Forex – Dollar Consolidates After Hitting 3-Week High on Trade Hopes

Investing.com — The dollar was consolidating in early trade in Friday after surging to a three-week high on Thursday in response to growing confidence that the economically damaging tariffs enacted by the U.S. and China on each other’s products will be reversed.

By 3 AM ET (0700 GMT), the was at 97.992, having risen as high as 98.078 overnight thanks to gains against the British pound, euro and Australian dollar. The index tracks the greenback against a basket of developed market currencies.

The Japanese , a haven currency that has suffered particularly badly as hopes for a trade settlement have grown staged a modest comeback overnight after stronger-than-expected numbers for September overnight.

Elsewhere in Asia, the weakened after Moody’s cut India’s sovereign rating outlook to negative from stable, citing rising public deficits and debt levels.

The , meanwhile, was opening flat. It hit a two-week low on Thursday, dipping briefly below $ 1.2800 after the Bank of England adopted a more dovish outlook about the possible need for interest rate cuts, given the weakening of global growth this year and the hit to domestic growth from the prolonged uncertainty over Brexit. That uncertainty is set to extended well into next year by the general election on Dec. 12.

For the first time in over a year, two members of the bank’s Monetary Policy Committee dissented from the overall view, calling for an immediate rate cut.

“All told, the MPC is demonstrating a clear easing bias, and given the downside risks to growth, looks increasingly minded to ease policy early next year,” said ABN Amro Bill Diviney in a morning note.

The has also traded weaker since Thursday morning when the European Commission’s forecast reflected low expectations for the kind of fiscal stimulus that many, including the European Central Bank and International Monetary Fund, say is needed to revive the euro zone economy.

After another weak set of German industrial output data earlier in the week, ’s are due at 3:45 AM ET (0745 GMT). The U.S. data calendar for Friday is led by the University of Michigan’s survey at 10 AM ET.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Global optimism, UK spending promises lift long gilt yields to three-month high

© Reuters.  Global optimism, UK spending promises lift long gilt yields to three-month high © Reuters. Global optimism, UK spending promises lift long gilt yields to three-month high

By David Milliken

LONDON (Reuters) – British long-dated government bond yields rose to their highest in more than three months on Thursday as a global improvement in risk appetite and the prospect of big increases in public spending overshadowed a more dovish Bank of England.

Ten-year gilt yields () peaked at 0.814%, up around 9 basis points on the day and the highest since July 16, and 20- and 30-year yields gained a similar amount () ().

By contrast, two-year yields () barely budged — pinned down by an unexpected split vote at the Bank of England — and the two-year/10-year yield curve rose to its steepest since July 15 at 24 basis points.

The steepening yield curve reflected countervailing forces at play for different maturities of gilts.

Markets received a shock earlier in the day when two BoE policymakers unexpectedly voted to cut rates, and the majority said a rate cut could become necessary if Brexit uncertainty and a global slowdown did not ease.

One measure of interest rate expectations now prices in a two thirds chance of a quarter-point BoE rate cut by the end of next year, compared with just over half on Wednesday, pushing down on two-year and five-year gilt yields, which are already well below the BoE’s 0.75% Bank Rate.

But the broader tone in markets on Thursday was negative for fixed income assets, bolstered by increased optimism about a trade deal between the United States and China.

German 10-year Bunds , like their British counterparts, rose to their highest since mid-July.

And for longer-dated gilts, there was added upward pressure on yields from the second day of Britain’s election campaign, in which both the Conservative Party and the Labour opposition promised big increases in spending if they win the Dec. 12 vote.

The fiscal news was “arguably more significant” for gilts than the BoE decision, Capital Economics analyst Oliver Allan wrote in a note to clients.

Labour’s would-be finance minister, John McDonnell, promised an extra 150 billion pounds ($ 192 billion) of infrastructure spending during the next five years, on top of 250 billion pounds he has already promised for the coming decade.

McDonnell’s Conservative counterpart, Sajid Javid, said he would spend an extra 100 billion pounds.

