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Forex News Timeline

Tuesday, September 22, 2020

During his testimony before the House Financial Services Committee on Tuesday, US Treasury Secretary Steven Mnuchin said they continue to work with Co

During his testimony before the House Financial Services Committee on Tuesday, US Treasury Secretary Steven Mnuchin said they continue to work with Congress toward a phase-four coronavirus relief package. "I believe a targeted package is still needed," Mnuchin added and noted that he sees tremendous growth in the third quarter led by strong retail sales, housing activity and manufacturing growth. Commenting on the Main Street Lending Program, Mnuchin acknowledged that they are expecting some losses on that facility and said that they are working with the Federal Reserve to improve the program. Market reaction The market mood remains cautious following these comments. As of writing, the S&P 500 Index was down 0.2% on the day at 3,275.  

The Reserve Bank of New Zealand (RBNZ) is expected to leave policy steady at its September meeting. Dovish forward guidance could weigh on the kiwi bu

The Reserve Bank of New Zealand (RBNZ) is expected to leave policy steady at its September meeting. Dovish forward guidance could weigh on the kiwi but dollar’s mood is set to dominate, FXStreet’s Dhwani Mehta reports.  More – Reserve Bank of New Zealand Preview: Six major banks expectations Key quotes “With the coronavirus restrictions lifted for most of New Zealand (NZ), lower unemployment rate forecast and less-severe-than expected economic slump, the Reserve Bank of New Zealand (RBNZ) is expected to keep the Official Cash Rate (OCR) unchanged at a record low of 0.25% for the fourth straight month in September.” “The strong fundamentals could prompt the RBNZ to stand pat on its monetary policy settings on Wednesday but Governor Adrian Orr and company could reinforce the dovish stance amid looming concerns over the longer-term economic impact of the coronavirus pandemic.” “Any hints on the adoption of the negative interest rates as a policy option and/or verbal intervention could exacerbate the pain in NZD/USD.” “The risk tone and the resultant sentiment around the US dollar could likely influence the NZD/USD reaction to the RBNZ's decision. Although the bias appears to the downside amid an expected dovish forward guidance.”  

Fiscal support is needed to prevent a "structural scarring" of the US economy, Chicago Federal Reserve Bank President Charles Evans said on Tuesday, a

Fiscal support is needed to prevent a "structural scarring" of the US economy, Chicago Federal Reserve Bank President Charles Evans said on Tuesday, as reported by Reuters. "We are not going to be concerned if unemployment rates go very low, as long as that's consistent with 2% inflation," Evans added and said that asset prices are expected to move up when real interest rates remain low.  Market reaction The greenback continues to gather strength against its rivals in the American session. As of writing, the US Dollar Index is at its highest level since early August at 93.97, gaining 0.44% on a daily basis. 

Regulators need to ensure the safety of the financial sector so the Federal Reserve can set rates based on the economy rather than financial stability

Regulators need to ensure the safety of the financial sector so the Federal Reserve can set rates based on the economy rather than financial stability concerns Chicago Federal Reserve Bank President Chales Evans said on Tuesday, as reported by Reuters. Additional takeaways "Fed has more to discuss in terms of further quantitative easing." "Yield curve control would likely be a statement about interest rates for perhaps six months or a year." "At the moment 10-year treasury rates are quite low, I don't see any issues about that." "Fed needs to have more discussion about averaging 2% inflation but there is no explicit formula." Market reaction US Dollar Index continues to push higher and was last seen gaining 0.39% on the day at 93.92.

The AUD/USD pair dropped to its lowest level in nearly a month at 0.7179 on Monday and economists at Rabobank are seeing a change of tone in the aussi

The AUD/USD pair dropped to its lowest level in nearly a month at 0.7179 on Monday and economists at Rabobank are seeing a change of tone in the aussie. They forecast AUD/USD trading at 0.68 on a six-month view. Key quotes “While the AUD could be undermined by signs of a more dovish RBA and fears about the outlook for global growth, we expect that the safe-haven USD will be lifted by short-covering. This is likely to be triggered by fears of another wave in COVID-19 in Europe and beyond, uncertainty around the US election, disappointment about the timing and size of US fiscal stimulus and/or China-related tensions are all risk factors.” “The world is becoming accustomed to the notion that measures to contain COVID-19 will be with us for longer. Several central banks in the G10 have touted the idea that a less severe 2020 economic downturn than feared in May will be followed by a weaker recovery in the coming years. Not only does this not bode well for global demand and commodity prices but it could trigger further policy responses from a variety of central banks including the RBA.”  “We see scope for AUD/USD to pullback towards 0.71 on a three-month view and to fall to 0.68 in six months.”  

The Consumer Confidence Indicator for the euro area improved slightly to -13.9 in September's preliminary reading from -14.7, the data published by th

Consumer confidence in the euro area rose modestly in September.EUR/USD continues to trade in the negative territory below 1.1750.The Consumer Confidence Indicator for the euro area improved slightly to -13.9 in September's preliminary reading from -14.7, the data published by the European Commission showed on Friday. This reading came in slightly better than the market expectation of -14.6. "At −13.9 points (euro area) and −14.9 points (EU), both indicators remain well below their long-term averages of  −11.1 (euro area) and −10.5 (EU)," the publication read. Market reaction This report doesn't seem to be having a significant impact on the shared currency's performance against its rivals. As of writing, the EUR/USD pair was down 0.3% on the day at 1.1734.

The USD/JPY pair jumped back closer to the overnight swing high, with bulls now eyeing a move towards reclaiming the key 105.00 psychological mark. A

USD/JPY added to the previous day’s recovery move from 104.00 mark, or multi-month lows.A sustained move above 100-hour SMA might be seen as a trigger for intraday bullish traders.Strength beyond the 105.00 mark runs the risk of fizzling out quickly near the 105.30-40 area.The USD/JPY pair jumped back closer to the overnight swing high, with bulls now eyeing a move towards reclaiming the key 105.00 psychological mark. A sustained strength beyond 100-hour SMA was seen as a key trigger for intraday bullish traders and supports prospects for additional gains. The intraday positive outlook is reinforced by bullish oscillators on the 1-hourly chart. However, technical indicators on the daily chart are yet to recover from the bearish territory. This, in turn, warrants some caution for bullish traders and before positioning for any further move up. Hence, the ongoing recovery move might still be categorized as a corrective bounce, which runs the risk of fizzling out rather quickly. Any subsequent move beyond the 105.00 mark might still be seen as a selling opportunity and remain capped near the 105.30-40 strong horizontal support breakpoint. On the flip side, the 104.40 region now seems to have emerged as immediate support. Failure to defend the mentioned support might be seen as a fresh trigger for bearish traders and drag the pair back towards the 104.00 mark, or over six-month lows touched on Monday. Some follow-through selling should pave the way for an extension of the recent depreciating move and turn the pair vulnerable to slide towards testing the 103.00 mark. The downward trajectory could further get extended towards March daily closing lows support, near the 102.35 region. USD/JPY 1-hourly chart Technical levels to watch  

It will be necessary for the US Federal Reserve to maintain its accommodative monetary policy for years amid low inflation, Chicago Federal Reserve Ba

It will be necessary for the US Federal Reserve to maintain its accommodative monetary policy for years amid low inflation, Chicago Federal Reserve Bank President Charles Evans said on Tuesday, as reported by Reuters. Additional takeaways "US has been able to return to about 90% of pre-crisis economy." "Disadvantaged sectors that are struggling include in-person services, travel, leisure." "US unemployment rate to fall to maybe 7% by end of year." Unemployment to fall to 5.5% by end of next year, assuming further fiscal support and a vaccine." "Inflation will continue to be challenged, will underrun 2% for a number of years." "Every week and month without renewing fiscal support risks a longer period of slow-growth if not outright recessionary dynamics." "Outlook is premised on at least $500 billion, perhaps $1 trillion of additional fiscal support." "A bigger overshoot on 2% inflation means you would get to an average 2% inflation more quickly." "Will need to have more Fed Committee discussion about asset purchases." Market reaction The US Dollar Index largely ignored these comments and was last seen gaining 0.26% on the day at 93.79.

Existing Home Sales in the United States rose by 2.4% in August, the data published by the National Association of Realtors (NAR) showed on Friday. Th

Existing Home Sales in the US rose for the third straight month in August.US Dollar Index clings to daily gains near 93.80.Existing Home Sales in the United States rose by 2.4% in August, the data published by the National Association of Realtors (NAR) showed on Friday. This reading followed July's impressive increase of 24.7% and came in line with the market expectation. Commenting on the data, "home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market," said Lawrence Yun, NAR’s chief economist. "Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery." Additional takeaways from the press release "The median existing-home price for all housing types in August was $310,600, up 11.4% from August 2019 ($278,800), as prices rose in every region." "Existing-home sales continued to climb in August, marking three consecutive months of positive sales gains." "Sales as a whole rose year-over-year, up 10.5% from a year ago (5.43 million in August 2019)." Market reaction The US Dollar Index pushed higher in the last minutes and is currently gaining 0.27% on the day at 93.80.

The activity in the Federal Reserve's Fifth District's manufacturing sector expanded at a stronger pace in September than it did in August with the Co

Richmond Fed Manufacturing Index rose modestly in September.US Dollar Index climbs higher toward 94.00 in American session.The activity in the Federal Reserve's Fifth District's manufacturing sector expanded at a stronger pace in September than it did in August with the Composite Index of the Richmond Fed's Survey of Manufacturing Activity rising to 21 from 18. Further details of the report showed that the Manufacturing Shipment Index declined from 22 to 13.  "Results reflected higher employment among many survey participants in September and suggested several manufacturers raised wages over the month, the publication read. "Firms struggled to find workers with the necessary skills. Respondents expected to see a continued rise in employment and wages." Market reaction The US Dollar Index edged higher after this report and was last seen gaining 0.27% on the day at 93.81.  

European Monetary Union Consumer Confidence above forecasts (-14.6) in September: Actual (-13.9)

United States Richmond Fed Manufacturing Index: 21 (September) vs 18

United States Existing Home Sales (MoM) meets forecasts (6M) in August

United States Existing Home Sales Change (MoM) meets forecasts (2.4%) in August

Jerome Powell, Chairman of the Federal Reserve System, will be testifying before House Financial Services Committee on Tuesday, September 22nd, at 143

Jerome Powell, Chairman of the Federal Reserve System, will be testifying before House Financial Services Committee on Tuesday, September 22nd, at 1430 GMT. Powell's testimony will be about the Federal Reserve's response to the coronavirus crisis. Related articlesEUR/USD trims losses and moves near 1.1760 ahead of Powell.EUR/USD has managed to regain some composure following new multi-week lows in the 1.1720 region recorded earlier in the session, always on the back of the moderate recovery in the greenback.Gold Price Analysis: XAU/USD reverses a dip to sub-$1900 levels, lacks follow-through.Gold edged higher during the early North American session and has now moved back closer to the top end of its daily trading range, around the $1917-18 region. About Jerome Powell (via Federalreserve.gov) Jerome H. Powell took office as Chairman of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028.

Gold edged higher during the early North American session and has now moved back closer to the top end of its daily trading range, around the $1917-18

Gold once again showed some resilience below the $1900 mark and staged an intraday bounce.A modest USD pullback from highs extended some support to the dollar-denominated commodity.Stable opening in the US equity markets kept a lid on any strong gains ahead of Powell’s testimony.Gold edged higher during the early North American session and has now moved back closer to the top end of its daily trading range, around the $1917-18 region. The commodity once again showed some resilience below the $1900 round-figure mark and managed to regain some traction, albeit lacked any strong follow-through buying. The intraday uptick was supported by a modest US dollar pullback, which tends to benefit the dollar-denominated commodity. This coupled with a softer tone surrounding the US Treasury bond yields further drove some flows towards the non-yielding yellow metal. Investors seem convinced that the Fed Chair Jerome Powell will reiterate to keep interest rates lower for longer during his congressional testimony on Tuesday. However, some stability in the US equity markets undermined the precious metal's safe-haven status and kept a lid on any strong intraday positive move. This makes it prudent to wait for some strong follow-through buying before positioning for any further intraday appreciating move. From a technical perspective, the overnight fall confirmed a near-term bearish break through a descending triangle. This coupled with the fact that technical indicators on the daily chart have just started drifting into the negative territory support prospects for additional weakness. Acceptance below the $1900 mark will reaffirm the bearish bias and prompt some aggressive technical selling. This might then turn the commodity vulnerable to accelerate the slide back towards testing August monthly swing lows support near the $1863-62 region. Technical levels to watch  

The continuation of the selling pressure around the Turkish lira lifted USD/TRY to clinch fresh all-time highs in levels just shy of the 7.67 mark ear

USD/TRY clinches new all-time highs just below 7.67 on Tuesday.Turkey’s Consumer Confidence ticked higher to 82.0 in September.Rumours of a potential rate hike by the CBRT keep rising.The continuation of the selling pressure around the Turkish lira lifted USD/TRY to clinch fresh all-time highs in levels just shy of the 7.67 mark earlier on Tuesday. USD/TRY now looks to CBRT USD/TRY is prolonging the upside momentum in the second half of the week as the offered bias in the lira remains everything but abated for yet another session. Indeed, market participants remain heavy sellers of the lira amidst rising and divided opinions regarding the probable move (if any at all) by the Turkish central bank (CBRT) at its meeting on Thursday. It is worth recalling that the selling impetus in TRY picked up extra pace particularly after ratings agency Moody’s downgraded the country’s sovereign debt to “junk” and revised lower its outlook to negative at the end of last week. In the domestic docket, Turkey’s Consumer Confidence improved to 82.0 for the current month (from 79.4). Later in the week, the Manufacturing Confidence measure is due on Thursday along Capacity Utilization figures, all ahead of the CBRT interest rate decision. Also noteworthy: USD/TRY rose more than 10% from August’s open near 6.96 to Tuesday’s new all-time highs just below 7.67. USD/TRY key levels At the moment the pair is gaining 0.33% at 7.6414 and faces the next hurdle at 7.6672 (all-time high Sep.22). On the downside, immediate support is located at 7.4490 (21-day SMA) seconded by 7.4124 (low Sep.10) and then 7.2961 (low Aug.28).

Following Monday's sharp declines, major equity indexes in the US opened modestly higher on Tuesday. As of writing, the S&P 500 Index was up 0.45% on

Wall Street's main indexes are posting modest gains on Tuesday.S&P 500 Consumer Discretionary Index gains more than 1%.Investors wait for FOMC Chairman Powell's and Treasury Secretary Mnuchin's testimony.Following Monday's sharp declines, major equity indexes in the US opened modestly higher on Tuesday. As of writing, the S&P 500 Index was up 0.45% on the day at 3,296, the Dow Jones Industrial Average was gaining 0.15% at 27,194 and the Nasdaq Composite was rising 0.6% at 10,844. All major sectors of the S&P 500, with the exception of the Healthcare Index, trade in the positive territory. The Consumer Discretionary Index is up 1.25% as the best performer in the early trade. Moreover, supported by a 1.5% rebound witnessed in crude oil prices, the Energy Index is gaining 1%. Later in the session, investors will be paying close attention to FOMC Chairman Jerome Powell and Treasury Secretary Steven Mnuchin's testimony before the House Financial Services Committee.  S&P 500 chart (daily)

EUR/USD is hovering around 1.1750 after hitting a fresh September low of 1.1719 as the second coronavirus wave in Europe keeps the shared currency und

EUR/USD is hovering around 1.1750 after hitting a fresh September low of 1.1719 as the second coronavirus wave in Europe keeps the shared currency under pressure. The pair is technically bearish and could lose the 1.1700 threshold, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “The shared currency remains under pressure amid mounting coronavirus-related concerns, as several countries have announced new restrictive measures.” “Powell is set to reiterate the Fed’s outlook on the economy, that is showing a ‘marked improvement,’ but also that the future is highly uncertain and depends on controlling the coronavirus pandemic. His prepared speech also notes that the need for more help from Congress, which continues to disagree on a coronavirus aid-package. “In the 4-hour chart, the EUR/USD pair remains below all of its moving averages, with the 20 SMA losing bearish momentum but holding below the larger ones. Technical indicators, in the meantime, remain near their daily lows although without clear directional strength.”

EUR/USD remains on the defensive in the mid-1.1700s ahead of key data in the region and Powell’s testimony. EUR/USD looks to Powell, USD EUR/USD has m

EUR/USD stays depressed near the 1.1760 region on Tuesday.EMU’s advanced Consumer Confidence gauge coming up next.Markets’ attention remains on the testimony by Fed’s J.Powell.EUR/USD remains on the defensive in the mid-1.1700s ahead of key data in the region and Powell’s testimony. EUR/USD looks to Powell, USD EUR/USD has managed to regain some composure following new multi-week lows in the 1.1720 region recorded earlier in the session, always on the back of the moderate recovery in the greenback. At his speech on Tuesday, ECB’s F.Panetta reiterated the central bank needs to closely watch the level of the exchange rate, adding that the results from the ECB stimulus plan are still not satisfactory while inflation is seen running well below the bank’s target. Later in the session, the European Commission (EC) will publish its preliminary gauge of the September Consumer Confidence followed by the speech of ECB’s P.Lane. In the US calendar, Existing Home Sales for the month of August are due seconded by the Richmond Fed index and the key testimony by Chief J.Powell before the House Financial Services Committee on the Federal Reserve’s response to the pandemic. What to look for around EUR EUR/USD dropped and recorded fresh monthly lows near 1.1720 earlier in the session, resuming the post-FOMC downtrend. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained. Further out, the underlying constructive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis), the so far calm US-China trade front and the steady – albeit vigilant- stance from the ECB. The solid position of the EMU’s current account and the positive performance of the speculative community are also lending support to the shared currency. EUR/USD levels to watch At the moment, the pair is losing 0.12% at 1.1756 and faces the next support at 1.1720 (monthly low Sep.22) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3). On the other hand, a break above 1.1917 (high Sep.10) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).

