Growth for US indices yesterday

The slight improvement in the situation in Turkey has led to the stabilization of world stock indices. US indicators even ended slightly on positive territory.
Dow Jones added 0.5% to nearly 25,300 points, while the broad S&P 500 rose 0.6% to 2,839.96. Nasdaq added 0.65% to its value - to 7,870.89 points.
Meanwhile, the Turkish lira rose 8 percent to 6.35 pounds a dollar after the Turkish currency hit a record low of 7.24 pounds per dollar on Monday.
The Turkish lira, which for some time on Friday lost over 20% of its value, reached a new record low on Monday. It registered a record drop of more than 15% in just one day. However, there was some recovery in value after the country's central bank announced it would step in to stabilize its national currency.

The strong dollar sank the metals and oil

The dollar continued with its exceptionally strong appreciation over other major currencies. Especially strong was the growth of the US dollar against the New Zealand dollar. The appreciation of the dollar has adversely affected metal prices. However, their decline was relatively limited. Silver is traded at levels of 15.25 dollars per ounce and gold at $1,208. Platinum lost at least its value, swapping at levels of about $820 per ounce.
Oil also fell on the first day of the new week. The reason for this was the growing tension in world trade, especially in Asia, although US sanctions against Iran support prices to some extent and lead to more limited supplies.
Brent fell 21 cents to 72.60 dollars a barrel, compared to Friday's closing price. The decline in US crude oil, which dropped by five cents to $67.60 a barrel, was far farther.
Keeping the bearish sentiment on the market, hedge funds and other financial managers have cut their oil futures positions in the US in the week ending August 7, according to the CFTC US Trends Trading Commission on Friday. Total long positions in New York and London were 9,117, to a total of 397,885, the lowest level since June 19, according to CFTC data.

The cryptocurrencies collapsed

The last two days were extremely heavy for the cryptocurrencies. More than 20% of their market value lost cryptocurrencies like ethereum and ripple. Earlier this morning, the ethereum is traded at levels of $365 per coin, while the ripple - at $0.34 per coin.
Serious decline has the bitcoin cash - down to $597, as well as the bitcoin, traded at $6,350 early this morning.
The depreciation of the cryptocurrencies occurred after the decision of the US Financial Supervision Commission to postpone its decision on VanEck's and SolidX's demands for an index based on the cost of the bitcoin. This was VanEck's third attempt to start this kind of fund.
More than $9 billion of the cost of the bitcoin was "wiped out" after the decision of the US regulator.
We can also recall that the Winklevos brothers' request for the creation of such a fund last month was also rejected. It was then that the strong decrease in cryptocurrencies levels was also started.
Market participants were hoping for a US regulator's permission for such a kind of index fund, which would be the first of its kind.
The proposal of the two investment companies, VanEck and Solid X, was to create an index fund backed by real bitcoins rather than futures on it.
Index funds are seen as a way of exposition of institutional investors to cryptocurrencies. The lack of such funds seriously limits the access of large investors to the relatively limited and not particularly liquid market of cryptocurrencies.
So far, there have been many attempts to obtain permission from the US regulator for an index fund, but none of them has been successful. The question is - how long can the regulators' rejection continue?

Pound/dollar - now where?

The growing prospect of a "Brexit without a deal" leaves GBP bulls away from the beginning of the week.
The comments of this kind supported some streams to safe havens such as the Japanese yen and the Swiss franc and proved to be one of the key factors for the sale of pounds. All this uncertainty surrounding the Brexit process continues to weigh on the striling, which in recent days has fallen away from most of its major competitors.
The bad series of the British currency continued for the 5th consecutive day and the previous lowest GBP/USD value for the year - 1.2919 was pierced. Almost immediately after this breakthrough, the cable tested 1.2900. Eventually disembarking underneath it can trigger stop orders and another sharp drop down. Especially in the absence of strong support.
The nearest level GBP can count on is about 1.2852, bottom since the end of August last year, after which the bears are likely to look at the nearly 14-month minimum 1.2774. On the other hand stabilization here and rising above the psychological 1.30 will give a sip of air to buyers who can look at 1.3049.
Still, overall, the picture around the British pound remains extremely sensitive to the news about Brexit. It is precisely the development of the UK-EU split negotiations that remain the main driver for couples including the GBP.

A new drop for precious metals and oil

Noble metals and oil dropped today after the US dollar rises again. Gold again returned at a trading rate of $1,210, and we can see a psychological limit test of $1,200 per ounce.
The silver is traded at levels of $15.30 per ounce, or close to the lowest levels for the last one year. Platinum is exchanged at 825 dollars per ounce.
Meanwhile, the price of oil fell somewhat after its strong rise at the start of the week. Data released indicated a reduction in oil and petroleum stocks in the United States, in enforced sanctions against Iran.
US crude oil fell by nearly 30 cents to $69 a barrel, and the Brent to $73.80 a barrel.
We can recall that the Brent came back at trading levels above $74 a barrel after US sanctions against Iran came into force yesterday. It is expected Iran's production to cut by about 1 million barrels, from its current level to nearly 3 million barrels.

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J. Gundlach: Decrease your US stocks positions!

