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จันทร์, กันยายน 21, 2020

Here is what you need to know on Tuesday, September 22: Risk-off took over the financial world. Equities plunged in Europe and the US and the greenbac

Here is what you need to know on Tuesday, September 22: Risk-off took over the financial world. Equities plunged in Europe and the US and the greenback was the one and only winner across the FX board. The dollar’s demand eased ahead of Wall Street’s close, but the currency retains daily gains against most major rivals. A second wave of coronavirus hitting Europe was the main reason behind the dismal mood. The number of daily cases in the most troubled countries is raising at levels last seen in April/May. Local lockdowns have been announced in different countries. EUR/USD reached a fresh September low of 1.1731 further weighed by comments from  German FinMin Scholz, who said this Monday that German debt will likely reach the 80% of the GDP, and subtle referred to EUR’s appreciation, as he added that the ECB is currently faced with a strengthening currency. Meanwhile, ECB’s Lagarde said that the Union’s economic recovery remains “very uncertain, uneven and incomplete.”The GBP/USD pair fell to  sub-1.2800 after the government’s chief medical officer, Chris Whitty,  said that if the current trend in rising cases continues, the UK could expect to see almost 50,000 new cases per day in mid-October. As a result, PM Boris Johnson is reportedly considering a national two-week lockdown, to stop the outbreak. Worth noting that the UK has already announced new restrictions in north-east England which came in force last week. Dollar’s demand hit commodities. Gold fell to $1,882 a troy ounce, ending the American session around 1,910. Crude oil prices also fell, with WTI ending the day below $40.00 a barrel. Cryptocurrencies were also affected by the dollar’s strength with BTC/USD losing the 11,000 level.

There has been a bipartisan agreement for weeks on the need for a basic spending stopgap at a time when it is needed to avert a catastrophic shutdown

There has been a bipartisan agreement for weeks on the need for a basic spending stopgap at a time when it is needed to avert a catastrophic shutdown in the middle of the ongoing pandemic, wildfires and hurricanes, and keep government open until December 11. But Republicans say the bill is far from conflict-free. Senate Majority Leader Mitch McConnell, R-Ky., called it a "rough draft" that "shamefully leaves out key relief and support that American farmers need." Market implications There is a toxic political environment on Capitol Hill and markets want to see Democrats and Republicans come together over coronavirus relief especially. The death of Supreme Court Justice Ruth Bader Ginsburg does not help either. US stocks are struggling at the start of the week. The S&P 500 is down some 1.6% at the time of writing as new lockdown fears swell with the US economy facing a longer road to recovery. 

Gold prices are testing the bull's commitments at the support structure around $1,906 in what could be a final test before the next leg higher of the

Gold is testing critical support as the US dollar shows there is still some life to it.The stimulus is now fading which is a hurdle for the bullish trend in gold.Gold prices are testing the bull's commitments at the support structure around $1,906 in what could be a final test before the next leg higher of the bullish trend. At the time of writing, gold, XAU/USD, is trading at the lows of the day, $1,905, having travelled from a high of $1,955.62, down some 2% to start the week. Gold prices have been in consolidation since correcting from all-time highs in late July and subsequently printing a low of 1861 at the start of August.  The price has chopped sideways, decelerating its daily range as markets try to get a handle on the various features of today's market conditions. One of the main drivers for precious metals has been the notion that real rates will be lower for longer as the Fed maintains a dovish outlook for several years ahead with inflation grounded.  However, with such sentiment already priced in, bloating positioning data could be a hurdle for the bulls at this juncture. The stimulus is now fading Given that the positioning data reflected expectations that Federal Open market Committee officials would strike a more dovish tone and suggest changes to the QE program, which they did not, we could be seeing some disappointments in the price action now. Meanwhile, a surge in the US dollar has not helped the spot market at the start of this week.  The DXY is trading at 93.66 and higher by some 0.7%.  With fiscal stimulus still in question, even more so following the death of Justice Ruth Bader Ginsburg, the probability that a Phase 4 deal would not be dropped before the election.  This should underpin the greenback because investors are less likely to take on risk until a fresh stimulus deal is struck.  The single currency, the euro, should also be monitored as it feels the pressure of a second wave of the coronavirus on mainland Europe.  The European Central Bank is in focus this week following the Financial Times publishing of a source's story that the ECB will launch a review of its PEPP programme.   The ECB intends to examine the length of the PEPP set for June 2021 but also look at transferring its flexibility to other purchase programmes.  It is still not clear if this will be a dovish or hawkish outcome, but given the risks of the second wave of the virus which will clash with flu season, the chances are the ECB could well be considering caring the tool into other programmes which would be dovish.  On the other hand, PEPP would not be used in full, it will be hawkish and significantly weigh on the US dollar, likely supporting the bullish case for both the euro and gold. Gold levels  

Major equity indexes in the US started the new week on the back foot and remain on track to close deep in the negative territory. As of writing, the S

Wall Street's main indexes look to close sharply lower.S&P 500 Energy Index is the worst-performing major sector on Monday.TechnipFMC PLC (FTI: NYSE) shares are down more than 11%.Major equity indexes in the US started the new week on the back foot and remain on track to close deep in the negative territory. As of writing, the S&P 500 Index was down 2.55% on the day at 3,235. Among the 11 major S&P 500 sectors, the Energy Index is down 4.55% pressured by a 4% decline in crude oil prices.  S&P 500 top movers Energy stocks are the biggest daily percentage decliners of the day. As of writing, TechnipFMC PLC (FTI: NYSE), Halliburton Co (HAL: NYSE) and National Oilwell Varco Inc (NOV: NYSE) shares are down 11.1%, 9.8% and 8.8% respectively.  On the other hand, technology shares are staying relatively resilient despite the risk-averse market environment. Take-Two Interactive Software Inc (TTWO: NASDAQ) is the best-performer of the day, gaining nearly 3%. Amont the other top tech stocks, PayPal Holdings Inc (PYPL: NASDAQ), Netflix Inc (NFLX: NASDAQ) and Advanced Micro Devices Inc (AMD: NASDAQ) are up around 2%.

In the past when stock markets take a dive CHF and JPY is where the flow of money would normally be headed. In this new normal the greenback has outpe

USD/CHF is trading 0.41% higher on Monday. CHF has not been trading in line with the risk sentiment.USD/CHF daily chart In the past when stock markets take a dive CHF and JPY is where the flow of money would normally be headed. In this new normal the greenback has outperformed and acts as a safe haven. Today has been no different, the dollar is 0.41% higher against CHF and 0.26% higher against the yen and the world major indices are in the red. Looking at the chart, it looks like a key reversal is taking place. The high lows have been marked out by the black circles. Now the previous wave high needs to be broken at 0.92 for confirmation.  Even if this break continues to the upside, there is some traffic above the current price level. There are two trendlines marked in black that could be targeted by the bulls. There is also the psychological 0.93 area that has been sticky in the past. The indicators are also looking pretty bullish at the moment too. The MACD histogram is in the green and it looks like the signal lines are above to follow and push over the zero level too. The Relative Strength Index is above 50 and there is still some space to move to the upside. This downtrend is not over just yet. The market could start to make consecutive higher highs and higher lows from here and the confirmation of that will mark the change of trend.  Additional levels  

The USD/JPY slumped to its lowest level since March at 104.00 on Monday as the JPY continued to capitalize on risk-off flows. However, the broad-based

USD/JPY staged a decisive rebound after dropping to 104.00.Wall Street's main indexes are suffering heavy losses on Monday.US Dollar Index registers strong daily gains near 93.70.The USD/JPY slumped to its lowest level since March at 104.00 on Monday as the JPY continued to capitalize on risk-off flows. However, the broad-based USD strength allowed the pair to stage a decisive rebound in the second half of the day. As of writing, USD/JPY was up 0.23% on a daily basis at 104.80. DXY climbs to multi-week highs on Monday Reflecting the dismal market mood amid renewed concerns over rising coronavirus cases causing a shaky economic recovery, major global equity indexes started the new week on the back foot. Germany's DAX 30 Index lost more than 4% on Monday and Wall Street's main indexes started the week deep in the negative territory. At the moment, the S&P 500 Index is down 2.3% on the day. On the other hand, the greenback also took advantage of the risk-averse market environment and gathered strength against its rivals with the US Dollar Index (DXY) rising to its highest level in more than a month at 93.78.  Meanwhile, the 60-pip spike seen in the early American session despite a lack of fundamental trigger paved the way for speculations about a possible Bank of Japan (BoJ) currency intervention.  There won't be any macroeconomic data releases featured in the Japanese economic docket on Tuesday. Later in the day, FOMC Chairman Jerome Powell and US Treasury Secrtary Steven Mnuchin will testify before the House Financial Services Committee. Technical levels to watch for  

The bears have got off to a racy start in the breakout from the corrective highs on the daily chart. At the time of writing, GBP/USD is trading at 1.2

GBP/USD bears have taken control in an impressive break out to the downside.Brexit and Covis risks, as well as sentiment for negative interest rates, have weighed on the GBP.The bears have got off to a racy start in the breakout from the corrective highs on the daily chart. At the time of writing, GBP/USD is trading at 1.2788, a touch from the lows of 1.2775 having travelled from a high of 1.2966. Cable is down almost 1% at the time of writing with all of the stars aligning from both a fundamental and technical basis.  The latest positioning data shows that the GBP shorts are still building up and might be expected to continue to do so while no-deal Brexit and COVID-19 second wave risks escalate.  GBP stood out in the G10 positioning last week. We have seen the erosion of GBP net long positioning with a drop from 7% of open interest to 2%. The dynamic coincides with speculation that there could be as many as 50,000 new COVID-19 UK cases a day by the end of October if there are not drastic measures implemented immediately to stem the spread of the second wave. This was a number warned by the government's chief scientific adviser, Sir Patrick Vallance: At the moment we think the epidemic is doubling roughly every seven days. If, and that's quite a big if, but if that continues unabated, and this grows, doubling every seven days... if that continued you would end up with something like 50,000 cases in the middle of October per day. Fifty-thousand cases per day would be expected to lead a month later, so the middle of November say, to 200-plus deaths per day. The challenge, therefore, is to make sure the doubling time does not stay at seven days. Meanwhile, there are mounting speculations that the UK government is about to back out of the Withdrawal Agreement while trade negotiations with the EU are balking. GBP positioning has more to go Shorts are a significant way from being where prior no-deal Brexit fear positioning was recorded.   The EU has given Britain until the end of the month to amend the newly introduced legislation seeks to unilaterally overturn one of the key provisions of the bilateral agreement reached in January with Brussels. The legislation seeks to unilaterally overturn a mandatory customs border between Northern Ireland and the rest of the UK if no free trade deal is agreed between London and the EU at the end of this year. Additionally, talk of negative rates from the BoE is back in the UK headlines which put the balance of risks skewed to the downside for sterling in the short-term.   GBP/USD levels The start of the move for which was forecast in the following article has got underway, if not a little too spirited in order to get on board at a healthy discount:GBP/USD Price Analysis: Testing strong resistance area, bears waiting to fadeIn the above analysis, both the DXY and GBP/USD have moved in the direction expected and cable is now firmly in the hands of the bears wrapped in bearish technical indicator readings. However, it is still possible that a discount will be awarded to the patient bears if this critical support holds the first tests. Pulling up the Fibonacci retracement levels of what appears to be the start of the next daily impulse, a 61.8% Fib comes in at the 1.29 area.  However, a continuation to the downside opens risk towards 1.2690 and 1.2610 according to the Fib extensions -0.271 and -0.618.  

Over the session, the risk environment has been negative as investors are worried about more lockdowns and closures due to the COVID-19 pandemic. Oil

The S&P 500 is trading nearly 2% lower on Monday.Coronavirus fears step up the selling pressure in the indices.Risk backdrop Over the session, the risk environment has been negative as investors are worried about more lockdowns and closures due to the COVID-19 pandemic. Oil companies have also been hit hard off the back of reports of higher Libyan production output and the aforementioned economic risk. The passing of U.S. Supreme Court Justice Ruth Bader Ginsburg also led some analysts to think that the fiscal stimulus could take longer.  Travel companies have also taken a dive in the S&P 500 as Delta Airlines is down over 8% and United Airlines are over 6% lower. Oil companies like Haliburton and Schlumberger are also struggling with the latter dropping 8% in early trade.  S&P 500 daily chart The S&P 500 has come up to an important support area at 3,233.25. The price did print below that level as it index hit a low of 3,229.10 but importantly there has not been a close below the zone.  If there is a close below the zone over the next couple of sessions that could send a bearish message to the market. Beyond that, the next major zone is at the blue line just under the 3K level.  The indicators are at an interesting point. The MACD histogram is in the red and the signal lines are testing the zero point. The Relative Strength Index is oversold and has made a lower low wave while the price has not made the same lower low as the indicator. The index is still in an uptrend and if the market makes a real lower high lower low wave then investors could get more worried. At the moment this can still be characterised as a deep correction. Additional levels  

The USD/CAD pair broke above 1.3300 on Monday and touched its highest level in six weeks at 1.3321. With the market action turning subdues in the last

USD/CAD is gaining more than 100 pips on Monday.US Dollar Index rose to its highest level since August 12.WTI is down more than 4% on the day, trading below $39.The USD/CAD pair broke above 1.3300 on Monday and touched its highest level in six weeks at 1.3321. With the market action turning subdues in the last hour, the pair seems to have gone into a consolidation phase and was last seen gaining 0.82% on a daily basis at 1.3312. DXY surges on safe-haven flows The broad-based USD strength combined with the heavy crude oil selloff on Monday fueled USD/CAD's rally. The risk-off market mood amid renewed concerns over the rising number of coronavirus cases impacting the global economic recovery provided a boost to the safe-haven greenback at the start of the week. After Wall Street's main indexes opened the day deep in the negative territory, the US Dollar Index (DXY) advanced to its highest level since August 12th at 93.78. At the moment, the DXY is up 0.73% on the day at 93.67, looking to post its biggest daily percentage gain since early June. On the other hand, the dismal energy demand outlook and reports suggesting that Libya is getting ready to restart oil production caused crude oil prices to fall sharply. At the moment, the barrel of West Texas Intermediate (WTI) is down 4.7% on the day at $38.94, not allowing the commodity-sensitive loonie to stage a rebound. There won't be any macroeconomic data releases from Canada on Tuesday and investors will be watching FOMC Chairman Jerome Powell's testimony before the House Financial Services Committee. Technical levels to watch for  

The dollar has had a broad-based recovery on Monday as the general risk tone in the stock markets is negative. This has in turn meant that commodities

EUR/USD is trading 0.84% lower and has broken some strong support zones.The next major support is at 1.1695 and a break and close would be bearish.EUR/USD daily chart The dollar has had a broad-based recovery on Monday as the general risk tone in the stock markets is negative. This has in turn meant that commodities are also trading lower. NZD and AUD are the worst affected currencies but the EUR has taken a beating too. This I suppose cements the greenbacks safe-haven status during risk-off bouts.  Looking at the chart, there is a rectangle type pattern forming and a break lower could confirm the bearish tone. The bottom of the pattern is at the consolidation support low of 1.1695 but the main support in the pattern has already been taken out. This would be the red support line in the chart and it has had the most touches and was firm for a long while.  The indicators are firmly bearish at the moment. The Relative Strength Index is under the 50 line and there is still room to hit the oversold level. The MACD histogram is under the zero level. The signal lines are still above the midpoint but they could cross over at any point now.  The chart is still in an uptrend but there are some major reversal signals. A break of the consolidation low would be the most important one as it would make a lower high lower low chart pattern.  Additional levels  

The outcome of the September FOMC meeting was mostly as expected forecasts were substantially upgraded, and median “dots” continue to imply policy rat

The outcome of the September FOMC meeting was mostly as expected forecasts were substantially upgraded, and median “dots” continue to imply policy rates remaining at 0-25bp through 2023, which favor the euro, according to analysts at CitiBank. They forecast EUR/USD at 1.17 over a three-month horizon at 1.22 in 6 to 12 months.  Key Quotes: “More medium term, relative real rate differentials continue to make new local highs (almost back to zero in EUR less USD), reducing the relative attractiveness of owning US dollars for investors. We still believe that the medium – long term likelihood of EUR/USD breaking 1.20 remains high, particular as US real rates are unlikely to move materially higher given the Fed’s fresh mandate. Besides, hard data showed that the economic recovery continues.” “EURUSD has been above the 55-day moving average for about 3 ½ months. The 55-day MA stands at 1.1703 with good horizontal support at 1.1696-1.1711. If, it were to fall again and close below the 55-day MA then the 200-day MA is a long way away at 1.1218, with resistance at 1.1495.
 

The USD/MXN is rising for the second consecutive day on Monday and reach 21.59, the highest levels since September 9. It is trading at 21.45, slightly

Mexican peso drops sharply versus the US dollar on risk aversion.USD/MXN short-term bias starts to point to the upside.The USD/MXN is rising for the second consecutive day on Monday and reach 21.59, the highest levels since September 9. It is trading at 21.45, slightly below the 20-day moving average that stands at 21.52. A daily close above 21.65/70 would negate the current short-term bearish bias, favouring a consolidation. The next resistance is seen at 21.80/85 (horizontal level and downtrend line from April high) followed by 22.25. The Mexican peso needs to hold below 21.40/45 in order to keep the negative pressure under control 21.15/20 is the immediate support level to consider; below another test of 21.00 seems likely. USD/MXN 4-hour chart  

Analysts at Citibank continue to be bullish over the medium and long term in gold. From a technical perspective, they warn that XAU/USD could correct

Analysts at Citibank continue to be bullish over the medium and long term in gold. From a technical perspective, they warn that XAU/USD could correct lower with a close below the 55-day moving average.  Key Quotes: “We are bullish gold tactically in the short-term and structurally over the medium-term. We maintain our 0-3m point-price target at $2,200/oz and a 6-12m target at $2,400/oz. We lift the 2021E base case gold price forecast by ~$300/oz, versus our early July update, to a record $2,275/oz.” “A close below the 55-day MA at $1,920 would look to be a warning of a deeper correction. However, given what happened in June and give the very strong support at $1,902-$1,903.”
 