The AUD/USD pair dropped to its lowest level in nearly a month at 0.7179 on Monday but staged a modest rebound during the European trading hours. Afte

AUD/USD is struggling to stage a meaningful recovery on Tuesday.US Dollar Index is edging higher following an early drop on Tuesday.FOMC Chairman Powell will testify before House Financial Services Committee.The AUD/USD pair dropped to its lowest level in nearly a month at 0.7179 on Monday but staged a modest rebound during the European trading hours. After rising to 0.7235, however, the pair lost its traction in the early American session and was last seen losing 0.11% on a daily basis at 0.7215. AUD weakens on dovish RBA commentary Earlier in the day, Reserve Bank of Australia's Deputy Governor, Guy Debelle, noted that a lower exchange rate for the AUD would be beneficial for the Australian economy said foreign exchange intervention was a policy option. Pressured by these dovish remarks, the AUD started the day under pressure on Tuesday. On the other hand, the US Dollar Index (DXY) stayed in a consolidation phase during the first half of the day and allowed AUD/USD to recover a portion of its losses. Nevertheless, the cautious market mood helped the greenback gather strength and forced the pair, once again, to turn south. At the moment, the DXY is posting modest daily gains at 93.60. The first data from the US showed that the Phiily Fed Nonmanufacturing Index improved to 8 in September from 1.6 in August but had little to no impact on the USD's performance against its rivals.  Later in the session, FOMC Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will be testifying before the House Financial Services Committee. Furthermore, Existing Home Sales and Richmond Fed Manufacturing Index data will be looked upon for fresh impetus.  Technical levels to watch for  

The USD/CHF pair edged higher for the third consecutive session on Tuesday and climbed to two-week tops, around the 0.9175 region during the early Eur

USD/CHF gained traction for the third consecutive session on Tuesday.The set-up favours bulls and supports prospects for additional gains.Dip-buying should help limit the downside near the 0.9080 support.The USD/CHF pair edged higher for the third consecutive session on Tuesday and climbed to two-week tops, around the 0.9175 region during the early European session. Given that the pair has now moved back above 50-day SMA, for the first time since late May, the near-term bias might have already shifted in favour of bullish traders. The constructive outlook is further reinforced by the fact that oscillators on the daily chart have just started moving into the positive territory. That said, bulls might still need to wait for a sustained strength beyond the 0.7200 mark before positioning for any further appreciating move. The pair might then aim to surpass August monthly swing highs resistance near the 0.9140 region and accelerate the momentum further towards reclaiming the 0.7300 mark. On the flip side, the 0.9140-30 region now seems to protect the immediate downside and is closely followed by support near the 0.9100 mark. Any subsequent fall would still be seen as an opportunity for bullish traders. This, in turn, should help limit the downside near the 0.9080-75 strong horizontal support. Only a convincing breakthrough the mentioned support levels will negate the positive bias and turn the pair vulnerable to slide back towards challenging the key 0.9000 psychological mark, or multi-year lows touched earlier this September. USD/CHF daily chart Technical levels to watch  

EUR/SEK now alternates gains with losses in the 10.40 region, as market participants continue to digest the recent Riksbank monetary policy meeting. E

EUR/SEK trades without a clear direction near 10.40 on Tuesday.Riksbank left the policy rate unchanged at its meeting.Riksbank’s Ingves said the bank can expand the balance sheet if needed.EUR/SEK now alternates gains with losses in the 10.40 region, as market participants continue to digest the recent Riksbank monetary policy meeting. EUR/SEK unchanged on Riksbank decisionEUR/SEK is prolonging the multi-session side-lined theme so far on Tuesday, gyrating around the 100-day SMA in the 10.40 region following the Riksbank event earlier in the European morning. In fact, the Swedish central bank left unchanged its policy rate at 0.0% on Tuesday, broadly in line with market expectations. The central bank sees the Nordic economy recovering from the recent sharp pullback, although still amidst high uncertainty. The Riksbank now expects the economy to contract 3.6% this year and to expand 3.7% in 2021 and 2022. Regarding inflation, the CPIF (CPI at constant interest rates) is seen rising 0.6% in 2020, 1.1% in 2021 and 1.3% in 2022. The key interest rate is seen unchanged at the current 0.0% level at least until Q3 2023. Following the central bank’s interest rate decision, Governor S.Ingves said the balance sheet can be expanded considerably in case of need, at the time when he defended the bank’s lending programmes and the QE when comes to keep rates at low levels. EUR/SEK levels to consider At the moment, the pair is losing 0.02% at 10.4067 and faces the next support at 10.3447 (low Sep.18) seconded by 10.3243 (55-day SMA) and finally 10.2570 (low Aug.27). On the upside, a move above 10.4297 (monthly high Sep.21) would target 10.5461 (200-day SMA) en route to 10.5959 (monthly high Jun.19).

United States Redbook Index (YoY) climbed from previous -1.2% to 1.5% in September 18

United States Redbook Index (MoM) up to -0.9% in September 18 from previous -1.6%

The EUR/GBP cross had some good two-way price swings through the mid-European session and now seems to have stabilized in the neutral territory, aroun

EUR/GBP witnessed an intraday turnaround from one-week tops set earlier this Tuesday.The sterling got a goodish lift after BoE Governor downplayed speculations of negative rates.Mixed Brexit-related headlines held the GBP bulls on the defensive and helped limit the slide.The EUR/GBP cross had some good two-way price swings through the mid-European session and now seems to have stabilized in the neutral territory, around the 0.9175 region. The cross built on its recent bounce from the 0.9080 region and shot to one-week tops, around the 0.9220 region during the first half of the trading action on Tuesday. The momentum quickly ran out of the steam after the BoE Governor Andrew Bailey downplayed expectations of negative interest rates. This coupled with some positive Brexit-related headlines provided an additional boost to the British pound. Adding to this, an offered tone surrounding the shared currency, prompted some fresh selling and dragged the EUR/GBP cross to an intraday low level of 0.9144, albeit lacked any strong follow-through selling. Meanwhile, the Brexit optimism turned out to be short-lived after Ireland's foreign minister, Simon Coveney said that there is a growing sense that perhaps Britain doesn't want a Brexit deal. Coveney further added that the UK government tactic is making complex talks even more difficult. Separately, the UK Prime Minister Boris Johnson outlined new coronavirus restrictions for England. The rules weren't that harsh to jeopardise the economy, though Johnson's warning to introduce greater restrictions if this does not work took exerted some fresh pressure on the sterling. The EUR/GBP cross quickly recovered around 30 pips from daily lows and was last seen hovering near the 0.9170-75 region. In the absence of any major market-moving economic releases, the incoming Brexit headlines will influence the pound and produce some short-term trading opportunities. Technical levels to watch  

The headline Diffusion Index of the Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Outlook Survey dropped to 8 in September from 16.

Philly Fed Nonmanufacturing Index edged higher in September.US Dollar Index clings to modest daily gains above 93.60.The headline Diffusion Index of the Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Outlook Survey improved to 8 in September from 1.6 in August, the monthly data showed on Tuesday. Key takeaways "Wage and Benefit Cost Index dropped to 13.1 in September from 14.6 in August." "Firm-level Business Activity Index edged higher to 20.4 in September from 17.9 August." "New Orders Index fell to 8.5 in September from 11.6 in August." "Full-time Employment Index improved to 5.1 in September from -3.0 in August." Market reaction The US Dollar Index showed no significant reaction to this data and was last seen gaining 0.12% on the day at 93.66.  

S&P 500 ideally holds below resistance at 3319/29 to keep its immediate risk lower for a deeper corrective setback to 3204/00, potentially the 200-day

S&P 500 ideally holds below resistance at 3319/29 to keep its immediate risk lower for a deeper corrective setback to 3204/00, potentially the 200-day average at 3104, analysts at Credit Suisse apprise. More: S&P 500 Index: Rotation needs macro support – Charles Schwab Equity Markets to extend the correction another 10% – Morgan Stanley Key quotes “The S&P 500 gapped sharply lower on Monday at the open and although the market subsequently managed to recover a good proportion of these losses in the afternoon the price gap from yesterday morning remains intact and with the market still below its 63 and 13-day averages we continue to look for a deeper corrective setback to emerge.” “Immediate resistance is seen at 3286/92, with the top of the price gap from yesterday at 3319 now ideally capping to keep the immediate risk lower.” “Support is seen at 3259/57 initially, beneath which should see a move back to 3229 and then a cluster of price supports at 3204/3198, which we look to hold at first. A direct break though can expose the 200-day average at 3104.” “Above 3319/29 would suggest a deeper recovery can be seen back to the 13-day average and 38.2% retracement of the sell-off at 3362/70, but with this then expected to remain tough resistance.”  

Inflation in the euro is still uncomfortably below the European Central Bank's (ECB) aim and the appreciation of the euro is one factor that needs to

Inflation in the euro is still uncomfortably below the European Central Bank's (ECB) aim and the appreciation of the euro is one factor that needs to be watched closely, ECB Executive Board Member Fabio Panetta on Tuesday, as reported by Reuters. Additional takeaways "Faced with such a sizeable downward skew, there is a strong case for our reaction function to be asymmetric." "Risks of a policy overreaction are much smaller than the risks of the policy being too slow or too shy to react and the worst-case scenarios materialising." "Macroeconomic policies – above all monetary and fiscal policies – must remain complementary." "Today, our monetary policy can gradually focus less on preventing financial and productive collapse and more on securing the return of inflation to our aim." "Results of the ECB's stimulus are not satisfactory yet." Market reaction The EUR/USD pair edged lower after these comments and was last seen losing 0.22% on the day at 1.1745.

The GBP/USD pair jumped back above mid-1.2800s during the mid-European session, albeit lacked any strong follow-through buying and quickly retreated o

GBP/USD staged a goodish intraday recovery from the 200-DMA support.The uptick got an additional boost from positive Brexit-related headlines.The UK PM Johnson announced new restrictions to curb virus outbreak.The GBP/USD pair jumped back above mid-1.2800s during the mid-European session, albeit lacked any strong follow-through buying and quickly retreated over 50 pips from daily tops. The pair witnessed some aggressive short-covering move from the vicinity of the 1.2700 mark – nearing the very important 200-day SMA – after the BoE Governor Andrew Bailey downplayed expectations of negative interest rates. The strong intraday recovery movement got an additional boost from positive Brexit-related headlines. EU source reportedly said that Brexit talks have been going a bit better than expected and that there is a 'window of opportunity'. Separately, Ireland's foreign minister, Simon Coveney was noted saying that there is a growing sense that perhaps Britain doesn't want a Brexit deal and the UK government tactic is making complex talks even more difficult. Meanwhile, the UK PM spokesman confirmed the EU Chief Brexit Negotiator Michel Barnier's visit tomorrow for informal talks. The spokesman further stressed that the UK will continue to work hard on securing a Brexit deal. Nevertheless, the GBP/USD pair moved into the positive territory and shot an intraday high level of 1.2867. The uptick was further supported by a softer tone surrounding the US dollar amid a modest recovery in the US equity markets. In the latest developments surrounding the coronavirus saga, the UK Prime Minister Boris Johnson announces new restrictions for England. The GBP/USD pair witnessed a modest pullback and was last seen hovering in the neutral territory, around the 1.2810-1.2800 region. It will now be interesting to see if the pair is able to capitalize on the move or the attempted recovery meets with some fresh supply at higher levels. This makes it prudent to wait for some strong follow-through buying before placing fresh bullish bets. Technical levels to watch  

British Prime Minister Boris Johnson announced on Tuesday that they will be introducing new COVID-19 restriction measures but added that they will not

British Prime Minister Boris Johnson announced on Tuesday that they will be introducing new COVID-19 restriction measures but added that they will not be returning to a full lockdown as they did in March. The PM said that they will be dropping the plan to allow people back into the sports stadiums and added that pubs and hospitality venues will be closing at 10 PM from Thursday. Developing story...

Ireland’s Foreign Minister Simon Coveney said on Tuesday that the Brexit message from European Union's chief Brexit negotiator, Michel Barnier, is cle

Ireland’s Foreign Minister Simon Coveney said on Tuesday that the Brexit message from European Union's chief Brexit negotiator, Michel Barnier, is clear: "The EU will remain firm and realistic." Additional takeaways via Reuters There is disappointment across the EU, trust is damaged." "Strong focus remains on bigger picture for the EU." "Trust and confidence in negotiators remains as strong as ever." "Brexit implementation has to be consistent with protocols." "Concerning that there is growing sense that perhaps the UK doesn't want a deal." "I believe the UK government wants a deal." "This is very damaging to Britain's reputation outside of Brexit bubble talks." "If legislation (Internal Market Bill) continues, the EU will respond legally." "No agreement on fisheries will lead to extraordinary uncertainty in the UK and the EU." Market reaction The GBP/USD pair largely ignored these remarks and was last seen gaining 0.1% on the day at 1.2837.

The USD/CAD extended its rally during the first half of the day on Tuesday and touched its highest level in more than a week at 1.3346. However, the p

USD/CAD rose to its highest level in more than a month on Tuesday.US Dollar Index is consolidating Monday's gains above 93.50.WTI is retracing Monday's losses, trades around $40.The USD/CAD extended its rally during the first half of the day on Tuesday and touched its highest level in more than a week at 1.3346. However, the pair lost its bullish momentum ahead of the American session and was last seen posting small daily losses at 1.3297. WTI rebound supports CAD Crude oil prices suffered heavy losses on Monday amid demand concerns and the barrel of West Texas Intermediate lost more than 3%. With the market mood improving modestly, the WTI staged a rebound and was last seen gaining more than 1% on the day at $40.05, helping the commodity-sensitive loonie stay strong against its rivals. On the other hand, the greenback seems to be having a difficult time preserving its strength as markets wait for FOMC Chairman Jerome Powell and US Treasury Secretary Mnuchin to testify before the House Financial Services Committee. Investors don't expect Powell to deliver any surprising remarks on the policy outlook and will be looking for fresh insights into the next coronavirus aid bill. A negative reaction in Wall Street's main indexes could help the DXY regain its traction. Meanwhile, S&P 500 futures are posting modest gains on the day, pointing out to a moderately higher opening in US stocks. .  The US Dollar Index, which gained 0.6% on Monday, is currently virtually unchanged on a daily basis at 93.55. Technical levels to watch for  

The Reserve Bank of New Zealand (RBNZ) is scheduled to announce its monetary policy decision on 23 September at 02:00 GMT. The market consensus is for

The Reserve Bank of New Zealand (RBNZ) is scheduled to announce its monetary policy decision on 23 September at 02:00 GMT. The market consensus is for the RBNZ to stay on hold and keep the Official Cash Rate (OCR) unchanged at a record low of 0.25% for the fourth straight month in September. As we get closer to the release time, here are the expectations forecast by the economists and researchers of six major banks regarding the upcoming central bank's meeting.  See – NZD/USD: The sharp reversal lower comes to a halt ahead of the 55-DMA at 0.6633 – Credit Suisse ANZ “ We expect a dovish tone at Wednesday’s Monetary Policy Review, reiterating that a lower OCR and bank “funding for lending” program are next up. The RBNZ is unlikely to change its forward guidance that the OCR will be left unchanged until March.  We also expect the RBNZ to continue its evolution towards a more tactical approach to its weekly LSAP purchases, given recent curve steepening.” Westpac “We expect no change in monetary policy next week. Data has been to the strong side, but the RBNZ will bank that without reaction. The RBNZ will reiterate that it intends to provide substantial monetary stimulus for as long as necessary and will remind us that it is preparing to deploy a negative OCR combined with cheap funding for banks, in case this is required in the future. We continue to expect that the bond-buying programme will run out of ammo before the battle is over. We, therefore, expect that the RBNZ will indeed have to deploy a negative OCR, in April next year.” Standard Chartered “We do not expect any changes to policy at this meeting after the central bank expanded the size and extended the duration of its Large Scale Asset Purchase (LSAP) programme in August. We expect the RBNZ to maintain its dovish tone though. Following the Jackson Hole event, Assistant Governor Hawkesby commented that the RBNZ’s ‘least regrets’ approach to policy could, like the Fed, see it allowing inflation to run above target for some time after a period of weakness. The central bank has expressed its preference for negative rates, supplemented by a term lending programme, as the next likely option after LSAP. We recognise the RBNZ’s firm accommodative stance and commitment to achieving its dual mandate of stable inflation and maximum sustainable employment, but are sceptical of the effectiveness of negative rates in achieving these objectives and therefore maintain our call for unchanged policy rates in 2021.” ING “Since the August policy meeting – when QE was expanded – RBNZ speakers have reiterated the bank’s readiness to add stimulus if necessary and a dramatic GDP contraction in 2Q (-12.4% YoY) left little doubts this meeting while be characterised by a similarly dovish tone. Still, we do not expect any cut or new policy measure at this meeting, with the Bank likely taking its time to fully assess the implications of a move to negative rates and wait for more data to gauge the impact of new lockdown measures in Auckland in August. With most of the RBNZ dovishness in the price, we suspect markets would be particularly reactive to the RBNZ announcement only if there is a surprising shift in language, with particular focus on any currency-related comments.” TDS “RBA Dep. Gov. Debelle delivers a speech on ‘The Australian Economy and Monetary Policy’. Focus likely to centre on lowering the cost of funding for semis via upsized TFF. Re RBNZ, unanimous expectation for the Bank to keep the cash rate on hold at 0.25% till Mar'21, with the Bank to reinforce willingness to deploy negative rates.” Bannockburn “The RBNZ is widely expected to leave policy on hold, and while a negative cash rate is possible at some juncture, it seems unlikely in Q4.”  