The popular investor, Jeffrey Gundlach, advised investors to cut their exposure to US stocks and diversify them with other markets, such as India and Japan.
In an interview, the head of DoubleLine Capital also said he expects at least two Fed rises in interest rates this year.
Gundlach, confirmed his position from last June that an increase in 10-year US Treasury interest rates, above the psychological limit of 3%, would cause serious trouble for US stocks. Such an action would certainly mark the end of the three-decades-long bullish bond market.
Gundlach's position is very close to that of another legendary bond investor, Bill Gross, according to which bonds will enter the bear market when interest rates on 10-year securities are 2.6%. And these interest rates had already passed.
With regard to shares, Gundlach reaffirmed his view that other markets, beyond the US, are far cheaper and have a significant catching-up potential.

The Fed still has time to observe the dynamics of employment

The statistics on the labor market published in the US turned out to be quite contradictory. On the one hand, the published data, including statistics on the growth rates of wages in July, coincided with market expectations (an increase of 2.7% year-on-year). But the data on unemployment and the number of jobs created outside the agricultural sector, diverged with market expectations. The unemployment rate in the US in July fell below 4% of the working-age population and was 3.9%. To a record low of May 2018 (3.8%), unemployment this time did not reach, but is already approaching this level, and the US economy - to full employment.
As for the number of new jobs outside agriculture, their number in July was 157 thousand, which is 17% below market expectations. In principle, this meaning can be further clarified or revised by the US Department of Labor, however, it may be that the dynamics of this indicator may again postpone the increase in the interest rate in the United States. It is usually believed that an increase of this figure by 200 thousand jobs a month adds about 3% to the US GDP. Now the growth was much less.
Fed noted that when deciding on the interest rate, inflation indicators and labor market conditions are necessarily taken into account. It's not excluded that at the next meeting the Fed can again postpone the decision to raise the interest rate, if this indicator of the labor market will again grow at such a low pace. However, it is possible that this is a temporary phenomenon, most likely related to seasonal factors, this indicator has a property to fluctuate strongly from month to month, so the Fed has time to observe the dynamics of employment and assess the state of the labor market.

Pound fell to 11-day low due to BoE concern

Today, the Bank of England Governor Mark Carney has completed what he did not finish yesterday - expressed obvious concern about Brexit without an agreement.
Carney said in an interview with BBC Radio that the possibility of Brexit without an agreement is inconveniently high.
According to him, it is absolutely in the interests of the UK and the EU to have a transitional agreement, Brexit without an agreement is highly undesirable. This Brexit is likely to mean higher prices over a period of time.
After these comments, the pound sterling fell to an 11-day low.
On Thursday the Bank of England raised interest rates, but at a subsequent press conference, Mark Carney said that there are signs of a softening of business confidence. He also noted that the negotiations between Great Britain and the EU are in a critical phase. All this contributed to the fall of the pound. In addition, as The Guardian, the pound fell against the backdrop of Carney's phrase that monetary policy should walk, and not run, to stay in place, as the natural level of interest rates is slowly rising.
Officials of the Bank of England's committee yesterday also said that to restrain consumer inflation, there will be a constant tightening, but based on futures on central bank funds, investors do not expect a further rate hike until next year.

What to expect from NASDAQ?

In recent days, the big US and European indices have experienced difficulties and slowed their growth amid worries about a global trade war. Tensions between the United States and China continue to rise after US Trade Representative Robert Laitizer announced that the US is considering increasing duties from 10% to 25%.
Looking at what is happening with the NASDAQ index and the rest of the world's largest indexes since the beginning of the year, we will notice that at the end of January we had a fairly deep correction (around 12-13% on NASDAQ). But this adjustment was very easily accepted by the market and new buyers quickly entered.
After this correction, which ended in February, the S&P 500 and Dow Jones did not manage to mark new highs. The same thing happened in the European indexes. Only the French CAC40 managed to reach a new peak, but failed to keep it. In contrast, NASDAQ gained a 6% lead and remained the only bullish base index.
The technology companies that have the greatest weight in the so-called FANG (Facebook, Amazon, Netflix, Google) and Apple continue to grow (except for the results of the reports).
This means that cash managers are starting to invest in just one group of shares, and if there will be some adjustment in these companies, there will be tremendous problems for long positions in NASDAQ.
Still, my expectations are that NASDAQ is likely to continue to rise in the short to medium term (next 1-2 weeks).

The metals and the brent become cheaper

The appreciation of the US dollar after the Fed hinted that it would raise more interest rates this year, had an adverse effect on the prices of precious metals and oil.
Silver fell to 15.40 dollars per ounce, while platinum fell to 815 dollars per ounce. Gold is traded early this morning at $1,217 an ounce.
Oil has also been affected by the appreciation of green money and has continued its decline since the last two days. On Wednesday the raw material lost 2.5% of its value.
Earlier this morning, the Brent was traded at $71.90 a barrel and US crude at $68.4.
Oil prices are influenced by the effects of continuing tensions in world trade, but market participants are worried about any slowdown in economic growth around the world.

