XAU/USD -Gold Recovers on Uncertainty over Trump Tax Plan

Gold has posted strong gains in the Wednesday session, erasing the losses from Tuesday. In North American trade, the spot price for an ounce of gold is $1285.57, up 0.83% on the day. On the release front, there are no key events on the schedule. On Thursday, the US releases unemployment claims.

After failing to pass a new healthcare act, President Trump has his sights set on tax reform, a key item in his domestic platform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, but that could prove to be too tight of a deadline. Most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. The bill is presently being debated in a congressional committee and is expected to move to the House floor next week. The Senate will present its version of the bill on Thursday, so we can expect plenty of activity in Congress in the next few weeks. Tax reform faces an uphill battle, which has weighed on investor risk appetite and pushed gold prices higher.

The labor market remains very strong, and this was reflected in another sharp employment report on Tuesday. JOLT Jobs Openings was almost unchanged at 6.09 million, easily beating the forecast of 5.98 million. Unemployment claims are also expected to show little movement on Thursday, with a forecast of 232 thousand. The unemployment rate is at a sizzling 4.1%, but wage growth remains a concern, reflective of weak inflation. In October, Average Hourly Earnings posted a flat 0.0.%, the first time wages have not increased since November 2016.

 

XAU/USD Fundamentals

Wednesday (November 8)

  • 10:30 US Crude Oil Inventories. Estimate -2.5M. Actual +2.2M
  • 13:01 US 10-year Bond Auction

Thursday (November 9)

  • 8:30 US Unemployment Claims. Estimate 232K

*All release times are GMT

*Key events are in bold

XAU/USD for Wednesday, November 8, 2017

XAU/USD November 8 at 12:35 EST

Open: 1275.20 High: 1287.26 Low: 1275.20 Close: 1285.57

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1213 1240 1260 1285 1307 1337
  • 1260 is providing support
  • 1285 is under pressure in resistance
  • Current range: 1260 to 1285

Further levels in both directions:

  • Below: 1260, 1240 and 1213
  • Above: 1285, 1307, 1337 and 1367

OANDA’s Open Positions Ratio

XAU/USD ratio is showing little movement in the Wednesday session. Currently, long positions have a majority (72%), indicative of trader bias towards XAU/USD reversing directions and moving towards higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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GBP/USD favors the downside amid political worries, BOE echoes

GBP/USD is finding it hard to hold onto the 1.31 handle and is flirting with this line. At current levels, cable is at the lower end of the wide range of 1.3030 to 1.3320 that characterized it recently. 1.3080 serves as a line of support, the last barrier before the bottom of the ranger. On […]

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GBP/USD – Little Reason to Be Bullish (Video)

Sterling and GBPUSD have been in the spotlight since Thursday’s rate hike. The pound dropped after the hike and gave back its recent gains. Craig Erlam, Senior Market Analyst for OANDA tells us that this shows the hike was fully priced in already. He says that it was a positive sign that it held around the 130.00/130.50 level.

However Craig tells us that in his view there is more downside potential than upside potential in the pair. Considering that the BoE is only foreseeing two rate hikes in the next 3 years. That is assuming that their forecasts are correct!

Looking at the technical picture the pair is currently in the 55/89 moving average band. It is now testing to the upside at around 132.00. That level is currently holding as resistance. One must also note that it is also the midpoint to the big candlestick that appeared after the rate hike. It wouldn’t surprise Craig if we moved back to the 130.00 and 130.50. Another test of that low.

Craig tells us that it is completely possible that it remains range bound in the near term as we await further developments. Should we see a break out at the 130.00 level then we could return to the 128.00 level. This would be a sign that people are a little bit more bearish on the pound.

Not only was there an absence of rate hike support there are still many other uncertainties. Such as slowing growth. The political situation isn’t helping either and could be exacerbated by the paradise papers. Craig says that there is no real reason to be bullish on Sterling. We have to remember that a 200 point move in a currency is quite significant. They don’t move in straight lines. They do tend to come with corrections along the way.