The NZD/USD is having the worst day since March on Monday, making a reversal after trading on Friday at the highest since March 2019. In a few hours,

Kiwi is among the worst G10 performers on Monday, affected by risk aversion.NZD/USD reverses sharply from highest in over a year, erases last week gains.The NZD/USD is having the worst day since March on Monday, making a reversal after trading on Friday at the highest since March 2019. In a few hours, it erased all of last week gains. Recently bottomed at 0.6650, the lowest level in more than a week. The kiwi is the biggest loser in the G10 space on Monday. Risk aversion and the fact that last week it outperformed, is affecting NZD significantly. Also technical factors are playing a role. In the US, the Dow Jones falls 810 points or 2.95% and the S&P 500 declines 2.15%. Commodities area also sharply lower with the WTI barrel falling 5% and gold 3%. The key event ahead for the NZD/USD is the Reserve Bank of New Zealand meeting on Wednesday but it could be offset by current market volatility if persists. Technical levels From a technical perspective, the NZD/USD is back under the 20-day moving average, ending a six-day winning streak. The momentum now favors more losses ahead. Below 0.6650, the next support stands at 0.6635 followed by the September low at 0.6600. On the upside, 0.6715 is again a resistance level to take into consideration. On a wider perspective, NZD/USD needs to break and consolidate above 0.6800 to clear the way to more gains. The trend is still bullish but the short-term bias, if the current decline is confirmed, will point to some consolidation ahead. More levels    

The AUD/USD pair dropped further and bottomed at 0.7199, the lowest level since September 9. As of writing, it trades at 0.7205/10, down 80 pips from

Aussie drops sharply versus US dollar amid risk aversion.AD//SUD test support at 0.7200, so far it holds above but remains under pressure.The AUD/USD pair dropped further and bottomed at 0.7199, the lowest level since September 9. As of writing, it trades at 0.7205/10, down 80 pips from Friday’s close and remains under pressure. A stronger US dollar is the key driver on Friday in the currency market. The greenback is the top performer. The DXY rose to 93.75, reaching the highest level in a month. Risk aversion boosted the demand for the safe haven. In Wall Street, the Dow Jones is falling 3.00% and the S&P 500 2.35%. Commodities are also under pressure. Crude oil (WTI) drops 4.70% and gold 2.90%. The deterioration in risk sentiment had no particular triggers. In Europe, report about major banks doing transactions with suspected customers; while in the US signs about economic deceleration take more significance amid the lack of progress in Washington for another round of stimulus. Technical levels  

There were 4,368 new confirmed coronavirus infections in the UK as of Monday morning, the UK government data showed. This reading followed Sunday's in

There were 4,368 new confirmed coronavirus infections in the UK as of Monday morning, the UK government data showed. This reading followed Sunday's increase of 3,899. Earlier in the day, British Prime Minister Boris Johnson's spokesman said the government is looking at whether additional containment measures are required.  Meanwhile, British Chief Medical Officer Chris Whitty said that some of the measures that they have to take are going to have an impact on the economy and the society. Market reaction The GBP/USD pair extended its slide after this report and was last seen losing 1% on a daily basis at 1.2787.

Crude oil prices closed the previous week sharply higher but erased a large portion of those gains on Monday. As of writing, the barrel of West Texas

WTI is suffering its biggest daily percentage decline in more than 10 days.Resurfacing demand concerns weigh on crude oil prices.Libya's oil supply is expected to reenter the market.Crude oil prices closed the previous week sharply higher but erased a large portion of those gains on Monday. As of writing, the barrel of West Texas Intermediate was down 4.2%, the biggest daily percentage decline in nearly two weeks, at $39.15. Demand-supply dynamics hurt WTI The rising number of coronavirus infections globally, especially in the US and Europe, revived concerns over an uneven recovery in the energy demand on Monday. Additionally, the flight-to-safety, as reflected by heavy losses witnessed in global equity indexes, is putting additional weight on risk-sensitive crude oil prices. Meanwhile, latest reports revealed that Libya's Sharara oil field have restarted its operations, suggesting that more oil is likely to enter the market in the near-term. Commenting on the matter, "at this stage, we should watch for some time," one OPEC sources told Reuters. "But the market is reacting much faster on bearish sentiment." Later in the week, developments in Libya and the US Energy Information Administration's and the American Petroleum Institue's crude oil inventory reports will be looked upon for fresh impetus. Technical levels to watch for  

Gold extended last week's rejection slide from a short-term descending trend-line resistance and tumbled to six-week lows during the early North Ameri

Gold maintained its heavily offered tone through the early North American session.The set-up supports prospects for an eventual break below the $1900 support area.Oversold conditions on hourly charts warrant some caution for bearish traders.Gold extended last week's rejection slide from a short-term descending trend-line resistance and tumbled to six-week lows during the early North American session. Bears now await some follow-through selling below a strong horizontal support near the $1905-$1900 region. Meanwhile, the combination of a descending trend-line resistance and horizontal support constituted the formation of a descending triangle. Hence, a convincing break below the $1900 level will mark a fresh bearish breakdown and pave the way for further weakness. Meanwhile, technical indicators on the daily chart have just started drifting into the negative territory and add credence to the bearish outlook. However, oscillators on hourly charts are already flashing oversold conditions and warrant some caution. Hence, it will be prudent to wait for a sustained breakthrough the mentioned horizontal support before positioning for any further near-term depreciating move. The commodity might then accelerate the fall towards August monthly swing lows support near the $1963-62 region. On the flip side, any attempted recovery might now be seen as an opportunity to initiate some fresh bearish positions. This, in turn, should keep a lid on any further gains for the commodity near a one-week-old trading range support breakpoint, around the $1937-38 region. Gold 4-hourly chart Technical levels to watch  

The USD/JPY pair spiked to fresh daily tops, around the 104.80-85 region in the last hour, albeit lacked any strong follow-through and quickly retreat

A strong pickup in the USD demand assisted USD/JPY to rebound swiftly from the 104.00 mark.A selloff in the equity markets benefitted the JPY’s safe-haven status and capped the upside.The USD/JPY pair spiked to fresh daily tops, around the 104.80-85 region in the last hour, albeit lacked any strong follow-through and quickly retreated few pips thereafter. The pair stalled its recent bearish trajectory and managed to find decent support near the 104.00 round figure mark amid oversold conditions on short-term charts. The strong recovery from the lowest level since March 8th was exclusively sponsored by a strong pickup in the US dollar demand. Concerns that the second wave of coronavirus infections could halt the current economic recovery provided a strong boost to the greenback's status as the global reserve currency. This, in turn, was seen as a key factor that prompted some aggressive short-covering move around the USD/JPY pair. The USD buying interest picked up pace during the early North American session and pushed the pair to an intraday high level of 104.84. However, a selloff in the equity markets extended some support to the Japanese yen's safe-haven status and kept a lid on any further gains for the USD/JPY pair. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have bottomed out in the near-term and positioning for any further near-term appreciating move. Market participants now look forward to the Fed Chair Jerome Powell's speech for a fresh impetus. Technical levels to watch  

Major equity indexes in the US opened sharply lower on Monday as flight-to-safety takes control of financial markets. Reflecting the risk-averse marke

Wall Street's main indexes started the new week sharply lower.CBOE Volatility Index is up more than 16% on Monday.All 11 major sectors of the S&P 500 trade in the negative territory.Major equity indexes in the US opened sharply lower on Monday as flight-to-safety takes control of financial markets. Reflecting the risk-averse market environment, the CBOE Volatility Index (.VIX), Wall Street's fear gauge, is up 16.03% on the day at 29.97. Resurfacing fears over rising number of COVID-19 infections hurting the global economic recovery and the uncertainty surrounding the next relief bill in the US seem to be weighing on market sentiment at the start of the week. As of writing, the S&P 500 was down 2% on the day at 3,252, the Dow Jones Industrial Average was losing 2.27% at 27,027 and the Nasdaq Composite was falling 1.85% at 10,596. All 11 major sectors of the S&P 500 trade in the negative territory with the Energy Index leading the decliners with a daily loss of more than 4%.  S&P 500 chart (daily)

The selling pressure around the single currency is now picking up pace and is dragging EUR/USD to new lows in the 1.1760 region at the beginning of th

EUR/USD loses the grip further and approaches 1.1750.Lagarde said the ECB remain attentive to the euro appreciation.Fed’s J.Powell will testify on Tuesday, Wednesday and Thursday.The selling pressure around the single currency is now picking up pace and is dragging EUR/USD to new lows in the 1.1760 region at the beginning of the week. EUR/USD focused on Lagarde, waits for Powell EUR/USD is adding to Friday’s losses below the key support at 1.18 the figure and threatens to revisit monthly lows in the 1.1740/35 band (September 17). In the meantime, the leg lower in the pair remains sustained by renewed USD-buying in a context where investors remain biased towards the risk aversion. Also weighing on the single currency, ECB’s Chief Christine Lagarde said the central bank remains attentive to the euro’s appreciation, reiterating at the same time that the ECB did not run out of ammunition and that a higher exchange rate put prices under downside pressure. Nothing worth mentioning data wise in Euroland, whereas the Chicago Fed Activity Index surprised to the downside in August. Later in the NA session, FOMC’s permanent voter and (mega) dovish member Lael Brainard is due to speak. Moving forward, the greenback is expected to remain in the centre of the debate later in the week in light of all three testimonies by Fed’s Jerome Powell (Tuesday, Wednesday and Thursday). What to look for around EUR EUR/USD dropped and recorded fresh monthly lows near 1.1740 following the FOMC gathering. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained. In addition, the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front are all underpinning the constructive view on the single currency. The solid positive stance in the speculative community, the latest message from the ECB and the euro area’s current account position also collaborate with this view on the currency. EUR/USD levels to watch At the moment, the pair is losing 0.65% at 1.1765 and faces the next support at 1.1737 (monthly low Sep.17) 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 USD/CAD pair struggled to make a decisive move in either direction last week but turned north on Monday and touched its highest level in more than

USD/CAD rose to its highest level since mid-August on Monday.Broad-based USD strength is helping USD/CAD push higher.Falling crude oil prices put additional weight on the loonie.The USD/CAD pair struggled to make a decisive move in either direction last week but turned north on Monday and touched its highest level in more than a month at 1.3266. As of writing, the pair was up 0.42% on a daily basis at 1.3260. DXY climbs toward 93.50 The broad-based USD strength seems to be fueling USD/CAD's rally on Monday. The US Dollar Index (DXY), which posted modest losses last week, was last seen gaining 0.5% on the day at 93.46. In the absence of significant macroeconomic data releases, the risk-averse market environment seems to be helping the safe-haven greenback outperform its rivals. Later in the session, FOMC Chairman Jerome Powell's speech will be looked upon for fresh impetus. Meanwhile, the only data from the US showed that the Federal Reserve Bank of Chicago's National Activity Index dropped to 0.79 in August and fell short of the market expectation of 1.95.  On the other hand, the dismal market mood also weighs on crude oil prices and hurt the commodity-sensitive loonie with the barrel of West Texas Intermediate (WTI) erasing 1.5% on the day at $40.25. Meanwhile, Statistics Canada reported on Monday that the New Housing Price Index in August increased by 0.5% on a monthly basis but was largely ignored by the market paritcipants. Technical levels to watch for  

The rally in the aussie is built more on solid fundamentals than speculative excess. This should mean the Reserve Bank of Australia (RBA) takes a hand

The rally in the aussie is built more on solid fundamentals than speculative excess. This should mean the Reserve Bank of Australia (RBA) takes a hands-off approach. All in all, economists at HSBC expect the AUD/USD pair to rise further in 2021. Key quotes “The RBA has communicated its relative comfort with FX strength lately. In the minutes for the September monetary policy meeting, the central bank repeated its view that the rally in the AUD is in line with fundamentals, although it would prefer the AUD to be weaker (source: RBA, 15 September 2020). Overall, the rhetoric does not suggest that the RBA views the currency as misaligned.” “The RBA’s balance sheet expansion has been modest by G10 standards and is shifting in composition away from bond purchases towards the recently expanded three-year Term Funding Facility, with the primary aim of lowering domestic bank funding costs. The RBA minutes for September also showed no sign that it plans to ease policy again over the short-term.” “We do not see any warning signs of extreme speculative positioning. There are also strong signs that the recent AUD rally is in line with fundamentals. For instance, the price of Australia’s export basket of commodities has stayed relatively elevated and is now higher than at the start of the year. The rebound in economic activity in China, including infrastructure investment, bodes well for these bullish fundamentals to persist into 2021. Meanwhile, yield differentials have moved firmly in favour of the AUD, given Australia’s economic contraction has been less than that of peers.”  

The greenback continues its march north unabated and is now testing fresh 2-day highs in the mid-93.00s when measured by the US Dollar Index (DXY). US

DXY clinches 2-day highs in the vicinity of 93.50.The Chicago Fed index came in below estimates in August.Focus of attention remains on Powell’s testimonies later in the week.The greenback continues its march north unabated and is now testing fresh 2-day highs in the mid-93.00s when measured by the US Dollar Index (DXY). US Dollar Index now looks to Powell The index is up for the second consecutive session on Monday, gathering extra pace on the back of the renewed and quite strong sentiment towards the safe havens. Also adding to the dollar’s momentum, Atlanta Fed R.Kaplan (voter, hawkish) hinted at the idea of higher rates once the unemployment rate reaches lower levels. However, he said the current ZIRP looks appropriate for the next 2-3 years. In the docket, the Chicago Fed National Activity Index came in at 0.79 for the month of August, missing consensus and lower than July’s 2.54. What to look for around USD The dollar keeps the composure at the beginning of the week and looks to stabilize above the 93.00 yardstick. Occasional bullish attempts in DXY are seen as temporary, however, as the broad-based sentiment towards the greenback remains bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, the unremitting advance of the coronavirus pandemic, 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 0.43% at 93.40 and a break above 93.66 (monthly high Sep.9) 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).

The GBP/USD pair maintained its heavily offered tone through the early North American session and was last seen hovering near daily lows, around the 1

GBP/USD witnessed some heavy selling for the second straight session on Monday.Talks of another lockdown amid rising COVID-19 cases took its toll on the sterling.The risk-off mood benefitted the safe-haven USD and contributed to the selling bias.The GBP/USD pair maintained its heavily offered tone through the early North American session and was last seen hovering near daily lows, around the 1.2840 region. The pair extended the previous session's rejection slide from the vicinity of the key 1.3000 psychological mark and witnessed some heavy selling for the second consecutive session on Monday. Fears over rising COVID-19 cases and talks of a second national lockdown in the UK took its toll on the British pound. Reports indicated that the UK Prime Minister Boris Johnson is considering another national lockdown for two weeks to counter the outbreak. The UK government's Chief Scientific Adviser Sir Patrick Vallance acknowledged on Monday that the country could see 50K new cases per day in mid-October if no action was taken. Meanwhile, renewed worries that the ever-increasing coronavirus cases globally could halt the current economic recovery dented investors' appetite for riskier assets. This was evident from a selloff in the equity markets, which drove some heaven flows towards the US dollar and exerted some additional pressure on the GBP/USD pair. Apart from this, possibilities of some short-term trading stops being triggered below 200-hour SMA, around the 1.2900 mark, further contributed to the GBP/USD pair's slide to four-day lows. Bearish traders might now aim to challenge the 1.2800 mark before dragging the GBP/USD pair back towards multi-week lows support, around the 1.2765-60 region. There isn't any major market-moving economic data due for release on Monday. Hence, developments surrounding the coronavirus saga will continue to play a key role in driving the broader market risk sentiment. This coupled with a scheduled speech by the Fed Chair Jerome Powell will influence the USD price dynamics and produce some short-term trading opportunities. Technical levels to watch  

Following her introductory remarks at the Franco-German Parliamentary Assembly on Monday, Christine Lagarde, President of the European Central Bank (E

Following her introductory remarks at the Franco-German Parliamentary Assembly on Monday, Christine Lagarde, President of the European Central Bank (ECB), said that they are attentive to the euro's appreciation. Lagarde further reiterated that the euro's appreciation puts downward pressure on prices, as reported by Reuters. Market reaction The shared currency continues to have a difficult time gathering strength against its major rivals after these comments. As of writing, the EUR/USD pair was trading at a fresh daily low of 1.1770, losing 0.56% on a daily basis. 

EUR/USD has fallen to 1.1763 during European trading hours, as local indexes plunged, spurring risk aversion as concerns about economic growth hit the

EUR/USD has fallen to 1.1763 during European trading hours, as local indexes plunged, spurring risk aversion as concerns about economic growth hit the financial world amid a second coronavirus wave in the EU. The pair is ready to pierce the monthly low at 1.1735, Valeria Bednarik, Chief Analyst at FXStreet, reports. Key quotes “The sour sentiment is the result of a second coronavirus wave hitting the EU and local lockdowns announced. The sour sentiment was exacerbated by news that a second participant in AstraZeneca trials of a vaccine has developed serious neurological symptoms. German FinMin Scholz said this Monday that German debt will likely reach the 80% of the GDP, and subtly referred to EUR’s appreciation, as he added that the ECB is currently faced with a strengthening currency.” “From a technical point of view, the 4-hour chart shows that EUR/USD has extended its slump below all of its moving averages, with the 20 SMA extending below the larger ones. Technical indicators head lower, although with uneven strength.” “The Momentum remains within positive levels, as the pair remains above its monthly low at 1.1736, the immediate support.”  