EUR/USD after the ECB meeting

The ECB meeting is already in the history. In general, it can be summed up that it did not produce anything more serious like news. The euro wondered where it would go against the dollar, but eventually chose to go down, falling below 1.1650. Earlier in the day, the single currency traded at levels of about 1.1700 after the good development from Trump and Juncker meeting.
Overall, the ECB decided to keep its base rate unchanged. Draghi also confirmed that 30 billion stimulus would gradually be reduced to reach zero by December 2018.
At the press conference, Draghi once again confirmed the plans of the financial institution to maintain the current interest rate by the summer of next year to ensure continued steady convergence of inflation over the medium term to levels near two percent.
Of course, the future decisions of ECB will continue to be predetermined by the outgoing macrodata. This was accepted by market participants as a signal that if the trade war resulted in a more serious slowdown in economic growth and inflation, the central bank could be much less aggressive about its interest rates.
In June, the ECB announced its plans to end its massive bond purchase program in December, hinting that interest rates are likely to remain at the current low levels until at least the summer of 2019. The ECB reaffirmed that any possible change to the current plan would depend on the current economic data.
According to technical analysts, the euro may try to retest the psychological limit of 1.1500 against the dollar, and the test will determine the further movement of the currency pair. Decline below this limit can be seen as a very negative signal and lead to further losses for the single currency towards 1.13-1.12. Otherwise, a failed breakthrough, as well as returning at trading levels above 1.1700, will require conditions to boost the euro's appreciation.

New ESMA regulations for forex traders

The European Securities and Markets Authority (ESMA) has published a new regulations for forex brokers, CFDs and binary options providers. The document was adjusted to add a section explaining the position of the mega-regulator in the issue of certification and provision of cross-border financial services to retail customers.
In relation to trading CFD contracts in Europe, the Authority changes the leverage in the range from 1:30 to 1:5, depending on the volatility of the underlying asset (the so-called historical price behavior). Also, the document sets standards for forced close out of the position (margin close out). That is, the stop out - level (in percent), when the provider is forced to close the client's position, will be the same for all traders with this asset.
Moreover, new measures of protection against negative balance are introduced. According to the regulator, this will provide a more guaranteed limit of possible losses to retail customers.
In addition, the European regulator is making crypto-currency instruments (CFD contracts) within the limits of these restrictions. Also, the ESMA regulator completely prohibits the trade in binary options in Europe.
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Gold, silver and platinum with new bottoms (2)

The Bloomberg Commodity Index, which tracks the performance of commodities, declined 10% from its nearly three-year high in May, and its sell-offs began to shift to other assets.
This is clear from the performance of the mining companies, the worst performing sector this month, as part of the European Stoxx Europe 600 Index. This is not a big surprise, given the poor performance of the metals.
The weakness of the raw materials was also transferred to the currencies of the raw-producing nations. Almost all 22 key commodities in the Bloomberg Commodity Index fell from their peak in May, with the exception of live cattle, cotton and orange juice. Copper, which is often used as a barometer for the state of the world economy, fell by as much as 18% over the period.
The burning trade war and the uncertainty about Chinese demand for raw materials is one of the main reasons for the depreciation of raw materials. While there is uncertainty about China, raw materials will continue to be under pressure, according to market observers.

Trump does not like the Fed's policy

When Donald Trump does not like something, he does not bother to share it. Even if this can have consequences on financial markets. Last week, the US president criticized the Fed's policy.
According to the president, every time when Us economy goes up, FED wants to raise rates. And Trump's really not happy about this.
And Trump's comments have led to a certain decline in the dollar against other major currencies on Thursday.
The yuan has been distinguished from the depreciation of the dollar. The Chinese currency has fallen to over one year's bottom.
Investors continue to worry about the decline of the yuan against the US dollar. The Chinese currency reached 6.8106 yuan per dollar, with the psychological limit of 6.8 being exceeded for the first time in more than a year.
China Central Bank announced a rate of 6.7671 yuan before opening the market on Friday, which was the lowest level in a year.
According to analysts, Trump's remarks can trigger investors who think buying dollars to postpone their deals.
Trump's comment on Thursday is not the first in which the president expresses dissatisfaction with the strong dollar. Earlier, in interview with Wall Street Journal Trump had said even more openly that the dollar was "too strong".

Gold, silver and platinum with new bottoms (1)

What happens to raw materials should seriously stress investors on global stock markets. Because they have entered a correction phase and traditionally it is believed that the direction of commodity price movements points to the situation in the growth of the world economy.
Copper, which has often predicted short-term GDP growth with very high precision, saw a decline of more than 18% from its peak in May. In the light of the appreciation of the US dollar, copper fell below $6,000 (18% of its peak in May), and US crude oil tested $68 a barrel.
Gold fell below $1,202, and platinum rested near a 14-year low at levels below $800 per ounce. Silver, another industrial noble metal, is about to test the psychological limit of $15 per ounce.

