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US retail sales unexpectedly recovered in March at the fastest rate in a year and a half, offsetting a gloomy February with the fall by 1.7%. As the March data shows, the structure of aggregate consumption saw exceedingly favourable shift, namely, consumers spent more on car purchases. This rebound could point to the improvement in household expectations regarding the size and stability of future income, but still with only one observation such a conjecture remains a shallow speculation. Although car sales tend to be volatile by nature and thus considered unreliable, the positive monthly change in March comes right in time to support the assumption about rebound of economic activity in the second quarter.

However, in January, car sales pulled consumption down, apparently due to seasonal exhaustion after New Year’s spending.

Broad retail sales indicator rose by 1.6% in March compared with February. Core sales also rose adding 1%.

From the interesting details of retail sales report, it can be noted that all four of the largest items of consumer spending posted an increase compared with the same month last year and February:

  • Cars and spare parts – + 3.8%
  • Food and drinks – + 1.0%
  • Restaurants – + 0.8%
  • Online purchases – +1.2% and +11.6% compared with March 2018.

Positive data further attracted buyers to the dollar, after the US currency went into the lead against the main opponents during the London session on Thursday:

Unemployment in the US is likely to continue to test historical lows in April, as shown by unemployment benefits data. The number of initial claims for benefits has dropped to its lowest level in 50 years (192K) and it is completely unclear how this fails to translate into the consumer inflation.

Large downward risks to the American economy, hovered in the air, are fading from view. Given that the data from China indicated fast recovery, the trading theme of the next week should be “the search for yield”.

The post US Retail sales join Chinese data to hint about early stage of global recovery appeared first on Tickmill.

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Good day!

Gold managed to break the lower side of triangle and is currently approaching the uptrend, targeting the 1215.00 level. It’s likely that the asset won’t pull back from uptrend, as there’s a reverse pattern blocking the daily uptrend:

The British pound managed to break the uptrend and could very well test the resistance levels next to the 1.2800 level. As for now, it’s probably wise to wait for three candles to secure their positions below the broken trendline:

The Australian currency broke the neckline of the inverse head and shoulders pattern, and now seems to be trying to close above the broken trendline and horizontal 0.7168 level. This is for the third day in a row, forming dojis as it goes. All in all, this asset could potentially jump:

Please note that this material is provided for informational purposes only and should not be considered as investment advice. Trading in the financial markets is very risky.

The post Gold Broke the Triangle! Could it Drop? appeared first on Tickmill.

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NIKKEI is approaching our first resistance at 22290.7 (61.8% Fibonacci retracement , 100% Fibonacci extension ) where a strong drop might occur below this level pushing price down to our major support at 21472.4 (61.8% Fibonacci retracement , 100% Fibonacci extension , horizontal pullback support).
Stochastic is approaching resistance as well where we might see a corresponding drop in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post NIKKEI approaching resistance, potential drop! appeared first on Tickmill.

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ASX is approaching our first support at 6238.2 (horizontal swing low support, 50% Fibonacci retracement, 61.8% Fibonacci extension) where a strong bounce might occur above this level pushing price up to our major resistance at 6306.1 (horizontal swing high resistance).
Stochastic is also approaching support where we might see a corresponding bounce in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post ASX approaching support, potential bounce! appeared first on Tickmill.

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GBPUSD is approaching our first support at 1.3000 (horizontal swing low support, 61.8% Fibonacci retracement, 61.8% Fibonacci extension) where a strong drop might occur below this level to our first support level at 1.3136 (horizontal swing high resistance, 38.2% Fibonacci retracement).
Stochastic is also approaching support where we might see a corresponding bounce in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post GBPUSD approaching support, potential bounce! appeared first on Tickmill.

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USDCAD is approaching our first resistance at 1.3399 (horizontal swing high resistance, 76.4% Fibonacci retracement, 61.8% Fibonacci extension) where a strong drop might occur below this level pushing price down to our major support at 1.3339 (50% Fibonacci retracement).
Stochastic is also approaching resistance where we might see a corresponding drop in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post USDCAD approaching resistance, potential drop! appeared first on Tickmill.

