at all. The actual reading is the strongest over the last 18 years, which is surely good for the American economy and currency. The Non-Farm Employment Change expanded up to 223K in May against the expected reading of 188K. By the way, the April number was revised downwards.

The Average Hourly Earnings (from time to time, this indicator becomes a more important factor for investors in buying or selling the USD) added 0.3% m/m in May, the same as expected.

However, the American currency didn’t get proper support from such strong numbers. In this light, investors are getting more worried about possible moves from the US Federal Reserve relating to the benchmark rate increase (it seems quite strange because earlier they were “dreaming” about the Fed’s being more determined in this matter). The next meeting of the regulator will take place in June and market expectations are pretty positive: investors are sure that the key rate will be increased during this meeting. Apart from this, in the meeting minutes, which will be published later, investors will look for any hints at the fourth increase in the rate this year.

Investors’ concerns, which influenced the Euro currency so much last week, are starting to fade away little by little. The political turmoil drama in Italy is dying down – it seems that there will be new elections, but not earlier than in September, which is quite far away from now. Another driver, the Spanish factor involving the corruption scandal, no longer remains a live issue of the day. All these things taken together gave EURUSD a short break.

From the technical point of view, EURUSD stopped falling steadily and right now is testing the resistance line of the mid-term descending channel. However, this is just an attempt to reverse the previous tendency. If the price fixes above the resistance line, which is becoming the support level, it will be the first step in forming a new uptrend. Reaching 1.1860, which is located on the projected resistance line, will confirm the tendency reverse. The main support level for the current ascending channel is at 1.1650.

EUR/USD 4H Chart
EUR/USD 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Aussie Again under Pressure

The Chinese government did release multiple important economic indicators on Tuesday. The manufacturing production grew by7% YoY, which exceeded both the expectations and the March data. This figure was actually going down since 2012, so it looks like it is steadily recovering first in 6 years, which is very positive.

This was the only piece of good news for today, though. The major asset investments also grew by 7% YoY, but this is lackluster compared to the previous period. This indicator is very important for the real sector, as it shows the number of funds spent by various businesses, from agriculture and production all the way to finance and administration.

Meanwhile, April retail sales grew by 9.4% YoY, a bit short of the expectations at 10% and the March growth of 10.1%. It is curious that the indicator performed well in the rural sector, but was weak in the cities.

Chinese news has a strong influence on the AUD, as the Celestial Kingdom is still a key partner for Australia. The Chinese economy beat the average expectations in Q1 2018, but the momentum may well fade out by the end of the year, with the growth returning to the official target at 6.5%.


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The AUD selloff this morning did fade out somewhat in the middle of the trading session, but then we have the USD strengthening, and this can affect the Aussie more than some local reactions. AUD/USD was trading at 0.7456, down 0.96% at the time of writing.

Technically, the AUD/USD shows the pair is still under pressure inside a midterm descending channel. 0.7453 may act as a local target for the sellers, with a potential to push the price to the recent low at 0.7407. The intermediate support is at 0.7491, while the resistance is at 0.7568

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

The British Pound in Need of Support

Investors came to a conclusion that the regulator would be wary regarding the interest rates moving forward.

One of the issues behind that is the slow growth rate of the UK economy early this year. Both the analysts and the BoE board members are, however, sure that this slowdown is a local one and is unlikely to continue.

In its meeting minutes, the UK central bank says that tightening its monetary policy will be in place in case the economy moves in line with the consensus overall. Sonders and McCafferty, both members of the BoE Board, are all for raising the rates to 0.75%, while others are happy with the current situation.

Meanwhile, the BoE consensus regarding the GDP growth dropped from 1.8% to 1.4%, which also acts as a bearish signal for the GBP traders.

As for the long-term outlook, it remained unchanged, as the Bank of England is still looking to raise the rates three times within the following three years. However, with the economy being week in Q1, the BoE may well change the interest rates later on, not in mid-2018 as planned before. This is, of course, another negative factor for the GBP.