The Turkish lira depreciates further vs. the greenback at the beginning of the week, lifting USD/TRY to fresh all-time highs beyond the 7.61 mark. USD

USD/TRY climbs further north of the 7.60 level on Monday.Wave of risk-off sentiment hits the EM FX space.Risks of a Balance of Payments crisis in Turkey stay on the rise.The Turkish lira depreciates further vs. the greenback at the beginning of the week, lifting USD/TRY to fresh all-time highs beyond the 7.61 mark. USD/TRY up on TRY-selling, dollar’s rally The Turkish currency accelerated its downside on Monday following headlines citing the country’s buffers against a crisis of the balance of payments could be depleted (or on the way to depletion). It is worth recalling that agency Moody’s cut Turkey’s sovereign debt rating to “junk” last week (in line with those of Egypt, Rwanda and Jamaica), while revising lower the outlook to “negative”, always on the back of rising risks over a balance of payments crisis. Adding to the upside momentum in the pair, the prevailing risk-off sentiment is also collaborating with the dollar’s firm demand. In the docket, Turkey’s Consumer Confidence is due on Tuesday ahead of Manufacturing Confidence, Capacity Utilization and the CBRT monetary policy meeting on Thursday. USD/TRY key levels At the moment the pair is gaining 0.97% at 7.6144 and faces the next hurdle at 7.6170 (all-time high Sep.21). On the downside, immediate support is located at 7.4360 (21-day SMA) seconded by 7.4124 (low Sep.10) and then 7.2961 (low Aug.28).

The Federal Reserve Bank of Chicago's National Activity Index (CFNAI) dropped from 2.54 (revised from 1.18) in July to 0.79 in August. This reading ca

Chicago Fed's National Activity Index dropped more than expected in August.US Dollar Index continues to climbg higher toward 93.50.The Federal Reserve Bank of Chicago's National Activity Index (CFNAI) dropped from 2.54 (revised from 1.18) in July to 0.79 in August. This reading came in worse than the market expectation of 1.95. Key takeaways "The CFNAI Diffusion Index, which is also a three-month moving average, decreased to +0.62 in August from +0.73 in July." "Forty-five of the 85 individual indicators made positive contributions to the CFNAI in August, while 40 made negative contributions. "Twenty-nine indicators improved from July to August, while 56 indicators deteriorated. Of the indicators that improved, 11 made negative contributions." Market reaction The US Dollar Index continues to push higher after this data and was last seen gaining 0.41% on the day at 93.38.

Gold continued losing ground through the mid-European session and dropped to 1-1/2-week lows, around the $1921 region in the last hour. The precious m

A strong pickup in the USD demand exerted some heavy pressure on gold.Bulls seemed rather unimpressed by a fresh leg down in equity markets.Gold continued losing ground through the mid-European session and dropped to 1-1/2-week lows, around the $1921 region in the last hour. The precious metal failed to capitalize on the previous week's modest gains, instead came under some renewed selling pressure on the first day of a new trading week amid a strong pickup in the US dollar demand. Worries about the second wave of the coronavirus infections boosted the greenback's status as the global reserve currency, which, in turn, weighed heavily on the dollar-denominated commodity. Bulls failed to gain any respite from a selloff in the global equity markets, which tends to underpin demand for the safe-haven precious metal. The risk-off mood was further reinforced by a steep decline in the US Treasury bond yields, albeit did little to lend any support or revive demand for the non-yielding yellow metal. Meanwhile, the latest leg of a sudden fall over the past hour or so could further be attributed to some technical selling below the $1930-28 horizontal support. Hence, some follow-through weakness towards challenging monthly lows, around the $1906 region, now looks a distinct possibility. There isn't any major market-moving economic data due for release from the US on Monday. Hence, the key focus will be on the Fed Chair Jerome Powell's scheduled speech. Powell's speech will be closely scrutinized for clues about the central bank's near-term monetary policy outlook and produce some meaningful trading opportunities. Technical levels to watch  

Canada New Housing Price Index (YoY) rose from previous 1.7% to 2.1% in August

United States Chicago Fed National Activity Index registered at 0.79, below expectations (1.95) in August

Canada New Housing Price Index (MoM) above forecasts (0.3%) in August: Actual (0.5%)

The economic recovery in the euro area remains very uncertain, uneven and incomplete, Christine Lagarde, President of the Europen Central Bank (ECB),

The economic recovery in the euro area remains very uncertain, uneven and incomplete, Christine Lagarde, President of the Europen Central Bank (ECB), said on Monday. "At the same time, the uncertainty of the current environment requires a very careful assessment of the incoming information, including developments in the exchange rate," Lagarde reiterated. "We judge that the economy still needs that support if the recovery is to continue and strengthen further." Market reaction The EUR/USD pair continued to push lower following these comments and was last seen losing 0.57% on a daily basis at 1.0770.

In an interview with Bloomberg TV on Monday, Dallas Federal Reserve Bank President Robert Kaplan said that he expects zero rates will be appropriate f

In an interview with Bloomberg TV on Monday, Dallas Federal Reserve Bank President Robert Kaplan said that he expects zero rates will be appropriate for the next two-and-a-half to three years. Additional takeaways "By 2023, the US could start to approach 3.5% unemployment." "Once the US gets to the point of lower unemployment, not sure Fed needs to still leave rates at zero." "Not sure how much benefit the Fed's new rate vow would deliver, concerned about excess risk taking." "Believed costs of new low rate vow was not worth the benefits." "Forecast of strong growth for this year assumes some further fiscal support." "Market cap to GDP is at historic highs, and normally some kind of correction can be helpful." "Monetary policy is not primary driver of economic outlook now; that's the virus." "Fed is looking at ways to make Main Street Lending Program more attractive." Market reaction The US Dollar Index largely ignored these remarks and was last seen gaining 0.3% on the day at 93.29.

These are the main highlights of the CFCT Positioning Report for the week ended on September 15th: Speculators trimmed their gross longs in the Britis

These are the main highlights of the CFCT Positioning Report for the week ended on September 15th: Speculators trimmed their gross longs in the British pound for the third consecutive week, taking the net longs to the lowest level since mid-April at around 2.3K contracts. The prospects of further easing by the BoE coupled with increasing uncertainty in the EU-UK trade talks appear to have weighed on sentiment in the last days. Net shorts in the US dollar rose to levels last seen in early December 2017. That was before the FOMC gathering, therefore It will not be surprising to see investors re-positioning in the greenback following the event and in light of the renewed bias towards the risk aversion seen in past days. Speaking about safe havens, net longs in JPY climbed to 2-week highs, while net longs in the Swiss franc retreated to levels last seen in late July. Despite the upbeat tone at the ECB event, speculators dragged net longs in EUR to the lowest level since late July. Profit taking and the resumption of some risk-off mood are seen behind the correction.

British Prime Minister Boris Johnson's spokesman said on Monday that the PM listened carefully to what Chief Medical Officer Chris Whitty said about t

British Prime Minister Boris Johnson's spokesman said on Monday that the PM listened carefully to what Chief Medical Officer Chris Whitty said about the spread of coronavirus and added that he is looking at whether further measures are required. "If that's the case, we will set them out to public," the spokesman noted.  Additional takeaways "PM and colleagues have been working throughout the weekend on coronavirus response, studying the latest advice." "PM will work with colleagues to make sure we will respond in most effective way to control the spread of the virus." Market reaction These comments don't seem to be having a significant impact on market sentiment. As of writing, the UK's FTSE 100 Index was down 3.35% on the day at 5,805.  

The GBP/JPY cross maintained its heavily offered tone through the mid-European session and was last seen trading just below the 134.00 mark. The cross

A combination of factors continued exerting some heavy pressure on GBP/JPY.Speculations about another lockdown in the UK undermined the British pound.The risk-off mood benefitted the safe-haven JPY and added to the selling bias.The GBP/JPY cross maintained its heavily offered tone through the mid-European session and was last seen trading just below the 134.00 mark. The cross prolonged a two-week-old bearish trajectory and witnessed some strong follow-through selling on the first day of a new trading week. The downfall was sponsored by a combination of factors, including the offered tone surrounding the British pound and a strong pickup in demand for the safe-haven Japanese yen. Reports that the UK could be headed for another national lockdown of two weeks to counter a resurgence in COVID-19 cases took its toll on the sterling. The UK government's Chief Scientific Adviser Sir Patrick Vallance acknowledged on Monday that they are in a situation where coronavirus infection numbers are clearly increasing. Meanwhile, concerns about the ever-increasing coronavirus cases weighed heavily on investors' sentiment and triggered a fresh wave of the global risk aversion trade. This, in turn, provided a strong boost to the Japanese yen's safe-haven status and further contribute to the GBP/JPY pair's ongoing slide. Apart from this, the downfall could further be attributed to some technical selling below the previous swing lows, around the 134.55 region. Meanwhile, RSI (14) on the daily chart is already flashing oversold conditions and warrant some caution for bearish traders or positioning for any further near-term depreciating move. Technical levels to watch  

S&P 500 has fallen as expected to test its key medium-term 63-day average, now at 3292. Although this is holding at present, the risk is seen for a cl

S&P 500 has fallen as expected to test its key medium-term 63-day average, now at 3292. Although this is holding at present, the risk is seen for a close below 3292 with next supports seen at 3285/80 and then 3260/59, per Credit Suisse. More: S&P 500 Index needs further fiscal support to avoid a correction Key quotes “The S&P 500 remains under pressure after completing a small bearish ‘reversal day’ at its 13-day exponential average and the decline has extended as expected for a test of its 63-day average at 3292. “Although the 63-day average at 3292 is holding for now we are seeing key supports break for a range of other markets and sectors (notable Tech) and a break and close below 3292 is seen likely. If confirmed this should then see support next at 3285/80 and stretching down to the 23.6% retracement of the rally from March at 3260/59, which we look to try and hold. Should weakness instead directly extend, this would warn of a more protracted and deeper correction lower with support seen next at 3204/00.”  “Resistance moves to 3329 initially, then 3345, with 3375/85 now ideally capping further strength.”  

In the absence of significant macroeconomic data releases from Australia at the start of the week, the risk-averse market environment made it difficul

AUD/USD is falling sharply pressured by broad USD strength.US Dollar Index is clinging to daily gains near 93.30.FOMC Chairman Jerome Powell's is scheduled to deliver a speech on Monday.In the absence of significant macroeconomic data releases from Australia at the start of the week, the risk-averse market environment made it difficult for the AUD to find demand. After closing the previous week virtually unchanged above 0.7300, the AUD/USD pair lost its traction and touched a daily low of 0.7254 on Monday. As of writing, the pair was down 0.33% on the day at 0.7265. USD capitalizes on safe-haven flows Resurfacing fears over the second wave of coronavirus crippling the global economic recovery weigh on market mood. Reflecting the intense flight-to-safety, major European equity indexes are losing more than 3% on the day and the S&P 500 futures are down around 1.5%. The Chicago Fed's National Activity Index will be featured in the US economic docket on Monday. More importantly, FOMC Chairman Jerome Powell is scheduled to deliver a speech at 1400 GMT.  Last week, Powell reiterated that the monetary policy will remain "highly accommodative" until they are sure the expansion is well along. However, Powell also acknowledged that the economic recovery over the last 60 days had been faster than expected. Meanwhile, investors will be following political developments with regards to next coronavirus relief bill in the US closely. Ahead of the American session, the US Dollar Index (DXY) is up 0.3% on the day at 93.30. Technical levels to watch for  

The NZD/USD pair closed the previous week in the positive territory as the kiwi gathered strength on expectations that the Reserve Bank of New Zealand

NZD/USD is falling sharply after closing the previous week higher.Greenback is capitalizing on safe-haven flows on Monday.FOMC Chairman Powell is scheduled to speak later. The NZD/USD pair closed the previous week in the positive territory as the kiwi gathered strength on expectations that the Reserve Bank of New Zealand (RBNZ) will keep its policy rate unchanged until March 2021. However, the risk-averse market environment at the start of the week provided a boost to the safe-haven USD and caused the pair to fall sharply. As of writing, NZD/USD was down 0.82% on a daily basis at 0.6703. DXY erases last week's losses on Monday Sharp upsurge witnessed in coronavirus infection numbers, especially in the Europe, is weighing on the market mood on Monday. At the moment, major European equity indexes are down between 3.1% and 3.3% and the S&P 500 futures are losing more than 1.5%. Meanwhile, the US Dollar Index (DXY), which lost 0.3% last week, is gaining 0.33% on the day at 93.31.  In the second half of the day, investors will be paying close attention to FOMC Chairman Jerome Powell's speech. The Federal Reserve Bank of Chicago's National Activity Index will be the only data featured in the US economic docket and the risk perception is likely to continue to impact NZD/USD's movements.  In the early Asian session on Wednesday, the RBNZ will announce its Interest Rate Decision and release the Rate Statement.  Technical levels to watch for  

EUR/USD drops to fresh 2-day lows in the sub-1.1800 area at the beginning of the week quickly eroding the optimism seen during the Asian trading hours

EUR/USD reverses the initial optimism and drops sharply below 1.18.Initial contention now emerges around monthly lows in the 1.1740/35 band.EUR/USD drops to fresh 2-day lows in the sub-1.1800 area at the beginning of the week quickly eroding the optimism seen during the Asian trading hours. A deeper pullback is not ruled out just yet and could initially target the monthly lows in the 1.1740 region ahead of the more relevant contention zone near 1.17, where converge late August lows and a Fibo level (of the 2017-2018 rally). The 55-day SMA, today at 1.1722, also reinforces this critical juncture. Looking at the broader scenario, 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 1.1223. EUR/USD daily chart  

Mexico Private Spending (QoQ) registered at -19.4%, below expectations (-0.4%) in 2Q

Mexico Private Spending (YoY) registered at -20.6%, below expectations (0.2%) in 2Q

The index extends the bounce off the sub-93.00 region on Monday and advances to fresh tops beyond 93.30 on the back of broad-based sell off in the ris

DXY adds to Friday’s gains above the key 93.00 barrier.Immediately to the up now emerges the weekly top near 93.70.The index extends the bounce off the sub-93.00 region on Monday and advances to fresh tops beyond 93.30 on the back of broad-based sell off in the risk complex. The continuation of the recovery should put last week’s highs near 93.70 back on investors’ radar ahead of the more relevant hurdle in the 94.00 neighbourhood (August 3). The negative outlook in DXY is seen unchanged while below the 200-day SMA, today at 97.16. DXY daily chart  

USD/JPY trades in the 104.10 price zone, modestly recovering from a daily low of 103.99. The pair is technically oversold, but there are no signs of a

USD/JPY trades in the 104.10 price zone, modestly recovering from a daily low of 103.99. The pair is technically oversold, but there are no signs of a bottom just yet as concerns about global growth and new lockdowns in Europe spur demand for safety, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “Concerns about global growth fueled by raising coronavirus cases in Europe and new localized lockdowns announced are behind the dismal market mood. In the data front, Japanese markets were closed amid a local holiday. The US session will bring the August Chicago Fed National Activity Index, foreseen at 1.95 from 1.18 in July. Also, several FOMC members will speak today, including chair Powell, although he is not due to referring to monetary policy.” “The 4-hour chart shows that technical indicators have pared their declines but stand within oversold readings. A firmly bearish 20 SMA remains above the current level and below the larger ones, which also gain bearish strength.”  “The USD/JPY pair may correct oversold conditions but would need to extend its recovery above 104.50 to shrug off its bearish strength, quite unlikely at the time being.”  

Economist at UOB Group Lee Sue Ann reviewed the latest GDP figures in New Zealand for the second quarter. Key Quotes “New Zealand’s GDP fell 12.2% q/q

Economist at UOB Group Lee Sue Ann reviewed the latest GDP figures in New Zealand for the second quarter. Key Quotes “New Zealand’s GDP fell 12.2% q/q in 2Q20, following a revised 1.4% q/q fall in 1Q20 (-1.6% q/q previously). Primary industries were the most resilient in the quarter, down 8.7% q/q. Goodsproducing industries were the most severely impacted, falling 16.3% q/q, whilst services declined 10.9% q/q… Compared to the same period one year ago, New Zealand’s GDP fell by 12.4% y/y, the first y/y decline since the March 2010 quarter.” “This is New Zealand's first recession since the 2008-2009 Global Financial Crisis, and its worst since 1987, when the current system of measurement began. Finance Minister Grant Robertson said the sharp economic decline was no surprise. The economic situation is likely to be a key issue in next month's election, which was delayed after an unexpected spike in COVID-19 infection cases in August.” “The slightly stronger 2Q20 print relative to our expectations of -16.6% y/y has led us to revise our 3Q20 and 4Q20 prints of -6.1% y/y and -3.5% y/y, to -5.9% y/y and -4.2% y/y, respectively. This will see our full year 2020 GDP contraction less severe at -5.0%, compared to our previous forecast of -6.6%.”