Decline for US indices

US indices ended last week on a negative territory, dragging the Asian indexes on their last trading day for the week. The broad US S&P 500 declined by 0.4%, while the Dow Jones blue chip index lost 134.79 points, or 0.53%. Technological Nasdaq was the least loss - 0.37%.
Otherwise, Japan's Nikkei 225 lost 0.66% of its value, and the South Korean crude fell 0.2%. The Hong Kong Main Index recorded a loss of 0.5% several hours before closing the market.
Investors continue to worry about the decline of the yuan against the US dollar. The Chinese currency reached 6.8106 yuan per dollar, with the psychological limit of 6.8 being exceeded for the first time in more than a year.

A Simple Gold Trading System (3)

What does gold look like today and what signal does it give, based on trading system requirements?

As we can see from the chart above, gold is currently trading below its 10-month moving average. That is, the trend for precious metal can be predetermined as a downward trend, and investors who want to buy gold are well worth waiting for the metal to return above that average. And this is most likely to happen when gold rises above the psychological limit of $1,300 per ounce.
In other words, be patient and wait for a confirmation that the downward trend in gold is exhausted.

A Simple Gold Trading System (2)

What was the result of this system?

Backtests of the system since 1971 show that it has earned investors an income of 16.8% a year when gold was bought (its price was above its 10-month moving average) and income of 2.9% when it was sold (the price was below the 10-month moving average).
For comparison, following the simple buy-and-go strategy for gold for the period under review has yielded an average annual return for investors of 8%.
In short, investors were definitely supposed to be in gold when they had a "purchases" signal.
Summarized, the system results look like this:
Between 2001 and 2012, the system has given frequent "buy" signals.
Between 2012 and 2015 dominated "sell" signals.
In 2016, the system gave signals for purchases in the first half of the year and a signal for sale from mid-October.

A Simple Gold Trading System (1)

The simple things are the ones you have to stick to when trading in the financial markets - this is advice given to investors by not one and two great investors, including the genius Warren Buffett.
In this line of thought, I will now introduce you a simple gold trading strategy that you can use as a second opinion when investing in the noble metal.
In fact, at this moment of uncertainty, more and more investors are looking at gold. Relations between the US and China are strained, and the official start of the "trade war" was also given in the beginning of the month.

What is the strategy?

The strategy is represented by experts from the Daily Wealth and includes long positions in gold if its price is over its 10-month moving average and shortening if the price of gold is below it. It just sounds simple, right? Yes... So we have met the requirement for simplicity.

Oil with dramatic loss yesterday

The oil price was exceptionally strong yesterday. The Brent lost $3.49 of its value, or 4.6%, to finish the first day of the week at $71.48 a barrel with delivery in September. This was the lowest closing date since April last year.
US crude oil fell by 2.95 dollars, or about 4.2% to 68.06 dollars a barrel. Its lowest closing level since 21 June.
The Trump administration, in addition to conducting active political talks with Russia and Saudi Arabia to boost production, plans to resort to US strategic reserves to stem the fall in oil prices.
The average selling price of oil rose 16% since the beginning of the year, resulting in serious dissatisfaction with Trump's policy.
The sanctions imposed by the US on Iran are largely among the main reasons for the rise in oil prices in international markets.
According to the International Energy Agency, US state producers are expected to raise their daily production by 143,000 barrels in August, compared to a year earlier.

Asian indices with the first weekly increase for five weeks

Asian indexes on Friday scored their first weekly boost in five weeks after China refrained from declaring details about their response to US tariff hikes. Shares in Japan, Hong Kong and South Korea rose on the last day of the week, while those in China and Australia declined.
Beijing's officials seem to mitigate against President Trump's tariffs as a result of the slowdown in the economy, the fall in prices of shares on stock markets and the weakness of the currency.
China's exports for June exceeded analysts' average expectations, while imports slowed far more than expected, export data said.
Investors and analysts are turning their eyes on the upcoming quarterly reports, which can largely determine the future direction of stock markets around the world.

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US indices ended yesterday on green territory

Yesterday, the US indices ended in positive territory, with the biggest gain of 0.5% being the Dow Jones blue chip index. The broad S&P 500 added 0.4% to its value. With least gains ended the technological Nasdaq, adding only 3 points to its value. Otherwise, the index following the performance of the smaller companies - Russell 2000, ended in a negative territory.
Oil lost $0.5 of its value, and noble metals returned almost everything earned within the day. Earlier this morning gold is traded at levels of $1,250 per ounce and silver is below the psychological limit of $16.00 per ounce. Now is the question whether we will see a test of the bottom at $15.60 an ounce and will it remain in force?

The pound is stabilizing

The British currency rebounded on the second day of the week, following fears about the withdrawal of two ministers yesterday. The British pound rose to 1.3270 against the dollar, after registering yesterday the lowest value of 1.3180 against the US currency.
After two ministers of May's cabinet resigned - first Brexit negotiator David Davis and then Foreign Minister Boris Johnson, there were given signals for a softer Brexit. And that's good news, according to market observers.
Several hours after Davis's resignation, the British Prime Minister appointed Dominique Raab, who was in charge of the London-Brussels talks on the UK's exit from the EU.
Conservative lawmakers announced that May is likely to be sure of her leadership despite two resignations, and that directly helped the British pound recover.