Technically, GBP/USD is still trading within a descending channel, with the support being at 1.3459, the last week and four months low. The bears have got a chance to push the UK currency even lower as long as it fails to come above 1.3600 or 1.3650.fun.

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Top 5 Stock Market Picks

Macerich (MAC)

Macerich is included in the S&P 500. Its major activity is acquiring, selling, managing, developing, and remodeling shopping malls all over the US. As of now, Macerich owns around 53M square feet of commercial property, which includes 48 retail shopping malls.

Macerich stock falls into the Financial Retail category; over the last week, they fell by 0.55%.

Technically, the stock tried to break out the 200-day SMA and start forming an ascending trend. With $60 acting as a strong resistance, its breakout may issue a signal of such a trend really forming. Meanwhile, the support is at $57, while the first major target is 10 dollars higher, at $67.

Macerich Daily Chart
Macerich Daily Chart

The investment fund transactions show the market is becoming interested in the stock, and while the buys are still very low, at around 0.29%, one should bear in mind that Macerich had not been previously considered as something valuable at all, so even such a small buying volume may boost future performance.

Over the last two months, the stock declined, but for now, open-sell positions are not that high, just around 4.87%. As such, the decline did not draw too much traders’ attention; it even acted in a contrary way, making Macerich quite attractive.

Dicerna Pharmaceuticals, Inc. (DRNA)

Dicerna Pharmaceuticals was founded in 2006. A biopharmaceutical company, its major is creating drugs for curing chronic liver and cardiovascular diseases.

The company falls into Healthcare/Biotechnology sector. It showed a good rise last week, jumping up by 12.88%.

Chiefly, this is due to the company has resolved its dispute with Alnylam Pharmaceuticals. Dicerna Pharmaceuticals finally agreed on paying $2M and grant Alnylam 983,208 shares (equals to around $12M), with more $13M to be paid within the Following four years.

2017 saw Dicerna Pharmaceuticals with $114M net profit; thus, the upfront payment of $2M (less than 2% of profit) is not going to weigh that much. The agreement on staged payments during the next 4 years was also positive, as the company would suffer much more losses if the dispute had not been resolved.

The board members did not take any significant actions during the trials, i.e. neither bought nor sold any shares. In the meantime, the funds cut their share by 2.3%, but with over 84% still remaining, this is not a big deal either. Besides, the news on the dispute being resolved came only Friday, with all market action going to take place this week.

Open selling positions percentage (2.74%) shows the investors are not very much interested in selling Dicerna, while many bears locked in their profits Friday when the stocks rose as much as by 17.86%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. As long as the price manages to break out $11 level and close above it, this trend may continue, having a chance to test $17, the analysts say.

DRNA Daily Chart
DRNA Daily Chart

Comcast (CMCSA)

Comcast Corporation is a global telecommunication giant, being the leading broadcasting corporation in the world in terms of revenue. This is also the second biggest pay cable TV and internet provider company. Besides, Comcast has been involved in TV shows and movies production since 2011.

Comcast falls into Service (Entertainment – Diversified) sector. It has grown just by 0.58% over the last week.

The Service sector in general performed badly last week, with just 2.1% growth, which shows the overall situation is a bit sore.

Technically, a descending trend is prevailing, with the price being below the 200-day SMA. The support is currently located at $33, that, if broken put, may push the prices further below to $30.

The board members have recently decreased their share by 4.95%, while the investment funds are very little interested in the company, with just a 0.1% buy. Still, the open short positions are quite low, too, being at 1.33%, which allows some room for the company growth. Still, this may only happen in case of the price breaks out $35, being then able to go towards $36.

Comcast Daily Chart
Comcast Daily Chart

Steven Madden, Ltd. (SHOO)

Steven Madden was founded back in 1990 and named after its founder, Stephen Madden, who is both a businessman and a fashion designer. The company creates and sells footwear and fashion accessories for men, women, and kids.

Steven Madden, Ltd. falls into the Consumer Goods (Textile-Apparel Footwear & Accessories) sector. Over the last week, the company stocks rose by 2.05%.