EUR/JPY remains under heavy downside pressure at the beginning of the week and slips back below the 123.00 mark for the first time since mid-July. The

EUR/JPY extends the bearish note and breaches the 123.00 mark.Interim support aligns at the 100-day SMA at 122.10.EUR/JPY remains under heavy downside pressure at the beginning of the week and slips back below the 123.00 mark for the first time since mid-July. The bearish impulse remains well in place and forced the cross to break below the key support region around 122.90. The leg lower now faces a minor support at the 100-day SMA at 122.10 ahead of the critical 200-day SMA, today at 120.85. Below the 200-day SMA the outlook on the cross is expected to shift to bearish. EUR/JPY daily chart  

The GBP/USD pair witnessed some heavy selling for the second consecutive session on Monday and dived to four-day lows, around the 1.2835 region during

GBP/USD remained under some heavy selling pressure for the second straight day.The set-up favours bearish traders and supports prospects for further weakness.Slightly oversold RSI on the 1-hourly chart warrants some caution for bearish traders.The GBP/USD pair witnessed some heavy selling for the second consecutive session on Monday and dived to four-day lows, around the 1.2835 region during the early European session. Given last week's repeated failures near the key 1.3000 psychological mark, a sustained break below the 1.2910-1.2900 confluence support was seen as a key trigger for intraday bearish traders. The mentioned region comprised of 200-hour SMA and a short-term ascending trend-line support. Bearish technical indicators on 4-hourly/daily charts support prospects for a further near-term depreciating move amid reports that the UK could be headed for another national lockdown. However, slightly oversold RSI (14) on the 1-hourly chart warrants some caution for bearish traders. Nevertheless, the pair still seems vulnerable to extend the downfall further towards testing the 1.2800 round-figure mark. The downward momentum could further get extended and drag the pair back towards multi-week lows, around the 1.2765-60 region touched on September 11th. On the flip side, any attempted recovery move might now confront a stiff resistance and remain capped near the 1.2900 confluence support breakpoint. That said, some follow-through buying might trigger some intraday short-covering move and pushed the pair back to the 1.2965-70 supply zone. GBP/USD 1-hourly chart Technical levels to watch  

British Chief Medical Officer Chris Whitty said on Monday that they have to take the resurgence of coronavirus cases in the UK very seriously and adde

British Chief Medical Officer Chris Whitty said on Monday that they have to take the resurgence of coronavirus cases in the UK very seriously and added that they should see this as a six-month problem. Additional takeaways "There is no evidence this is a milder virus than earlier in the year." "We see here the virus is moving up the age bands." "We have learned to treat this virus more effectively." "The virus will have a significant impact on the nation's health if we let it get out of control." "Some of the things we are going to have to do will have an impact on the economy/society." "If we do too little this virus will get out of control "if we do too much it will hit the economy." "We must reduce social contacts." "If we do not change the course we will find ourselves in a very difficult place." Market reaction The risk-averse market environment continues to weigh on the British pound. As of writing, the GBP/USD pair was down 0.52% on a daily basis at 1.2850.

The British government's Chief Scientific Adviser Sir Patrick Vallance acknowledged on Monday that they are in a situation where coronavirus infection

The British government's Chief Scientific Adviser Sir Patrick Vallance acknowledged on Monday that they are in a situation where coronavirus infection numbers are clearly increasing, as reported by Reuters. Additional takeaways "We must not enter into the exponential growth." "We need speed and action." "Antibodies fade over time, under 8% of population have been infected." "A vast majority of us are not protected." Market reaction The UK'S FTSE 100 Index continues to push lower following these comments and was last seen losing 3.47% on a daily basis at 5,798.

EUR/GBP has stabilized above its 21-day average at 0.9085/79 and analysts at Credit Suisse view weakness as corrective ahead of a move back to 0.9292.

EUR/GBP has stabilized above its 21-day average at 0.9085/79 and analysts at Credit Suisse view weakness as corrective ahead of a move back to 0.9292. Key quotes “EUR/GBP has found support as expected from the 21-day exponential average and 50% retracement of the September rally at 0.9089/79 and although we would still not rule out an overshoot to the 55-day average at 0.9041, our bias remains to look for a fresh floor here for a resumption of the core uptrend.” “Resistance is seen at 0.9172/82 initially, with a break above 0.9209 needed to see the risk turn higher again for strength back to the recent high and top of the trend channel from late April at 0.9292 and 0.9307 respectively.”  “Immediate support moves to 0.9114, with 0.9085/77 now ideally holding. Below can see weakness extend to the 55-day average at 0.9041/34, but with a close below here needed to suggest the broader trend has turned sideways again with support then seen next at 0.8967/56 and more importantly at 0.8894/87.”   

The USD/CHF pair rallied around 65 pips from the early European session swing lows and shot to 1-1/2-week tops, around mid-0.9100s in the last hour. F

USD/CHF regained positive traction for the second consecutive session on Monday.A strong pickup in the USD demand was seen as a key factor driving the pair higher.The positive move seemed unaffected by a selloff across the global equity markets.The USD/CHF pair rallied around 65 pips from the early European session swing lows and shot to 1-1/2-week tops, around mid-0.9100s in the last hour. Following an early dip to the 0.9085 region, the pair caught some fresh bids and turned positive for the second consecutive session on Monday amid a strong pickup in the US dollar demand. The ever-increasing coronavirus cases dampened hopes of a V-shaped economic recovery and boosted the greenback's status as the global reserve currency, which, in turn, was seen as a key factor driving the pair higher. The USD bulls seemed largely unaffected by a steep fall in the US Treasury bond yields and fading hopes for another round of the US fiscal stimulus measures. Investors remain worried that the lack of additional fiscal measures could halt the current US economic recovery. Nevertheless, the USD price dynamics was seen as the only factor driving the USD/CHF pair higher during the first half of the trading action on Monday. Meanwhile, negative developments surrounding the coronavirus saga weighed heavily on investors' sentiment and dented demand for perceived riskier assets. The anti-risk flow was evident from a selloff across the global equity markets, which tends to underpin demand for the safe-haven Swiss franc and keep a lid on any strong gains for the USD/CHF pair, at least for the time being. From a technical perspective, the USD/CHF pair was last seen hovering near 50-day SMA resistance, around mid-0.9100s, which if cleared decisively will be seen as a fresh trigger for bullish traders. Bulls might then push the pair further towards monthly tops, around the 0.9200 mark, touched on September 8th. There isn't any major market-moving economic data due for release on Monday. Hence, the key focus will be on the Fed Chair Jerome Powell's speech. Powell's comments might influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session. Technical levels to watch  

USD/JPY maintains its bearish continuation pattern and is now testing below the July low at 104.19. Economists at Credit Suisse continue to look for a

USD/JPY maintains its bearish continuation pattern and is now testing below the July low at 104.19. Economists at Credit Suisse continue to look for a clear and closing break below the aforementioned level, with the next support seen at 103.43. More: USD/JPY to see a small rebound from the 104.20 July low ahead of further falls – Commerzbank Key quotes “USD/JPY weakness is showing signs of accelerating following its break of the potential uptrend from the 2020 low at 105.20/10 and the completion of a bearish continuation pattern and the market is now testing the 104.19 low of July. Whilst a fresh rebound from here should be allowed for, we look for a closing break in due course with support then seen next at 103.43 – the 78.6% retracement of the March rally – and with the ‘measured pattern objective’ at 103.14.” “Immediate resistance is seen at 104.64/68, then 104.88, above which can see a deeper recovery back to the 13-day average and price resistance at 105.18/23, but with fresh sellers expected here.”  

The UK Health Secretary Matt Hancock is back on wires now, via Reuters, this time commenting on the prospects of a coronavirus vaccine. He said that t

The UK Health Secretary Matt Hancock is back on wires now, via Reuters, this time commenting on the prospects of a coronavirus vaccine. He said that the progress is 'going well' on a vaccine but no vaccine is certain yet. “If a vaccine does come off, we should be back to normal by summer next year,” Hancock added.     more to come ...

The jobless rate in Australia is seen picking up pace towards the end of the year, according to Economist at UOB Group, Lee Sue Ann. Key Quotes “Austr

The jobless rate in Australia is seen picking up pace towards the end of the year, according to Economist at UOB Group, Lee Sue Ann. Key Quotes “Australia's jobless rate unexpectedly slipped from a 22-year high of 7.5% in July, to 6.8% in August, as employment surged past expectations helped by part-time work… Despite the improvement in unemployment, the underemployment rate remained elevated at 11.2%, 2.4 percentage points above the level in March.” “Whilst the latest numbers definitely came as a surprise, job gains were held back by Victoria, where employment fell 1.3% m/m in August. Employment rose 1.7% m/m across other regions. Nonetheless, the latest jobs report is certainly a testament to the government’s signature Jobseeker employment subsidy – that will extend into 2021 – as well as monetary stimulus.” “We still look for unemployment in Australia to climb higher into year-end before gradually recovering in later part of 2021, provided COVID-19 developments comes under control as expected (i.e. state borders opened by year end but international borders not until this time next year) and there is a strong stimulus package in the October budget.”

The risk sentiment took a further hit in the European session, as the S&P 500 futures (risk barometer), extended the declines below 3,300 levels to hi

US stock futures dumped amid intensifying risk-off mood.Coronavirus curbs, banking woes hit risk, boost the dollar. US fiscal gridlock remains a drag ahead of Fed’s Powell. The risk sentiment took a further hit in the European session, as the S&P 500 futures (risk barometer), extended the declines below 3,300 levels to hit fresh two-month lows of 3,248. At the press time, the US stock futures trim losses to trade around 3,270, still down 1.50% on the day. The bears tightened the grip after the coronavirus lockdown worries aggravated in the European trading and knocked-off the regional equities. The virus second-wave is intensifying in Europe, with a spike in infections prompting authorities to consider reimposing region lockdowns and stricter measures. Denmark and Greece already announced new restrictions last Friday. The UK Prime Minister (PM) Boris Johnson is weighing in another lockdown while parts of the Spanish capital Madrid are under lockdown restrictions once again to contain the virus spread.  The market sentiment also remains dampened by the sell-off in the banking sector stocks on the European indices. Reports of HSBC, Standard Chartered, Barclays and other banks allegedly involved in illicit money flows hammered their stocks to the lowest levels since 1998. Further, the gridlock on the US fiscal stimulus also does little to boost the market mood but underpins the haven demand for the greenback across its main competitors. Attention now turns towards the  US Federal Reserve (Fed) Chairman Jerome Powell’s speech for fresh hints on the monetary policy, which could have a significant impact on the Wall Street sentiment.

The better start of the week in the greenback is forcing EUR/USD to recede to fresh 2-day lows in the sub-1.18 area on Monday. EUR/USD focused on ECB,

EUR/USD fades the initial strength and moves below the 1.18 mark.Dollar-buying remains behind the correction lower in the pair.ECB’s Christine Lagarde speaks later on Monday.The better start of the week in the greenback is forcing EUR/USD to recede to fresh 2-day lows in the sub-1.18 area on Monday. EUR/USD focused on ECB, looks to USD The continuation of the upside momentum in the greenback prompted sellers to keep the risk-associated assets under pressure at the beginning of the week, prolonging the downside bias sparked on Friday at the same time. In fact, the dollar regains poise and advance well above the 93.00 mark when gauges by the US Dollar Index (DXY), or 2-day highs, in a context where the risk-off sentiment looks comfortable. Despite the move, the pair remains well immersed into a multi-day consolidative range. Nothing scheduled data wise in Euroland on Monday, whereas the focus of attention will be on the participation of ECB’s C.Lagarde at an event later in the European afternoon. Across the pond, the calendar is not much interesting either, with the Chicago Fed index only for release and the speech by FOMC’s L.Brainard. What to look for around EUR EUR/USD dropped and recorded fresh monthly lows near 1.1740 following the FOMC gathering. Despite the move, the pair’s outlook remains positive and bouts of weakness are so far deemed as short-lived and look contained. In addition, the improved sentiment in the risk-associated universe, auspicious results from domestic fundamentals - which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis – as well as a calmer US-China trade front are all underpinning the constructive view on the single currency. The solid positive stance in the speculative community, the latest message from the ECB and the euro area’s current account position also collaborate with this view on the currency. EUR/USD levels to watch At the moment, the pair is losing 0.42% at 1.1787 and faces the next support at 1.1737 (monthly low Sep.17) 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).

Economist at UOB Group Lee Sue Ann reviewed the latest BoE event. Key Quotes “As expected, all nine members of the Monetary Policy Committee (MPC) vot

Economist at UOB Group Lee Sue Ann reviewed the latest BoE event. Key Quotes “As expected, all nine members of the Monetary Policy Committee (MPC) voted to keep the main lending rate at 0.10%, with the central bank having cut rates twice from 0.75% since the beginning of the COVID-19 pandemic. The MPC also voted unanimously to maintain target for the total stock of its bond purchases at GBP745bn. However, much of the attention was on the reveal that the BOE and Prudential Regulation Authority will begin work in 4Q20 on the operational considerations around a move below zero.” “The overnight commentary from the BOE reinforces our view that the BOE is ready to embark on further efforts to counter the economic slump. It is now a case of when, not if, the MPC eases again. Having said that, we think it is more likely to push the effective lower bound (ELB) by cutting the Bank Rate once more this year, but keep rates positive. A decision on that is possible at the next 5 November meeting, when we also expect the BOE to boost its bondbuying stimulus program by another GBP100bn.”

S&P 500 is treading water at a fresh six week low and is headed to official correction territory as attention is returning to fiscal assistance given

S&P 500 is treading water at a fresh six week low and is headed to official correction territory as attention is returning to fiscal assistance given a loss of momentum in the economic data and the surge in COVID-19, FXStreet’s Ross J. Burland reports. Key quotes “With researchers around the world racing to develop a vaccine, the optimism has dimmed and investors have been spooked by the spike in new coronavirus cases in several European countries. This has encouraged some profit-taking, adjustments and rotation between sectors, or a rebalancing act between the biggest weights in the market to the smallest weights.” “Attention returns to the prospects of more fiscal assistance given a loss of momentum in the economic data. The problem lies with Senate Republicans. The equity rally and President Trump’s executive orders have bought them time but the question is whether it will take a steeper stock market correction or acceleration in unemployment to spark action. The froth of the markets has been swiped off partly due to the highly anticipated Federal Reserve meeting that eventualised into a slightly less dovish than hoped for outcome.” “What the stock markets want to see is an enactment of the sort of package that President Trump or Speaker Pelosi have both endorsed, although Washington’s deadlock means hopes are waning for cash-strapped states. As such, this is undermining growth prospects in the last quarter for 2020.” “The focus for the week will be on a flurry of Fed speakers, starting with Chair Powell testifying to a congressional subcommittee on the central bank’s response to the pandemic. Mester and Rosengren will also be speaking at virtual events. However, as far as details on the new average inflation target go, it appears that the US stock market will have to be satisfied with the vague wording we got in the September meeting.” “The S&P 500 is already crossing below its uptrend and it is now close to a 10% decline from the peak. A 10% fall is commonly viewed by market technicians as an official correction. The structure to watch for is the 61.8% Fibonacci around 3200 to the downside.”

The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, has reversed the initial pessimism and it now climbs to daily h

DXY starts the week on a positive footing near the 93.30 region.Chicago Fed index, Fedspeak coming up next in the docket.Markets’ focus will be on Chief Powell’s testimonies later this week.The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, has reversed the initial pessimism and it now climbs to daily highs in the 93.30 region. US Dollar Index looks to Powell, risk trends The index is adding to Friday’s gains beyond 93.00 the figure, as market participants seem to favour the safe haven universe amidst the prevailing risk aversion mood at the beginning of the week. Indeed, the selling sentiment among the riskier assets is sustaining the continuation of the recovery in the buck, which has the initial target at last week’s peaks in the 93.55/60 band (September 17). Later in the day, the Chicago Fed National Activity Index will be the sole release seconded by the speech by FOMC’s L.Brainard (permanent voter, dovish). Moving forward, investors’ focus are expected to gyrate around the testimonies by Fed’s Powell on Tuesday, Wednesday and Thursday. What to look for around USD The dollar keeps the composure at the beginning of the week and looks to stabilize above the 93.00 yardstick. Occasional bullish attempts in DXY are seen as temporary, however, as the broad-based sentiment towards the greenback remains bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, the unremitting advance of the coronavirus pandemic, 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 0.30% at 93.28 and a break above 93.66 (monthly high Sep.9) 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).

Gold meets fresh supply amid the US dollar turnaround. Ascending triangle breakdown spotted on the hourly chart. Hourly RSI flirts with the oversold

Gold meets fresh supply amid the US dollar turnaround. Ascending triangle breakdown spotted on the hourly chart. Hourly RSI flirts with the oversold territory, eyes on Powell. Having faced rejection above $1950 on several occasions so far this Monday, Gold (XAU/USD) came under heavy selling pressure and fell nearly $10 in a matter of an hour. The latest leg down in the yellow metal can be mainly attributed to a broad-based US dollar rebound, as the risk-aversion tightened its grip in Europe amid mounting coronavirus fears. Markets also prefer to hold the US currency ahead of the Fed Chair Jerome Powell’s speech due later on Monday. From a near-term technical perspective, the price broke below the rising trendline support at $1945.58 last hour, confirming an ascending triangle breakdown on the hourly sticks. The metal faced stiff resistance once again at the horizontal 100-hourly Simple Moving Average (HMA) at $1954. At the moment, the price trades below all the major HMAs and remains poised to test the pattern target at $1915. Ahead of that level, last Thursday’s low of $1932.88 will likely test the bears’ commitment. The hourly Relative Strength Index (RSI), currently peeping into the oversold territory, suggests that there is more room to the downside. On the flip side, recapturing the healthy resistance level around $1950 is critical to reviving the bulls. The 21, 50 and 200-HMAs are aligned around the confluence area. However, the recovery will gain momentum only on a firm break above the 100-HMA. Gold: Hourly chart Gold: Additional levels

Belgium Consumer Confidence Index up to -16 in September from previous -26

EUR/USD keeps navigating within the recent choppy range, looking to extend further north the ongoing rebound from last week’s monthly lows in the 1.17

EUR/USD keeps navigating within the recent choppy range, looking to extend further north the ongoing rebound from last week’s monthly lows in the 1.1740/35 band. Target emerges at the 1.19 mark and above, as FXStreet’s Pablo Piovano notes. Key quotes “The continuation of the upside momentum in EUR/USD should target recent tops in the 1.1925/20 band (September 10). If the upside impetus gathers extra pace, then the investors’ focus will shift to the August’s peak at 1.1965 ahead of the 2020 high near 1.2010 recorded on September 1.” “The constructive view on EUR/USD is expected to remain unchanged as long as the critical 200-day SMA, today at 1.1224, holds the downside.”  “On the opposite side, a breach of monthly lows in the 1.1740 should open the door to a potential deeper retracement to the more relevant contention area in the 1.1700 neighbourhood. A move to the latter, however, remains unfavourable at least in the short-term horizon.”  

Greece Current Account (YoY) rose from previous €-1.421B to €-0.874B in July

Germany’s Finance Minister Olaf Scholz said in a statement on Monday, the European Central Bank (ECB) is currently faced with a strengthening euro. F

Germany’s Finance Minister Olaf Scholz said in a statement on Monday, the European Central Bank (ECB) is currently faced with a strengthening euro. Further comments “German debt likely to rise to around 80% of GDP.” “Germany to take 2021 new debt of just under EUR100 billion.”