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Tickmill - Forex Traders Blog by Desmond Leong - 2d ago

We are seeing a nice setup on GBPUSD and ASX as it is approaching support where we are expecting a bounce above this level.
Here are some of our nice calls previously:
USDCAD bounced nicely from our first support
https://www.tradingview.com/chart/USDJPY/raaFUFZi-USDCAD-approaching-support-potential-bounce/

USDJPY reversed nicely from our first resistance as well:
https://www.tradingview.com/chart/USDJPY/50XE97fQ-USDJPY-approaching-resistance-potential-drop/

The post Summary appeared first on Tickmill.

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The source of genuine fundamental improvements in the Chinese economy can only come from the manufacturing sector… At least this is the opinion of Chinese investors who bought stocks and ditched fixed-income securities during the last episode of rising manufacturing PMI:

Let me remind you that on March 29, the markets were updated with the closely-tracked China manufacturing PMI, which unexpectedly jumped into positive territory (above 50 points), markedly outstripping the estimate. In one of my previous articles, we explored that the magnitude of the PMI rebound is of less importance than the variation of rise, depending on the size of firms. The greatest increase in activity was observed in small enterprises most vulnerable to demand shocks and credit conditions:

This is a very promising shift in terms of the outlook for corporate optimism as its more volatile and sensitive to economic changes in small firms.

It’s also important that two key sub-indexes shifted to recovery: production volumes and new orders (a leading indicator).

The government linked the positive changes in production with the success of the targeted credit measures for enterprises that bolstered consumption and investment. Well, the episode of liquidity injection into the economy, to the tune of 4.6 trillion Yuan in January is not quite a targeted measure. However, in February the PBOC tried to move monetary aggregates back to normal, but yet again returned to expansion in March:

Given the size and position of the Chinese economy in the world, it’s easy to understand what’s now driving the global appetite for risky assets. Reliance stems from the PBOC’s assistance, with its sheer scale obviously supporting domestic production data.

The growth of divergence in the economic surprises of US and China is probably the direct result of the difference in the magnitude of monetary easing. More precisely, the Fed kind of took a break concerning this:

Data released on Wednesday indicated that the impulse in PMI developed in broad macroeconomic variables. Industrial production and retail sales exceeded expectations, while the government’s target variable – GDP, rose by 6.4% in the first quarter, compared with a forecast of 6.3%. At first sight, the forecast looks good, however it’s possible that the “impatient” PBOC is just waiting for the first signs of improvement in order to tighten control of the monetary supply.

Further to this, the first signs of a U-turn in monetary policy are already in full view. For example:

  • The widely expected decline in RRR in April was not realized.
  • The PBOC did not conduct open market operations for 18 days in a row.
  • The new medium-term lending facility decreased in size. As a result, overnight repo rates soared to a maximum of 4 years, indicating growing liquidity deficit.

It’s clear that, with the transition of the People’s Bank of China to a more offensive stance, the stock market will again be under pressure. Additionally, if the growth of Chinese economy again turns out to be not “self-sustained”, then new economic shocks overlapping the tightening policy may hit the asset prices much more painfully.

The post Chinese Economy’s “Good News” May Be Bad News for Stocks appeared first on Tickmill.

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NIKKEI is approaching our first resistance at 22290.7 (61.8% Fibonacci retracement , 100% Fibonacci extension ) where a strong drop might occur below this level pushing price down to our major support at 21472.4 (61.8% Fibonacci retracement , 100% Fibonacci extension , horizontal pullback support).
Stochastic is approaching resistance as well where we might see a corresponding drop in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post NIKKEI approaching resistance, potential drop! appeared first on Tickmill.

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XAGUSD is approaching our first support at 14.86 (horizontal swing low support, 61.8% Fibonacci extension) where a strong bounce might occur above this level pushing price up to our major resistance at 15.14 (61.8% Fibonacci extension, 61.8% Fibonacci retracement, horizontal pullback resistance).
Stochastic is also approaching support where we might see a corresponding bounce in price.
Trading CFDs on margin carries high risk.
Losses can exceed the initial investment so please ensure you fully understand the risks.

The post XAGUSD approaching support, potential bounce! appeared first on Tickmill.

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