USD/JPY has retreated from around the 38.2% retracement of its latest daily slump and now trades below the 23.% retracement of the same slump, this la

USD/JPY has retreated from around the 38.2% retracement of its latest daily slump and now trades below the 23.% retracement of the same slump, this last at 104.50. The pair is biased lower amid a persistent dismal mood and could break below 104.00 in the near-term, FXStret’s Chief Analyst Valeria Bednarik reports. More – USD/JPY: Yen to win the battle of the safe havens – Rabobank Key quotes “The sour sentiment fuels demand for the Japanese currency ahead of US Federal Reserve Chief Powell’s testimony before Congress. Powell is due to testify on the CARES Act before the House Financial Services Committee, although the document has already been released. According to it, the economy is showing a ‘marked improvement,’ but the future is highly uncertain and depends on controlling the coronavirus pandemic. It also shows that Powell will refer to the need for more help from Congress.” “The USD/JPY pair is biased lower according to the 4-hour chart, as it’s now developing below a firmly bearish 20 SMA. The larger moving averages also head lower although far above the shorter one, while technical indicators maintain their bearish slopes within negative levels.”  “The 104.00 level is the immediate support, with a steeper decline expected on a break below it.”  

EUR/USD drops to fresh 6-week lows around 1.1720 earlier on Tuesday, extending the leg lower for the third session in a row. A deeper pullback remains

EUR/USD intensifies the break below the 1.1800 support.The next significant support lines up in the 1.1700 region.EUR/USD drops to fresh 6-week lows around 1.1720 earlier on Tuesday, extending the leg lower for the third session in a row. A deeper pullback remains on the cards and is expected to target the 1.1700 neighbourhood, where converge late August lows and a Fibo level (of the 2017-2018 rally). Furthermore, the bullish view on EUR/USD is expected to remain unchanged as long as the pair trades above the critical 200-day SMA, today at 1.1226. EUR/USD daily chart  

NZD/USD stages a modest rebound after dropping to two-week lows at 0.6639. Supports at 0.6639/33 and 0.6601/6600 ideally hold for further rangebound t

NZD/USD stages a modest rebound after dropping to two-week lows at 0.6639. Supports at 0.6639/33 and 0.6601/6600 ideally hold for further rangebound trading, with resistance seen initially at 0.6678, per Credit Suisse. Key quotes “NZD/USD forcefully extended its rejection from the pivotal July 2019 and current 2020 highs as well as the 200-week average at 0.6783/98 on Monday. However, the correction lower is so far coming to a halt just ahead the 55-day average at 0.6639/33 and with key price support just below at 0.6601, we ideally look for the zone to hold for further rangebound trading.” “Below 0.6639/33 would see a move back to the 0.6601/00 support, which is a key technical inflection point. Beyond here though would see a small ‘double top’ complete to suggest significant further weakness.” “We see resistance initially at 0.6678, then 0.6693/96, above would ease the immediate downside pressure for a move back to the aforementioned 0.6783/98 area, which we expect to cap for now to maintain the range.”  

The rally in DXY has so far faltered in the proximity of the 94.00 neighbourhood on turnaround Tuesday. This is a key hurdle where sits the August’s t

DXY fades the earlier uptick to the 93.90 region on Tuesday.Immediately to the upside is located the key barrier near 94.00.The rally in DXY has so far faltered in the proximity of the 94.00 neighbourhood on turnaround Tuesday. This is a key hurdle where sits the August’s top. A breakout of this area should face a minor resistance at the Fibo level (of the 2017-2018 drop) at 94.20 ahead of the 6-month resistance line near 94.90. Looking at the broader picture, the negative outlook on DXY is seen unchanged while below the 200-day SMA, today at 97.15. DXY daily chart  

US stocks have outperformed their global counterparts for more than a decade, but that streak may soon end, with the COVID-19 recession accelerating

US stocks have outperformed their global counterparts for more than a decade, but that streak may soon end, with the COVID-19 recession accelerating that shift, Lisa Shalett from Morgan Stanley reports. More: S&P 500 Index: Rotation needs macro support – Charles Schwab Equity Markets to extend the correction another 10% – Morgan Stanley Key quotes “China’s recovery leads other major economies by as much as a year. It is the best performing region – the MSCI China Index is up 17% this year – due to a strong pick-up in global trade, despite the overhang of trade tensions with the US. The renminbi is strengthening relative to the dollar, which should support China’s strategy of turning it into an international currency that is held by more central banks.”  “Most emerging markets are linked to China and will benefit from the weaker dollar and the stronger renminbi. So far, emerging markets have lagged strong gains in commodities, which is unusual and could indicate that they are underpriced. These markets could also benefit from the Federal Reserve’s plans to keep interest rates low, even as inflation trends upward.” “Europe not only boasts more reasonable stock valuations, but its COVID-19 relief plan could be a game-changer. Europe’s recovery plan could bring about greater fiscal integration across the region and provide much-needed aid to the southern periphery. The plan also provides funds for green energy projects that should create jobs, while fighting climate change.” “Japan offers attractive valuations, ongoing economic transformation and an important break in dollar/yen correlations. Indeed, the yen’s still nascent weakening against the dollar could help boost its exports, which would become more competitive. It also helps that Japan has the lowest level of unemployment and the lowest mortality impact from COVID-19 of any developed country.”

"It will take time for consumption to return to normal growth," China's Premier Li Keqiang told the state media on Tuesday, as reported by Reuters. Li

"It will take time for consumption to return to normal growth," China's Premier Li Keqiang told the state media on Tuesday, as reported by Reuters. Li further noted that they will maintain financial support for the real economy.  Market reaction These comments don't seem to be having a significant impact on market sentiment. As of writing, major European equity indexes were up between 0.3% and 1%. Meanwhile, the S&P 500 futures are gaining 0.15% on the day, suggesting that Wall Street's main indexes could start the day slightly higher following Monday's sharp drop.  

EUR/JPY extends further the downtrend and is flirting with the key contention area in the 122.90/80 band on Tuesday. The bearish impulse remains well

EUR/JPY remains under heavy pressure below the 123.00 level.Interim support aligns at the 100-day SMA at 122.18.EUR/JPY extends further the downtrend and is flirting with the key contention area in the 122.90/80 band on Tuesday. The bearish impulse remains well in place and forced the cross to record fresh 2-month lows in the mid-122.00s at the beginning of the week. If the cross breach this area on a sustainable basis, then the next support comes in around 122.20, where is located the 100-day SMA. Further south emerges the more significant contention in the 200-day SMA, today at 120.86. Below the 200-day SMA the outlook on the cross is expected to shift to bearish. EUR/JPY daily chart  

The NZD/USD pair lost more than 100 pips on Monday and extended its slide to a fresh two-week low of 0.6639 on Tuesday. With investors opting out to s

NZD/USD staged a modest rebound after dropping to two-week lows.US Dollar Index clings to small daily gains above 93.50.Focus shifts to FOMC Chairman Powell's testimony, RBNZ policy announcements.The NZD/USD pair lost more than 100 pips on Monday and extended its slide to a fresh two-week low of 0.6639 on Tuesday. With investors opting out to stay on the sidelines ahead of key macroeconomic events, the pair started to consolidate its losses and was last seen gaining 0.23% on the day at 0.6682. DXY stays quiet ahead of Powell's testimony The risk-averse market environment provided a boost to the greenback at the start of the week. The US Dollar Index (DXY) advanced to 93.78 on Monday and closed 0.6% higher at 93.55. Ahead of FOMC Chairman Jerome Powell's and US Treasury Secretary Mnuchin's testimony before the House Financial Services Committee, the DXY is staying flat on the day above 93.50.  Meanwhile, Existing HomeSales and Richmond Fed Manufacturing Index will be featured in the US economic docket on Tuesday. On the other hand, the Reserve Bank of New Zealand (RBNZ) will release its Rate Statement and Interest Rate Decision in the early trading hours of the Asian session on Wednesday. Last week, New Zealand's finance minister, Grant Robertson, noted that the RBNZ could keep its policy rate unchanged until March of 2021 if the economic recovery were to be stronger than expected. If the RBNZ adopts a natural tone as suggested by the finance minister, it could help the NZD gather strength against its rivals. Technical levels to watch for  

WTI stalls the bounce above $40 as hourly RSI turns flat. A firm break above $40.50 is needed for the further upside. 200-HMA guards the downside ahe

WTI stalls the bounce above $40 as hourly RSI turns flat. A firm break above $40.50 is needed for the further upside. 200-HMA guards the downside ahead of the API crude stocks data. WTI (futures on NYMEX) consolidates the bounce above the $40 barrier, having regained the 21-hourly Simple Moving Averages (HMA), currently at $39.75. The US oil traders have turned cautious ahead of the American Petroleum Institute’s (API) weekly crude stockpiles data release. The rebound in the black gold faltered below the critical $40.50 barrier, which is the confluence of the 100 and 50-HMAs. A break above which doors will open towards the $41 mark. The next upside target for the bulls will be the Monday high of $41.51. To the downside, the immediate cushion is seen at the previous resistance now support at 21-HMA. A failure to resist above the latter could call for a test of the horizontal 200-HMA at $39.16. The hourly Relative Strength Index (RSI) has turned south, suggesting that the recovery momentum appears to have fizzled out. WTI hourly chart WTI additional levels

Gold slipped below the $1900 mark during the early European session, albeit lacked any strong follow-through and recovered a bit thereafter. The preci

Gold remained depressed for the second consecutive session on Tuesday.The downside remains limited ahead of the Fed Chair Powell’s testimony.The set-up still supports prospects for a slide back to August monthly lows.Gold slipped below the $1900 mark during the early European session, albeit lacked any strong follow-through and recovered a bit thereafter. The precious metal failed to capitalize on the previous day's late rebound of around $30 from six-week lows and met with some fresh supply on Tuesday amid a stronger US dollar. Investors remain concerns that the second wave of coronavirus infection could lead to fresh lockdown measures and halt the current global economic recovery. This, in turn, continued benefitted the greenback's status as the global reserve currency and undermined the dollar-denominated commodity. This coupled with some stability in the US equity futures further dented the precious metal's safe-haven status. A slight improvement in the global risk sentiment was evident from a goodish rebound in the US Treasury bond yields, which further contributed to the offered tone surrounding the non-yielding yellow metal through the first half of the trading action on Tuesday. However, expectations that the Fed Chair Jerome Powell will reaffirm to keep interest rates lower for longer during his congressional testimony later this Tuesday. This makes it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move. That said, the commodity still seems vulnerable to slide further towards retesting August monthly swing lows support near the $1863 region. Technical levels to watch  

United Kingdom CBI Industrial Trends Survey – Orders (MoM) below forecasts (-40%) in September: Actual (-48%)

European Commission is said to use a 'no-deal' Brexit scenario as the basis to prepare its autumn forecast, Spanish media outlet – elEconomista report

European Commission is said to use a 'no-deal' Brexit scenario as the basis to prepare its autumn forecast, Spanish media outlet – elEconomista reported, citing community sources.   more to come ...

USD/JPY ideally holds below 104.88 for a clear break of the July low at 104.19, with next support seen at 103.43, the Credit Suisse analyst team repor

USD/JPY ideally holds below 104.88 for a clear break of the July low at 104.19, with next support seen at 103.43, the Credit Suisse analyst team reports. More – USD/JPY: Yen to win the battle of the safe havens – Rabobank Key quotes “USD/JPY was unable to sustain its move below the 104.19 July low on Monday but despite the sharp recovery in the afternoon the market has not cleared any resistance of note and we maintain our bearish outlook.” “Support is seen at 104.37 initially, then 104.19, with a move below 104.00 needed to reassert downward momentum again with support then seen next at 103.43 – the 78.6% retracement of the March rally – and with the “measured objective” from the bearish continuation pattern seen at 103.14 and with the broader risk seen for a move back below 102.00.” “Immediate resistance is seen at 104.63, then 104.83/88, which we look to continue to ideally cap. Above which can see a deeper recovery back to the 13 -day average and price resistance at 105.12/25, but with fresh sellers expected here.”  

Economist at UOB Group Ho Woei Chen, CFA, gives her opinion on the latest PBoC event. Key Quotes “In line with market’s expectation, the People’s Bank

Economist at UOB Group Ho Woei Chen, CFA, gives her opinion on the latest PBoC event. Key Quotes “In line with market’s expectation, the People’s Bank of China (PBoC) kept its Loan Prime Rate (LPR) unchanged in September with the 1Y LPR and the 5Y & above LPR set at 3.85% and 4.65% respectively. The central bank has maintained the LPR steady since May following 30 bps cut in the earlier part of the year.” “Economic data in July and August suggest that the full-year GDP growth in China is on track for our forecast of 1.8% or even surpass it if the momentum picks up further. With the acceleration in economic recovery, the pressure to ease monetary policy further has been greatly reduced which will now allow the PBoC to pay attention to financial risks mitigation ahead.” “While we do not expect the PBoC to lower interest rates further, the central bank is still expected to continue to maintain strong market liquidity through its open market operations while also continuing to implement its relending facility as well as credit loans to the small and micro businesses via temporary purchase of uncollateralized loans as highlighted by the PBoC at a meeting in August.”

The GBP/JPY cross found a decent support near the 133.00 level – marked by the 50% Fibonacci level of the 124.07-142.72 move up – and staged a goodish

GBP/JPY stalled its recent bearish trajectory and bounced off the 133.00 support.The near-term technical set-up still seems tilted firmly in favour of bearish traders.Hence, any subsequent move up runs the risk of meeting with some fresh supply.The GBP/JPY cross found a decent support near the 133.00 level – marked by the 50% Fibonacci level of the 124.07-142.72 move up – and staged a goodish rebound from the lowest level since early July. The BoE Governor Andrew Bailey downplayed expectations of negative interest rates and extended some support to the British pound. This, in turn, was seen as a key factor that prompted short-covering move amid slightly oversold conditions on short-term charts. Given the recent breakthrough an important confluence support near the 137.00 mark, the set-up still seems tilted firmly in favour of bearish traders. The mentioned region comprised of the very important 200-day SMA and a near six-month-old ascending trend-line. Hence, any subsequent move up might still be seen as a selling opportunity near the 134.55-60 horizontal resistance. This, in turn, should keep a lid on any further gains near the key 135.00 psychological mark, which is followed by 38.2% Fibo. level near mid-135.00s. On the flip side, bears might now wait for some follow-through selling below the 133.00 mark before positioning for any further depreciating move. The pair might then accelerate the fall further towards the 132.00 level en-route the 131.75-70 support zone and 61.8% Fibo. level. GBP/JPY daily chart Technical levels to watch  

The selling pressure around the single currency remains well in place on turnaround Tuesday, with EUR/USD clinching fresh multi-week lows around 1.172

EUR/USD extends the drop to the 1.1720 area on Tuesday.ECB-speak, EMU’s Consumer Confidence next in the calendar.Markets’ attention remains on Powell’s first testimony later in the session.The selling pressure around the single currency remains well in place on turnaround Tuesday, with EUR/USD clinching fresh multi-week lows around 1.1720. EUR/USD looks to data, Powell EUR/USD prolongs the leg lower for the third session in a row on Tuesday, briefly testing fresh lows in the 1.1720 region albeit managing to regain some composure soon afterwards. The dominating risk aversion mood and the renewed and strong demand for the greenback put the pair under extra downside pressure in past sessions, opening the door at the same time to deeper retracement in the short-term. Later in the session, ECB’s Board members F.Panetta and P.Lane are due to speak while the European Commission (EC) will publish the preliminary gauge of the Consumer Confidence in the region. Across the pond, Chief J.Powell wil testify on the Fed’s response to the pandemic before the House Financial Services Committee. In the data space, Existing Home Sales and the Richmond Fed Index are also due. What to look for around EUR EUR/USD dropped and recorded fresh monthly lows near 1.1720 earlier in the session, resuming the post-FOMC downtrend. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained. Further out, the underlying constructive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis), the so far calm US-China trade front and the steady – albeit vigilant- stance from the ECB. The solid position of the EMU’s current account and the positive performance of the speculative community are also lending support to the shared currency. EUR/USD levels to watch At the moment, the pair is losing 0.26% at 1.1739 and faces the next support at 1.1720 (monthly low Sep.22) seconded by 1.1709 (38.2% Fibo of the 2017-2018 rally) and finally 1.1695 (monthly low Aug.3). On the other hand, a break above 1.1917 (high Sep.10) would target 1.1965 (monthly high Aug.18) en route to 1.2011 (2020 high Sep.1).

During the fourth round of trades talks with the US, the UK's Trade Secretary Liz Truss said that both sides exchanged initial tariff offers and held

During the fourth round of trades talks with the US, the UK's Trade Secretary Liz Truss said that both sides exchanged initial tariff offers and held a discussion about market access. The exchange of tariff offers is a notable milestone, she added. Additional comments “The negotiations will continue at pace through the autumn.” “Fifth round of talks will take place in mid to late October.”

“Big five” stocks recently hit an extreme of weight within the S&P 500 relative to the market peak in 2000 but their valuations are more reasonable to

“Big five” stocks recently hit an extreme of weight within the S&P 500 relative to the market peak in 2000 but their valuations are more reasonable today. What’s more, rotation could give way to broader-based selling if economic data fails to support recent leadership by more classically-cyclical sectors, according to Liz Ann Sonders from Charles Schwab. More: S&P 500 Index needs further fiscal support to avoid a correction Key quotes “Valuations are as stretched as they were in 2000; however, less so in the case of the largest stocks. Although the S&P 500’s forward P/E ratio recently hit heights not seen since 1998-2000; the forward P/E of the largest five stocks today is more “reasonable” at 33 relative to their average multiple of 60 in 2000” “The equity risk premium (ERP) is quite elevated relative to where it was at the market’s peak in 2000. Notwithstanding the elevated ERP and strong fundamentals for the big five, traditional valuation metrics are stretched enough that we will need a meaningful earnings growth rebound. The rotation that’s been underway this month may be part of the process of easing some of this valuation excess. However, the move toward more traditional cyclical leadership – Materials and Industrials – likely also will need support from an improving economic backdrop. Absent the latter, a simple rotation could give way to more broad-based selling of equities than what’s occurred over the past few weeks.”  