Trump Rally Alive and Well

CAC Edges Lower, French Trade Deficit Matches Forecast

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Brent Crude – Rally Showing Few Signs of Fatigue (Video)

Brent Crude Oil has been moving steadily upwards over the past few weeks. We speak with Craig Erlam, Senior Market Analyst for OANDA about the commodity and whether or not it can go higher. It recently pushed through the $61/$62 a barrel price. Craig tells us that it may not be due to the Saudi Arabian effect.

The media has been keen to pounce and claim the positive move on Brent Crude Oil has been caused by Saudi Arabia. However Craig thinks that it is just a slow market, and that people are looking for excuses. Saudi Arabia is OPEC’s biggest producer. 1 in every 9 barrels is Saudi. Political uncertainty will most likely push doubt on the oil price. However there have been no signals yet that it will have an impact on oil output. So therefore shouldn’t be an impact on the Brent price.

Looking at the technical perspective we have broken through the 200SMA. We passed the prior zone of support and resistance. It is now plausible that we can move towards $67.50/$70 a barrel. Also the 233SMA comes in to play, which brings in a nice psychological level.

Craig tells us that this is a supply and demand story. The market is moving back towards balance. The Oil Rig count in US is favourable for a rise. Global demand for oil is still rising. Craig tells us that there are plenty of other stories in the oil market apart from the Saudi Arabia effect.

On the other hand if we do see a retracement the market could return to the $55 area. When we loo​k behind us there are a number of resistance levels that we had to break through to get where we are currently, and these still stand as the areas of resistance and support. Below $60 there is a heavily congested zone of support and resistance. Craig argues that there are no signs that is materialising in the near term.

Trump Rally Alive and Well

CAC Edges Lower, French Trade Deficit Matches Forecast

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CAC Edges Lower, French Trade Deficit Matches Forecast

The CAC index has posted slight losses in the Wednesday session. Currently, the CAC is trading at 5,503.80, down 0.17% on the day. On the release front, there are no major events in the eurozone. France posted a trade deficit of EUR 4.7 billion, which matched the estimate.

In the eurozone, retail sales reports were mixed on Tuesday. Retail PMI came in at 51.1 in October, pointing to muted expansion in the retail sector. There was much better news from September retail sales, as gain of 0.7% came after two straight declines, and was the strongest gain since February. The markets are hoping for strong euorozone consumer spending in the fourth quarter, given the robust German economy and stronger economic conditions in the eurozone.

It’s been a banner year for global stock markets, thanks in large part to Donald Trump. Expectations that Trump will cut taxes has improved risk appetite and sent share prices higher. Investors are keeping a close eye on Trump’s determined push for tax reform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, in what is a very tight deadline. Most Democrats have come out against the proposal, and not all Republicans are on board. The bill is presently being debated in a congressional committee and is expected to move to the House floor next week. The Senate will present its version of the bill on Thursday, so we can expect plenty of activity in Congress in the next few weeks. If the Republicans can pass the bill through Congress, the CAC rally should continue. The index has looked sharp, jumping 6.9 percent since September 1.

Economic Calendar

Wednesday (November 8)

  • 2:45 French Trade Balance. Estimate -4.7B. Actual -4.7B

Thursday (November 9)

  • 4:00 ECB Economic Bulletin
  • 5:00 EU Economic Forecasts

*All release times are GMT

*Key events are in bold

CAC, Wednesday, November 8 at 8:30 EDT

Open: 5489.50 High: 5498.80 Low: 5462.50 Close: 5471.30

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The post CAC Edges Lower, French Trade Deficit Matches Forecast appeared first on Forex news – Binary options.

GBP/USD to 1.25 during the next 6 months – BNPP

GBP/USD has been hit by the BOE but has not gone too far. The pair still maintains the range. What are the long-term prospects for the pair? Here is their view, courtesy of eFXnews: BNP Paribas Research discusses GBP outlook in light of last week’s BoE policy decision. “We expect growth in the UK to […]

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