More new jobs and higher unemployment in the United States

The newly created jobs in the United States surprised the analysts happily, rising to 213,000 in the past month, or more than the average expectations of 200,000 new jobs.
What disappointed investors, however, was the unemployment figures. Instead of keeping at 3.8%, as expected, unemployment rose to 4%.
The other disappointing figures in the report were those of raising average hourly wages. The index grew by 0.2% on a monthly basis and 2.7% on an annual basis in June, against expectations of an increase of 0.3 and 2.8%, respectively.
All this has made investors take a step backwards in terms of forecasts of four US interest rates hikes this year after we've seen two. In other words, they can only expect another increase in interest rates this year.
The dollar has fallen sharply against other major currencies. The euro rose to 1.1750 levels after trading at levels of about 1.1700 previously.

The European indices ended with growth

The European Stock Exchange session ended in positive territory despite the start of the US-China trade war late last week.
Employment data in the US also had an impact on European indexes on the first day of the new week. The European Stoxx 600 reported the highest rise after the UK FTSE 100 Main Index.
The political turbulence in the UK, in connection with the resignations of two negotiators, was also accepted by market participants as good news. Expectations for a reversal in the negotiations with the EU and a "soft break" have risen after the two resignations.
French carmaker Renault-Nissan came to the bottom because of concerns over his Nissan partner company, which has admitted to falsifying exhaust emissions and fuel economy in the Japanese automotive market.

Gold is pushed up from its bottom

At the beginning of the week, platinum fell momentarily below the psychological limit of $800 per ounce. But there was a fast return, and early this morning, the "white metal" was trading at 840 dollars per ounce.
Gold also recovered substantially from its decline on Monday when it reached the lowest value of $1 236 per ounce. Earlier today, precious metal was traded at levels of $1 254 per ounce.
The big loser is silver, although the metal was also the one that dropped at least during the precious metal fall at the beginning of the week.
Silver has returned at levels of trade above the psychological limit of 16 dollars per ounce, but faces difficulties for further growth. Serious resistance is at the level of $16.10 per ounce.
Down below, silver should not fall below the bottom of November last year at $15.60 an ounce. If this happens, the prospects for the appreciation of the metal will fall seriously. On the other hand, witnessing the acceleration of silver growth can only be achieved with a sustained return of more than 16.20 dollars per ounce.

Oil is headed to $80 a barrel?

Oil continued to rise to $75, after data on US crude oil stocks and continuing concerns about supply shortages.
Despite assurances that Saudi Arabia will raise its production, in response to President Trump's request and his administration, there was a scandal. The media severely condemned Trump's tweets, saing they were offensive to Saudi Arabia.
US crude oil rose 1%, with a premium between futures contracts shipped month by month, expanding heavily. This indicates the market participants' expectations for a potential further rise in the price of "black gold."
In addition, the decline of the dollar against other major currencies has also fueled the slight rise in oil prices.
Oil prices are rising despite OPEC countries' assurances that they will adhere to a 1 million barrel per day production agreement.
The rise in the cost of raw materials in such environments has led a number of market observers to believe that OPEC will not be able to cope with the supply of such a quantity of oil due to lack of sufficient spare capacity.
And this may trigger further rising of raw material to the next key $80 per barrel.

Platinum under $800

The price of platinum has collapsed. It fell below $800 per ounce, marking a record low in its history. The noble metal started with its decline a week ago but only yesterday lost more than 5% of its value.
The prices of other precious metals also fell. Gold fell below the support level of $1,250 and fell to $1,238 per ounce.
Silver is trading early this morning at $15.78, or its lowest value since November last year.
The platinum and gold price ratio is at a record low of 0.646.
The sharp decline in platinum prices is largely determined by fears that US duties on aluminum and steel will reduce demand for platinum.
The strong dollar and the decline in demand for diesel cars, whose platinum catalysts are used, are other reasons for the decline in platinum prices.
There are also some concerns about manipulating the price of platinum. The fall of the metal below $811, which is a bottom since 2004, has increased panic sales of investors. Many stop losses were taken, which further prompted the supply of precious metal.
Whether levels of less than $800 would not have been a good time to buy, we're going to see very soon.

Emerging market currencies are sharply declining

Trump's latest measures to deepen protectionism have triggered further sell-offs in emerging markets.
The currencies and indices of emerging markets are turning to their biggest losses since September 2015. The Hungarian forint has fallen to a historic bottom after the country's central bank has confirmed its not particularly aggressive monetary policy.
Yuan fell on Thursday for the tenth consecutive day against the dollar, which was his longest series of declines since March of 2014.
A cheap yuan is part of China's policy to resist US blows in the ever-worsening trade war between the two super-economic powers.
Chinese yuan is cheaper also because the central bank of China refrains from raising interest rates after the Fed raised interest rates by 25 basis points.

The silver broke $16 - the next stop is 15.50

Traditional economic theories say that gold and other precious metals should rise in times of geopolitical uncertainty. In an environment of constant mention of the word "trade war" between the US and China, what better geopolitical instability than this?
Still, noble metals can not find their way up and continue with their loss.
Gold broke the key support level of $1,250 and traded at $1,248 earlier this morning. Subsequent levels of support for the yellow metal are at levels of about $1,230 per ounce.
More worrying is the silver situation, where there was a break of the psychological limit of $16 per ounce. This level has already stopped the downward depreciation of the metal several times, and now the situation is quite worrying.
It seems almost certain that silver will test its key level of support at $15.50 per ounce.