Hong Kong SAR Consumer Price Index came in at -0.4%, above expectations (-2.8%) in August

A sudden pickup in the USD demand pushed the USD/CAD pair back above the 1.3200 round-figure mark during the early European session. Worries about the

A combination of factors assisted USD/JPY to regain traction for the second straight session.A sharp fall in the global equity markets extended some support to the safe-haven greenback.A fresh leg down in oil prices undermined the loonie and remained supportive of the move up.A sudden pickup in the USD demand pushed the USD/CAD pair back above the 1.3200 round-figure mark during the early European session. Worries about the second wave of coronavirus infections, along with speculations of fresh lockdown measures to control the outbreak took its toll on the global risk sentiment. The anti-risk flow was evident from a slump in the equity markets, which drove some haven flows towards the US dollar. The USD/CAD pair reversed an early dip to the 1.3170 region and has now moved into the positive territory for the second consecutive session. The momentum was further supported by a steep fall in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. In fact, WTI crude oil fell around 2.50% on Monday and moved back closer to the $40.00/barrel mark on the potential return of output from Libya. Adding to this, concerns about the global fuel demand – amid the ever-increasing COVID-19 cases – further weighed on the already weaker black gold. It will now be interesting to see if the USD/CAD pair is able to capitalize on the move or once again meets with some fresh supply near the 1.3150-60 region. In the absence of any major market-moving economic releases, Monday's key focus will be on a scheduled speech by the Fed Chair Jerome Powell. Technical levels to watch  

USD/CAD is consolidating after breaking the five-month down channel. Joseph Trevisani, an analyst at FXStreet, is awaiting a catalyst for an upmove as

USD/CAD is consolidating after breaking the five-month down channel. Joseph Trevisani, an analyst at FXStreet, is awaiting a catalyst for an upmove as any run higher can be expected to bolstered by stop buying.   Key quotes “The inconclusive break of the pandemic downtrend presents an undecided view forward in the USD/CAD. There is as yet not enough evidence that the US economy has recovered from the lockdown debacle to generate a strong return in the dollar. The Fed’s evident caution reinforces that wariness.” “That a reversal of a five-month trend would be blocked by the relatively weak resistance at 1.3270 is another indication of market uncertainty. The USD/CAD has returned to its pre-pandemic range which is perhaps not surprising after the egregious but essentially artificial excitation of the virus.” “A major point for the US economy remains the labor market which continues to shed nearly one million job a week despite the strong return of payroll positions in the NFP report.  Were these figures claims to drop the chances for a concerted gain in the USD/CAD would rise substantially.”  “The USD/CAD reached above 1.3600 in December 2018 and traded above 1.3400 for much of the second quarter of 2019.  Those ranges would be the natural destination for any move higher. Profit-taking purchases would likely begin north of 1.3350 where the USD/CAD bounced in early June.” “For the moment the USD/CAD is waiting for catalyst but with profit-taking buying lurking in the wings it would not take much improvement in US statistics to send the probes higher.”   

The AUD/USD pair quickly retreated around 35-40 pips during the early European session and weakened back below the 0.7300 mark, refreshing daily lows

AUD/USD failed to capitalize on its early uptick and refreshed daily lows in the last hour.The risk-off mood was seen as a key factor that weighed on the perceived riskier aussie.The AUD/USD pair quickly retreated around 35-40 pips during the early European session and weakened back below the 0.7300 mark, refreshing daily lows in the last hour. The pair managed to regain positive traction on the first day of a new week, albeit lacked any strong follow-through buying and remained confined in a one-week-old trading range. A fresh wave of the global risk aversion trade 0capped the upside for the perceived riskier Australian dollar. The ever-increasing number of coronavirus cases across the global dampened hopes of any V-shaped economic recovery. This coupled with renewed concerns over worsening diplomatic tensions between the world's two largest economies weighed on investors' sentiment and dented appetite for risker assets. The anti-risk flow was evident from a fresh leg down in the equity markets. This, in turn, provided a modest lift to the US dollar's perceived safe-haven status and further contributed to the AUD/USD pair's pullback from an intraday high level of 0.7324, touched during the Asian session. In the absence of any major market-moving economic releases, the broader market risk sentiment will play a key role in influencing the AUD/USD pair. Apart from this, a scheduled speech by the Fed Chair Jerome Powell might influence the USD price dynamics and produce short-term trading opportunities. Technical levels to watch  

FX Strategists at UOB Group noted the outlook on USD/CNH still remains biased towards the downside. Key Quotes 24-hour view: “Last Friday, we held the

FX Strategists at UOB Group noted the outlook on USD/CNH still remains biased towards the downside. Key Quotes 24-hour view: “Last Friday, we held the view that USD could ‘dip towards the 6.7380 support before a more sustained rebound can be expected’. Our view was incorrect as USD rebounded to a high of 6.7788 (low has been 6.7453) before closing at 6.7775 (+0.34%). While USD opened on a weak note this morning, momentum indicators are mostly neutral and USD is unlikely to weaken much from here. All in, USD is more likely to trade sideways, expected to be 6.7480/6.7750 range.” Next 1-3 weeks: “Two days ago (15 Sep, spot at 6.7980) we highlighted that the negative phase that started in mid-August ‘has received a new lease of life’. We added, the next level to focus on is at 6.7660 followed by 6.7500. USD subsequently dropped at a furious pace and it cracked 6.7500 yesterday (low of 6.7429). Over the past 3 days, USD has lost a whopping -1.28%, its biggest 3- day loss in 20 months. It is not surprising that the rapid decline is oversold now. That said, downward momentum remains robust and the outlook for USD still remains weak. However, the pace of any further decline is likely to be slower and the next major support at 6.7165 may be out of reach this time round (there is a minor support 6.7300). Overall, only a break of 6.8100 (‘strong resistance’ level previously at 6.8230) would indicate that the current month-long negative phase has run its course.”

Brexit and politics are affecting the pound again. The external challenge, alongside a difficult growth path and limited fiscal flexibility, suggests

Brexit and politics are affecting the pound again. The external challenge, alongside a difficult growth path and limited fiscal flexibility, suggests that the GBP should fall from here regardless, in the view of economists at HSBC. Key quotes “The window to sign a free-trade agreement between the UK and EU is closing fast. And there is an increasingly fraught domestic political situation. The Internal Market Bill – which the government itself has admitted breaks international law (albeit in a ‘limited and specific’ way) via reneging on the previously signed Withdrawal Agreement (source: BBC, 8 September 2020) – has created headlines which have swung the GBP back and forth. However, the real question for the GBP is whether these events increase or decrease the possibility of a free-trade agreement with the EU. The mood music from the EU suggests things are getting more difficult, not less.” “Anything that makes a free-trade agreement less likely should weigh on the GBP. If it becomes evident that ‘no deal’ is the most likely outcome, the fall in GBP would not be ‘limited and specific’. We believe GBP/USD should trade materially lower in this scenario. But even if a deal can be reached, it is worth remembering that the barriers to UK-EU trade and investment will still be greater in the future than they are now.” “The external challenge, alongside the difficult growth path and limited fiscal flexibility, suggests that GBP should fall from here regardless. We expect GBP/USD to decline further this year.”  

USD/CAD is posting mildly losses on Monday, down -0.1% to 1.3190, as the loonie is still locked in the 1.3150-1.3200 range. Terence Wu, FX strategist

USD/CAD is posting mildly losses on Monday, down -0.1% to 1.3190, as the loonie is still locked in the 1.3150-1.3200 range. Terence Wu, FX strategist at OCBC Bank, expects the USD/CAD pair to consolidate within a broader 1.3120-1.3250 range. Key quotes “Little to no traction for the USD/CAD pair on either side of the 1.3150 to 1.3200 range leaves the pair locked in.” “Soft retail sales print weighs on the CAD, but front-end yield differentials are widening in the CAD’s favour.” “Overall, different drivers pulling the loonie in opposite directions, leaving the pair still consolidative within a broader 1.3120 and 1.3250 range.”  

The USD/JPY pair remained depressed for the sixth consecutive session on Monday and dropped to its lowest level since March 13th, around the 104.15 re

USD/JPY witnessed some follow-through selling for the sixth consecutive session on Monday.The USD was being pressured by fading hopes of another round of the fiscal stimulus measures.Resurgent COVID-19 cases benefitted the safe-haven JPY and contributed to the offered tone.The USD/JPY pair remained depressed for the sixth consecutive session on Monday and dropped to its lowest level since March 13th, around the 104.15 region. The pair failed to capitalize on the previous session's modest bounce of around 30 pips, instead met with some fresh supply on the first day of the new trading week. The downtick was sponsored by the prevalent US dollar selling bias and reviving safe-haven demand. Worries that the lack of additional fiscal stimulus measures could hinder the current US economic recovery largely negated last week's not so dovish FOMC monetary policy statement. This, in turn, kept the USD bulls on the defensive and exerted pressure on the USD/JPY pair. On the other hand, concerns about the ever-increasing number of coronavirus cases weighed on investors sentiment. This was evident from a weaker tone around the equity markets, which benefitted the safe-haven Japanese yen and contributed to the USD/JPY pair's downfall. Meanwhile, a goodish pickup in the US Treasury bond yields failed to impress bullish traders, albeit might turn out to be the only factor lending some support to the USD/JPY pair. Investors might also be reluctant to place fresh bets ahead of the Fed Chair Jerome Powell's speech later this Monday. Moreover, slightly oversold conditions on short-term charts further warrant some caution before positioning for any further depreciating move. Hence, any subsequent fall is more likely to find decent support and remain limited near the 104.00 round-figure mark. Technical levels to watch  

Gold (XAU/USD) is wavering in a familiar range around $1950, looking for a strong catalyst for a range break out. The US dollar weakness amid US fisca

Gold (XAU/USD) is wavering in a familiar range around $1950, looking for a strong catalyst for a range break out. The US dollar weakness amid US fiscal impasse and concerns over the economic recovery underpin the metal. Meanwhile, the US-China tensions and correction in the US equities also buoy the sentiment around the safe-haven. However, the Fed’s reluctance to further stimulus has limited the gold’s attempts on the upside. How is gold positioned technically ahead of the Fed Chair Powell’s multiple appearances this week? Gold: Key resistances and supports The Technical Confluence tool shows that gold failed to hold onto the significant resistance at $1954, which is the SMA5 one-hour and Bollinger Band four-hour Middle. Therefore, to the downside, the spot could find dense support around $1947-$1945 levels, where the Fibonacci 38.2% one-month coincide with SMA10 one-day. A fresh sell-off could be triggered below the latter, opening floors for a test of the previous week low of $1932. Alternatively, recapturing of the critical barrier at $1954 could call for a test of the next upside barrier at $1958, the confluence of the SMA200 four-hour and Fibonacci 38.2% one-week. Further north, Friday’s high at $1961 could be tested, exposing the powerful $1969 hurdle, the pivot point one-day R2.                          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

USD/JPY is approaching the 104.20 July low and Commerzbank’s Karen Jones expects the pair to see a small rebound form this level ahead of further loss

USD/JPY is approaching the 104.20 July low and Commerzbank’s Karen Jones expects the pair to see a small rebound form this level ahead of further losses. Key quotes “USD/JPY has recently severed the six-month uptrend and has sold off to the late July low at 104.20 – this guards the 103.43/78.6% Fibonacci retracement, which is the last defence for the 101.18 March low.” “Intraday rallies should now struggle ahead of the 55-day ma at 106.13.”  “Please note that we suspect that 104.20 will hold the initial test for a small rebound ahead of further losses.  “The market will need to regain 107.05, the recent high, to trigger a move to the 200-day ma at 107.72.”  “We are negative, intraday rallies are indicated to falter around 105.04.”  

UK Prime Minister Boris Johnson agreed to compromise on the controversial Brexit bill and sent the pound higher before the Federal Reserve boosted the

UK Prime Minister Boris Johnson agreed to compromise on the controversial Brexit bill and sent the pound higher before the Federal Reserve boosted the dollar. Politics are set to outweigh economic figures in rocking the pound in the last full week of September, FXStreet’s analyst Yohay Elam reports. Key quotes “Parliament is set to approve the Internal Markets Bill during the week, and markets will focus on the EU's response. If talks collapse, the pound would tumble, while attempts to reach a compromise would boost it.” “BoE officials may have the chance to clarify their intentions in Westminster hearings or interviews. How determined are they to set negative rates? How close is the move? The pound may rock on any hint from Governor Andrew Bailey – who has scheduled speeches – or any other member of the Monetary Policy Committee.”  “Rishi Sunak, the Chancellor of the Exchequer, has yet to announce what would replace – if at all – the furlough scheme which expires next month. The specter of mass UK layoffs is worrying about the nation and markets. A gradual tapering of the scheme is likely, but without details, sterling could suffer. The longer and the more generous the gradual retreat from the program is, the better for the economy and the currency.” “Markit's preliminary purchasing managers' indexes for September are projected to show an ongoing recovery, with statistics for the services and the manufacturing sectors printing well above 50 points – firmly in growth territory. Any slide toward this breakeven level could show investor fear and result in a weaker pound.”  “The Fed already announced its last pre-election decision, yet Chairman Powell may still move markets via public appearances – and so can his colleagues. Hints about expanding the bond-buying program may boost markets and weigh on the dollar, while urging elected officials to agree on fresh relief would weigh on stocks and boost the safe-haven greenback. “ “Democrats and Republicans are still playing the blame-game and don't seem to get any closer to an accord. However, a group of moderate self-proclaimed "problem-solvers" may present a deal that the parties' bigwigs may eventually accept. The larger and the faster a deal arrives, the better for equities and for GBP/USD. Ongoing accusations could weigh on cable.”  

The AUD/USD pair is holding on to its long-term bullish trend around 0.7300, unchanged for a second consecutive week, despite there were quite a few h

The AUD/USD pair is holding on to its long-term bullish trend around 0.7300, unchanged for a second consecutive week, despite there were quite a few headlines that could have spurred action, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “This past week was the turn of the US Federal Reserve, which, as widely expected, kept rates at record lows near zero, and formalize the new framework focused on targeting average inflation. The Fed’s stance was quite similar to that of the Reserve Bank of Australia (RBA), which met earlier this month. A modestly optimistic upgrade of the economic outlook, covered with a good dose of uncertainty and linked to the pandemic developments.” “The Fed’s stance was quite similar to that of the RBA, which met earlier this month. A modestly optimistic upgrade of the economic outlook, covered with a good dose of uncertainty and linked to the pandemic developments. Policymakers from around their world pledged to keep supporting the economy but refrained from making new announcements for the near-term.” “Good news in Australia fell short of boosting the Aussie. According to the official release, the country added  111K new jobs in August, while the unemployment rate fell to 6.8%, beating expectations, despite the lockdown in Victoria. In the region, however, 42.4K lost their jobs. Also, coronavirus cases in the country continued to ease, which lead to a lift to the travel cap for citizens abroad.”  “The upcoming week will be quite light in terms of macroeconomic data, as Australia will only publish the preliminary estimates of the September Commonwealth Bank PMIs. Manufacturing activity is seen falling again into contraction territory, as the index is foreseen at 48.3 from 53.6, while services output is expected to have shrunk further, down from 49 to 48.3. The US, on the other hand, will see Fed’s chief Powell testifying before the Congress, the September preliminary Markit PMI and August Durable Goods Orders.” “A relevant support level is 0.7190, followed by the 0.7100 figure. Given the persistent dollar’s weakness, it seems quite unlikely that the pair could fall below this last. Resistances for the upcoming days stand at 0.7350 and 0.7413, the high set this September.”  

The yen regained its ascendancy against the dollar rising 1.7% last week after stalling for most of the month, as Japan installed a new Prime Minister

The yen regained its ascendancy against the dollar rising 1.7% last week after stalling for most of the month, as Japan installed a new Prime Minister and the Federal Reserve stretched its zero-rate prediction to the end of 2023. Joseph Trevisani, an analyst at FXSTreet, expects the USD/JPY to trade lower, perhaps for longer. Key quotes “The combination of lackluster US statistics, a visibly cautious Fed and a quiet Bank of Japan (BoJ), and a mild retreat of risk sentiment due to rising COVID-19 caseloads in Europe and only slowly withdrawing rates in the US has reinforced the overall downtrend in the USD/JPY.  Or to put it another way, there is nothing in the current markets to question or reverse the continuing and gathering move lower in the USD/JPY. The yen retains its safe-haven status even if the current approach is gradual rather than panic-driven. Without a substantial improvement in US statistics, the main economic variable, there is little reason for traders to change this view.” “At first blush, the USD/JPY reversed at 104.20 on Friday but support there is not strong as it represents a brief one-day low without sustained price action. The March panic lows can be ignored as a guide to future sentiment. Prior support ranges from 100 to 105 but it stems from the second half of 2016 and is weakened by age. The area between 104.00 and 103.00 is largely barren of support. It was only traded for two days at the height of the COVID-19 panic and price points from four years ago have scant relevance.”  “One caveat to the slide in USD/JPY could come from the new Suga administration in Tokyo. The Abe administration made its economic reputation on its successful devaluation of the yen which it characterized as an irrational impediment to Japan’s export-driven economy.” “Whether the BoJ has the financial firepower or the will to attempt an arrest of the strengthening yen is open to question. The same is true for the impact of any supplemental budget forthcoming from Tokyo.”   

