Daily market analysis

We present an analysis of price dynamics of financial markets, identifying market trends and potential. The objective of this technical analysis is to explain the price fluctuations in the market and finding the best ways to make a profit. Our knowledge and expert assessment to help you develop an effective trading strategy.

13072017
Canadian dollar near 13-month highs after BoC rate hike

The Canadian dollar was touch lower against its U.S. counterpart on Thursday but was still close to 13-month highs after its country’s central bank hiked interest rates on Wednesday.

USD/CAD edged up 0.09% to 1.2761 by 09.30 AM ET, not far from the low of 1.2679 set on Wednesday, which was the weakest since June 2016.

The Bank of Canada raised interest rates for the first time in almost seven years on Wednesday, making it the first major central bank to join the Fed in tightening monetary policy.

The BoC said the economy no longer needed as much stimulus and added that policymakers would look to the data to decide when they can hike again.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 95.59, not far from the nine-month low of 95.22 plumbed in late June, following dovish sounding comments from Federal Reserve Chair Janet Yellen.

In testimony before Congress on Wednesday, Yellen said the economy is on a strong enough footing for the Fed to raise rates and begin winding down its massive bond portfolio.

She also emphasized that inflation is below target and noted that it is a particular “uncertainty” that could affect monetary policy.

Investors were looking ahead to Friday’s U.S. inflation figures for June for their potential impact on Fed policy.

Data on Thursday showed that the number of Americans filing new claims for unemployment benefits fell last week for the first time in a month.

Initial jobless claims fell to 247,000 last week, from 250,000, indicating that the labor market remains robust.

A separate report showed that U.S. producer prices unexpectedly rose in June.

Signs of strength in the labor market and an uptick in inflation could help reinforce expectations for a third rate hike by the Fed this year.

In Canada, data on Thursday showed that new house prices rose more than expected in May, led by gains in Toronto, the country’s largest city and Vancouver.

13072017
Dollar broadly lower after Yellen, loonie near 13-month highs

The dollar was lower against most of the other major currencies on Thursday following dovish comments from Federal Reserve Chair Janet Yellen while the Canadian dollar was near 13-month highs after its country’s central bank hiked interest rates.

The dollar was weaker against the yen, with USD/JPY sliding 0.17% to a one-week low of 112.95 by 06.55 AM ET.

In testimony before Congress on Wednesday, Yellen said the economy is on a strong enough footing for the Fed to raise rates and begin winding down its massive bond portfolio.

She also emphasized that inflation is below target and noted that it is a particular “uncertainty” that could affect monetary policy.

Investors were looking ahead to Friday’s U.S. inflation figures for June for their potential impact on Fed policy.

Sterling was higher against the dollar, with GBP/USD advancing 0.33% to 1.2924.

The pound received a boost after Bank of England policymaker Ian McCafferty said the bank should rethink its current policy of not unwinding its huge quantitative easing program until interest rates have risen close to more normal levels.

The greenback was touch lower against the Canadian dollar, with USD/CAD at 1.2735, not far from the 13-month low of 1.2679 set on Wednesday after the Bank of Canada hiked interest rates.

It was the first rate increase by the BoC in nearly seven years, making it the first major central bank to join the Fed in tightening monetary policy.

Other commodity linked currencies were also higher, with AUD/USD rising 0.73% to 0.7736 and NZD/USD surging 1.02% to 0.7333 following the release of stronger-than-expected Chinese trade data for June.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 95.59, not far from the nine-month low of 95.22 plumbed in late June.

The euro was lower, with EUR/USD slipping 0.2% to 1.1389, pulling away from the 14-month high of 1.1489 set on Wednesday.

The euro turned lower after European Central Bank governing council member Ilmars Rimsevics said quantitative easing will continue for “a few years.”

The comments came amid heightened speculation that the ECB is moving closer to scaling back its ultra-loose monetary policy.

13072017
Bitcoin, Ethereum push higher, struggle to make headway

Prices of Bitcoin and Ethereum were higher on Thursday, but struggled to make headway amid persistent concerns that cryptocurrencies are facing a period of correction after recent record rallies.

Bitcoin rose $38.6 or 1.65% on the U.S.-based GDAX exchange operated by Coinbase to $2,376.0 by 05.17 AM ET.