How to deal the dollar next few days?

Discrepancies in the monetary policy of the Fed and the ECB are likely to lead to an increase in the dollar exchange rate and a decrease in the euro next week, making the dollar more attractive to profit-seeking investors.
On Wednesday the "three bigs" - Kuroda, Draghi and Powel will perform in Portugal and would shake the markets with some volatility, bringing to table good trading options.
On Thursday the Bank of England will keep the interest rate unchanged. The decision of the National Bank of Switzerland will be similar.
The US dollar index fell 0.14% at the end of the trading session on Friday to 94.80, after rising to a maximum in eleven months, to 95.13. Over the last week, the dollar index rose 1.33%, which was the largest growth in seven weeks.
More likely, the dollar will keep the good pace next week.

Gold gets cheaper after the dollar rises

Gold declined after the dollar appreciated against other major currencies as a result of the surprisingly good results of the historic meeting between Trump and Kim Chen Un.
The spot price of gold fell 0.2 percent to $1,297 per ounce, and the precious metal futures with delivery in August lost 0.1 percent to $1,301.50 per ounce.
The dollar has been a major driver of the movement in the price of gold and other precious metals lately. The reduction in geopolitical tensions, however, has an additional impact on the direction of the shiny metal, according to Daniel Hines, an analyst at ANZ.
The price of gold is at serious resistance at levels of 1300-1305, as well as support from Asian buyers when it approaches $ 1,290 per ounce.
For other metals, silver fell 0.3 percent to $ 16.83 and platinum was traded at about $ 903 per ounce.

50 Cent bets on VIX again

Do you remember the mysterious trader "50 Cent"? The guy who, for nearly a year, has consistently bet on put options on the VIX volatility index and, though for a long time shadowed, ultimately made a profit of tens of millions of dollars?
This might be a good example of how patience and persistence of trading, coupled with a good commercial strategy, reward the player.
Well, it looks like the mysterious trader is back to its favorite instrument again.
After profiting about $183 million and long absent, or rather awaiting, from the volatility index market, the trader made its bet again.
It was placed on Tuesday with the purchase of 50,000 call options with $28 bet on the volatility index at a level of 0.50 and 0-51 cents. On Wednesday morning, a similar deal was made again, but this time for 0.49 cents.
Of course, there are some doubts about whether the bet is made by the original "50 cent" and not by an immitator. So it's good to have one mind on S&P 500.

Russia is raising its oil production

Oil prices dropped somewhat, as a result of negative forecasts from JPMorgan late last week that non-OPEC countries are expected to raise their production seriously in 2019.
They will be led by the United States, along with Russia, Brazil, Canada and Kazakhstan, the US investment bank said.
In addition, downward pressure on oil prices also revealed that Russia's production in May was over 11 million barrels a day, or above the country's target of producing less than 11 million barrels.
Next, the appreciation of the dollar, pending the Fed's decision to raise the interest rate again, also has its impact on the price of "black gold".
The number of oilfields in the United States has risen to 862, according to Baker Hughes. This is their highest level since March 2015. This suggests that US production, which is already at a record of 10.82 million barrels per day, may continue to rise in the future.
Oil prices, however, have changed their negative course, following comments by the oil minister of Iraq, that oil-producing countries should not be pressed to produce more oil.

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Nasdaq is down and everyone is fleeing from FANG companies

US indices traded mixed yesterday, which is definitely a cause for concern. Technological Nasdaq Composite and Nasdaq 100 continued with their decline after new record highs reached, while Dow Jones rose.
The Nasdaq 100 Index declined for the first time in five days, with investors dumping and selling shares in the FANG group and targeting the stocks of the banking companies.
Interest rates on 10-year US bonds continue to keep below the psychological limit of 3%, but according to market observers the expected almost 100% rise in interest rates in June begins to weigh above the market and indices.
The Stoxx Europe 600 Index returned its earlier earnings yesterday after disappointing factory orders in Germany. The euro appreciated as a result of rising expectations for the end of monetary stimulus in the euro area.

The world's biggest hedge fund: the 2019th will be hard for the economy

When the founder and head of the world's largest hedge fund, Ray Dalio, speaks, the market is silent and listening. And what Dalio says should bother all market players.
According to the head of Bridgewater Associates, next year will be difficult for stock markets and the economy. He is bearish for almost every asset class, Dalio commented in a recent letter to the clients of the fund he manages.
2019 seems to be a dangerous period for the economy, Dalio says.
Earlier in the month, the hedge fund manager said he was at the forefront of the stock market and this is a problem.
The company, which currently manages assets worth about $150 billion, believes the US bond yield curve should remain flat, in a range where oil reached $62 a barrel and the dollar fell 3.5 percent against the rest of the major currencies.
2019 seems to be a dangerous period for the economy when the financial stimulus is over, and the Fed's interest rate cycle will find its peak, Dalio said in the letter to the hedge fund investors. Given the fact that financial markets are ahead of what is happening in the real economy, the danger to investors is already present.