Gold (XAU/USD) trades in the $1950 area, similar to the Friday’s close, as the yellow metal draws bids from broad-based US dollar weakness and the dow

Gold (XAU/USD) trades in the $1950 area, similar to the Friday’s close, as the yellow metal draws bids from broad-based US dollar weakness and the downbeat market mood. Coronavirus updates and Fed Chair Powell’s speech are eyed on Monday, FXStreet’s Dhwani Mehta reports. Key quotes “The sentiment remains sour amid resurgent coronavirus fears, especially after the UK is considering nationwide lockdown while Greece and Denmark announced new restrictions on Friday. Investors seek safety in gold, as they fear the fresh measures to contain the virus resurgence could temper the nascent global economic recovery. Meanwhile, the US dollar remains on the back foot, despite the risk-aversion, as the overhang over the US fiscal impasse combined with growing election risks continues to weigh.” “The negative tone in the US equity futures points to a weak start on Wall Street, which could bode well for the bright metal. The focus also remains on the speech by the US Federal Reserve (Fed) Chairman Jerome Powell due later on Monday at 14:00 GMT. Any hints on the Fed’s future monetary policy path will have a significant bearing on the dollar-denominated gold.” “A break above the 100-HMA hurdle at $1955, the price could see a fresh uptick towards the rising channel trendline resistance at $1963.11. Only a sustained break above the latter could open doors towards the last week’s high of $1973.64.” “Should the bulls face rejection at the $1963.11 barrier, the price could fall back towards the 100-HMA. Further down, sellers will aim for the 200-HMA at $1949.75 if the 21-HMA resistance-turned-support gives way. Steeper declines cannot be ruled, as the bears would regain control below a break of the $1940 level.”  

The UK Transport Minister Grant Shapps warned about the rising odds of a nationwide lockdown, as the coronavirus situation in the country is at a cri

The UK Transport Minister Grant Shapps warned about the rising odds of a nationwide lockdown, as the coronavirus situation in the country is at a critical point. Key quotes “We are at a very critical moment.” “We are just a few weeks behind Europe.” “We will hear from PM Johnson on the next steps this week.” “Unless people follow rules, we will end up back where we don't want to be in.” “We must keep schools open.”  

The negative view in USD/JPY is seen alleviated on a break above 105.20, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted l

The negative view in USD/JPY is seen alleviated on a break above 105.20, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted last Friday that ‘the decline is severely oversold but there is room for USD to dip below 107.50 first before a more sustained rebound can be expected’. We added, ‘last month’s low at 104.16 is not expected to come into the picture’. Our view was not wrong as USD dropped to 104.25 before rebounding to end the day at 104.55 (-0.17%). Downward pressure has eased and USD is likely to consolidate and trade sideways for today, expected to be between 104.30 and 104.75.” Next 1-3 weeks: “We have held a negative view in USD since early last week (see annotations in the chart below) 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.”

EUR/GBP trims losses while trading around 0.9160 during the pre-European session on Monday. The quote snapped its two-day rise, following the U-turn f

EUR/GBP extends pullback from 0.9154 after initially snapping two-day winning streak.Bullish MACD, sustained bounce off 21-day EMA highlights one-week-old resistance line for the buyers.Bears will have multiple downside barriers before retaking the control.EUR/GBP trims losses while trading around 0.9160 during the pre-European session on Monday. The quote snapped its two-day rise, following the U-turn from 21-day SMA, during the early Asian session. Though, bullish MACD favor the sellers to attack a falling trend line from September 11. It should be noted that the June month’s high near 0.9175 can offer intermediate halt before directing the buyers towards the trend line resistance around 0.9200. During the quote’s upside past-0.9200, a daily closing beyond 0.9210, comprising the low of September 10, becomes necessary for EUR/GBP before challenging the monthly top of 0.9291. On the contrary, multiple highs marked in late-July near 0.9140 can offer an immediate support to the pair ahead of 21-day SMA, currently around 0.9090. Also acting as downside barriers are the August high of 0.9070, as well as 50% and 61.8% Fibonacci retracement of April-September upside, respectively near 0.8980 and 0.8910. EUR/GBP daily chart Trend: Further recovery expected  

Germany’s Health Minister Jens Spahn said on Monday, the coronavirus situation across Europe is worrying but added that the country can cope with the

Germany’s Health Minister Jens Spahn said on Monday, the coronavirus situation across Europe is worrying but added that the country can cope with the current cases. Additional quotes “Virus infection dynamic in Europe is worrying.” “Virus cases in France, Netherlands, Austria is worrying.” This comes after the Robert Koch Institute (RKI) confirmed on Monday the new infections rose by 922 to 272,337 while no deaths were reported.

Here is what you need to know on Monday, September 21: The US dollar remained on the defensive starting out a fresh week this Monday, extending last w

Here is what you need to know on Monday, September 21: The US dollar remained on the defensive starting out a fresh week this Monday, extending last week’s softness, courtesy of the gridlock on the US fiscal stimulus.  The US lawmakers are still nowhere near agreeing on new relief aid, which could likely thwart the nascent economic recovery. The greenback failed to benefit from the risk-off market mood amid renewed US-China tensions. Trump administration ordered to ban WeChat and TikTok application from the states, although the curbs were put on hold by a judge. Meanwhile, President Donald Trump approved Oracle Corp.’s bid for the US operations of TikTok “in concept.” Asian equities tracked Wall Street lower, with Japanese markets closed on a public holiday. Investors weighed in China ratcheting up the risk of military confrontation in the Taiwan Strait, as Sino-American row over Taipei escalates.AUD/USD was the top gainer in Asia and regained 0.7300, helped by the upbeat comments from Australian Prime Minister (PM) Scott Morrison. He predicts a job bounce-back as Victoria prepares to reopen. The kiwi also followed suit and headed back towards 0.6800 after NZ PM Ardern lowered the country-wide alert outside Auckland to level 1. The yen advanced on broad risk-aversion against the US dollar, with USD/JPY downed to near two-month lows of 104.26.EUR/USD jumped back onto 1.1850, with the 1.1900 level back in sight, as the common currency shrugged-off concerns over the coronavirus resurgence in Europe. Fresh restrictions were imposed in Greece and Denmark last Friday. Spain and France mulled local lockdowns amid a spike in infections.  Among other news, the European Central Bank (ECB) launched a review of its pandemic bond-buying program (PEPP), as cited by the Financial Times (FT).GBP/USD stood resilient above 1.2950, despite the increasing odds of a nationwide lockdown in the UK. Health Minister Hancock said that the country is at a “tipping point.” Chancellor Sunak may extend business support loans. Optimism over a Brexit deal, courtesy of European Commission President Ursula von der Leyen’s upbeat comments, continued to bode well for the pound.Gold traded on the front foot above $1950 amid the dollar weakness, ahead of the Fed Chairman Jerome Powell’s speech. Oil prices returned to the red despite the US storm-led production halt. WTI posted small losses to test the $41 mark.Cryptocurrencies’ traded modestly flat, with Bitcoin probing the $11K level.

Advanced readings from CME Group for Natural Gas futures markets noted open interest went up for the third session in a row on Friday, this time by ar

Advanced readings from CME Group for Natural Gas futures markets noted open interest went up for the third session in a row on Friday, this time by around 8.5K contracts. On the other hand, volume reversed two straight daily builds and dropped by almost 220K contracts. Natural Gas met support near the 200-day SMA Prices of the Natural Gas bounced off multi-week lows around the 200-day SMA ($1.939/MMBtu) against the backdrop of rising open interest at the end of last week. That said, there is the chance for the rebound to extend further with the immediate target at the 55-day SMA around $2.13/MMBtu.

Gains in AUD/USD are expected to pick up pace on a breakout of 0.7350, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectatio

Gains in AUD/USD are expected to pick up pace on a breakout of 0.7350, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectation for AUD to ‘edge above the major resistance at 0.7350’ did not materialize as it traded between 0.7283 and 0.7334 before settling slightly lower at 0.7290 (-0.30%). Momentum indicators are neutral and AUD is likely to consolidate and trade sideways for today, albeit at a lower range of 0.7275/0.7325.” Next 1-3 weeks: “We have held the same view since last Friday (11 Sep, spot at 0.7265) wherein AUD ‘is in a consolidation phase and could trade between 0.7200 and 0.7350 for some time’. After a week, upward momentum is showing tentative sign of picking up. While a move above 0.7350 would not be surprising, AUD has to close above this major resistance before further gains towards 0.7400 can be expected. At this stage, the prospect for such a move is not high but it would continue to increase as long as AUD does not move below 0.7250 within these few days.”

Despite stepping back from intraday high of $41.51 to currently around $41.22, WTI prints 0.16% intraday gain ahead of Monday’s European session. The

WTI fades upside momentum, eases from $41.51 off-late.Friday’s Doji directs bears towards 21 and 50-day EMA confluence.Bulls remain cautious unless refreshing the monthly top.Despite stepping back from intraday high of $41.51 to currently around $41.22, WTI prints 0.16% intraday gain ahead of Monday’s European session. The energy benchmark portrayed a bearish candlestick formation on Friday, which in turn can recall the near-term key support area unless the quote crosses $41.75. In addition to the confluence of 21 and 50-day EMA joint near $40.40/35, the $40.00 round-figures and $38.60 can also lure the bears during WTI’s fresh downside. Though, any more weakness past-$38.60 will make the black gold vulnerable enough to revisit the monthly bottom surrounding $36.40. Alternatively, an upside clearance of Friday’s top near $41.75 can direct the bulls towards the month-start low near $42.90. Should the WTI bulls manage to keep the reins beyond $42.90, the monthly peak near $43.55 and August month’s high close to $43.86 can probe the oil traders before offering them the $44.00 threshold. WTI daily chart Trend: Pullback expected  

CME Group’s flash data for Crude Oil futures saw open interest rising by around 2.3K contracts on Friday following two consecutive daily pullbacks. Vo

CME Group’s flash data for Crude Oil futures saw open interest rising by around 2.3K contracts on Friday following two consecutive daily pullbacks. Volume, instead, shrunk for the second session in a row, this time by around 310.4K contracts. WTI still navigates below $42.00 The barrel of WTI is poised to extend the consolidative theme amidst the inconclusive performance in both open interest and volume. That said, the $42.00 mark per barrel continues to cap the upside ahead of the August’s peak around $43.75.

In opinion of FX Strategists at UOB Group, Cable could now move within the 1.2800-1.3100 range in the next weeks. Key Quotes 24-hour view: “Our expect

In opinion of FX Strategists at UOB Group, Cable could now move within the 1.2800-1.3100 range in the next weeks. Key Quotes 24-hour view: “Our expectation that the ‘rapid rebound in GBP could extend’ did not materialize as it traded sideways between 1.2914 and 1.2999. The underlying tone has weakened and from here, GBP could drift lower to 1.2875 (minor support is at 1.2900). For today, a sustained decline below this level is not expected. Resistance is at 1.2975 followed by 1.3000.” Next 1-3 weeks: “There is not much to add to our latest narrative from last Thursday (17 Sep, spot at 1.2950). As highlighted, last week’s 1.2763 low 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.”

Although the return of the coronavirus (COVID-19) woes weighs on the market sentiment, Asian equities could print only mild losses as markets in Japan

Asian shares fail to please momentum traders amid Japanese holidays.Virus woes, concerns surrounding US stimulus deadlock return to the table.China’s optimism, liquidity pumping fail to get many applauds.New Zealand’s lockdown alert level reduced, UK fears virus resurgence can recall activity restrictions.Although the return of the coronavirus (COVID-19) woes weighs on the market sentiment, Asian equities could print only mild losses as markets in Japan are off on Monday and Tuesday. As a result, the MSCI index of Asia-Pacific shares, ex-Japan, drops 0.30% while heading into Monday’s European session. Australia’s ASX drops 0.70% as China’s Global Times flashed indirect signs of a war with the Pacific major if it chooses to follow the US. In doing so, the Aussie barometer ignores weekend comments from Chinese Prime Minister Xi Jinping conveying economic optimism. Further, New Zealand’s NZX 50 drops around 1.0% by the press time even as lockdown conditions in ex-Auckland have been reduced to alert level 01. The reason could be traced to the anticipated bearish tone from Wednesday’s Reserve Bank of New Zealand (RBNZ) statement. Moving on, markets in China stayed depressed as the People’s Bank of China (PBOC) refrained from further stimulus while Xinhua cited the injection of 210 billion Yuan into the dragon nation’s markets. Elsewhere, stocks in Hong Kong, Indonesia and South Korea also remain downbeat but India’s BSE Sensex buck the trend with 0.14% gains to 38,895 as we write. It’s worth mentioning that the fears of another national lockdown in the UK and the Tehran-Washington tussle are some additional catalysts that weighed on the risk-tone sentiment. As a result, S&P 500 Futures mark a four-day losing streak while declining 0.30% by the press time. Looking forward, a light calendar can restrict the market moves ahead of the US session where a bunch of Fed policymakers, including Chairman Jerome Powell, are up for speaking at different venues.

Open interest in Gold futures markets rose by nearly 3K contracts at the end of last week according to preliminary data from CME Group. On the other h

Open interest in Gold futures markets rose by nearly 3K contracts at the end of last week according to preliminary data from CME Group. On the other hand, volume retreated for the second session in a row, this time by around 104.1K contracts. Gold now targets $1,992/oz Prices of Gold edged higher on Friday amidst rising open interest, opening the door to the continuation of the recovery. That said, the next target of relevance still emerges at the monthly tops around $1,992 per ounce in the short-term horizon.

FX Strategists at UOB Group noted the likeliness of EUR/USD to slip back to the 1.1750 area appears to have lost momentum. Key Quotes 24-hour view: “W

FX Strategists at UOB Group noted the likeliness of EUR/USD to slip back to the 1.1750 area appears to have lost momentum. Key Quotes 24-hour view: “We highlighted last Friday that ‘there is room for EUR to extend its gains’ but we were of the view that ‘the odds for a break of the strong resistance at 1.1885 are not high’. EUR subsequently traded in a relatively quiet manner between 1.1825 and 1.1870 before settling a tad lower at 1.1837 (-0.08%). Momentum indicators are turning neutral and EUR could continue to trade in a quiet manner, expected to be between 1.1820 and 1.1885.” Next 1-3 weeks: “Yesterday (17 Sep, spot at 1.1795), we highlighted that EUR ‘is under mild downward pressure and could dip below 1.1750 but any weakness may not be sustained’. EUR subsequently dropped to a low of 1.1735 before staging a surprising sharp and robust rebound (overnight high of 1.1853). While downward momentum has been dented, only a break of 1.1885 (no change in ‘strong resistance’ level) would indicate the current mild downward pressure has eased. In other words, there is still chance, albeit a diminishing one for EUR to stage another attempt to close below 1.1750. Looking forward, a breach of 1.1885 would indicate EUR could consolidate within a broad range for a period of time.”

In a report to clients, Goldman Sachs’ Economists Kevin Daly and Clemens Grafe believed that the Turkish economy may see a shallower recession while

In a report to clients, Goldman Sachs’ Economists Kevin Daly and Clemens Grafe believed that the Turkish economy may see a shallower recession while calling for higher interest rates. Key quotes “As the ability of Turkey’s central bank to intervene in the market declines in tandem with its foreign currency reserves, we think that monetary policy will need to tighten to slow the pace of imports, encourage inflows and discourage dollarization.”  “Gross domestic product will shrink 3.5% in 2020, a revision of its earlier forecast for a 5% decline. As a result of a “more limited contraction,” the economists expect the current-account deficit at 4% of GDP in 2020. “Turkey’s policy rate could end the year at 12% and reach 14% by the end of the first half in 2021.” “The main risk to this view is that the authorities tighten policy too little, too late as they prefer to remain supportive of growth, a policy course which would add to the risks around the lira.”