The GBP/USD pair prolonged its recent rejection slide from the key 1.3000 psychological mark and dropped to near two-month lows during the early Europ

GBP/USD found some support near 200-DMA and stalled its recent bearish trajectory.BoE’s Bailey clarified that the BoE statement did not imply the use of negative rates.The USD struggled to preserve its early gains ahead of the Fed Chair Powell’s testimony.The GBP/USD pair prolonged its recent rejection slide from the key 1.3000 psychological mark and dropped to near two-month lows during the early European session on Tuesday. The downfall was sponsored by fresh coronavirus jitters and rising odds of fresh lockdown measures to curb the second round of the outbreak. This, in turn, continued weighing on investors' sentiment and benefitted the US dollar's relative safe-haven status. The British pound lost some additional ground after the UK Cabinet Minister Michael Gove said that new restrictions will be imposed in the UK and Prime Minister Boris Johnson will spell out further details later this Tuesday. The pair dropped to the lowest level since July 24th, albeit managed to rebound swiftly in reaction to the BoE Governor Andrew Bailey's comments, saying that the UK economic recovery has been quite rapid and substantial. Speaking at a webinar hosted by the British Chamber of Commerce, Bailey further clarified that last week's BoE statement did not imply that the central bank would use negative rates. This turned out to be the only factor extended some support to the British pound, instead prompted some intraday short-covering move from the very important 200-day SMA and led to the pair's strong recovery of around 120 pips. Meanwhile, the USD struggled to preserve its gains amid expectations that the Fed Chair Jerome Powell will reiterate to keep interest rates lower for longer during his congressional testimony later this Tuesday. Hence, the goodish recovery move could further be attributed to some repositioning trade ahead of the key event risk. In the meantime, the US economic docket – featuring the releases of Existing Home Sales and Richmond Manufacturing Index – will be looked upon for some trading impetus. Short-term technical outlook From a technical perspective, the intraday bounce from a technically significant moving average warrants some caution for bearish traders. The mentioned support is closely followed by the 38.2% Fibonacci level of the 1.1412-1.3482 positive move, which if broken will be seen as a fresh trigger for bearish traders. The pair might then turn vulnerable to break below the 1.2600 mark and accelerate the slide towards the 1.2570-60 congestion zone. The downward trajectory could eventually drag the pair back towards the key 1.2500 psychological mark en-route 50% Fibo. level, around the 1.2440-30 region. On the flip side, any subsequent move up might still be seen as a selling opportunity and remain capped near the 1.2900 mark. That said, some follow-through buying will prompt a short-covering move and push the pair back towards the 1.3000 round-figure mark. The latter marks the 23.6% Fibo. level and should now act as a key pivotal point for the pair’s next leg of a directional move.

Action by Congress and the Fed, and its absence, has paved the way for the recent downturn in equities, putting markets back on a more sustainable foo

Action by Congress and the Fed, and its absence, has paved the way for the recent downturn in equities, putting markets back on a more sustainable footing, Chief Investment Officer at Morgan Stanley Mike Wilson explains. Key quotes “It looks like Congress is having a difficult time coming to terms on the next round of fiscal stimulus. It's not that either side is unwilling to spend more money, it's how much and where does it go. What that really means is both sides want to make sure they get credit from voters in November. But markets are impatient and are likely to exert pressure on Congress to get the deal over the goal line, which may take a few more weeks. The unfortunate and unexpected passing of Supreme Court Justice Ginsburg is also likely to further cloud this ongoing negotiation.” “In the past few months, the Fed has changed its strategy in terms of exactly how it will support the recovery going forward, and that has come as a bit of a surprise to markets. They have moved to what is called an ‘average inflation targeting’ regime. What that means is that the Fed will not raise interest rates even as inflation rises above its 2% goal. However, what they have not committed to is keeping longer-term interest rates lower via Treasury bond purchases. And last week they reaffirmed that stance and made it even clearer by not providing any definitive guidance in its quantitative easing program.” “While all equities are long-duration assets depending on ten-year yields, expensive growth stocks with cash flows further out in the future are the most vulnerable to rising back end rates. Compounding that risk is the fact that many of these stocks became overpriced in August on the view that long-term rates were never going higher. This is why the Nasdaq has underperformed so much in this recent correction and is likely to continue until the stocks reflect this risk of higher long term rates. I estimate that's another 10% downside from here for major equity markets and perhaps 15% for the Nasdaq.” “This will be a buying opportunity for those who have cash or those who missed the first powerful leg of this new bull market. We continue to focus on those companies that can deliver better than expected earnings growth next year. This includes a mix of companies most levered to the reopening of the economy and a select group of growth stocks once they better reflect the risk of higher rates.”  

Commenting on the Brexit issue, the Bank of England (BOE) Governor Andrew Bailey said, “we are watching the Brexit developments very carefully.” Addit

Commenting on the Brexit issue, the Bank of England (BOE) Governor Andrew Bailey said, “we are watching the Brexit developments very carefully.” Bailey speaks at a webinar hosted by the British Chamber of Commerce on Tuesday. Additional comments (via Reuters) Trade agreement between the UK and EU would be better Brexit outcome. We would do everything we can to help the economy if there is disruption after Brexit transition. Recent news from the EU on financial clearing was encouraging. The UK cannot be a rule taker on the EU financial services, not a price worth paying.

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight announced on Tuesday that a joint committee between t

Maroš Šefčovič, European Commission Vice President of Interinstitutional Relations and Foresight announced on Tuesday that a joint committee between the European Union (EU) and the UK on the Brexit issue will take place on September 28.  

The USD/JPY’s extension lower found a firm base at 104.00, rebounding higher towards 105.00. Terence Wu, FX strategist at OCBC, expects the pair to co

The USD/JPY’s extension lower found a firm base at 104.00, rebounding higher towards 105.00. Terence Wu, FX strategist at OCBC, expects the pair to consolidate but is biased lower and, therefore, further dips to the 104.00 area are on the cards. Key quotes “Expect the USD/JPY pair to consolidate north of 104.00 for now, but it should make further tests of that level in the coming sessions.” “Immediate topside resistance at 105.00.”  

Additional comments crossing the wires, via Reuters, as the Bank of England (BOE) Governor Andrew Bailey continues to speak at a webinar hosted by the

Additional comments crossing the wires, via Reuters, as the Bank of England (BOE) Governor Andrew Bailey continues to speak at a webinar hosted by the British Chamber of Commerce on Tuesday. Negative rates have been a mixed bag in other countries. Negative rates would right puzzle public without clear communication. Last week's BOE statement on negative rates should be no surprise. BOE needs to know how to implement negative rates, but should not read more into it. BOE's statement last week did not imply BOE would use negative rates. GBP/USD drops to two-month lows and rebounds, finds some support ahead 1.2700 mark

The GBP/USD pair dropped to near two-month lows, around the 1.2725 region during the early European session, albeit managed to defend the very importa

GBP/USD witnessed some heavy selling for the third consecutive session on Tuesday.Fears of renewed lockdown measures in the UK continued weighing on the sterling.BoE Governor Bailey’s comments did little to impress bulls or provide any respite.The GBP/USD pair dropped to near two-month lows, around the 1.2725 region during the early European session, albeit managed to defend the very important 200-day SMA and quickly retreated few pips thereafter.  The pair extended its recent rejection slide from the key 1.3000 psychological mark and remained under some selling pressure for the third consecutive session on Tuesday. The British Pound retained its softer bias across the board amid fears a new nationwide lockdown aimed at stemming the second wave of coronavirus infections. In fact, British Cabinet Minister Michael Gove said that new restrictions will be imposed in the UK and Prime Minister Boris Johnson will spell out further details later today. Gove further urged people to work from home if possible. This comes amid persistent Brexit anxieties, which further contributed to the weakness surrounding the sterling. The GBP/USD pair had a rather muted reaction the BoE Governor Andrew Bailey's comments that the UK economic recovery has been quite rapid and substantial, though is very uneven. Bailey acknowledged that labour demand is weak and unemployment is higher than the reported number. Investment is also very weak, but the housing market is strong Bailey added further. On the other hand, the US dollar added to the previous day's strong gains and remained well supported by the prevalent risk-off environment. Meanwhile, the latest leg of a fall over the past hour or so could further be attributed to some technical selling below the previous swing lows support near the 1.2765-60 region. In the absence of any major market-moving economic releases, the latest developments surrounding the virus situation will play a key role in driving the broader market risk sentiment. This, in turn, might influence the USD price dynamics and produce some trading opportunities ahead of the Fed Chair Jerome Powell's congressional testimony. Technical levels to watch  

The Bank of England (BOE) Governor Andrew Bailey said while speaking at a webinar hosted by the British Chamber of Commerce on Tuesday. Key quotes (v

The Bank of England (BOE) Governor Andrew Bailey said while speaking at a webinar hosted by the British Chamber of Commerce on Tuesday. Key quotes (via Reuters) UK recovery has been quite rapid and quite substantial. Q3 recovery a little bit ahead of what BOE expected in August. more to come ... About BOE Governor BaileyAndrew Bailey is the Bank of England's Governor. He took office on March 16th, 2020, at the end of Mark Carney's term. Bailey was serving as the Chief Executive of the Financial Conduct Authority before being designated. This British central banker was also the Deputy Governor of the Bank of England from April 2013 to July 2016 and the Chief Cashier of the Bank of England from January 2004 until April 2011.

EUR/USD is suffering the pick-up in the risk aversion sentiment among market participants, coming under exacerbated downside pressure and recording fr

EUR/USD is suffering the pick-up in the risk aversion sentiment among market participants, coming under exacerbated downside pressure and recording fresh multi-week lows in the proximity of 1.1730 at the same time. The downside could extend further while investors are now focused on the testimony by Fed’s J.Powell, FXStreet’s Pablo Piovano briefs. Key quotes “On Tuesday, investors are expected to closely follow the first testimony by Chief Jerome Powell on the Fed’s response to the pandemic ahead of two other testimonies on Wednesday and Thursday. The dollar will, therefore, be under the microscope practically during the whole week.” “It seems that further downside in EUR/USD looks like a probable scenario in the short-term horizon. That said, the next relevant contention area emerges in the 1.1700 neighbourhood, considered as the lower bound of the August-September range. On the other hand, bullish attempts now low somewhat out of favour, although they should meet strong resistance in the 1.19 zone.”

Sweden Riksbank Interest Rate Decision in line with forecasts (0%)

USD/CHF rises for the third consecutive day as the pair remains mildly bid while trading near 0.9160 on Tuesday. Karen Jones, Team Head FICC Technical

USD/CHF rises for the third consecutive day as the pair remains mildly bid while trading near 0.9160 on Tuesday. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the USD/CHF pair to continue climbing above the 55-DMA at 0.9173 with potential to reach the six-month downtrend at 0.9456. Key quotes “USD/CHF has eroded its four-month downtrend. The close above here introduces scope for a deeper correction to the 55-day ma at 0.9173, which is currently holding and potentially the 38.2% retracement of the move down from the March peak at 0.9342.”  “It should be noted that the market is possibly basing and above 0.9342 would suggest a test of the six-month downtrend at 0.9456.”  “Dips should remain contained by 0.9078/48. Only a slide below 0.9048 will trigger a slide back to the 0.8998 recent low.”  

The AUD/USD pair turned heavy amid the broader risk-off tilt and is now trading below the 0.72 mark. Terence Wu, FX strategists at OCBC Bank, has a ne

The AUD/USD pair turned heavy amid the broader risk-off tilt and is now trading below the 0.72 mark. Terence Wu, FX strategists at OCBC Bank, has a negative bias for the aussie as the stock market is falling. The analyst will be closely watching the 0.7170/00 support. Key quotes “With Asian equities and S&P 500 futures still in the red, expect the climate to be negative for the pair for now.” “The aussie should trade in line with shifting risk sentiment and the commodity complex in the coming sessions.” “Watch 0.7170/00 on the downside, against 0.7240 resistance.”  

The AUD/USD pair weakened back below the 0.7200 round-figure mark and dropped to near one-month lows during the early European session. The pair added

AUD/USD remained under some selling pressure for the third consecutive session on Tuesday.The downbeat market mood benefitted the USD’s safe-haven status and exerted some pressure.The aussie dollar was further weighed down by not so optimistic remarks by RBA's Debelle.The AUD/USD pair weakened back below the 0.7200 round-figure mark and dropped to near one-month lows during the early European session. The pair added to its previous day's heavy losses and witnessed some follow-through selling for the third consecutive session on Tuesday. Renewed coronavirus jitters and fears of fresh lockdown measures to curb the second wave of the outbreak continued weighing on investors' sentiment. The anti-risk flow benefitted the US dollar's relative safe-haven status and exerted some pressure on the AUD/USD pair. The Australian dollar was further weighed down by the RBA Deputy Governor Guy Debelle's comments that a lower exchange rate would definitely be beneficial for the economy. Debelle further added that the economy is currently seeing a gradual and uneven recovery. Debelle, however, noted that the aussie dollar is broadly aligned with fundamentals and intervention may not be effective. Meanwhile, the USD bulls now seemed to have turned cautious amid expectations that the Fed Chair Jerome Powell will reaffirm to keep interest rates lower for longer during his congressional testimony later this Tuesday. This makes it prudent to wait for some follow-through selling before positioning for an extension of the recent pullback from YTD tops – levels just above the 0.7400 mark. Market participants now look forward to the US economic docket, featuring the release of Existing Home Sales and Richmond Manufacturing Index. The data might influence the USD price dynamics, which, along with the broader market risk sentiment will assist traders to grab some short-term opportunities. Technical levels to watch  

Turkey Consumer Confidence climbed from previous 59.6 to 82 in September

The Japanese yen and the US dollar are both safe-havens assets. Economists at Rabobank see a battle between these two currencies with the JPY outpacin

The Japanese yen and the US dollar are both safe-havens assets. Economists at Rabobank see a battle between these two currencies with the JPY outpacing the gains in the USD amid a fall in risk appetite. They expect the USD/JPY trading around the 105 zone in the coming months. Key quotes “From fears about the impact of a second wave of covid-19, to worries about the disappointing pace of fiscal stimulus in the US there are plenty of economic factors to concern investors. Added to this are fears about possible disruption from the US election in addition to various geo-political factors.” “On any sharp fall in risk appetite in the coming months, we expect that the JPY is the only other currency which could keep up or outpace the gains in the USD. Which currency is the better performer may be a function of the type of news that is undermining investor confidence.” “The JPY can be very sensitive to geopolitical risk, particularly in the Asian region. There are currently plenty of headlines related to China and the reactions of other regional countries to its activities in the S. China Sea, E. China Sea and Taiwan Straits. Activity along China’s land border with India and have also been a concern. Our central view is that USD/JPY will be holding around the 105 area in the months ahead, though any further rise in tensions on this front could push USD/JPY lower.”  

FX Strategists at UOB Group now sees USD/CNH edging higher in the near-term, although always between the broader 6.7500-6.8300 range. Key Quotes 24-ho

FX Strategists at UOB Group now sees USD/CNH edging higher in the near-term, although always between the broader 6.7500-6.8300 range. Key Quotes 24-hour view: “The strong advance in USD yesterday came as a surprise (high of 6.8080). The rapid rise appears to be running ahead of itself and further sustained gain is unlikely. USD is more likely to consolidate and trade sideways at these higher levels, expected to be between 6.7700 and 6.8100.” Next 1-3 weeks: “We have held a negative view in USD since mid-August. In our latest narrative from last Thursday (17 Sep, spot at 6.7520), we indicated that the ‘decline is oversold but outlook for USD remains weak for now’ and we added, ‘pace of any further weakness is likely to be slower and next major support 6.7165 may be out of reach this time round’. Yesterday (21 Sep), USD rebounded strong and touched a high of 6.8080, not far below our ‘strong resistance’ level of 6.8100. While the ‘strong resistance’ is still intact, downward momentum has waned considerably and this coupled with the still oversold conditions suggest that the month-long negative phase has run its course. From here, there is room for the current rebound to extend higher but for now, any advance is viewed as part of broad 6.7500/6.8300 range.”

The greenback is extending the upside momentum and pushes the US Dollar Index (DXY) to the area of 93.80, or daily highs. US Dollar Index now looks to

DXY remains bid and advances to the 93.70/80 band.Existing Home Sales, Richmond Fed index, Evans next in the docket.Chief J.Powell will testify on the Fed’s response to the pandemic.The greenback is extending the upside momentum and pushes the US Dollar Index (DXY) to the area of 93.80, or daily highs. US Dollar Index now looks to Powell The index advances for the third consecutive session at the beginning of the week and extends the positive note to the vicinity of 93.80, where also lies the 55-day SMA. In fact, the renewed sentiment towards the risk aversion has been lending extra legs to the dollar in past sessions. This investors’ move away from the risk complex has met support in the unabated advance of the coronavirus pandemic across the world as well as persistent uncertainty surrounding a potential US stimulus package. Later in the session, all the attention will be on the first testimony by Fed’s Jerome Powell, this time before the House Financial Services Committee and on the Fed’s Pandemic Response. In the US data space, Existing Home Sales for the month of August, the speech by Chicago Fed C.Evans (2021 voter, centrist) and September’s Richmond Fed Index are all due later in the NA session. What to look for around USD The dollar keeps the bid bias in the first half of the week and extends the rally further north of the 93.00 yardstick. The ongoing bullish move in DXY is (still) seen as temporary, however, as the underlying sentiment towards the greenback remains on the negative side. This view is reinforced by the “lower for longer” stance from the Federal Reserve, the ongoing recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections. US Dollar Index relevant levels At the moment, the index is gaining 0.17% at 93.70 and a break above 93.78 (monthly high Sep.21) would open the door to 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the other hand, the next support emerges at 92.70 (weekly low Sep.10) seconded by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.75 (2020 low Sep.1).