Both plans would require a significant increase in gilt issuance over the medium term, and could push up inflation or BoE rates if the spending hits the economy at a time when it is close to full capacity.

However, Capital said it expected the increase in British yields to be limited as any significant rise would attract foreign investors at a time when yields on much euro zone debt are below zero.

“Although UK yields are low historically, they are not particularly low relative to those elsewhere in the developed world,” Allen said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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S&P opens at an all-time record high

Major indices open with solid gains

The S&P index is opening at an all-time record high as US/China trade hopes and a Brexit extension give the markets a boost.

The current numbers a few minutes after the opening are showing:

  • S&P index up 17.12 points or 0.57% at 3039.76. The all time high price (before today that is) was at 3027.98
  • The NASDAQ index is up 57 points 9 points or 0.70% at 8300.  
  • The Dow is up 165 points or 0.61% at 27122

The all time high for the Nasdaq is up at 8339.63. At 8300, the index is still some 39 points away from its all-time record.

Microsoft is up 3.38% after winning the Pentagon contract from Amazon. Amazon is currently down -0.60%.

Alphabet will report earnings after the close and is currently trading up 1.22% at $ 1279.77.

It is a another big week for earnings. Below is the list of major corporations scheduled to release their quarterly earnings this week, including Apple, Facebook, Pfizer, Merck, Bristol-Myers Squibb, Celgene, Exxon Mobil. 

Monday, October 28

  • Alphabet, G00GL
  • AT&T, T
  • Spotify, SPOT
  • T mobile, TMUS
  • Beyond Meat, BYND

Tuesday, October 29

  • Electronic arts, EA
  • Advanced Micro Devices, AMD
  • Stryker Corp., SYK
  • Sprint, S
  • Corning, GLW
  • ConocoPhillips, COP
  • Merck, MRK
  • General Motors, GM
  • Pfizer, PFE
  • MasterCard, MA

Wednesday, October 30

  • Apple, AAPL
  • Yum Brands, YUM
  • GE, GE
  • Cirrus Logic, CRUS
  • McKesson, MCK
  • Hyatt hotels, each
  • Starbucks, SBUX
  • Facebook, FB

Thursday, October 31

  • Alibaba group, BABA
  • Bristol-Myers Squibb, BMY
  • Clorox, CLX
  • International Paper, IP
  • Celgene CELG
  • Cigna, CI
  • Kraft Heinz, KHC

Friday, November 1

  • Exxon Mobil, XOM
  • Chevron, CVX
  • Colgate-Palmolive, CL

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Forexlive America’s FX news wrap: S&P index trades to all time high but stalls

Forex news for NY trading on October 25, 2019 

In other markets as the trading we comes to close is showing:

  • Spot gold, up $ 0.72 or 0.05% at $ 1504.70. The price of gold was as high as $ 1518.28. However, talk of progress in the US China trade talks, helped to push the price back lower. The low for the day reached $ 1500.15
  • WTI crude oil futures is closing the week at $ 56.61. That is up $ 0.38 or 0.68%. For the week WTI crude oil rose by over 5%.  Inventory data showed a surprise drawdown midweek that helped to push the price above its 100 day moving average where it stayed for the rest of the week.  
  • Bitcoin on Coinbase caught a bid and moved up by over $ 1100 on the Coinbase exchange. Rumblings that China was exploring blockchain and some technical breaks to the upside, helped to push the price higher.  The hi for the day reached $ 8800. That was just short of the $ 8886.40 200 day moving average.   A move above that level over the weekend would be more bullish for the digital currency

In the US stock market, the  S&P index closes just shy of record levels at 3025.68. The price closed at 3022.55 but did trade intraday above that record level.   The NASDAQ composite index was the biggest gainer amongst the major global indices today. The UK FTSE 100 was the only index in the red today as the Brexit October 31 date approaches next week, and there is still uncertainty as to what exactly might transpire. 

Forex news for NY trading on October 25, 2019 

Although lower for the day, the UK FTSE 100 led the charge for the week, rising by 2.43%. The best gainer in the US was the NASDAQ index which rose by 1.9% (see the rank of the major indices below).