USD/CHF drops to 0.9097, down 0.20% on a day, during the pre-European session on Monday. In doing so, the Swiss major takes offer inside a short-term

USD/CHF reverses Friday’s gains, stays offered below 0.9115.Three-day-old symmetrical triangle restricts the pair’s immediate moves.Bears may have to relinquish control considering the nearness to a multi-month low.USD/CHF drops to 0.9097, down 0.20% on a day, during the pre-European session on Monday. In doing so, the Swiss major takes offer inside a short-term triangle established since last Wednesday. With the latest pullback from the triangle’s resistance, sellers are targeting the 0.9085 support confluence including the lower line of the technical pattern and 23.6% Fibonacci retracement level of September 08-10 downside. However, the September 10 bottom and the monthly low, respectively around 0.9050 and 0.9000, will question the pair sellers afterward. Alternatively, buyers will look for fresh entries beyond the triangle’s resistance, at 0.9115 now, which in turn could question 61.8% Fibonacci retracement level of 0.9142. Given the USD/CHF bulls’ dominance past-0.9142, the monthly high near 0.9205 will be in the spotlight. USD/CHF hourly chart Trend: SIdeways  

A resurgence of coronavirus cases poses a risk to EUR/USD's uptrend, which is already showing signs of exhaustion. "The rise in virus cases in Europe

EUR/USD's uptrend at risk as coronavirus cases rise across the Eurozone. New lockdown restrictions may force the ECB to adopt a stronger dovish stance. Traders eye preliminary Eurozone PMI numbers along with virus figures. A resurgence of coronavirus cases poses a risk to EUR/USD's uptrend, which is already showing signs of exhaustion.  "The rise in virus cases in Europe should be a cause for concern for all EUR/USD traders. The ECB is not worried about the level of the currency. But, if new restrictions lead to a further slowdown, the central bank may have to alter its stance," BK Asset Management's Kathy Lien noted in her daily analysis.  Second wave Last week, Europe reported 300,000 new infections – the most significant weekly rise ever, including the first spike in spring, according to the World Health Organization's (WHO) regional director Hans Kluge.  France, Poland, the Netherlands, and Spain are reportedly dealing with the second wave. Britain is already considering a new lockdown, while countries from Denmark to Greece announced new restrictions on Friday.  Stricter restrictions will be imposed if the situation worsens. That will likely torpedo the nascent recovery from the coronavirus crash, forcing the European Central Bank (ECB) to add more stimulus.  So far, the ECB has been relatively less dovish than the Federal Reserve. That's one of the big reasons for EUR/USD's rally from 1.08 to 1.20, seen in the 3.5-months to Sept. 1. More importantly, the Fed recently signaled tolerance for high inflation. In other words, the central bank would allow inflation to rise above the 2% target for some time before raising interest rates. The ECB, too, may feel compelled to follow suit if the coronavirus cases continue to rise.  Apart from the number of coronavirus cases, traders need to keep an eye on the Eurozone preliminary PMI reports for September, scheduled for release on Wednesday. "A slowdown in service and manufacturing activity could be the key trigger for EUR/USD reversal," Lien noted.  Uptrend exhaustion The back-to-back Doji candles seen on EUR/USD's weekly chart suggests the uptrend from lows below 1.08 seen in May has run out of steam.  The immediate bias is neutral, and the focus now is on the previous week's high and low of 1.19 and 1.1737.  Acceptance below 1.1737 would confirm a bearish Doji reversal or a bullish-to-bearish trend change. Alternatively, 1.19 is the level to beat for the bulls. That said, more credible evidence of bullish revival would be a daily close above the psychological hurdle of 1.20. The pair is trading near 1.1870 at press time, representing a 0.30% gain on the day.  EUR/USD Price Analysis: Euro may be eyeing reversal lower Technical levels  

GBP/USD takes the bids near 1.2955, up 0.33% intraday, while heading into the London open on Monday. In doing so, the Cable pays a little heed to the

GBP/USD stays bid near the mid-1.2900s following three successive failures to cross 1.3000 during last week.UK’s health authorities tease lockdown restrictions following the recent jump in cases, deaths due to the pandemic.British Chancellor Sunak may extend business support loans, the BDO survey suggests no V-shaped recovery.Fedspeak eyed amid a light calendar, risk catalysts are the key.GBP/USD takes the bids near 1.2955, up 0.33% intraday, while heading into the London open on Monday. In doing so, the Cable pays a little heed to the coronavirus (COVID-19) threats emanating from the UK, as well as Brexit pessimism, while cheering the broad US dollar weakness. Given the light calendar ahead of the Fed policymakers’ comments during the American session, risk catalysts will be the key. Excerpts from the upcoming speech of British Chief Medical Officer Chris Whitty, shared by Reuters, suggest that the pandemic’s return is not only fading the economic recovery but also pushes the nation towards another lockdown and a “very challenging winter”. On the other hand, London Mayor Sadiq Khan also said, as per the BBC, that they’re "catching up" with Covid-19 hotspots in northern England. Other than the virus worries, Brexit pessimism is also looming over the Pound traders. Having initially showed readiness to hear the Internal Market Bill (IMB), mainly due to the UK PM Boris Johnson’s offer to ease fisheries, the European Union (EU) is reiterating the warning if London moves ahead to conquer the Brexit Withdrawal Agreement Bill (WAB). Amid these negative points, a survey report from the Make UK and BDO suggest that the talks of V-shaped recovery are just fanciful. As a result, UK Finance Minister Rishi Sunak is again stepping forward to help businesses. The news, cited by the Financial Times (FT), indicates an extension of four loan schemes for applications until the end of November. On the other hand, the US dollar index (DXY) drops 0.27% to 92.75 by the press time as markets await fresh clues to extend the latest greenback recovery amid mixed signals from virus, stimulus and a tussle with China. Adding to the greenback’s problem is its latest tussle with Iran and an on-going tension with Beijing. Looking forward, a light calendar may keep traders directed to the risk catalysts and hence speech from the UK’s health authorities, at 10:00 AM GMT will be the key to watch. Technical analysis A daily closing beyond 50-day SMA, currently around 1.3010, becomes necessary for the Cable bulls to target the late-August lows near 1.3055, failing to do so can keep the monthly low of 1.2762 on the bears’ radars.  

In a Bloomberg interview over the weekend, the UK Health Secretary Matt Hancock said that a second nationwide lockdown is on the table to contain the

In a Bloomberg interview over the weekend, the UK Health Secretary Matt Hancock said that a second nationwide lockdown is on the table to contain the coronavirus second-wave, per Reuters. Key quotes "If everybody follows the rules then we can avoid further national lockdowns, but we, of course, have to be prepared to take action if that's what's necessary." "I don't rule it out, I don't want to see it." Market reaction The coronavirus curbs fears have little impact on the GBP bulls, as GBP/USD edges higher above 1.2950 amid notable US dollar supply. At the moment, the cable adds 0.34% to trade at daily highs of 1.2962.

NZD/USD takes the bids near 0.6775, up 0.23% on a day, during the early Monday. In doing so, the kiwi pair defies Friday’s bearish candlestick formati

NZD/USD keeps recovery moves from 0.6755 despite Friday’s bearish candlestick.The 0.6700 threshold, 21-day SMA offer immediate support.A seven-week-old resistance line can lure the buyers before latest highs.NZD/USD takes the bids near 0.6775, up 0.23% on a day, during the early Monday. In doing so, the kiwi pair defies Friday’s bearish candlestick formation amid bullish MACD. However, buyers will remain cautious unless the pair crosses the latest top near 0.6800, a break of which will direct NZD/USD towards an ascending trend line from July 31, at 0.6831 now. In a case where the bulls remain dominant past-0.6830, April 2019 top near 0.6840 and the 0.6900 may return to the charts. Alternatively, 0.6700 and 21-day SMA level of 0.6691 can restrict the near-term downside of NZD/USD. During the pair’s additional weakness below 0.6691, the monthly bottom surrounding 0.6600 should be the key to watch. NZD/USD daily chart Trend: Pullback expected  

The People's Bank of China (PBOC) injected a net 210 billion yuan into the banking system through open market operations during the last week. During

The People's Bank of China (PBOC) injected a net 210 billion yuan into the banking system through open market operations during the last week.  During Sept. 14 to Sept. 18 period, the central bank injected 600 billion yuan via medium-term lending facility (MLF) while 200 billion yuan of MLF matured. In other words, the PBOC conducted MFL operations to ensure liquidity remains at a reasonable level.  On Monday, the central bank kept one- and five-year loan prime rates unchanged at 3.85% and 4.65%. 

The USD/CNH pair may be in for consolidation or minor bounce, as the offshore yuan or CNH looks overbought for the first time in over two years. USD/C

USD/CNH's weekly chart indicator shows CNH's rally is overdone. The pair's daily chart also favors a corrective bounce. The USD/CNH pair may be in for consolidation or minor bounce, as the offshore yuan or CNH looks overbought for the first time in over two years.  USD/CNH's 14-week relative strength index (RSI) has declined below 30, a sign of oversold conditions. A sub-30 reading was last seen in March 2018.  The daily chart is also reporting oversold conditions for the third straight week. An oversold reading on the RSI implies the sell-off is overdone. However, the oversold reading needs validation from signs of downtrend exhaustion on the price chart.  The pair created an inverted hammer last Thursday, indicating seller fatigue and potential for reversal higher.  All-in-all, the odds appear stacked in favor of a corrective bounce. The immediate resistance is seen at 6.8135 (Sept. 1 low) followed by 6.9048 (March 9 low). Meanwhile, support is seen at 6.7423 (Sept. 16 low).  Weekly chart Daily chartTrend: Oversold Technical levels  

While AUD/JPY has bounced up from three-week lows, it struggles to chart a convincing break above a crucial technical hurdle. The pair is currently tr

AUD/JPY is probing the 50-day SMA hurdle, having hit three-week lows on Friday. The Asian stocks trade in the red on fears of fresh coronavirus lockdown restrictions. Risk aversion favors a deeper drop in the AUD/JPY pair. While AUD/JPY has bounced up from three-week lows, it struggles to chart a convincing break above a crucial technical hurdle.  The pair is currently trading around the 50-day simple moving average (SMA) hurdle at 76.30, having hit a low of 75.98 on Friday. That was the lowest level since Aug. 25.  The pair is having a tough time scaling the 50-day SMA alongside losses in the Asian equities. As of writing, stocks in Australia and New Zealand are down 0.5%. The Shanghai Composite index is nursing a 0.26% loss, and shares in Hong Kong and South Korea are flashing red. The futures tied to the S&P 500 are also down 0.10%. Japanese markets are closed for a public holiday. The risk-off tone could be associated with the resurgence of the coronavirus across the globe. Britain is already considering a new lockdown, while countries from Denmark to Greece announced new restrictions on Friday.  Investors fear that new lockdown restrictions would torpedo the nascent recovery, and the situation would worsen if the US fiscal impasse over additional stimulus persists.  The anti-risk Japanese yen will likely pick up a bid, sending AUD/JPY back to Friday's low if the stock markets continue to trade in the red during the day ahead. In particular, the US technology stocks could feel the pull of gravity as speculators have recently boosted their bearish bets to the highest level since April 2008.  Technical levels  

In their latest client note, Goldman strategists led by David Kostin noted that value shares will be more favored than cyclical stocks on a COVID-19

In their latest client note, Goldman strategists led by David Kostin noted that value shares will be more favored than cyclical stocks on a COVID-19 vaccine than cyclical stocks, per Bloomberg. Key quotes “Value stocks tend to have short-duration cash flows, so will outperform as rates rise, while cyclicals and defensives have similar durations on average.” “The consensus view of investors is cyclicals will outperform when a vaccine is identified.” “However, the correlation of returns with the prospects for a vaccine suggest value rather than cyclicals is the better tactical expression of this view.” “Vaccine catalysts may coincide with the upcoming US election, which may also provide a tailwind to value in the near term.”

According to the latest survey conducted by the Make UK industry association and accountants BDO, Britain’s manufacturers remain little optimistic on

According to the latest survey conducted by the Make UK industry association and accountants BDO, Britain’s manufacturers remain little optimistic on the recovery from coronavirus pandemic induced manufacturing recession, with no evidence of a ‘V-shaped’ recovery. Key findings “The survey’s quarterly gauge of investment intentions fell to -32% from -26%.” “The manufacturers’ employment expectations deteriorated in the latest Make UK/BDO survey, although its gauge of future output improved somewhat.” Stephen Phipson, Chief Executive at Make UK, said: “Manufacturing has begun to climb away from the abyss that it stared into earlier in the year.” “But, make no mistake it is going to be a long haul back towards normal trading conditions, with talk of a ‘V’-shaped recovery nothing more than fanciful, Phipson added. Market reaction The pound is undeterred by the above findings of the survey, as GBP/USD looks to extend gains above 1.2950 amid broad US dollar weakness.

AUD/USD rises to 0.7310, up 0.28% intraday, during early Monday’s trading. The aussie pair recently refreshed the intraday high to 0.7314 while carryi

AUD/USD defies Friday’s halt to five-day winning streak while refreshing the intraday high.Bearish MACD fails to disappoint buyers cheering a sustained move beyond short-term SMAs.Monthly resistance line on bulls’ radars, sellers can aim for the key Fibonacci retracements before the monthly low.AUD/USD rises to 0.7310, up 0.28% intraday, during early Monday’s trading. The aussie pair recently refreshed the intraday high to 0.7314 while carrying its U-turn from the 10-day and 21-day SMA confluence. In doing so, the quote ignores bearish MACD while also parting ways from Friday’s downbeat performance. Considering the pullback from the key SMA joint, AUD/USD prices may attack the falling trend line from September 01, at 0.7327 now, during the further recoveries. However, the pair’s upside past-0.7327 becomes doubtful, which if happen needs to cross last week’s top near 0.7350 before directing the bulls towards the August 31 top close to 0.7415. Meanwhile, a daily closing below 0.7285/80 support confluence will attack 50% and 61.8% Fibonacci retracements of AUD/USD upside marked in August, respectively around 0.7245 and 0.7205. In a case where the bears dominate past-0.7205, the monthly bottom near 0.7190 will be the key to watch. AUD/USD daily chart Trend: Further recovery expected  

Heading into the Reserve Bank of New Zealand (RBNZ) monetary policy decision due to be announced this Wednesday, the New Zealand Institute of Economic

Heading into the Reserve Bank of New Zealand (RBNZ) monetary policy decision due to be announced this Wednesday, the New Zealand Institute of Economic Research (NZIER) Monetary Policy Shadow Board continues to favor the expansion of the quantitative easing (QE) program to adopting negative interest rates for additional stimulus. Key quotes “Fewer Board members see further quantitative easing as appropriate over the coming year.“ “Although an expansion of quantitative easing remains more favored than a negative OCR in stimulating the economy, there has been an increase in appetite amongst Shadow Board members to introduce a negative OCR over the coming year.” “Some Shadow Board members continue to highlight their skepticism about the effectiveness of a negative OCR in stimulating the economy.” Market reaction Despite dovish RBNZ expectations and risk-off mood, NZD/USD stays well bid above 0.6750. The spot continues to benefit from the country’s lowering of the coronavirus alert level to 1 while the Chinese central bank keeps the interest rates on hold. At the press time, NZD/USD gains 0.16% to trade at 0.6771.

The People's Bank of China's (PBOC) decision to keep interest rates unchanged fails to elicit a reaction from the USD/CNY pair. The central bank retai

USD/CNY lacks a clear directional bias on Monday. The PBOC keeps one- and five-year interest rates unchanged. The pair looks oversold and due for a corrective bounce. The People's Bank of China's (PBOC) decision to keep interest rates unchanged fails to elicit a reaction from the USD/CNY pair.  The central bank retained one and five-year loan prime rates (LPR) at 3.85% and 4.65%.  A status quo decision was expected, given the recent improvement in the forward-looking economic indices. For instance, the Caixin China purchasing managers index, which focuses on small, private manufacturers, rose to a nine-year high of 53.1 in August from 52.8 in July. As such, the CNY hasn't seen notable moves since the rate decision. The USD/CNY pair is trading in the sideways manner near 6.7636 at press time. The pair has declined by over 5% since topping out at 7.1766 in May.  The 14-day relative strength index is hovering below 30 or in the oversold region for the fourth straight week. Therefore, a corrective bounce could be in the offing.  The case for a bounce would strengthen if the US stocks extend the recent risk aversion, boosting the greenback's haven demand. The futures tied to the S&P 500 are currently down 0.20%.  The official data released Friday showed speculators boosted their short positions in the tech-heavy Nasdaq 100 to the highest level since 2008 int he week ended Sept. 15.  Technical levels  

S&P 500 Futures prints 0.20% gains while rising to 3,325 during Monday’s Asian session. Although the absence of traders from Tokyo and a light calenda

S&P 500 Futures snap previous three-day losing streak to regain 3,300.Off in Japan weighs on market moves but upbeat headlines from New Zealand, China and Tokyo trigger the risk reset.Virus woes, US-Iran tussle stand on the other side but US dollar weakness pays for all.S&P 500 Futures prints 0.20% gains while rising to 3,325 during Monday’s Asian session. Although the absence of traders from Tokyo and a light calendar trigger risk reset, news from Wellington and Beijing favor the risk-tone sentiment. In doing so, fears of the coronavirus (COVID-19) and the Tehran-Washington tussle seem to have been ignored, for now. After a few weeks of the second lockdown, New Zealand’s (NZ) Prime Minister Jacinda Ardern announced an easing of virus-led restrictions to alert level 1 outside the epicenter Auckland. On the other hand, China’s President Xi Jinping praised the economic momentum while shrugging off geopolitical risks, indirectly hitting the US. Alternatively, the recent surge in the UK’s pandemic numbers joins escalating new cases from Europe to renew fears of another lockdown conditions. Also challenging the risk could be the US threat to levy sanctions on over 20 firms tied to helping Iran over arms’ building. Elsewhere, China’s Global Times again flashed war signals, this time for Australia, while saying, "If we have no choice but war, we should first avoid direct conflict with the US. We can (instead) severely beat up a US running dog that always crosses our bottom line... to send a warning.” It should also be noted that the global markets are still hopeful of further stimulus from the UK, Japan and the US, which in turn should favor the equities. Though, tech rout and aid-package deadlock in America seems to weigh on the shares amid the mixed signals from the US Federal Reserve. Moving on, Chicago Fed National Activity Index and Fed Chair Jerome Powell’s speech will be the key to watch for fresh impetus. However, risk catalysts will remain in the driver’s seat.

China PBoC Interest Rate Decision remains unchanged at 3.85%

Gold's multi-week consolidation in a narrowing price range could end with a bullish breakout, as a widely-tracked daily chart indicator is about to tu

Gold remains stuck in a four-week-long descending triangle. A widely-tracked momentum indicator is teasing a bullish revival. Gold's multi-week consolidation in a narrowing price range could end with a bullish breakout, as a widely-tracked daily chart indicator is about to turn bullish.  The yellow metal has carved out a descending triangle pattern over the past four weeks. The triangle's upper end or resistance is currently located at $1,960, and support is seen at $1,910.  Gold is trading at $1,953 per ounce at press time, representing a 0.13% gain on the day.  The daily chart MACD histogram, an indicator used to gauge trend strength and trend reversal, is printing higher lows below the zero line, a sign of weakening of the bearish momentum. Besides, the indicator now looks set to cross into bullish territory above zero.  As such, gold could soon take out the triangle resistance at $1,960. That would open the doors for $2,015 (Aug. 18 high).  Daily chartTrend: Bullish above $1,960 Technical levels  

China keeps its one-year loan prime rate unchanged at 3.85%, as expected and its five-year loan prime rate unchanged at 4.65%, as expected. More to co

China keeps its one-year loan prime rate unchanged at 3.85%, as expected and its five-year loan prime rate unchanged at 4.65%, as expected. More to come...