Overall, Consumer Goods sector was the weakest one last week, having fallen by 3.4%. The way Steven Madden are doing is quite optimistic compared to that, and this allows one to assume this rise is going to continue.

The investment fund longs are very low, at around 0.33%, but this is quite obvious, as their overall share has already reached 95.6%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. Breakout of $48 may lead to the stock growing further.

Steve Madden Daily Chart
Steve Madden Daily Chart

Many analysts say Steven Madden may well reach $53 or even $58 per share.

Abeona Therapeutics Inc. (ABEO)

Abeona Therapeutics Inc was founded back in 1974; this biopharmaceutical company develops methods of curing rare and life-threatening genetic diseases.

The company falls into Healthcare/Biotechnology sector. Over the last week, its price per share increased by 5.82%.

Overall, Healthcare fell by 0.1% last week, which makes ABEO a pretty much attractive asset.

The percentage of open short positions is very high (37.11%), which may lead to a very sharp increase in price. Meanwhile, the company shares have already increased from $14 further on, as many traders started closing their selling transactions after the analysts missed the quarterly earnings forecast.

With such a high sell-off percentage, the investment funds have still increased their share by 1.14%, to reach 63.20%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. The key support at $20 has already been broken out, which may allow the price go further to reach its target at $26.

ABEO Daily Chart
ABEO Daily Chart

The analysts say ABEO may well reach $26 or even $36 per share.

abeo

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Strong Crude May Lead to Risky Environment

In the meantime, Baker Hughes reported the rig count had increased by 5 and amounted to 1,013 in the US last week. The situation was quite the same the previous week, which is a good driver for the sellers. Still, the investors have not yet turned to these data.

The OPEC+ committee met Friday, but there was very little information on renewing the agreement regarding low production or ‘freezing’. All major comments were related to the current situation, which is going just as planned. Still, the OPEC not giving any clear signals on its further policy making is also good for the bears, while bullish investors are still hoping to get some hints during another OPEC meeting on June 22, which will be held in Vienna, Austria. If the OPEC fails to provide hints once again, however, the market will find itself in very tight circumstances.

Another thing worth noticing is that the currency stops influencing the crude oil price growth, with the USD index increasing over the last 5 days and likely to continue climbing up.

Besides, the price itself shows the investors are minimizing and hedging their risks as long as the crude goes up, which can be traced by the difference between the current contract and the futures contract with an 18-month expiry.

Technically, Brent is still uptrending both long and mid-term. The market has been inside an ascending channel for long, with the latest short-term impulse allowing for both tests and break out the resistance, which becomes support once the price stays above. The major target, for now, may be at the projection channel resistance at $78.50. Looking at the short-term ascending trend, one may note that the momentum is fading out, with lower highs formed. However, if the price bounces off the support currently being tested, it may continue rising up to $76.00. At the same time, support breakout near $73.30 is also possible, and in this case, the price may get back to the previous channel range, with the first descending trend target being at $69.50.

Brent 4H Chart
Brent 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Crude Oil Looking for Correction

The US supported by the UK and France carried out its missile strikes against the targets where the supposed chemical weapons might have been produced. This was highly expected in the markets, and once it happened the prices went down.

Thus, Brent crude is trading at $71.50 today, against the last week high at $73.09. Another bear signal came from Baker Hughes with their US and Canada rig count report. By Apr 13, the rig count in the US increased by 7 over the week to reach 1,008. Although it got a bit lower in Canada, this is not usually taken much into account, as Canada stats are usually very mixed.

US oil weekly inventory reports remain mixed, too, with the market trying to follow other drivers that do not require too much analysis. This, first and foremost, includes geopolitical events. Syria will be a major market mover for long, and much depends on how Russia will be going to act. The US government may continue supporting tensions verbally, but, overall, this is likely to be put on hold for a while.

As we move forward to the rest of 2018, the question of non-OPEC countries oil production is going to become much more important. There are already some fundamentals pointing to the possible production slowdown in Q3 and Q4, which could lead to lower demand. Even with a small supply increase, this could end up putting the oil price under pressure.