Bitcoin has struggled to regain momentum since hitting a peak of $3,000 in June.

Analysts at Morgan Stanley on Wednesday warned that rather than buying Bitcoin, owners need to be spending it.

“Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation,” the team of analysts led by James Faucette wrote in a report.

“Bitcoin acceptance is virtually zero and shrinking,” the team warned.

“The ecosystem has focused more on value speculation rather than the foot leather-eating work of increasing acceptance,” the team wrote, adding that this focus has made it “way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”

The report comes at a time when many analysts are warning of a bubble in cryptocurrencies which have hit all-time highs this year.

Meanwhile, Ethereum ticked up to $209.3, up $4.32 or 2.16% for the day.

Ethereum notched its third weekly loss in a row last week and prices are down almost 55% since peaking at an all-time high close to the $400-level in mid-June.

Other cryptocurrencies such as Litecoin and Ripple were mixed.

13072017
Gold nears 1-week high as markets bet on patient Fed

Gold prices edged higher in European trade on Thursday, nearing a one-week high following Federal Reserve Chair Janet Yellen’s congressional testimony to gradually raise interest rates.

Comex gold futures were at $1,222.49 a troy ounce by 3:18AM ET (0718GMT), up $3.40, or around 0.3%.

Prices tallied a third-straight gain Wednesday after Yellen sounded cautious on inflation and noted the Fed would not need to raise rates “all that much further” to reach current low estimates of the neutral funds rate.

She also said that the U.S. economy is healthy enough for the Fed to begin winding down its massive $4.5 trillion balance sheet at some point this year.

The speech was seen as mainly dovish by market participants.

The dollar index traded down almost 0.3% at 95.31 in early trade, not far from the nine-month low of 95.22 plumbed in late June.

Yields of the benchmark 10-year U.S. Treasury fell to 2.32%, well off highs near 2.39% touched last week.

Investors now looked ahead to more comments from the Fed chair, will testify for a second day on the institution’s monetary policy in front of the House Financial Services Committee at 10:00AM ET (1400GMT).

Besides Yellen, Thursday’s calendar also features PPI inflation data and weekly jobless claims, both due at 8:30AM ET (1230GMT). Monthly CPI data is due Friday.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path.

Futures traders are pricing in around a 40% chance of a hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Also on the Comex, silver futures tacked on 2.2 cents, or roughly 0.2%, to $15.90 a troy ounce.

Among other precious metals, platinum was up 0.4% at $922.20, while palladium was little changed at $861.30 an ounce.

13072017
Oil slides as OPEC compliance with output cuts wanes

Oil prices were lower in North American trade on Thursday, after the International Energy Agency said OPEC’s compliance with production cuts fell in June to its lowest levels in six months, underling worries over a global supply glut.

OPEC’s compliance with cuts slumped to 78% last month from 95% in May, according to the IEA’s monthly market report released earlier, as several members pumped much more oil than allowed by their supply deal.

In May, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output.

The U.S. West Texas Intermediate crude August contract was at $45.42 a barrel by 8:35AM ET (1235GMT), down 8 cents, or around 0.2%, after being down by as much as 1% at $44.99 earlier.

Elsewhere, Brent oil for September delivery on the ICE Futures Exchange in London slipped 14 cents to $47.60 a barrel.

Oil ended higher on Wednesday after U.S. government data confirmed a sharp decline in domestic crude supplies for a second week in a row. Prices, however, ended off the best levels of the session, as rising production in the U.S. underlined concern over a supply glut.

Data from the U.S. Energy Information Administration showed that crude oil inventories fell by 7.6 million barrels in the week ended July 7. There was additional support stemming from a decline in U.S. gasoline inventories.

But total domestic crude production edged up by 59,000 barrels a day to 9.397 million barrels a day last week, according to the EIA figures.

Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output canceled out production cuts by OPEC and non-OPEC members.

Elsewhere on Nymex, gasoline futures for August shed 0.2 cents to $1.515 a gallon, while August heating oil dipped 0.3 cents to $1.470 a gallon.

Natural gas futures for August delivery slipped 2.4 cents to $2.961 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.

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