GBP/USD looks to be back under pressure as the market is seeing dollar strength across the board. The pair is trading near to the 1.2780 daily low and

GBP/USD looks to be back under pressure as the market is seeing dollar strength across the board. The pair is trading near to the 1.2780 daily low and a loss of the 1.2690 support is set to trigger a deeper fall to the 1.2250/00 zone, per Commerzbank. Key quotes “GBP/USD’s bounce from the 200-day ma at 1.2724 appears to be over and while capped by the 20-day ma at 1.3070, a negative bias is maintained.” “Loss of the 1.2690 Fibo support should be enough to trigger a slide to 1.2445 and then 1.2250/00.”  “The 20-day ma guards the recent high at 1.3483 and the 1.3522 downtrend.”  

The USD/JPY pair seesawed between tepid gains/minor losses through the Asian session on Tuesday and was last seen trading in the neutral territory, ar

USD/JPY struggled to capitalize on the overnight goodish rebound from multi-month lows.The risk-off mood benefitted the safe-have JPY and exerted some support to the major.The USD was seen consolidating near six-week tops and helped limit any meaningful slide.The USD/JPY pair seesawed between tepid gains/minor losses through the Asian session on Tuesday and was last seen trading in the neutral territory, around the 104.60-65 region. The pair failed to capitalize on the previous day's solid intraday bounce from the 104.00 mark – the lowest level since March 11 – and met with some fresh supply on Tuesday. The prevalent risk-off mood benefitted the safe-haven Japanese yen and exerted some pressure on the USD/JPY pair. The ever-increasing number of COVID-19 cases dampened prospects of a sharp V-shaped global economic recovery and dented investors appetite for perceived riskier assets. The anti-risk flow was evident from a weaker tone across the global equity markets and the US Treasury bond yields. Meanwhile, rising odds of fresh lockdown measures to curb the second wave of coronavirus outbreak boosted the US dollar's status as the global reserve currency. A stronger greenback was seen as one of the key factors that extended some support to the USD/JPY pair and helped limit deeper losses. The USD bulls, however, seemed reluctant amid expectations that the Fed Chair Jerome Powell will reiterate to keep rates lower for longer during his congressional testimony later this Tuesday. This makes it prudent to wait for some follow-through buying before positioning for any further gains. In the meantime, developments surrounding the coronavirus saga will continue to play a key role in influence the broader market risk sentiment. This coupled with second-tier US economic releases – Existing Home Sales and Richmond Manufacturing Index – will be looked upon for some trading impetus. Technical levels  to watch  

Gold (XAU/USD) plummeted 3% and reached the lowest levels in six-week at $1882 on Monday. The yellow metal treads water above $1900 in Tuesday’s tradi

Gold (XAU/USD) plummeted 3% and reached the lowest levels in six-week at $1882 on Monday. The yellow metal treads water above $1900 in Tuesday’s trading so far, as the dollar bulls take a breather, digesting the release of the Fed Chair Jerome Powell’s prepared remarks ahead of his three-day Congressional testimony, FXStreet’s Dhwani Mehta briefs. Key quotes “Powell said that the Fed is committed to using all policy tools available to support the post-pandemic economic recovery. The sentiment on the global stocks will remain in focus for fresh impetus on gold. Should the risk-aversion deepen in the sessions ahead, the safe-haven dollar could see a fresh leg higher, weighing once again on the USD-denominated gold.” “Although a brief bounce cannot be ruled out before the yellow metal resumes the sell-off. The 14-day Relative Strength Index (RSI), currently at 43.85, has turned flat, backing the case for a temporary pullback, especially given Monday’s slump. Therefore, the immediate upside barrier is aligned at the pattern support now resistance at $1930. A break above which the confluence of the 21 and 50-DMAs around $1940/41 will limit the recovery attempts.” “To the downside, the $1900 level could be once again challenged by the bears. The next downside target at $1882 (Monday’s low) could be put at risk. A failure to defend the latter could expose the August low at $1863.”  

According to FX Strategists at UOB Group, the bearish note in USD/JPY is expected to lose impetus if 105.20 is regained in the next weeks. Key Quotes

According to FX Strategists at UOB Group, the bearish note in USD/JPY is expected to lose impetus if 105.20 is regained in the next weeks. Key Quotes 24-hour view: “Our expectation for USD to consolidate yesterday was wrong as it dropped to a low of 103.99 before rebounding strongly. Downward pressure has more or less dissipated and USD is likely to trade sideways for today, expected to be between 104.20 and 104.90.” Next 1-3 weeks: “We have held a negative view in USD since early last week and in our latest update from last Thursday (17 Sep, spot at 105.00), we highlighted that ‘the outlook remains weak’ and we were of the view that ‘the July’s low of 104.16 may be out of reach this time round’. However, downward momentum has been stronger than expected as USD dropped to a low of 104.25 last Friday. From here, USD could dip below 104.16 but oversold conditions suggest that a sustained decline below this level is unlikely (next support is at 103.80). All in, the weakness in USD appears to be overstretched but only a break of 105.20 (‘strong resistance’ level was previously at 105.50) would indicate that the negative phase has run its course.”

British Cabinet Minister Michael Gove was out with some comments in the last hour, saying that new restrictions will be imposed in the UK and PM will

British Cabinet Minister Michael Gove was out with some comments in the last hour, saying that new restrictions will be imposed in the UK and PM will spell out further details. Additional quotes: We are taking these steps reluctantly. If it is possible to work from home, people should do so. The remarks kept the GBP on the defensive and held the GBP/USD pair below the 1.2800 mark, closer to near one-week lows set on Monday.

CME Group’s advanced readings for Natural Gas futures markets noted open interest shrunk by around 19.4K contracts on Monday, reversing three builds i

CME Group’s advanced readings for Natural Gas futures markets noted open interest shrunk by around 19.4K contracts on Monday, reversing three builds in a row. Volume, instead, extended the choppy activity and rose by around 218.2K contracts. Natural Gas met decent support near $1,80/MMBtu Prices of the Natural Gas dropped to new 2-month lows in the $1,80 per MMBtu at the beginning of the week. The move was amidst diminishing open interest, leaving the scenario of further decline unfavoured at least in the veery near-term.

NZD/USD could accelerate the downside to the 0.6600 level in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlight

NZD/USD could accelerate the downside to the 0.6600 level in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that the ‘pullback in NZD could extend lower but any weakness is viewed as part of a 0.6740/0.6780 range’. However, NZD plunged to a low of 0.6653 before ending the day sharply lower at 0.6670 (-1.33%). The rapid improvement in downward momentum suggests further NZD weakness towards 0.6630. For today, the next support at 0.6600 is likely out of reach. On the upside, 0.6725 is likely strong enough to cap any intraday recovery (minor resistance is at 0.6700).” Next 1-3 weeks: “Our latest narrative was from last Friday (18 Sep, spot at 0.6765) wherein ‘upward momentum has improved but NZD has to close above 0.6800 before further sustained advance can be expected’. NZD subsequently rose to a high of 0.6798 before staging a sudden and sharp decline yesterday (21 Sep). The outsize drop is accompanied by strong downward momentum and NZD is likely to weaken further to 0.6600. Resistance is at 0.6725 but only a move above 0.6760 would indicate that our view is wrong.”

Traders scaled back their open interest positions in crude oil futures markets by around 32.5K contracts on Monday, resuming the downside following Fr

Traders scaled back their open interest positions in crude oil futures markets by around 32.5K contracts on Monday, resuming the downside following Friday’s uptick. On the other hand, volume went up by more than 93K contracts following two daily drops in a row. WTI: Solid support emerges around $36.00 The barrel of WTI dropped and tested the vicinity of the $38.00 mark at the beginning of the week, just to rebound afterwards. The negative performance in the commodity was amidst declining open interest, signalling that a deeper pullback looks somewhat unlikely for the time being. The next support of relevance in case the downside picks up pace is at the monthly lows in the $36.00 zone per barrel.

Denmark Consumer Confidence dipped from previous -5.5 to -7.4 in September

The USD/CAD pair was seen oscillating in a range above the 1.3300 mark through the Asian session and consolidated the previous day's strong positive m

USD/CAD remained confined in a range and consolidated the overnight strong positive move.A subdued USD price action held bulls from placing fresh bets ahead of Powell’s testimony.A softer tone surrounding oil prices undermined the loonie and helped limit the downside.The USD/CAD pair was seen oscillating in a range above the 1.3300 mark through the Asian session and consolidated the previous day's strong positive move to six-week tops. Rising odds of fresh lockdown measures to curb the second wave of coronavirus outbreak triggered a selloff in the global equity markets. The anti-risk flow provided a strong boost to the US dollar's status as the reserve currency. Apart from this, a steep fall in crude oil prices undermined the commodity-linked currency – the loonie – and further contributed to the USD/CAD pair's momentum on the first day of a new trading week. However, expectations that the Fed Chair Jerome Powell will reiterate to keep interest rates lower for longer during his congressional testimony later held the USD bulls from placing fresh bets. This, in turn, led to a subdued/range-bound price action through the first half of the trading action on Tuesday. Meanwhile, a softer tone surrounding crude oil prices continued lending some support to the USD/CAD pair and helped limit the downside. Market participants now look forward to the US economic docket, featuring the releases of Existing Home Sales and Richmond Manufacturing Index. The data might influence the USD price dynamics and produce some short-term trading opportunities during the early North American session. The key focus, however, will be on Powell's testimony, which will play a key role in driving the near-term sentiment surrounding the greenback. Technical levels to watch  

Gold remains mildly heavy around $1,910, down 0.11% on a day, while heading into Tuesday’s European session. The bullion slumped the most since August

Gold prices remain on the back foot for second consecutive day.Sustained break of six-week-old support line, now resistance, keeps the sellers hopeful.200-bar EMA adds to the upside barriers, August month’s low offer extra support.Gold remains mildly heavy around $1,910, down 0.11% on a day, while heading into Tuesday’s European session. The bullion slumped the most since August 19 the previous day after breaking a 1.5-month-old ascending trend line. Although counter-trend traders tried to recover losses from $1,882 while reaching $1,920, failures to cross the previous support line keeps the bears hopeful. Hence, gold sellers are currently targeting the $1,900 psychological magnet before the previous day’s low of $1,882. Though, any further downside will have to respect August month’s bottom surrounding $1,863, if not then the early-July tops near $1,818 will return to the charts. In a case where the fresh pullback moves cross the immediate resistance line around $1,928/29, the 200-bar EMA level of $1,938 can question the buyers. If at all the upside momentum stays strong beyond $1,938, the previous week’s high around $1,973 will lure the bulls. It’s worth mentioning that the RSI conditions may probe bears below the $1,900 round-figures. Gold four-hour chart Trend: Bearish  

Cable is now expected to extend the correction lower to the 1.2730 region in the next weeks, in opinion of FX Strategists at UOB Group. Key Quotes 24-

Cable is now expected to extend the correction lower to the 1.2730 region in the next weeks, in opinion of FX Strategists at UOB Group. Key Quotes 24-hour view: “Yesterday, we detected the ‘weakened underlying tone’ and expected GBP ‘to drift lower to 1.2875’. However, GBP plunged to a low of 1.2776 before recovering to close on a weak note at 1.2816 (-0.77%). The rapid decline appears to be overdone and while GBP could retest the 11 Sep low of 1.2763, a sustained decline below this level is not expected (next support is at 1.2730). Resistance is at 1.2860 but only a move back above 1.2890 would indicate the current downward pressure has eased.” Next 1-3 weeks: “We have held the same view since last Thursday (17 Sep, spot at 1.2950) wherein ‘1.2763 is likely an interim bottom’ and GBP ‘could consolidate between 1.2800 and 1.3100 for a period of time before attempting to move below 1.2763’. After the strong decline yesterday (11 Sep), a break of 1.2763 would not be surprising but at this stage, is appears too soon to expect a move towards the next major support at 1.2660. All in, we expect GBP to trade with a downward bias towards 1.2730 but GBP has to close below this level before further weakness can be expected. On the upside, a break of 1.2930 (‘strong resistance’ level) would indicate that GBP needs more time before moving lower in a more sustained manner.”

Preliminary figures for Gold futures markets from CME Group noted open interest decreased by nearly 4.7K contracts at the beginning of the week. Volum

Preliminary figures for Gold futures markets from CME Group noted open interest decreased by nearly 4.7K contracts at the beginning of the week. Volume, instead, reversed two consecutive daily pullbacks and rose sharply by around 226.8K contracts. Gold remains capped by the $1,990 region Prices of the ounce troy of gold dropped markedly on Monday, briefly testing fresh multi-week lows in the sub-$1,900 region albeit regaining composure soon afterwards. The move, however, was on the back of shrinking open interest, leaving the likeliness of extra losses somewhat flat in the very near-term.

Here is what you need to know on Tuesday, September 22: The US dollar consolidated the surge to six-week highs, as the bulls took a breather amid holi

Here is what you need to know on Tuesday, September 22: The US dollar consolidated the surge to six-week highs, as the bulls took a breather amid holiday-thinned quiet trading and ahead of the US Federal Reserve (Fed) Chair Jerome Powell first of three appearances on Capitol Hill this week. According to the prepared remarks released early Monday, Powell is expected to say that the Fed committed to using all tools available to ensure a strong recovery. The uncertainty and delays in US fiscal stimulus combined with mounting coronavirus risks on the global economic recovery spurred the haven demand for the greenback at the expense of the risk assets. The omnipresent US-Sino tensions also added to the downbeat market mood. The Global Times reported that Beijing is unlikely to approve the Tik Tok-Oracle deal, which is in-principally approved by US President Donald Trump.Asian equities traded mostly lower, despite the easing of the Wall Street sell-off towards the closing. The US stock futures also traded on the back foot, reflective of the tepid risk sentiment. Across the fx board, AUD/USD tested two-week lows sub-0.7200 after the Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle unveils four policy options, including currency intervention and negative interest rates. USD/JPY stabilized around 104.50 following the rejection near the 104.80 region.EUR/USD remained under pressure above 1.1750 amid the virus resurgence and localized lockdowns in different countries in the Old Continent. The European Central Bank (ECB) President Christine Lagarde’s downbeat outlook on the economy also weighed on the shared currency.GBP/USD’s rebound stalled above 1.2800, as traders await the Bank of England (BOE) Governor Andrew Bailey’s speech and UK Prime Minister (PM) Boris Johnson’s emergency COBRA meeting amid a spike in infections. A two-week nationwide lockdown could be on the table. Pubs and restaurants in England will be shut after 2200 hours.Gold attempted a bounce on the $1900 level after Monday’s 3% slump. WTI licked its wounds below $40, in the face of rising concerns over global economic recovery.Cryptocurrencies’ remained in downside consolidation mode, with Bitcoin hovering below the $10,500 level.

WTI keeps the previous day’s bearish momentum while declining to $39.44, down 1.09% intraday, during the pre-European open trading on Tuesday. In doin

WTI over 1.0% on the failures to stretch bounces off $38.91 beyond $40.05.100-day SMA n the bears’ radar but bullish MACD can restrict further downside.Friday’s high adds to the upside barrier beyond the 50-day SMA.WTI keeps the previous day’s bearish momentum while declining to $39.44, down 1.09% intraday, during the pre-European open trading on Tuesday. In doing so, the oil benchmark stretches the U-turn from 50-day SMA towards 100-day SMA. 50% Fibonacci retracement of WTI’s June-August upside, near $39.25, offers immediate support to the quote ahead of the 100-day SMA level of $38.54. However, bullish MACD can probe the black gold’s further weakness past-$38.54 around the 61.8% Fibonacci retracement level of $38.16. Meanwhile, 38.2% of Fibonacci retracement, at $40.33, can question WTI’s upside beyond the $40.00 threshold. It should, however, be noted that the peak of Friday’s Doji candle, at $41.75, becomes the key resistance for buyers’ entry. WTI daily chart Trend: Further weakness expected  

EUR/USD risks a further pullback to the 1.1695 level in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “The sudden sh

EUR/USD risks a further pullback to the 1.1695 level in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “The sudden sharp decline in EUR that sent it plummeting to a low of 1.1730 came as a surprise (closed at 1.1769, -0.57%). While the rapid decline appears to be overdone, there is no sign of stabilization just yet. From here, there is scope to EUR to dip towards 1.1720 first before the current weakness should stabilize. Resistance is at 1.1790 followed by 1.1815.” Next 1-3 weeks: “In our latest narrative from last Friday (18 Sep, spot at 1.1850), we held the view that ‘there is still chance, albeit a diminishing one for EUR to stage another attempt to close below 1.1750’. That said, the sudden sharp decline yesterday (21 Sep) was not exactly expected as EUR posted a loss of -0.57% and closed at a 6-week low of 1.1769. While EUR did not close below 1.1750, the rapid improvement in downward momentum suggests EUR could weaken further towards the next major support at 1.1695. A clear break of this level would indicate that the early Sep high of 1.2011 could remain in place for longer period of time. Overall, EUR is expected to stay under pressure unless it can move above the ‘strong resistance’ level at 1.1855.”