Technically, Brent crude is still uptrending, with the latest growth impulse reaching the current channel resistance. This means the trend is steady enough, and the current downmove is nothing else than correction, with the possible target at $70.00. After the correction is over and a new support is ready, a new upside channel is likely to be formed. A bounce-off against the support may lead to the price going up to the resistance at $72.60. in case it gets broken out, the price may move to the projection resistance at 75.00, which is an important round number.

Brent Oil 4H Chart
Brent Oil 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Negative Fundamentals Put EUR under Pressure

The euro might have grown last week, but investors got wary about the fundamentals. As such, manufacturing production in the Eurozone fell by 0.8% MoM in February, with -0.6% in January. The expectations were at +0.1%, but they were not met for the third time in a row. YoY, manufacturing production also fell in Feb, by 2.9%, with -3.7% in Jan, and came short of expectations, too.

While such a plunge could be explained by the holiday season in Jan and cold weather in Feb, this alone would not have lead to such a serious slowdown. Most likely, consumer demand is also falling, and this is quite alarming.

Last week, the ECB meeting report came in, too, saying there are risks for the Eurozone in connection with trade war escalation and expensive euro. With this in mind, cutting the QE is to be done in a very careful way, so as not to minimize its effect. The meeting minutes once again repeat that the ECB is going to act very cautiously in terms of rate hikes.

ECB Chair Mario Draghi said last week that such a careful approach is very feasible right now, with all the external influence putting the economy under pressure. He was positive regarding the inflation, though, saying it should reach the target in the mid-term. Overall, Mr. Draghi says, the Eurozone economy will be growing steadily in the rest of 2018.

Technically, the EUR/USD is forming a triangle in the mid-term, while an upside channel appeared after the bounce-off against the support. The immediate target of this uptrend is the diagonal resistance at 1.2345; in case it gets broken out, the price may move to the projection resistance at 1.2520, while the major local uptrend target will be the current high at 1.2555. Conversely, if the support at 1.2299 gets broken out, the pair may fall again to reach and test the support at 1.2240.

EUR/USD 4H Chart
EUR/USD 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

AUD Going Up, China All for Peaceful Trade

Besides, today the AUD is feeling good because of the positive Chinese news regarding the ‘trade wars’. Xi Jinping, the Tianxia leader, said today’s morning that China had no intention to threaten the global trade process or change the existing world order. Just as before, Beijing persists in supporting free trade, reforms and opened borders, being against the ‘Cold War’.

Xi Jinping also pointed out that China’s goal was to expand market access, improve the conditions for the foreign business, and increase import. This is a whole new level of the talks with the US, taking into account the recent complications.

This way, there may be a pause in this trade war, that initially was started by the US in order to help the market recover and improve the competition conditions. Such things had, of course, happened before, but this time it came in very handy. This is very much positive for Australia, too, as China is their major trading partner.

Today’s macroeconomic stats revealed that the business sentiment index decreased by 7 points in March, with the previous value being -9 points. The market did not pay too much attention to this, as the traders kept watching the global news and events/

Technically, AUD/USD is trading within a few trends of different scale. The midterm trend is still descending, with the correctional movement towards the resistance; still, the downtrend is not fading out yet. The growth target, meanwhile, is the midterm trend resistance at 0.7825. In case this resistance gets broken out, the price may move to the upper projection channel, and the new target will be the resistance at 0.8000. As for the support and the possible downtrend target, it may be at 0.7590, which coincides with the midterm channel support.

Speaking short-term, technically, the downtrend here is at the pivotal stage, as the price is above the local resistance. The target of the new growth impulse may be located at 0.7805, which coincides with the short term projection channel resistance. Thus, the range between 0.7805 and 0.7825 is going to be the testing rage for the current midterm trend.

AUD/USD 4H Chart
AUD/USD 4H Chart

RoboForex is a group of companies that offers brokerage services to clients in various countries over the world. The group provides traders from the Forex and stock markets with access to its proprietary trading platforms.

Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.