The ECB meeting is approaching and change may be significant

The ECB is expected to take test trials on the outcome of its monetary policy at its next week's meeting, which may end with publicly announcing the plans when we will see an exit from this policy.
It is very likely that ECB President Mario Draghi will use the June 14th summit in Latvia as an opportunity to discuss the end of the buy-back program, according to market observers.
Currently, bond purchases are scheduled to take place at least until September. However, there is no more clarity about the time of their end, which brings serious uncertainty among market participants.
And many market observers see a good time at the ECB meeting to "prepare the ground". Dearly, it is possible to use the press conference to signal that a decision on the end of the stimulus could come at the July meeting of the bank.
Even if the topic is concerned, there would be serious progress on the way out of the incentives, comment market observers.
The June decision may also be accompanied by new economic forecasts on the euro area by the ECB, which also give some signals to investors. If the forecasts are good, investors may decide that we will see a recent exit from the incentives.

The gold and platinum fall

Despite the observed return of the dollar against other major currencies, gold and platinum fell. The yellow metal dropped to $1,290, where it now finds strong support.
However, according to technical analysts, if gold falls below $1,290, we can see a further decline in the price of precious metal to $1,280 and further to $1,270.
Platinum has returned below the psychological limit of $900, and now the point is, will the level of support remain at $890 unpierced.
If the metal returns over $900 and moves away above the level, which is likely to be a strong drag area, we can see a further appreciation of the metal.
But to a large extent, the movement of precious metals will continue to be predetermined by geopolitical factors such as trade relations between the US and China, as well as the direction of the dollar's movement relative to other major currencies.

US producers increase their oil production

The US oil producers is clearly the most satisfied group of high oil prices. The cost of raw materials declined on Friday after it became clear that OPEC and Russia could increase their production. And the latter may be the result of US production growth in an environment of rising production.
US crude oil lost about 1 percent of its value to $66.39 a barrel late Friday, while the Brent fell 0.6 percent to $77.07 and was already more than $3 below its highest since late May.
US oil production is growing at a good pace and weekly data show no signs of slowing down, according to Seaport Global analysts, adding that growth is mainly driven by Texas and New Mexico.
US oil production rose 215,000 barrels per day to 10.47 million barrels per day in March, according to the US energy ministry. Production in Texas rose 4% to 4.2 million barrels per day, while that in New Mexico - by 6.5% on a monthly basis.
Increasing production by US companies in the US is a reality when the market increasingly talks about Russia and OPEC being able to override accepted production constraints. Namely the latter were the basis of the strong rise in oil prices to a maximum of four and a half years.

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Oil between $50 and $75 suits everyone

Over the past four days, US crude oil fell nearly 10 percent of the cyclical peak $73 a barrel, reaching yesterday low at $65. This poses the question - has the downward correction of the raw material been exhausted and can it start rising again?
The sharp decline in oil became a reality as a result of the data that Saudi Arabia and Russia are considering increasing production. Both parties signaled some increase in their production.
It is the trade between Russia and OPEC in the past year to curb production, triggering a strong rise in raw material prices.
Experts, however, comment that the potential resistance of some OPEC members against Saudi Arabia and Russia's decision to boost production could lead to a certain return in the price of oil.
After the peak of 115 dollars in 2011, oil was traded in a range between 115 and 75 dollars for 30 months. Such developments would mean oil price rate in the range of between $70 and $50 over the next few years. And that would perfectly suit Russia and Saudi Arabia, according to market observers.
Any oil levels above this range are already leading to some problems for consumers related to inflation, as well as an upsurge in US oil production, which is becoming profitable.
So, it seems very likely that the price of oil will be kept in a relatively narrow range over the coming years.
There are, of course, some analysts who believe that the price of oil will continue to rise and may go beyond that limit. Some of them are experts from Goldman Sachs, according to which there is an essential background for growth in the price of oil.

Italian banks have led the downturn in Europe

Italian banks have led the fall of European financial companies downwards as a result of growing fears of new elections in the country that could boost the position of major populist parties in the country.
The decline was driven by the shares of Banca Monte dei Paschi di Siena SpA, the volatile government-backed bank whose shares lost 7.8% of its value.
Seven of the eight worst-performing stocks in the Bloomberg Europe Banks Index were at European banks. The shares of the largest Italian bank - UniCredit SpA, lost nearly 5% of its value.
Meanwhile, the decline in Italian banking stocks has triggered the deletion of the growth of FTSE MIB Italian index since the beginning of the year.
New political choices, coupled with growing consensus opinions among populists, seriously frighten investors, according Gabriela Pinosa, head of Go-spa Consulting, a Milan-based consulting company quoted by Bloombaerg.
The victory of Euro-skeptics may lead to a gradual withdrawal of Italy from the eurozone and a potential debt write-off. And this can be extremely negative for the euro.
Interest rates on 10-year Italian bonds rose yesterday to over 2.6%, which was their highest level in nearly four years.
The fall in Italian bond prices has occurred after populist leader Mateo Salvini said it does not make much sense for Italy to remain within the EU unless the Union rewrote its rules.
The political situation seems extremely unfavorable for Italian bonds and debt holders because of the future unpredictability of vague Italian leaders.