US stock market closed higher today

In the forex market today, the CAD road the trend for the week and ended as the strongest on the day. The AUD and the USD also moved higher.    The biggest the choir was the NZD for the day.

The Canadian dollars strongest

On the week, the CAD was also the strongest with gains against all the major currencies. The GBP was the weakest after the UK approved the Boris Johnson Brexit deal but voted down his quick timetable to sign it into law.  That did not sit well with cable buyers and the price rotated lower ahead of next weeks key decisions. 

The GBP was the weakest of the major currencies this week.

Technically speaking today (and for this week too),

  • The EURUSD it is closing near the lows for the week, and in the process is just below a broken trend line on the hourly chart at the 1.1081 level. Today, the price high stalled ahead of its key 100 day moving average at 1.11264. For the week, the price trade above and below that moving average. Closing below however, is more bearish into the new trading week
  • The GBPUSD reach as high a Monday at the 1.30116 level. The low for the week reach 1.2787 on Thursday. In trading today, the highs stalled near the pairs 200 hour moving average. That moving average comes in at 1.2869.  The 100 hour moving averages at 1.2888.  In the new week, stay below those 2 moving averages would give the bears the control.  On the downside, the 1.2746 area looks to be the next logical  support target. Moving below that level will have traders looking toward its 200 day moving average at 1.2711. That will be a key level on more selling in the new trading week.
  • The USDJPY traders did extend the narrow trading range for the week, on a move above the 108.748 level. That’s the good news for the bulls. The bad news for the bulls is that the high could only extend if you pips above that level to 108.769. The pair does remain above its 100 hour moving average at 108.576 and 200 hour moving average at 108.606. So there is still some hope for buyers that the price goes higher early next week. However if those levels are broken, the sellers are likely to take back control.
  • USDCHF. The USDCHF reached up to new week highs in trading today (trade to the highest level since October 16), but when the price extended to the 200 day MA, sellers leaned against the level (at 0.9954 – the high reached 0.99544). The pair is trading back down at 0.9944 as the week comes into the close.  Next week, if the price is going higher, breaking above that 200 day moving average would be the key barometer for traders. Failure to do that, and a rotation back lower would be more likely.

Next week is shaping up to potentially be a very volatile trading week with:

  • The Brexit ups and downs
  • The BOC, FOMC, BOJ rate decisions. The Fed is expected to cut rates by 25 basis points
  • US employment statistics on Friday
  • ISM data will also be released.  

On the earnings front next week:

  • Apple
  • Alphabet
  • AT&T
  • AMD
  • Merck,
  • Pfizer
  • MasterCard
  • Starbucks
  • Facebook
  • Alibaba
  • Bristol-Myers Squibb’s
  • Celgene
  • Exxon, and 
  • Chevron

are all due to release earnings.   

So there is lot of stuff that can cause market volatility.

Thank you for your support this week and always.   Wishing you all a happy and healthy weekend. 

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Thailand Looks to Rein in Baht as It Hits 6-Year High

(Bloomberg) — The Bank of Thailand is considering imposing additional measures to rein in the currency amid further gains in the baht to a six-year high and worries about economic growth.

The economy could be more sensitive to greater currency appreciation, the Bank of Thailand said in minutes of the Sept. 25 monetary policy committee meeting published on Wednesday. This would be an “additional pressure” on softening domestic demand, particularly exported-related manufacturing and services, it said.

The committee “saw the need to closely monitor developments of exchange rates, capital flows, and impacts on the economy through various channels, as well as consider implementing additional measures at an appropriate timing if necessary,” the central bank said.

The monetary authority took steps in July to curb short-term inflows, worried that a strengthening baht will add further pain to an export-reliant economy already being hit by the U.S.-China trade war. The currency has gained more than 7% against the dollar this year, making it the best performer in Asia.

More Steps

Additional currency measures could include continued relaxation of capital outflow regulations to encourage Thai residents to increase their portfolio investment abroad, the central bank said. It could also consider measures in collaboration with other organizations, “including efforts to stimulate investment to reduce the elevated current-account surplus.”