Markets in Asia remain offered as global central bankers convey economic worries based on the COVID-19 wave 2.0. Also adding to the risk-off mood can

Asian shares track Wall Street’s losses as coronavirus (COVID-19) resurgence dent hopes of economic recovery.Downbeat comments from the ECB, RBA and the Fed also praise the sellers.New Zealand’s NZX 50 prepares for Wednesday’s RBNZ amid easing lockdown restrictions at home.Japanese markets are off for the second day, Sino-American tussle returns to the fore.Markets in Asia remain offered as global central bankers convey economic worries based on the COVID-19 wave 2.0. Also adding to the risk-off mood can be the latest tussle between the US and China over the South China Sea after American Secretary of State Mike Pompeo praised the UK, France and Germany for backing the rejection of Beijing's claim over the disputed land. Be it the Fed Chair Jerome Powell’s first version of a testimony or the ECB President Christine Lagarde’s sober words, not to forget RBA’s Deputy Governor Guy Debelle’s hint for intervention, everybody from the central bank fraternity is worried due to the virus. The policymakers are more concerned with the pandemic as the latest wave hits the UK and Europe and may dampen the expectations of economic recovery. While portraying the mood, the MSCI index of Asia-Pacific shares outside Japan drops 0.63% whereas China’s blue-chip index declines around 0.25% intraday ahead of Tuesday’s European session. It should additionally be noted that Australia’s ASX 200 and Hong Kong’s Hang Seng also shed over 0.50% but New Zealand’s NZX 50 becomes the exception and adds over 1.0% ahead of tomorrow’s RBNZ meeting. South Korea’s KOSPI drops the most in the region, down 2.20% by the time of press, as South Korean Producer Price Index Growth beat forecasts and reduced odds of further easing after the nation re-opened schools the previous day. Further, Indonesia’s IDX and India’s BSE Sensex are following the suit with losses below 1.0% as we write. Also portraying the risk-off mood is the 0.20% loss of S&P 500 Futures and mild gains of the US dollar index near a six-week top, flashed the previous day. Japanese markets are off and hence the US treasuries may move, mostly on the downside, on the European open. Although the lack of any major data/events suggests a continuation of the latest trend, further comments from the BOE and the Fed members, coupled with the UK PM Johnson’s emergency meeting, remain as the key catalysts to watch.

GBP/JPY stays mildly offered while declining to 133.98 during the pre-UK opening on Tuesday. In doing so, the pair sellers catch a breather around the

GBP/JPY stays heavy for fourth consecutive day, nears lowest levels since July 01.The key Fibonacci retracement may offer intermediate moves but buyers are less likely to enter below 100-day SMA.June low is on the bears’ radars below the immediate stop beyond 133.00.GBP/JPY stays mildly offered while declining to 133.98 during the pre-UK opening on Tuesday. In doing so, the pair sellers catch a breather around the lowest since early July amid the oversold RSI conditions. Other than the aforementioned momentum indicator, the 50% Fibonacci retracement of March-September upside by GBP/JPY also probes the bears around 133.35. As a result, the quote’s further weakness is limited beyond the key Fibonacci retracement support, a break of which will recall June month’s low of 131.76 back to the chart. On the contrary, July 24 low near 135 may restrict the pair’s short-term pullback. Though, any buyers are likely to remain cautious unless witnessing a break of 100-day SMA, at 135.73 now. Given the pair’s ability to cross 100-day SMA on a daily closing, multiple upside barriers around 136.60/65 can question the GBP/JPY buyers as portrayed by a short-term horizontal line. GBP/JPY daily chart Trend: Bearish  

Netherlands, The Consumer Spending Volume increased to -6.2% in July from previous -7%

Netherlands, The Consumer Confidence Adj rose from previous -29 to -28 in September

GBP/USD bounces off 1.2798 to currently around 1.2820 while heading into the London open on Tuesday. Unlike other major currency pairs that mostly por

GBP/USD snaps two-day losing streak, bounces off one-week low.US dollar pullback plays its role amid a quiet session.Pubs and restaurants in England will be shut after 10:00 PM.BOE’s Bailey, UK PM Johnson’s COBR meeting and Fedspeak in the spotlight.GBP/USD bounces off 1.2798 to currently around 1.2820 while heading into the London open on Tuesday. Unlike other major currency pairs that mostly portrayed US dollar gains, the Cable marked the coronavirus (COVID-19) woes at home to please the sellers the previous day. As a result, today’s announcements from the UK PM Boris Johnson’s emergency meeting will be the key. However, comments from the BOE Governor Andrew Bailey can offer immediate direction. With the virus-led deaths reaching to April/May levels, authorities in the UK and Europe are pushed to announce restrictions over activities. While local lockdowns have been in fashion off-late, the latest announcement of time-limit to stay in the English pubs and restaurants has been the most severe recently. Despite the latest moves from the UK policymakers, the GBP/USD recovers as the first version of the Fed Chair Jerome Powell struck economic pessimism. Also likely to activate the US dollar pullback could be the recent Sino-American tussle over the South China Sea after Trump administration member Mike Pompeo cheered support from the UK, France and Germany to reject Beijing’s claim over the disputed area. Against this backdrop, S&P 500 Futures decline 0.10% while the losses in Asia-Pacific, except Japan, are magnified as US-China tension joins the COVID-19 burden on the risk sentiment. Looking forward, BOE’s Bailey is to speak at a webinar hosted by the British Chamber of Commerce at 07:30 GMT. Ahead of the event, TD Securities said, “We still believe that markets over-interpreted the BoE's comments on negative rates in last week's MPC minutes, and look for confirmation from Governor Bailey that this is merely another step in the theoretical exercise of examining whether negative rates should be added to the BoE's toolkit.” Further, UK PM Johnson will chair today’s Cabinet Office Briefing Rooms (COBR), emergency response meeting, which in turn becomes the key event after BOE’s Andrew Bailey goes off. Although the recent restrictions on the pubs and restaurants have already limited the scope of any action from the Tory battalion, any surprise moves can’t be ruled out considering the severity of the virus woes in the nation. Following that, the second version of the Fed Chair Jerome Powell’s testimony will be important to watch. Although the Fed boss has already shown his cards in the first remarks, any surprise optimism may help the US dollar to extend the latest run-up. Technical analysis Unless breaking a descending trend line from September 01, currently around 1.2930, buyers are less likely to take entries. As a result, a horizontal area comprising July 21 top and the monthly low, between 1.2762 and 1.2767, is actually in the spotlight.  

EUR/USD is comatose around its 50-day simple moving average (SMA) of 1.1771, with investors waiting for fresh cues from the European stocks. On Monday

EUR/USD trades largely unchanged on the day near its 50-day SMA. The pair risks breaching key support on continued risk aversion in stocks. The options market has flipped bearish with Monday's drop. EUR/USD is comatose around its 50-day simple moving average (SMA) of 1.1771, with investors waiting for fresh cues from the European stocks.  On Monday, the pair fell by more than 0.5% from 1.1840 to 1.1732, and a. The sell-off gathered steam in Europe after major indices like Germany's DAX, France's CAC, and UK's FTSE fell by over 3% in early trade, boosting haven demand for the US dollar.  Investors sold risk assets on Covid's resurgence in Europe, the uncertainty surrounding the US elections, and the publication of leaked papers claiming compliance failures by large banks. If the risk aversion worsens, the EUR/USD pair will likely find acceptance below 1.1770. That would confirm a head-and-shoulders breakdown or a bearish reversal pattern on the daily chart.  EUR/USD Price Analysis: Teasing head-and-shoulders breakdown The futures tied to the major European equity indices are currently indicating a flat start to trading on Tuesday. The S&P 500 futures are also trading flat to negative.  EUR/USD's options market, however, has turned bearish with put options or bearish bets drawing higher premium than call options or bullish bets. In other words, investors are anticipating continued risk aversion and bigger losses in the common currency.  Apart from stock markets, the focus would be on the European Central Bank member Panetta's speech and Eurozone Consumer Confidence for September. The US will report Existing Home Sales for August and Richmond Fed Manufacturing Index for September. Also, the Federal Reserve chairman Jerome Powell's testimony to Congress is scheduled at 14:30 GMT.  EUR/USD options market flips bearish Technical levels  

The latest report published by the US Congressional Budget Office (CBO) on Monday, warned of the US federal debt expansion, courtesy of the coronaviru

The latest report published by the US Congressional Budget Office (CBO) on Monday, warned of the US federal debt expansion, courtesy of the coronavirus fiscal response, and its impact on the economy. Key takeaways (via Xinhua) "Even after the effects of the 2020 coronavirus pandemic fade, deficits in coming decades are projected to be large by historical standards," “The federal deficit to increase from 5 percent of US gross domestic product (GDP) in 2030 to 13 percent in 2050.” "High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on how that debt is financed, rising inflation.” US Dollar Index Price Analysis: DXY bulls catch a breather around six-week top

US dollar index (DXY) consolidates the previous day’s gains, the highest since late-August, while easing to 93.53 during early Tuesday. The greenback

DXY retraces gains from 93.77, the highest since August 12.50-day EMA probes the buyers despite bullish MACD.21-day EMA, 23.6% Fibonacci retracement offers immediate key support.US dollar index (DXY) consolidates the previous day’s gains, the highest since late-August, while easing to 93.53 during early Tuesday. The greenback gauge probed August 12 top on Monday but failures to cross 50-day EMA seem to have triggered the latest pullback. As a result, sellers are eyeing towards 93.17/16 support confluence including 21-day EMA and 23.6% Fibonacci retracement of June-September declines. Also acting as the downside filter for DXY traders is the monthly ascending trend line near 92.82, a break of which will direct sellers to the August 18 low of 92.12 ahead of highlighting the previous month’s bottom surrounding 91.75. Alternatively, a daily closing past-50-day EMA level of 93.81 will have to stay steady beyond the 94.00 threshold to convince the buyers. In doing so, 50% and 61.8% Fibonacci retracement level of 94.77 and 95.50 will lure the FXY bulls. DXY daily chart Trend: Pullback expected  

AUD/USD is currently trading unchanged on the day at 0.7220, having found bids just below the 50-day simple moving average (SMA) of 0.7199 early Tuesd

AUD/USD defends the 50-day SMA support at 0.7199. The bias remains bearish as RSI holds below 50.AUD/USD is currently trading unchanged on the day at 0.7220, having found bids just below the 50-day simple moving average (SMA) of 0.7199 early Tuesday.  While the average support has been defended, the bias remains bearish, as the 14-day relative strength index is still hovering below 50.  Acceptance under the Sept. 9 low of 0.7192 would validate the bearish lower high of 0.7345 created on Sept. 16 and likely yield a deeper decline to 0.70.  A daily close above the lower high of 0.7345 is needed to put the bulls back into the driver's seat.  Daily chartTrend: Bearish Technical levels  

Ahead of the release of US Treasury Department’s long-delayed semi-annual currency report, US President Donald Trump suggested his aides if the excha

Ahead of the release of US Treasury Department’s long-delayed semi-annual currency report, US President Donald Trump suggested his aides if the exchange rate of the US dollar could be adjusted, in order to counter the alleged yuan manipulation by China. President Trump noted: “I go to my guys, ‘What about doing a little movement on the dollar?’” In response, the US officials said: “‘Sir, we can’t do that. It has to float naturally,” as cited by Trump.   more to come ...

One-month EUR/USD risk reversals, a gauge of calls to puts, fell below zero on Monday, indicating investors are now adding bets (put options) to posit

One-month EUR/USD risk reversals, a gauge of calls to puts, fell below zero on Monday, indicating investors are now adding bets (put options) to position for weakness in the common currency.  Risk reversals declined to -0.075 – the lowest since July 20 – having topped out at 0.675 on Aug. 5.  EUR/USD fell by 0.56% to 1.1732 on Monday as renewed coronavirus concerns weighed over the global equities and fueled demand for the safe-haven US dollar. 

China’s highly influential media outlet, Global Times, carried an editorial-opinion piece on Tuesday, citing that the government is unlikely to approv

China’s highly influential media outlet, Global Times, carried an editorial-opinion piece on Tuesday, citing that the government is unlikely to approve the agreement between Tik Tok’s parent company ByteDance and Oracle, already approved by US President Donald Trump on Sunday.   Key reasons “Oracle will have the authority to check the source code of TikTok USA and updates. As the TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin, the Chinese version of TikTok.“ “TikTok Global will control the business of TikTok around the world except China. It will block IP from the Chinese mainland to access it. This means the Americans can take control of the global business of TikTok and reject Chinese to access it.”

The Turkish Lira fell to a new record low of 7.6374 per US dollar on Tuesday, surpassing the previous lifetime low of 7.6363 reached on Monday. The cu

The Turkish Lira fell to a new record low of 7.6374 per US dollar on Tuesday, surpassing the previous lifetime low of 7.6363 reached on Monday.  The currency depreciated by 1% on Monday – the biggest single-day decline since Aug. 12 – after rating agency Moody's warned that Turkey's buffers against a balance-of-payments crisis are "almost depleted." Moody's recently downgraded Turkey's debt rating deeper into Junk. The sovereign's credit rating was cut to B2, five levels below investment grade and on par with Egypt, Jamaica, and Rwanda.  Lira is now down 28% on a year-to-date basis, having depreciated by 12.48% in 2019. 

According to a survey conducted by the American Chamber of Commerce in South China, a majority of the companies said that the supply chain disruptions

According to a survey conducted by the American Chamber of Commerce in South China, a majority of the companies said that the supply chain disruptions due to the coronavirus pandemic-imposed lockdowns have eased, the South China Morning Post (SCMP) reports. Key findings “More than 78% of the 172 companies said they had no supply chain difficulties, an increase of 46% since March. Of the 22% of respondents that were still experiencing supply chain disruptions.” “Some 46% said it was because of problems in transport and logistics, according to the survey of US, Chinese and other multinational firms conducted between August 28 and September 8.” “Fully 46% of companies reported a drop in revenue in their Chinese operations in the first half of 2020. “ Market reaction Despite the optimism from the Chinese companies, the sentiment remains tepid amid growing virus cases in the Old Continent. S&P 500 futures shed 0.20% while the Asian equities reported moderate losses, tracking the sell-off in Wall Street overnight. 

NZD/USD's daily chart shows a double top pattern – the buyers failed to chew through offers around 0.68 on Friday and on Sept. 2. The Sept. 9 low of 0

NZD/USD has carved out a double top pattern on the daily chart. A close below the neckline support of 0.6601 would confirm a breakdown.  NZD/USD's daily chart shows a double top pattern – the buyers failed to chew through offers around 0.68 on Friday and on Sept. 2.  The Sept. 9 low of 0.6601 is the neckline support of the double top pattern. A close below that level would create room for a sell-off to 0.64 (target as per the measured move method).  A drop to 0.6601 looks likely, as the daily chart is showing a bearish reversal candlestick pattern. The pair fell by 1.23% on Monday, validating or confirming the bullish-to-bearish trend change signaled by Friday's inverted hammer.  At press time, the pair is trading at 0.6674, having hit a low of 0.6653 early today. A close above 0.68 is needed to invalidate the bearish candlestick pattern.  Daily chartTrend: Bearish Technical levels  

USD/CHF remains mildly bid while trading near 0.9153 during early Tuesday. The pair buyers cheer the successful break of the 21-day SMA amid normal RS

USD/CHF rises for the third consecutive day despite failing to provide a daily close beyond 50-day SMA.Normal RSI conditions, sustained trading beyond 21-day SMA directs buyers toward a falling trend line from August 03.Sellers may wait for the downside break of the September 10 low before taking any entries.USD/CHF remains mildly bid while trading near 0.9153 during early Tuesday. The pair buyers cheer the successful break of the 21-day SMA amid normal RSI conditions but the 50-day SMA seems to limit the immediate upside. Even if the quote closes beyond the said SMA resistance of 0.9150, a seven-week-old resistance line near 0.9180 can will question further upside by USD/CHF. Should the bulls manage to conquer 0.9180, the 0.9200 threshold and 61.8% Fibonacci retracement of June 30 to August 31 fall, close to 0.9330, will be on their radars. On the contrary, a downside break of 21-day SMA, currently around 0.9100, will not be enough to recall the sellers as there are multiple supports adjacent to 0.9050/45 that also includes September 10 bottom. Furthermore, the August month’s low of 0.8998 and the late January 2015 high around 0.8770 are likely levels that can lure the bears past-0.9045. USD/CHF daily chart Trend: Pullback expected  

Gold (XAU/USD) is licking its wounds after plummeting 3% on Monday, as the haven demand for the US dollar resurfaced amid growing coronavirus risks an

Gold (XAU/USD) is licking its wounds after plummeting 3% on Monday, as the haven demand for the US dollar resurfaced amid growing coronavirus risks and US fiscal deadlock. The greenback jumped to six-week highs across its main competitors on concerns over the global economic recovery, especially after localized lockdowns were announced in key European economies.    ‘Sell everything’ mode returned to markets and knocked down gold alongside global equities. Despite the slump, the metal managed to close the day above the $1900 mark. Let’s look at the technical charts to gauge whether the bulls could be offered any reprieve ahead of Day 1 of the Fed Chair J. Powell’s testimony. Gold: Key resistances and supports The Technical Confluence tool shows that gold failed to sustain the rebound from six-week lows above the powerful barrier at $1915, which is a convergence of the Fibonacci 23.6% one-month and previous high on 15-minutes. Therefore, the sellers now probe the next downside target at $1910, where the Fibonacci 38.2% one-day, SMA10 one-hour and previous low four-hour intersect. The Fibonacci 161.8% one-week at $1907 is a soft cap, which could be tested if the bulls fail to defend the $1910 level. Acceptance below the latter could trigger a sharp sell-off towards $1891, the pivot point one-week S3. On the flip side, a firm break above the aforesaid $1915 barrier is critical for a sustained recovery momentum. The next minor resistance is aligned at $1917, the SMA10 on 15-minutes. The bulls will then aim for $1927, the confluence of the Fibonacci 61.8% one-day and SMA100 15-minutes. The bearish bias will likely remain intact unless gold recaptures the fierce resistance at $1933 with conviction. The hurdle is the intersection of the pivot point one-week S1 and the previous week low. Here is how it looks on the tool   About the Confluence Detector   The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. Learn more about Technical Confluence

Markets have started the week off in a risk-off mood as the relentless spread of the coronavirus in Europe has troubled the outlook for the global rec