Oil loses more than $4 on Friday, continues to go down

The price of oil continued with its exceptionally strong depreciation on Friday and the first day of the new week. Brent futures with delivery next month lost $1.1, or 1.4% on Friday's closing level.
US crude oil fell by 1.57 dollars, or 2.3% on Friday's closing level.
Brent and US oil fell respectively by 6.4 and 9 percent of its peak in early May. In China, oil fell 4.5 percent to 459 yuan a barrel (71.83 dollars a barrel).
The rise in oil prices in recent weeks has sparked serious debates among market participants and OPEC members about the impact of oil prices on the world economy, according Chittag Ay, chief economist at Morgan Stanley.
On Friday, Saudi Arabia and Russia, which are considered to be drivers of the oil market, said some oil production growth of 1 million barrels per day was under discussion.
Production cuts were the factor that led to substantial oil prices on international markets.
With the price rise, however, the US producer of US oil is also growing, benefiting from the high oil price.
Oil prices have collapsed after reports that Saudi Arabia and Russia have agreed to increase their production in the second half of the year, ANZ said.
US energy companies have added 15 new field deposits for the week to May 25.

May seems to be the best 5-th month for US markets for 9 years

You've probably heard the Wall Street rule - "Sell in May and relax." Well, it turns out that this rule does not apply, at least this year.
Indeed, US indices are moving to their best performance for nine years, after rising 2.8% since the beginning of the month. The blue chip index Dow Jones Industrial is also heading for its best performance since May 2009, according to FactSet.
In May 2009, the index added 5.3% to its value. Since the beginning of the fifth month of this year, the indicator has brought 4.1% return to investors.
The Nasdaq Composite Index is the best-performing US index this month, with a return of 5.2% since the beginning of the month. Better was its performance in May 2005, when it rose by 7.63%.
Investors' eyes will now be on trade data, US GDP growth, and employment and unemployment figures in the US for the past month, which will most likely predict the direction of the market next month.

USD/CAD: technical view for 05/25/18

The pair is trading near the upper limit of the range 1.2750-1.2900 against the background of correction of prices for crude oil. If oil quotes continue to decline, then the pair may continue local upward movement.
Technical picture:
The price is located above the lower line of the boundaries of the Bollinger bands, below EMA 5 and EMA 13. RSI is above the level of 50% and moves horizontally. Stochastics are neutral. MACD is above the zero mark and is growing. Indicators do not confirm each other.
Trading recommendations:
If the pair overcomes the 1.2900 mark, we should expect its local growth to 1.2970.

OPEC prepares markets for changing quotas

At the auction on Thursday Brent crude oil fell by more than 1% after once again did not dare to challenge the level of 80. In general, quotes remain high and continue to feed by the subject of sanctions, but the market is beginning to form fears of another kind that can put the end of the recent rally.
Before the semi-annual OPEC + summit in Vienna, a little less than a month remains, and exporters need to prepare the markets in advance for possible scenarios, so as not to shock investors and avoid sharp fluctuations in prices. It seems that this preparation is just beginning. By the way, according to rumors, all key producers of the Middle East support the weakening of quotas.
As this development, we can see a way out of long positions on Brent in a wave of profit-taking at still attractive levels for sale. Moreover, the downside risks will increase, if, for example, there are fears that Iran will be able to compensate losses from US sanctions at the expense of deliveries to the EU.
From a technical point of view, the probability of a downward breakout is now higher than the chance of a return above 80. Accordingly, the level 78 may be at risk, the loss of which will signal a further elimination of the longs. The catalyst for this movement may be the current report of Baker Hughes, if it indicates the resumption of the growth in the number of drilling in the US.

Pound is in no hurry to recover

European currencies are making new attempts to recover within the bearish trend, but the momentum remains limited. Euro slightly moved away from the fresh lows of the year under the 1.17 mark, but on approach to the 100-hour moving average consolidated slightly above the opening level.
The pound received a good push to accelerate the bullish pulse, but could not use it fully. Retail sales in Britain were much better than forecasts in April. The indicator in monthly terms jumped 1.6% after a decrease of 1.1% against expectations of a recovery of 0.7%. Sales excluding fuel also recovered, showing an increase of 1.3% after a 0.5% decrease in volumes in March.
GBP/USD tried to grow in response to the release, but just like the euro, it ran into a 100-hour moving average in the 1.3420 area and fell back under the psychological mark. The pair must close above 1.34 to confirm the weakening of short-term pressure.
The reaction of quotations speaks not only of the restraint of buyers in the market, where the dollar continues to trade within the uptrend, but also that the restoration of retail sales did not affect the expectations of players regarding the future policy of the Bank of England. In addition, the April data players regard as obsolete - the response to fresh releases promises to be more lively.
In the short term, the pound is unlikely to develop the momentum of growth and is likely to continue to attract sales on growth attempts. The nearest important resistance is in the area of ​​1.3460.