The comments came on the same day the baht rose to as high as 30.334 per dollar, the strongest level since June 2013. It was up 0.3% at 30.345 as of 10:33 a.m. in Bangkok.

The central bank left its benchmark interest rate unchanged in September after reducing it to 1.5% in August.

The MPC “saw the need to preserve policy space in order to cushion against possible risks in the future and deemed it necessary to monitor the impacts of the policy rate cut and fiscal stimulus measures on the economy,” according to the minutes. The panel will be “data-dependent” going forward, and will monitor growth, inflation and financial stability risks, it said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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NewsBreak – Scottish High Court Rules U.K. Prorogation Unlawful

© Reuters.  © Reuters.

Investing.com – Three judges on the Scottish High Court ruled that U.K. Prime Minister’s Boris Johnson’s decision to suspend parliament is unlawful. An appeal is expected to be heard in the Supreme Court on Tuesday.

• rose 0.1% to 1.2356 as of 5:23 AM ET (9:23 GMT).

• fell 0.2% to 0.8921.

• The yield rose 5.5% to 0.674.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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US treasury sells $32 billion of 7-year notes at a high yield of 1.489%

WI level at auction was 1.468%

  • high yield 1.489% well above the 1.468% WI level. Tail of 2.1 bps
  • Bid to cover 2.16x vs 2.44x 6 month average
  • dealers take 33.8%
  • Directs take 16.1%
  • Indirects take 50.2%

This is a poor auction with a 2.1 basis point tail and bid to cover well below the 6 month average. Dealers were also forced to take a much greater percentage of the auction. The 6 month average was only 23%. They are settled with 33.8%.  

Yields are moving higher at a result post the auction with the 5 year up from 1.404% to 1.4224%. The 10 year is up from 1.514% to 1.5299%.

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Forex – U.S. Dollar Falls From Two-Year High  

© Reuters.  © Reuters.

Investing.com – The U.S. dollar fell back slightly from a two-year high after the excitement of the Federal Reserve’s wait-and-see approach wore off.

The Fed cut rates by 25 basis points on Wednesday, the first cut in a decade, but indicated it would not be aggressive on its approach to monetary policy.

Fed Chairman Jerome Powell called the cut a small correction and “not the beginning of a long series of cuts.”

“You would do that if you saw real economic weakness … That’s not what we’re seeing,” he said during his press conference.

The , which measures the greenback’s strength against a basket of six major currencies, was up 0.1% to 98.382 by 11:03 AM ET (15:03 GMT) after reaching an earlier high of 98.665.

The dollar was higher against the Japanese yen, with falling 0.5% to 108.19.

Sterling was still in the red, with down 0.1% to 1.2143, after the Bank of England kept rates steady. The bank voted unanimously to keep the rate at 0.75%, as expected, but downgraded its projections for growth for the next two years.

The BoE did not warn against a no-deal scenario, but did say that “companies expect output, employment and investment to be much lower in a no-deal Brexit.”

The pound lost more than 4% in July on fears of a hard Brexit, as newly elected Boris Johnson has insisted that the U.K. will leave the European Union on October 31 with or without a deal.

Elsewhere, was down 0.1% to 1.1058, and rose 0.2% to 1.3209, while was up 0.3% to 19.1852.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Dollar Hits 2-Month High on Brexit Woes; GDP Data Eyed

Investing.com — The dollar hit its highest level in two months early Friday in Europe, resuming its upward trend against both the euro and sterling after unconvincing performances on Thursday from both the European Central Bank and the U.K.’s new Prime Minister.

The , which tracks the greenback against a basket of developed-market peers, rose 97.627 during Asian trading and was hovering just below that level 4 AM ET (0800 GMT). That was its highest since late May.

The dollar’s rise is somewhat counter-intuitive, given that second-quarter figures for the U.S., due at 8:30 AM ET (1230 GMT), are expected to show a sharp slowdown in growth to an annual rate below 2%.