Markets lacking impetus as COVOID-19 spreads and still no vaccine in sight.WHO-backed program to facilitate poor countries' access to coronavirus vaccines.Markets have started the week off in a risk-off mood as the relentless spread of the coronavirus in Europe has troubled the outlook for the global recovery. There is little clarity from the powers that be as to when exactly a vaccine might be realised and available. A vaccine would normally take years, if not decades, to develop but researchers have hoped to achieve the same amount of work in only a few months. Speculation that a vaccine could come as soon as this fall is starting to dim as we approach the regular flu season. There had been some optimism that if trials are successful, then a small number of people - such as healthcare workers - may be vaccinated before the end of this year. The BBC reported on a number os steps that would need to accomplished, from the trials that need to show the vaccine is safe and to find a way of producing the vaccine on a huge scale must be developed for the billions of potential doses Finally there will be the huge logistical challenge of actually immunising most of the world's population, the BBC noted. On that point, there are more than 60 wealthy nations have joined a WHO-backed program to facilitate poor countries' access to coronavirus vaccines. The World Health Organization has in coordination with the global vaccine alliance group Gavi and the Coalition for Epidemic Preparedness Innovations (CEPI) created a mechanism aimed at ensuring a more equitable distribution of any future COVID-19 vaccines. But the mechanism, known as Covax, has struggled to raise the funds needed to provide for the 92 low-income countries and other economies that quickly signed up. In any case, the vaccine will need to be administered to around 60-70% of people in order to stop it spreading easily (known as herd immunity). This would be billions of people around the world even if the vaccine worked perfectly.  "The purpose of the Covax facility is to try to work with every country in the world," Gavi chief Seth Berkley said of China's absence.  "I can assure you that we have had conversations and will continue to have conversations with all countries," he added. The United States which is in the process of withdrawing from the organization, is not on the list also. Meanwhile, WHO chief Tedros Adhanom Ghebreyesus voiced optimism that so many countries -- representing nearly two-thirds of the global population -- had agreed to participate in the  WHO-backed program to facilitate poor countries' access to coronavirus vaccine. COVID-19 is an unprecedented global crisis that demands an unprecedented global response. Vaccine nationalism will only perpetuate the disease and prolong the global recovery,. This is not charity. It's in every country’s best interest. We sink or we swim together. Market implications The US dollar has started to show signs of life again as equities sink towards correction levels at the start of the week. The combination of stagnant recoveries, a lack of clarity over stimulus packages and the potential for extended lockdowns are playing into the hands of the greenback once again.  This could have a material impact on teh price of gold:Gold Price Analysis: XAU/USD bullish bias starting to fade 

S&P 500 Futures stay mildly heavy near the July 31 low. Policymakers from the Fed, RBA and the ECB have been dovish off-late. US-China tussle adds to

S&P 500 Futures stay mildly heavy near the July 31 low.Policymakers from the Fed, RBA and the ECB have been dovish off-late.US-China tussle adds to the risk-off mood amid a light calendar and off in Tokyo.S&P 500 Futures drop to 3,270, down 0.10% on a day, during early Tuesday. In doing so, the equity derivative declines for the fifth consecutive day. It’s worth mentioning that the US stock gauge slumped to the lowest since July 31 the previous day as fears of the coronavirus (COVID-19) resurgence roiled the global markets. Read: Wall Street Close: Benchmarks start off the week in the red Having heard fears waning economic recovery from the European Central Bank (ECB) President Christine Lagarde and Germany’s Finance Minister Olaf Scholz, the risk barometer recently reacted to the downbeat comments from the Fed and the RBA members. Following the Fed Chair Jerome Powell’s pessimistic hearing of Testimony, the St. Louis President James Bullard also said that the Fed will be much less pre-emptive about hiking rates. While being extreme, the RBA Deputy Governor Guy Debelle hinted towards the central bank intervention, either through bonds or FX, during his latest speech on "The Australian Economy and Monetary Policy" at the Australian Industry Group conference. Elsewhere, US Secretary of State Mike Pompeo took helps from France, Germany and the UK to reject China’s claims of the South China Sea at the United Nations (UN). The troubled are joins Taiwan as the latest subject for the Sino-American tussles. Against this backdrop, stocks in Australia, China, South Korea and Hong Kong are down near 1.0%, on an average, whereas New Zealand’s NZX 50 bucks the trend with 0.80% gains ahead of tomorrow’s RBNZ. Moving on, the absence of major data/events in Asia can restrict any scope of change in the market mood, which in turn can keep favoring the safe-havens. Though, limited moves can be expected ahead of the US session where a few more of the Fed speakers, led by Chairman Jerome Powell, will entertain the market players.

West Texas Intermediate (WTI), the North American oil benchmark, is trading near $39.65 at press time, having failed to clear the 200-day simple movin

WTI's bounce from overnight lows faces rejection at the 200-day SMA hurdle. Prices fell by 4% on Monday on risk-off and prospects of increased Libyan exports. West Texas Intermediate (WTI), the North American oil benchmark, is trading near $39.65 at press time, having failed to clear the 200-day simple moving average (SMA) hurdle at $40.03 an hour ago.  Prices fell by more than 4% to $38.87 on Monday as financial markets turned risk-averse on the resurgence of coronavirus. Prospects of Libya resuming oil exports added to bearish pressures around the black gold.  COVID concerns Investors sold oil and other risk assets on Monday on fears new coronavirus restrictions could cause bigger economic damage than the second quarter.  On Monday, German Health Minister Jens Spahn took note of the worrying rise in the COVID cases in France, Austria, and the Netherlands and warned that Germany would sooner or later import cases.  Meanwhile, the former US Food and Drug Administration Commissioner Scott Gottlieb said that the nation is likely to experience "at least one more cycle" of the virus in the fall and winter. The US stocks fell sharply, with the S&P 500 hitting the lowest level since July. Gold, a traditional safe haven, declined by 3%, while the dollar index, which gauges the greenback's value against majors, rose more than 5%.  Libya to resume oil exports Apart from risk-off, Libya's plan to reopen its oil industry likely weighed over oil prices.  Analysts at investment bank Goldman Sachs believe Libya could quickly resume its oil exports, as it holds large inventory at ports. The bank expects the nation's oil output to rise to 550,000 barrels per day by the end of December.  Oil is likely to remain under pressure on Tuesday on renewed coronavirus fears and Libya oil news. Traders, however, should keep an eye on potential reversal higher in the US equities. Federal Reserve's chairman Jerome Powell is likely to reiterate the central bank's dovish stance during this testimony to Congress, scheduled at 14:30 GMT.  Technical levels  

USD/JPY prints 0.11% intraday losses while declining to 104.53 during the early Tuesday. The yen major dropped to the lowest since March 12 the previo

USD/JPY fails to extend recovery moves beyond 104.84.Virus woes, Sino-American tension weigh on the risk-tone sentiment.Policymakers from the Fed, RBA and ECB speak dovish as hopes of economic recovery wanes.Off in Japan, a light calendar can restrict the counter-trend moves unless any surprises.USD/JPY prints 0.11% intraday losses while declining to 104.53 during the early Tuesday. The yen major dropped to the lowest since March 12 the previous day, before bouncing off 104.00 to close on a positive side near 104.65. Although the US dollar’s broad strength, amid risk-off mood, favored the quote earlier, failures to keep the pullback may join downbeat comments from the Federal Reserve members in pleasing the USD/JPY bears. Economic optimism fades… Not before a few days, global markets were cheering hopes of economic recovery after the coronavirus (COVID-19) hit the macros. However, the recent resurgence in the pandemic, mainly in Europe and the UK, probes the bulls. Also joining the line are the latest comments from the US Secretary of State Mike Pompeo from the United Nations (UN) meet. The Trump administration member thanked, France, Germany and the UK, via twitter, as they backed rejection to China’s claim over the South China Sea. Elsewhere, the Fed Chair Jerome Powell said, in the first of testimony, that the path ahead of the economy remains “highly uncertainty”. Further, the Federal Reserve Bank of St. Louis President, James Bullard, also spoke dovish on Bloomberg's interview while saying, that the Fed will be much less pre-emptive about hiking rates. Not only the Federal Open Market Committee (FOMC) members but the decision-makers from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) also marked their worries in the latest appearances. As a result, S&P 500 Futures drop for the fifth day in a row to 3,270 as we write. Given the off in Japan, due to the Autumnal Equinox Day, coupled with an absence of major data/events, the bears are likely to keep the reins until any news on the vaccine erupts. Technical analysis Unless breaking above the August month’s low near 105.10, buyers are less likely to re-enter the ring.  

RBA Deputy gov. Guy Debelle says it is plausible that the worse is behind us. Debelle is currently taking questions in an event titled 'The Australian

RBA Deputy gov. Guy Debelle says it is plausible that the worse is behind us. Debelle is currently taking questions in an event titled 'The Australian Economy and Monetary Policy'. He has clarified that the RBA is no more likely to go negative or intervene in forex markets now than before, but that there are those options which are being considered.  More here: RBA's Debelle: RBA is assessing currency market intervention – ReutersThe impact on AUD/USD has seen the price fall 0.4% so far.    

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7872 versus Monday's fix at 6.7595.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7872 versus Monday's fix at 6.7595.

GBP/USD bounces off an intraday low of 1.2803 to 1.2817 during Tuesday’s Asian session. In doing so, the Cable traders trim the previous day’s losses.

GBP/USD retraces from the lowest in one week to regain 1.2800.Bearish MACD, monthly falling trend line keeps the sellers hopeful.Two-month-old horizontal support becomes the key, 1.3010/15 adds to the upside barriers.GBP/USD bounces off an intraday low of 1.2803 to 1.2817 during Tuesday’s Asian session. In doing so, the Cable traders trim the previous day’s losses. However, bearish MACD pushes the buyer to take entries only on the break of a descending trend line from September 01, currently around 1.2930. It should also be noted that a confluence of 38.2% Fibonacci retracement of June-September upside and 50-day SMA around 1.3010/15 will challenge the bulls afterward. Meanwhile, a horizontal area comprising July 21 top and the monthly low, between 1.2762 and 1.2767, provides crucial support to the pair. Also acting as downside barriers are the 61.8% Fibonacci retracement level and July 09 high, respectively close to 1.2720 and 1.2670. GBP/USD daily chart Trend: Bearish  

According to investment banking giant Goldman Sachs Inc., Libya's oil production will rise to 550,000 barrels per day (bpd) by the end of December. Li

According to investment banking giant Goldman Sachs Inc., Libya's oil production will rise to 550,000 barrels per day (bpd) by the end of December.  Libya's oil industry, which has been shut down since January because of civil war, is now reopening, the nation's state energy firm National Oil Corp. said on Saturday.  Analysts at Goldman Sachs believe the nation can resume exports quickly given it holds large crude inventory at ports. 

AUD/JPY slumps from 75.73 to 75.45 following the downbeat comments from RBA policymaker amid Tuesday’s Asian session. Other than Debelle’s hint to for

AUD/JPY stays depressed near the lowest since seven weeks after RBA’s Deputy Governor Guy Debelle’s speech.RBA board member suggests market intervention is a policy option.Virus woes, Sino-American tussle also weigh on the quote.AUD/JPY slumps from 75.73 to 75.45 following the downbeat comments from RBA policymaker amid Tuesday’s Asian session. Other than Debelle’s hint to foreign exchange intervention, challenges to the risk-tone sentiment, emanating from the coronavirus (COVID-19) and US-China tension, also please the pair bears near the lowest since August 03. During his speech on "The Australian Economy and Monetary Policy" at the Australian Industry Group conference, RBA’s Guy Debelle said that the board continues to assess other monetary policy options. The policymaker also cited bond purchases and foreign exchange intervention as available options. Read: RBA's Debelle: RBA is assessing currency market intervention It should be noted that the pair marked the biggest losses in two weeks the previous day as global markets praised the risk-aversion wave. Increasing chatter over the national lockdowns in Europe and the UK, backed by the recent surge in the COVID-19 numbers, could be cited as the main catalyst for the traders’ rush to risk-safety. Additionally, the tension between the US and China adds pressure on the AUD/JPY as China is the largest customer of Australia. Recently, the American Secretary of State Mike Pompeo thanked the UK, Germany, and France to mark the joint rejection of China's claims in the South China Sea at the United Nations (UN). The event intensifies the rivalry among the world’s two largest economies. Even so, S&P 500 Futures snaps a four-day losing streak while gaining 0.23% to 3,282 as we write. Looking forward, off in Japan may restrict the pair’s moves but risk aversion can keep the bears happy. Technical analysis The pair’s break of the 50-day SMA dragged to the lowest since August 03 while bearish MACD signals indicate further downside.  

The offered tone around the Australian dollar strengthened on Tuesday, pushing AUD/USD lower from 0.7235 to 0.7205 after Reserve Bank of Australia's (

AUD/USD runs into offers as RBA's Debelle says intervention is a policy option. A weaker AUD would be beneficial for Australia's economy, Debelle added. Sustained risk aversion in global equities could yield a deeper decline in the AUD.The offered tone around the Australian dollar strengthened on Tuesday, pushing AUD/USD lower from 0.7235 to 0.7205 after Reserve Bank of Australia's (RBA) deputy governor Guy Debelle said a weaker Aussie dollar would bode well for the Australia economy.  "The board is watching developments in the forex markets closely, and while intervention may not be effective as the AUD is broadly aligned with fundamentals, a lower exchange rate would definitely be beneficial for the economy," Debelle said.  The policymaker added that intervention is a policy option, and the bank could buy bonds further out along the curve to lower rates at longer maturities.  Debelle mentioned lower cash rates and negative rates as other options and added that the economy is currently seeing a gradual and uneven recovery.  The policymaker's comment on the intervention being an option isn't surprising, given the AUD/USD pair has rallied by over 1,700 pips over the past six months. However, as noted earlier, the central bank believes the exchange rate is aligned with fundamentals. As such, the bank is unlikely to go beyond occasional jawboning any time soon.  However, the pair could suffer a deeper drop during the day ahead if the risk aversion worsens. Global equities fell on Monday, pushing the US dollar higher across the board as a resurgence of coronavirus cases across Europe and other parts of the world threatened to derail the nascent economic recovery.  Technical levels  

Deputy Governor Guy Debelle said on Tuesday that Australia's central bank is assessing various monetary policy options including currency market inter

Deputy Governor Guy Debelle said on Tuesday that Australia's central bank is assessing various monetary policy options including currency market intervention and negative rates to meet its inflation and employment goals.  More here: RBA's Debelle: RBA is assessing currency market intervention AUD/USD plummets 0.4%

Deputy Governor Guy Debelle said on Tuesday that Australia's central bank is assessing various monetary policy options including currency market inter

Deputy Governor Guy Debelle said on Tuesday that Australia's central bank is assessing various monetary policy options including currency market intervention and negative rates to meet its inflation and employment goals. Given the outlook for inflation and employment is not consistent with the Bank’s objectives over the period ahead, the Board continues to assess other policy options," Debelle said in a speech titled 'The Australian Economy and Monetary Policy. One option being considered is to buy bonds with maturities beyond three years to help lower longer-dated government bond rates, Debelle said. FX intervention Reuters reported that foreign exchange intervention was another potential policy option, though explained that Debelle said it was not clear whether this would be effective given the Australian dollar was "aligned with fundamentals." A lower exchange rate would definitely be beneficial for the Australian economy, so we are continuing to watch developments in the foreign exchange market carefully, Debelle added. Reuters reports that a third option would be to lower the cash rate without taking it into negative territory. Negative rates success is mixed And, the final option was negative rates, as Reuters reported, but explained that Debelle said the empirical evidence on its success was mixed. The RBA has previously said on multiple occasions that negative rates were "extraordinarily unlikely" in Australia though Debelle did not repeat that message.

In its latest report, seen early Tuesday in Asia, JP Morgan suggests selling AUD/NZD unless it breaks the monthly resistance line, currently around 1.