“A number below 2% would be the first reading that low since Q1 2017, and represent a meaningful deceleration,” said John Velis, a currency strategist with BNY Mellon.

The dollar is partly the beneficiary of other currencies’ weakness. Brexit continues to cast shadows over both the pound and, to an increasing extent, the euro, after Prime Minister Boris Johnson’s first overtures to the EU were brusquely rejected by officials on Thursday.

Johnson has said that the Withdrawal Agreement hammered out by his predecessor Theresa May is dead. However, in a telephone call, outgoing European Commission President Jean-Claude Juncker rejected his demands for a renegotiation and said it was “the best and only deal possible.”

has bumped along at multi-year lows since the prospect of a “N-Deal” Brexit under Johnson became the central case scenario two months ago. A new paper by analysts at the Peterson Institute for International Economics argued that while Brexit will leave no country better off, it will hit the U.K. far harder than anyone else.

However, the Brexit effect on the euro is more recent. Clemens Fuest, the head of the Ifo think tank in Munich, told Bloomberg on Thursday that German manufacturing is “in freefall” and that he didn’t expect the decline to bottom out in the event of a No-Deal Brexit.

Sterling’s brief bounce after Johnson’s appointment has now completely reversed and the pound was heading back toward the two-year low it hit on Tuesday.

The euro, meanwhile, was treading water, roughly where it was before the ECB’s ‘all-talk-and-no-action’ governing council meeting Thursday. The euro zone’s central bank indicated it could ease policy substantially in September but disappointed hopes for a modest 0.1% cut in its deposit rate.

Elsewhere, the Turkish lira showed few ill effects of the sharp cut in interest rates from Turkey’s central bank on Thursday. The 425 basis point cut to 19.75% in the CBRT’s key rate was the largest since the country switched to inflation targeting in 2002, and was sharper than the 300 basis points called for by President Recep Tayyip Erdogan. The was at 5.6848 to the dollar, well within its recent ranges.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – U.S. Dollar Flat as Philly Fed Index Jumps to 1-Year High 

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was flat on Thursday after data showing that business activity in the Mid-Atlantic jumped to its strongest level in a year.

The , which measures the greenback’s strength against a basket of six major currencies, was unchanged at 96.850 by 10:32 AM ET (14:32 GMT).

The Philadelphia Federal Reserve said its rose to 21.8 in July, the highest level since July 2018.

A figure above zero suggests the region’s business activity is growing.

Meanwhile a separate report showed that while unemployment claims rose slightly last week, the labor market still remained strong. Initial jobless claims rose 8,000 to a seasonally adjusted 216,000 for the week ended July 13, the Labor Department said, while data for the prior week was revised down by 1,000.

Taken together, the data add little to arguments for the half-point cut in interest rates that some still expect from the Federal Reserve at the end of the month.

The dollar did give up some of its recent gains against the British pound after U.K. lawmakers approved an amendment that would make it harder for the next Prime Minister to suspend parliament in order to force through Brexit on Oct. 31. The amendment would require parliament to be sitting to consider Northern Irish affairs for several days in September and October even if it was suspended.

Sterling rose as high as $ 1.2495 on the news, after having traded below $ 1.24 for the first time in two years earlier this week. By 10:50 AM ET (1450 GMT), it was up 0.4% on the day at $ 1.2480.

Lawmakers backed a proposal by 315 to 274 that would require parliament to be sitting to consider Northern Irish affairs for several days in September and October even if it was suspended.

Elsewhere, traders pushed the rand higher after the South African Reserve Bank cut its key interest rate by 25 basis points to 6.5% and cut its growth forecast to 2019 to a mere 0.6%. The dollar fell 0.7% against the rand to test a new seven-month low at below 13.8900.

That followed an interest rate earlier in the day by the central bank of South Korea, after which the won strengthened some 0.2%.

Ongoing trade disputes between the U.S. and China also weighed on the dollar. The Wall Street Journal reported that the two have stalled on progress towards a deal over disputes on how to ease restrictions on Chinese tech giant Huawei.

Elsewhere, was flat at 1.1221, while gained 0.2% to 1.3075.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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