In its latest report, seen early Tuesday in Asia, JP Morgan suggests selling AUD/NZD unless it breaks the monthly resistance line, currently around 1.0900. However, the bank is not clear on the factors, other than the technical signals, that will trigger the selling. Key quotes Short-term market is very long the cross. Positive local news from Australia with regards to virus numbers in Victoria coming down and as USD/CNH continues to find sellers on rallies. NZD should be much lower in a year as the RBNZ likely go to negative rates. Also read: AUD/NZD Price Analysis: Bulls seeking a break and restest of overhead resistance

EUR/USD is trading near the head-and-shoulders (H&S) neckline support of 1.1770 at press time. A close below the support line would confirm H&S breakd

EUR/USD has charted a bearish reversal pattern on the daily chart. A close below 1.1770 would confirm the trend change. EUR/USD is trading near the head-and-shoulders (H&S) neckline support of 1.1770 at press time.  A close below the support line would confirm H&S breakdown or a bullish-to-bearish trend change and open the doors for 1.1530 (target as per the measured move method).  The pair has already dived out of a trendline rising from May 14 and July 10 lows. The bullish trendline's downside break is backed by a below-50 or bearish reading on the 14-day relative strength index.  As such, a  head-and-shoulders breakdown looks likely. The bias would turn bullish if the pair rises above 1.1918 (Sept. 10 high).  Daily chartTrend: Bearish Technical levels  

Guy Debell, the Assistant Governor (Financial Markets) at the Reserve Bank of Australia, will be speaking at the top of the hour on the topic, 'The Au

Guy Debell, the Assistant Governor (Financial Markets) at the Reserve Bank of Australia, will be speaking at the top of the hour on the topic, 'The Australian Economy and Monetary Policy.'There will likely be some comments that will interest markets and a live link to the event can be accessed here. Guy Debelle is the Assistant Governor (Financial Markets) at the Reserve Bank of Australia, a position he has held since March 2007. In that role, he has oversight of the Bank's operations in the domestic and global financial markets, including the management of Australia's foreign reserves. He briefs the Reserve Bank Board on developments in financial markets at the monthly Board meetings and participates as the Bank's representative in a number of global fora, including the BIS Committee on Global Financial Stability. AUD/USD update  AUD/USD: Bears battle key support line near two-week low beyond 0.7200

Silver prices take the bids near $25.20, up 1.8% intraday, during Monday’s Asian session. In doing so, the white metal trims the previous day’s losses

Silver recovers from 14-week low to regain $25.00.Sustained break of two-month-old support line keeps sellers hopeful.The key Fibonacci retracements, 100-day EMA offer short-term support.Silver prices take the bids near $25.20, up 1.8% intraday, during Monday’s Asian session. In doing so, the white metal trims the previous day’s losses, the biggest since August 11, which dragged it to the multi-day bottom. While the downside break of an ascending trend line from July 28 triggered the bullion’s fall, bearish MACD and 50-day EMA seem to restrict silver’s latest recovery moves. Other than the $25.17 EMA resistance, the September 05 low near $25.85 will also challenge the buyers’ attempt to regain the status beyond an upward sloping trend line, previous support, around $26.55. On the flip side, 50% and 61.8% Fibonacci retracements of the metal’s run-up between June and August, respectively around $23.40 and $21.85, will be the key levels on the bears’ radars. Also acting as downside support for silver traders could be the 100-day EMA level of $22.76 and lows marked during late-July near $22.30/25. Silver daily chart Trend: Bearish  

NZD/USD struggles for a clear direction near 0.6665 during Tuesday’s Asian session. The pair dropped the most since early-June on Monday as the US dol

NZD/USD consolidates the previous day’s losses from the seven-day low of 0.6651.Virus-led risk aversion remains as the key driver, US dollar strength cheered the most.Traders seem to prepare for Wednesday’s RBNZ, Fedspeak can offer intermediate moves.NZD/USD struggles for a clear direction near 0.6665 during Tuesday’s Asian session. The pair dropped the most since early-June on Monday as the US dollar strength helped kiwi bears prepare for Wednesday’s Reserve Bank of New Zealand (RBNZ) monetary policy meeting. Not only the coronavirus (COVID-19) woes but the Sino-American tension and the US stimulus deadlock were also contributors to the latest risk-off mood. Is it the pre-RBNZ warm-up? With the surge in virus numbers from Europe and the UK recalling local lockdowns, also indicating fears of national restrictions, the economic pessimism grew on Monday. The same push policymakers from the European Central Bank (ECB) and the US Federal Reserve to mark concern over the latest economic recovery during their latest public appearances and speeches. Further, the American moves to reject Beijing’s claim over the South China Sea gets support from the UK, France and Germany at the United Nations (UN). The issue has recently sparked tensions between the US and China while both the economies are still jostling over trade terms. It’s worth mentioning that the delay in the US stimulus and Brexit woes also add to the market pessimism and weigh on the risk barometers. While portraying the same, Wall Street dropped on Monday whereas S&P 500 Futures await fresh clues at 3,280, up 0.15% intraday as we write. The US dollar index (DXY) was the winner of the day with over 0.70% gains to probe the highest since August 12. The greenback gauge seesaws around 93.55 by the time of the press. Moving on, a light calendar may keep traders wander around the multi-day low but comments from the US Federal Reserve (Fed) policymakers may offer intermediate moves ahead of tomorrow’s RBNZ meeting. Although the New Zealand central bank isn’t expected to alter its current monetary policy, a dovish outlook is widely anticipated. Hence, analysts at the Australia and New Zealand Banking Group said, “We don’t expect any change on policy, but the tone will be dovish and they may signal an intention to flex the pace of the LSAP more to help flatten the curve, which would take the pressure off the NZD.” Technical analysis An ascending trend line from August 20, at 0.6675 now, offers immediate resistance to the pair whereas a 50-day SMA near 0.6640 lures the bears due to the previous day’s downside break of the aforementioned support line, now resistance.  

USD/CAD is a mixed techcnial picture until the price breaks the weekly and daily resistance structure. However, the monthly chart is above a firm supp

USD/CAD bulls seeking a break of resistance for a convincing bullish bias. The monthly chart is dominant while price holds above strong support. USD/CAD is a mixed techcnial picture until the price breaks the weekly and daily resistance structure. However, the monthly chart is above a firm support structure. If the price does move higher, there will be a confluence between the monthly, weekly and daily charts for a firmly bullish bias. The following is a topdown analysis of the pair across the aforementioned time frames. Monthly chart: Bullish above strong support The price of the pair is holding above a prior resistance now turned to support and an upside extension is expected.  W1 Chart: Bullish when above resistance The problem we have is that the weekly time frame shows the price below resistance. D1 Chart: Price needs to break resistance Tghe above illustration is what the bulls are waiting for. A break above the resistance will likely give rise to a restest of the structure from which bulls will look to get on board with as the price heads higher. 

USD/CAD seesaws around 1.3310 amid the initial Asian trading on Tuesday. The loonie major confirmed a bullish chart pattern the previous day while ris

USD/CAD keeps the 25-pip range between 1.3295 and 1.3320 while probing the August 12 high.Buyers rely on the confirmation of a bullish chart pattern, 50-day SMA also strengthens the neckline support.USD/CAD seesaws around 1.3310 amid the initial Asian trading on Tuesday. The loonie major confirmed a bullish chart pattern the previous day while rising to the highest in over 1.5 months. Considering the absence of the overbought RSI conditions and sustained trading beyond the neckline of stated inverse head-and-shoulders, bulls are likely to keep reins. As a result, August month’s top near 1.3400 becomes the immediate resistance on optimists’ radar whereas the July 30 peak around 1.3460 can challenge the buyers afterward. If at all USD/CAD remains positive beyond 1.3460, the late-June bottom surrounding 1.3485 can offer an intermediate halt during the rise to the 1.3500 threshold. Alternatively, the pair’s 50-day SMA adds strength to the 1.3265/45 neckline area that becomes the key support for sellers to watch. Should USD/CAD prices drop below 1.3245 on a daily closing, the mid-September bottom close to 1.3130/25 will be in the spotlight. USD/CAD daily chart Trend: Bullish  

Bank of America stays bullish on the safe-haven currencies for the rest of 2020 while citing fewer odds of strong economic recovery. Also in their arg

Bank of America stays bullish on the safe-haven currencies for the rest of 2020 while citing fewer odds of strong economic recovery. Also in their arguments was the likely delay in the coronavirus (COVID-19) vaccine that can weigh on risks. Key quotes We expect that a weak recovery of the global economy and delays on when a Covid19 vaccine will allow a move back to normality will squeeze long positions in risk assets.   We see limits in further macro policy support. For the rest of the year, we are positive on JPY, USD and CHF against EUR, GBP, CAD and SEK. Based on these arguments, we went short USDJPY in mid-July via a 3 month USD put /JPY call, to hedge against higher volatility this fall. Market implications While the risk-off mood is already at its full steam, such bank reports strengthen traders’ perspective towards the safe-haven currencies.

The Telegraph reports that UK PM Johnson told MPs that he will be telling Britons Tuesday that “people should work from home if you can”. More to come

The Telegraph reports that UK PM Johnson told MPs that he will be telling Britons Tuesday that “people should work from home if you can”. More to come  

Gold retraces from the lowest from August 12 to $1,913 amid the early Asian session on Tuesday. The bullion dropped to the multi-day low as the market

Gold prices pullback after dropping the most in over a month.US dollar strength stopped buyers from cheering the drawdown in equities amid waning market sentiment.Virus woes are the strongest catalysts, US stimulus deadlock, Brexit and the Sino-American tussle also weigh on the mood.Risk catalysts to keep the powder dry, the second version of Fed Chair’s testimony will also be the key.Gold retraces from the lowest from August 12 to $1,913 amid the early Asian session on Tuesday. The bullion dropped to the multi-day low as the market’s risk-off tone preferred the US dollar above all, which in turn has an inverse correlation with the safe-haven metal. Virus woes take the lead in fuelling the greenback… The coronavirus (COVID-19) resurgence in Europe and the UK sours the trading sentiment off-late. While local lockdowns have been in fashion in some parts of the bloc and northern Britain, pubs and restaurants in England are to have a closing time of 10:00 PM starting from Tuesday. While the BOE policymakers are yet to mark their pessimism, the European Central Bank (ECB) President Christine Lagarde and Germany’s Finance Minister Olaf Scholz have already spoken dovish the previous day. On the other hand, the Fed Chairman’s first version of testimony also suggested that the path ahead for the economy remains "highly uncertain". While adding color to the risk-off mood, US Secretary of State Mike Pompeo praised Germany, France and the UK to back ejection of China's unlawful maritime claims in the South China Sea at the United Nations. Additionally, the struggle of the American Congress, in overcoming the stimulus deadlock ahead of the September-end deadline, joins the risk of hard Brexit to portray the market’s downbeat mood. Amid all these catalysts, Wall Street marked losses on Monday whereas S&P 500 Futures seem to pause around eight-week lows by the time of press. It’s worth mentioning that the US dollar index (DXY) probed August 12 high during the previous day’s run-up before settling around 93.54. Moving on, a light calendar in Asia keeps the risk catalysts on the driver’s seat. However, comments from the US Federal Reserve Chairman Jerome Powell and other Fed policymakers, during separate events, will entertain momentum traders. Technical analysis A sustained break below the 50-day SMA, at $1,917 now, directs the sellers toward the August 12 low near $1,863.  

Speaking in an interview with Bloomberg, CEO of the Federal Reserve Bank of St. Louis, James Bullard, says that the Fed will be much less pre-emptive

Speaking in an interview with Bloomberg, CEO of the Federal Reserve Bank of St. Louis, James Bullard, says that the Fed will be much less pre-emptive about hiking rates. Key comments Bullard said that he supported the FOMC decision last week. Bullard expects that the Bank's new approach to lifting inflation will work. Bullards said that the Bank will be much less pre-emptive about raising rates. Bullards said there may be enough fiscal aid in the pipeline for recovery. Market implications Markets have already priced in the stance at the Fed that will help to ensure plentiful USD supply. Fed Chairman Powell appears before the House Financial Services panel tomorrow with US Treasury Secretary Mnuchin, and Powell will also appear before the House Panel on COVID-19 on Wednesday.

AUD/JPY consolidates the losses nears the six-week lows while taking rounds to 75.60 amid the early Tuesday morning in Asia. The pair’s break of the 5

AUD/JPY bears cheer the break of 50-day SMA around the lowest since August 03.Bearish MACD adds strength to the sellers’ confidence.Bulls need a clear break beyond July month’s peak for re-entry.AUD/JPY consolidates the losses nears the six-week lows while taking rounds to 75.60 amid the early Tuesday morning in Asia. The pair’s break of the 50-day SMA dragged to the lowest since August 03 while bearish MACD signals indicate further downside. Other than the 75.00 threshold, July 24 low near 74.85 can provide strong support for the pair ahead of the 100-day SMA level of 74.57. If at all the bears refrain from stepping near the multi-day lows, also comprising the key SMA, a confluence of 200-day SMA and 5% Fibonacci retracement of April-August upside near 72.90/85 will be crucial for AUD/JPY traders. Meanwhile, the pair’s pullback moves may target 50-day SMA, at 76.30 now, as immediate recovery but buyers may remain cautious until the quote cross July month’s high of 76.87. Following that 77.00 and September 10 peak surrounding 77.85/90 will appear on the bulls’ radars. AUD/JPY daily chart Trend: Bearish  

Amid the surging coronavirus (COVID-19) numbers, British authorities to come out with the fresh restrictions for people visiting pubs and restaurants

Amid the surging coronavirus (COVID-19) numbers, British authorities to come out with the fresh restrictions for people visiting pubs and restaurants to be levied from this Thursday. The news crossed wires, via the BBC, ahead of UK PM Boris Johnson’s address to the nation, up for publishing at 20:00 on Tuesday. “New measures will also come into force in Lancashire, Merseyside, parts of the Midlands and West Yorkshire from Tuesday,” said the BBC. Key quotes All pubs, bars, restaurants and other hospitality venues in England must have a 22:00 BST closing time from Thursday, to help curb the spread of coronavirus. The UK cabinet will meet on Tuesday morning and Boris Johnson will also chair a Cobra emergency meeting - which will be attended by the leaders of Scotland, Wales and Northern Ireland. Further restrictions will also be announced in Scotland on Tuesday, while restrictions on households mixing indoors will be extended to all of Northern Ireland. FX implications Considering the grip of the virus woes over the market sentiment, news like this weighs on the risk barometers. As a result, AUD/USD remains heavy around a two-week low while taking rounds to 0.7220 by the press time of early Tuesday morning in Asia.

AUD/USD fails to magnify the bounces off the lowest since September 09, marked the previous day, while taking rounds to 0.7225 at the start of Tuesday

AUD/USD struggles to keep bounces off 50-day SMA, seesaw around seven-week-old support trend line.Risk aversion helped bears to cheer the biggest losses since early August.Fears of bigger virus wave 2.0, economic activity suppression and US stimulus deadlock were main contributors.Comments from RBA’s Debelle can entertain traders amid a light calendar day.AUD/USD fails to magnify the bounces off the lowest since September 09, marked the previous day, while taking rounds to 0.7225 at the start of Tuesday’s Asian session. With the risk-off mood at its full steam, global traders rushed to the US Dollar while dumping everything else including equities, commodities and linked currencies. Searching for the reasons, coronavirus (COVID-19) resurgence could be cited as the main catalyst whereas uncertainty over the US aid package and downbeat comments from Europe, the UK and the US policymakers also joined the line. All hail to King Dollar… Despite witnessing a mild recovery during the early hours of the week’s start, AUD/USD ended up marking the biggest losses in more than seven weeks by the end of Monday. The risk barometer initially took a hit after the surge in the COVID-19 numbers in Europe and Britain propelled chatters of another national lockdown. It’s worth mentioning that some of the countries in the bloc and the northern UK have already re-started local lockdown restrictions. Elsewhere, European Central Bank (ECB) President Christine Lagarde said that the Union’s economic recovery remains “very uncertain, uneven and incomplete.” The Fed Chair, on the other hand, recently testified that the path ahead for the economy remains "highly uncertain". Additionally contributing to the sober mood is unending arguments, over the much-awaited COVID-19 stimulus, between the US Democrats and Republicans. The American Congress does not only fail to offer the details of the aid package but also lags conveying the stop-gap funding plans despite being near to the deadline of September-end. On a distant note, comments from the Global Times editor Hu Xijin, warning Australia to not follow the US advice to avoid the risk of war also weigh on the Australian dollar. Against this backdrop, Wall Street closed in red whereas the US 10-year Treasury yields dropped 2.5 basis points to 0.669% at Monday’s close. Looking forward, Guy Debelle, Deputy Governor of the Reserve Bank of Australia (RBA) is up for speaking at 00:30 GMT and will be closely followed for fresh impetus. The title of the speech at the Australian Industry Group conference is "The Australian Economy and Monetary Policy" and will be the key to predict short-term AUD/USD moves ahead of the second day of the Fed Chair’s testimony. Technical analysis Although 50-day SMA, currently around 0.7195, helped AUD/USD to close beyond an ascending trend line from August 03, at 0.7225 now, buyers are likely to remain unconvinced unless the quote crosses the 0.7340/46 area comprising August 31 low and multiple highs marked from September 03.  

GBP/USD has been selling off recently after the recent trendline retest. Elliott Wave analysts will be very interested in the Fib confluence lower dow

GBP/USD is trading 0.77% lower on Monday. The Feb extension and retracement match up at the 76.4% retracement.GBP/USD 4-hour chart GBP/USD has been selling off recently after the recent trendline retest. Elliott Wave analysts will be very interested in the Fib confluence lower down close to the 76.4% Fibonacci. At the moment the price is stalling at the wave low but if there is a break the targets lower down seem strong. At the moment, the bulls have found support at 1.2760. Looking at the chart the red circle illustrates the point where the 200% and 76.4% meet. The thing that makes it stronger is the support level from the consolidation in mid-July.  The indicators are also confirming the bearishness. The Relative Strength Index is just pulling away from the overbought zone. The MACD is giving the stronger signal as the histogram is firmly in the red and the signal lines have just crossed the mid level.  This looks like a confirmation for a trend change to the downside. The key now is the break of the previous wave low at 1.2760 but keep an eye on the 61.8% retracement as it can sometimes be a sticky Fib zone. Additional levels  

South Korea Producer Price Index Growth (YoY) came in at -0.5%, above expectations (-0.9%) in August

South Korea Producer Price Index Growth (MoM) came in at 0.5%, above expectations (-0.2%) in August

US benchmarks ended lower on Monday as the coronavirus spreads and lockdowns in Europe along with the possible delays in fresh stimulus from Congress

Dow Jones Industrial Average lost 2%.The S&P 500 fell 1.28%. The Nasdaq Composite dropped 0.22%.US benchmarks ended lower on Monday as the coronavirus spreads and lockdowns in Europe along with the possible delays in fresh stimulus from Congress trobles investors. Investor's fears over the US economy facing a longer road to recovery is weighing on markets to start the week. Congress has for weeks remained deadlocked over the size and shape of another coronavirus-response bill, on top of the roughly $3 trillion already enacted into law   The death of US Supreme Court Justice Ruth Bader Ginsburg likely means that the passage of another stimulus package in Congress less likely before the US presidential election. Consequently, the Dow Jones Industrial Average lost 2% to end at 27,102.99 points ,while the S&P 500 fell 1.28% to 3,276.87. The Nasdaq Composite dropped 0.22%, to 10,769.20. The CBOE Market Volatility index VIX, Wall Street's fear gauge, shot up to its highest level in nearly two weeks. As for US data, the Chicago Fed’s National Activity indicator for August pointed to a sharp loss of momentum in the recovery last month. It fell to 0.79 from 2.54 in July. Production related indicators added 0.23 to the index, down from 1.26 the prior month. Some normalisation is to be expected after manufacturing recovered impressively as the lockdown eased. Forty-five of the 85 indicators in the index were positive while 40 were negative, analysts at ANZ bank explained.  SP 500 index levels      
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