Silver prices rise to $26.91, intraday high of $26.96, during the Asian session on Monday. The white metal dropped from $26.84 to $26.50 at the start

Silver keeps the pullback moves from $26.50 while battling 10-day EMA.Monthly triangle restricts short-term moves amid normal RSI conditions.Silver prices rise to $26.91, intraday high of $26.96, during the Asian session on Monday. The white metal dropped from $26.84 to $26.50 at the start of the day’s trading. However, the following recovery attacks 10-day EMA resistance. Other than the 10-day EMA level of $26.97, a falling trend line from September 01, at $27.13 now, also probes the bulls targeting the mid-September top surrounding $27.65. In a case where silver buyers manage to cross $27.65 on a daily closing basis, the monthly high of $28.90 will be in the spotlight. Alternatively, a downside break of the short-term triangle’s support, near $26.40, will quickly recall the $26.00 threshold on the chart before targeting the monthly low close to $25.85. Considering the symmetrical triangle formation and the normal RSI conditions, the white metal traders are likely to remain standby unless silver prices offer any notable breakout. Silver daily chart Trend: Sideways  

New Zealand prime minister Ardern says a full return to normal at border depends on a COVID-19 vaccine but says COVID-19 restrictions in Auckland to m

New Zealand prime minister Ardern says a full return to normal at border depends on a COVID-19 vaccine but says COVID-19 restrictions in Auckland to move to alert level 2. The rest of the country is to move to alert level 1 from Tuesday. Key comments New Zealand pm Arden says gathering limit in Auckland increased to 100 people. NZ pm Arden says rest of country to move to alert level 1 from Tuesday. New Zealand pm Arden says level 2 in Auckland will remain in place for 14 days. New Zealand pm Ardern says a full return to normal at border depends on a COVID-19 vaccine. Market implications The kiwi has enjoyed some optimistic comments recently from officials such as  Finance Minister Grant Robertson who said "going hard and early means that we can come back faster and stronger," he said. This week is all about the RBNZ MPR on Wednesday. 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 pressure off the NZD, analysts at ANZ Bank explained. 

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7595 versus Friday's fix at 6.7591.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.7595 versus Friday's fix at 6.7591.

The bulls are looking for an extension of the bull trend following a break of current resistance from which a bullish setup on a retest of resistance

AUD/CHF remains on course for a breakout to the upside.An extension of the daily breakout opens prospects of mid 0.67 area.The bulls are looking for an extension of the bull trend following a break of current resistance from which a bullish setup on a retest of resistance turning support can target 0.6745.  The following is a top-down analysis of the market and an update of the prior article as follows:AUD/CHF Price Analysis: Bulls looking set for 1:3 R/R on break of resistance structure1 Month chart 1W chart 1D chart 4HR chart

USD/JPY seesaws around 104.45 during Monday’s Asian session. Even if Japan’s close and the recent uptick in risk barometers challenge the yen major’s

USD/JPY recovers early Asian losses while bouncing off 104.43.Risk dwindles as virus woes combat hopes of further stimulus and geopolitical headlines.Markets in Tokyo are off for Respect-for-the-Aged Day, Chicago Fed National Activity Index, Fed Chair’s speech will be the key.USD/JPY seesaws around 104.45 during Monday’s Asian session. Even if Japan’s close and the recent uptick in risk barometers challenge the yen major’s immediate downside, bears refrain from stepping back from the seven-week low. Off in Tokyo joins a lights calendar… Other than the extended weekend for Japanese traders, the absence of any major data/events from the rest of the Asia-Pacific nations also hinders USD/JPY performance off-late. Even so, worsening coronavirus (COVID-19) conditions in the UK and Europe join the US-Iran tussle to probe the risk-tone sentiment. While the British Chief Medical Officer suggested the return of lockdowns, virus numbers are also rising from Spain and Germany. Elsewhere, America is likely to sanction the firms helping Iran build arms while Tehran laughed on the Trump administration’s failures at the United Nations (UN). On the contrary, the upbeat statement from Chinese President Xi Jinping and expectations of further stimulus for the Asian major under the presidency of Yoshihide Suga favor the market optimism. Not only from Japan but the UK and the US are also up for additional money supply. Against this backdrop, S&P 500 Futures gain 0.17% to 3,321 whereas stocks in Australia and New Zealand are mildly offered by the press time. Looking forward, the Asian session is likely to remain dull amid a lack of major catalysts. Though, Chicago Fed National Activity Index, expected 1.95 versus 1.18 prior, will precede Federal Reserve Chairman Jerome Powell’s speech to please the momentum traders. Technical analysis Only if the pair bounce back beyond the August month low of 105.10, it can witness the 106.00 again, else sellers will keep eyes on the July low near 104.20 for fresh entries.  

Speculators boosted their net short positions in the tech-heavy Nasdaq 100 index during the week ended Sept. 15, pushing the total tally to the highes

Speculators boosted their net short positions in the tech-heavy Nasdaq 100 index during the week ended Sept. 15, pushing the total tally to the highest level since April 2008, according to US Commodity Futures Trading Commission data released on Friday. Technology stocks have come under pressure this month, putting a floor under the oversold safe US dollar.  On Friday, the Nasdaq 100 slipped to 10,769 – the lowest level since July 31 – having topped out at a record high of 12,439 on Sept. 2. It has found acceptance below the 50-day simple moving average for the first time since April 13.  The recent sharp rise in shorts suggests investors are anticipating deeper losses in the technology shares. 

EUR/USD's two weeks of indecisive price action may presage a short-term bearish reversal. The pair formed a second consecutive Doji candle on the week

EUR/USD's weekly chart candlestick pattern shows uptrend fatigue. The previous week's low is the level to defend for the bulls. EUR/USD's two weeks of indecisive price action may presage a short-term bearish reversal.  The pair formed a second consecutive Doji candle on the weekly chart during the five days to Sept. 18.  A Doji is usually taken to represent indecision in the market place. However, in this case, the back-to-back Doji candles have appeared following a notable rally from 1.08 to 1.2011. As such, they are indicative of buyer exhaustion.  The lower highs on the weekly chart MACD histogram also suggest bull fatigue. Hence, a pullback may be seen in the short-term.  Acceptance under last week's low of 1.1737 would confirm a bullish-to-bearish trend change.  On the higher side, a daily close above 1.20 is needed to restore the bullish bias.  Daily chartTrend: Buyer fatigue Technical levels  

USD/CAD stays heavy around 1.3193 during Monday’s Asian session. In doing so, the loonie pair fails to extend Friday’s gains from the 21-day SMA despi

USD/CAD remains mildly offered between 1.3192 and 1.3208.Bullish MACD, repeated pullbacks from 21-day SMA favor the buyers.Sellers will have multiple downside barriers before refreshing the monthly low.USD/CAD stays heavy around 1.3193 during Monday’s Asian session. In doing so, the loonie pair fails to extend Friday’s gains from the 21-day SMA despite bullish MACD signals. As a result, sellers are likely to have limited space, until the mentioned level of 1.3146, before stepping backward. However, a daily close below the immediate SMA can direct USD/CAD sellers towards 1.3100 and 1.3050/45 supports before highlighting the monthly bottom near 1.2995. On the flip side, the monthly top surrounding 1.3260 can entertain buyers during the fresh rise but a confluence of 50-day SMA and 38.2% Fibonacci retracement of June-September downside, close to 1.3270, may challenge the bulls afterward. If at all the buyers manage to conquer 1.3270, the July month’s low surrounding 1.3330 will be in the spotlight. USD/CAD daily chart Trend: Pullback expected  

WTI recovers the early-Asian losses while trading near $41.20 during the pre-Tokyo Asian trading on Monday. In doing so, the energy benchmark keeps tr

WTI remains heavy below 50-day SMA, drops from $41.18 to begin the week.Trump administration to sanction firms tied to Iranian arms embargo, Tehran says US faces defeat.Coronavirus resurgence poses serious challenges to Europe and some parts of Asia.Hopes of further stimulus, China’s optimism favor energy bulls.WTI recovers the early-Asian losses while trading near $41.20 during the pre-Tokyo Asian trading on Monday. In doing so, the energy benchmark keeps trailing 50-day SMA for over two weeks while taking clues from the US-Iran tussle and the coronavirus (COVID-19) headlines. Fears of supply glut battle hopes of geopolitical challenges… With the rising cases in the UK and Spain, virus woes are retaking controls, which in turn weigh on the energy prices. Recently, comments from British Chief Health Officer, cited by Reuters, up for publishing on 10:00 GMT, suggested a very challenging winter ahead. Conditions in Spain, India and Brazil are also worsening with the daily jump in new cases and a lack of a cure to the pandemic. Elsewhere, the restart of oil rigs in the Gulf of Mexico and internal tension amid the Organization of the Petroleum Exporting Countries (OPEC), concerning the output cut accord, also weigh on the WTI prices. Alternatively, the US and Iran are again at loggerheads as America prepares to sanction over 20 firms tied to Tehran’s building of arms. During the weekend, Iranian President Hassan Rouhani said, per Reuters, “The United States faces defeat in its move to reimpose U.N. sanctions on Tehran.” It should also be noted that the market’s risk-off tone, as portrayed by 0.10% loss by S&P 500 Futures also weighs on the energy prices. Looking forward, oil traders may continue watching over the geopolitical headlines and the US dollar moves, amid a light calendar, for near-term direction. Technical analysis Friday’s Doji below 50-day SMA highlights $41.30 as the key short-term resistance ahead of July month’s high of $42.52. Meanwhile, the 21-day SMA level of $40.60 and the $40.00 can offer nearby strong supports to the WTI quote.  

NZD/USD is currently trading at 0.6758 in a quiet start to the week in Asia, oscillating between a low of 0.6752 and 0.6768. With an upside correction

NZD/USD has corrected from fresh highs as markets eye the RBNZ this week.The optimism of a fast recovery from the deepest recession in decades has buoyed the bird.NZD/USD is currently trading at 0.6758 in a quiet start to the week in Asia, oscillating between a low of 0.6752 and 0.6768. With an upside correction in the greenback, NZD/USD has been scaled back since reaching a new high for the year on Friday at 0.6797. The northerly trajectory has been mostly down to weakness in the greenback which has otherwise masked the vulnerabilities in the currency pertaining to the deepest recession in decades. The strict measures in response to the COVID-19 pandemic have led to the country's Gross Domestic Product shrank by 12.2% between April and June as the lockdown and border closures hit. However, helping the currency on its way to the new highs last week, Finance Minister Grant Robertson said the GDP numbers were better than expected and suggested a strong recovery ahead. "Going hard and early means that we can come back faster and stronger," he said. There are also predictions of a swift recovery, because of New Zealand's strong response to the virus from analysts at Westpac "We expect the June quarter's record-breaking GDP decline to be followed by a record-breaking rise in the September quarter," said Westpac's Senior Economist Michael Gordon. Eyes on RBNZ The main focus at this juncture is with the Reserve Bank of New Zealand with the Policy Review scheduled for this Wednesday. 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 pressure off the NZD, analysts at ANZ bank wrote.  NZD/USD levels

GBP/USD print mild gains around 1.2930 during the initial Asian trading on Monday. The Cable recently picked up bids after taking a U-turn from 200-HM

GBP/USD fails to extend Friday’s losses while staying beyond 1.2900 mark.Normal RSI, bullish chart pattern offer additional clues for the bulls to watch.Sellers may eye the monthly low on conquering the channel’s support.GBP/USD print mild gains around 1.2930 during the initial Asian trading on Monday. The Cable recently picked up bids after taking a U-turn from 200-HMA. While considering the normal RSI conditions and the latest bounce, not to forget a one-week-old ascending trend channel formation, the quote is likely to print further recovery. In doing so, 1.2945/50 and 1.2975 may offer immediate resistance to the buyers ahead of Friday’s top near the 1.3000 threshold. During the quote’s run-up beyond 1.3000, 50% Fibonacci retracement of September 04-11 downside, at 1.3040, can become GBP/USD buyers’ favorite ahead of the resistance line of the aforementioned rising channel, currently around 1.3055. Alternatively, the lower line of the channel, at 1.2900, can add a floor to the pair’s downside below the 200-HMA level of 1.2911. Though, GBP/USD weakness below 1.2900 may attack the monthly bottom surrounding 1.2765/60. GBP/USD hourly chart Trend: Further recovery expected  

United Kingdom Rightmove House Price Index (YoY): 5% (September) vs 4.6%

United Kingdom Rightmove House Price Index (MoM) increased to 0.2% in September from previous -0.2%

Gold prices remain pressured at $1,948.10, down -0.13% intraday, during the pre-Tokyo open Asian trading on Monday. The yellow metal marked gains duri

Gold remains sluggish around $1,950 after declining from $1,951.86 at the week’s start.Virus woes return to the table but hopes of further stimulus seem battling the safe-haven bulls.US-Iran and Sino-American tussles continue, Brexit headlines offer mixed clues.Fed Chair Powell’s speech will be the key.Gold prices remain pressured at $1,948.10, down -0.13% intraday, during the pre-Tokyo open Asian trading on Monday. The yellow metal marked gains during the previous two weeks as the US dollar’s downbeat performance favored the bulls cheering risk-off sentiment. Though, buyers seem to await major signals to extend the weekly moves while carrying the recently sluggish intraday moves. Pessimism continues but with asterisk… Although coronavirus (COVID-19) risk in Europe is mounting and the trade-political tension between the US and China continues, the risk-aversion wave isn’t taking a turn towards the precious metals off-late. The reason could be traced from the hopes of heavy stimulus from the UK and Japan even as the American policymakers dwindle in announcing the much-awaited stimulus package. Elsewhere, Tehran and Washington are also probing each other and the US is about to slap over two dozen companies for helping the Arab nation in building arms. Furthermore, China battles the US, India and some other Asian nations like Taiwan, Hong Kong and Thailand silently but the latest comments from President Xi Jinping suggested that the world’s second-largest economy is recovering. During the last week, hints of prolonged monetary easing from the US Fed, BOJ and BOE seem to have favored the bullion buyers amid the further weakening of the major currencies, especially the US dollar. However, the market’s optimism towards the American leadership hint otherwise. Against this backdrop, S&P 500 Futures drop 0.34% to 3,305 by the press time. Global equities have been declining for the last two weeks and add a feather into the golden crown. Moving on, the Asian economic calendar is mostly silent and hence the risk catalysts become the key to watch ahead of Federal Reserve Chairman Jerome Powell’s speech, up at 14:00 GMT. Global traders will seek clues of last week’s optimism to recall the USD bulls, which in turn may weigh on gold prices. Technical analysis Repeated bounces off 50-day SMA, currently around $1,940, favor buyers targeting a break of the one-month-old falling trend line near $1,960.  

British Chief Medical Officer Chris Whitty is expected to ring alarm over the UK’s coronavirus (COVID-19) conditions during his 10:00 GMT speech on Mo

British Chief Medical Officer Chris Whitty is expected to ring alarm over the UK’s coronavirus (COVID-19) conditions during his 10:00 GMT speech on Monday, per Reuters’ piece published during the early Asian session. Key quotes The trend in the UK is heading in the wrong direction and we are at a critical point in the pandemic. We are looking at the data to see how to manage the spread of the virus ahead of a very challenging winter period. More than 40,000 people in Britain have died within 28 days of testing positive for COVID-19 since the start of the pandemic in March, the highest number in Europe. Health minister Matt Hancock on Sunday warned the country was at a tipping point, saying that people must follow rules on self-isolating or face the imposition of further lockdown measures. The government announced large fines for non-compliance. Hancock has refused to rule out another national lockdown - something which Johnson has said would have disastrous consequences for the economy - and said officials were meeting to decide how best to handle the rising cases in London. FX implications GBP/USD refrains from respecting the virus woes amid hopes of further stimulus from the Tory government as well as mild optimism concerning Brexit. That said, the Cable seesaws around 1.2935 by the press time.

AUD/JPY stays on the recovery mode around 76.30 during the early Monday morning in Asia. In doing so, the pair buyers attack 50-day SMA inside the mon

AUD/JPY buyers trying to snap five-day losing streak above 76.00.Confluence of 21-day SMA and falling wedge resistance becomes the key.An eight-day-old falling trend line can offer immediate support.AUD/JPY stays on the recovery mode around 76.30 during the early Monday morning in Asia. In doing so, the pair buyers attack 50-day SMA inside the monthly falling wedge, a bullish chart pattern, on the daily formation. Considering the bearish MACD signals and strong resistance, the quote is likely to remain depressed and may revisit 76.00 round-figures. Though, it’s further downside will be limited to the wedge’s support line, at 75.92 now. In a case where AUD/JPY drops below 75.90, August 20 low near 75.60 and the previous month’s bottom surrounding 75.10 will be the key to watch. Meanwhile, an upside clearance of the 50-day SMA level of 76.33 will aim for 76.90 whereas 21-day SMA and a falling trend line from August 31, currently around 77.06, will be the key to watch afterward. It should, however, be noted that the quote’s daily closing beyond 77.06 will confirm the bullish chart play towards the theoretical target of 79.50. However, 77.70 and August month’s peak near 78.50 can offer intermediate halts during the rise. AUD/JPY daily chart Trend: Pullback expected  

Early Monday morning in Asia, Nikkei Asian Review came out with the news suggesting the extension of Abenomics under Japan’s New Prime Minister Yoshih

Early Monday morning in Asia, Nikkei Asian Review came out with the news suggesting the extension of Abenomics under Japan’s New Prime Minister Yoshihide Suga. Key quotes Japan's Ministry of Defense will request a record 5.4 trillion yen ($51.6 billion) in the fiscal 2021 budget, seeking a ninth straight year of increases as China rises and new technological threats emerge. The tally, which also covers Japanese contributions to the U.S. military presence, has topped records every year since fiscal 2015 under now-former Prime Minister Shinzo Abe. The ministry considers the fiscal 2021 increase necessary in a fast-changing East Asian security landscape that includes Chinese provocations in the East and South China seas and the North Korean missile program. New Prime Minister Yoshihide Suga has expressed interest in continuing efforts by Abe to bolster Japan's defenses and diplomatic strategy. The Defense Ministry requested 5.32 trillion yen for fiscal 2020, receiving 5.31 trillion yen in the initial budget. It has gotten about 40 billion yen less a year on average than it has sought since fiscal 2015. FX implications Global markets players are waiting for the Tokyo open to respond to the news. However, an early uptick in the AUD/USD and AUD/JPY quotes, to 0.7300 and 76.30 respectively, seem to have justified the update.

Chinese President Xi Jinping crossed wires, via Xinhua reported by Reuters, during the weekend. The dragon leader shrugged off risks from external cat

Chinese President Xi Jinping crossed wires, via Xinhua reported by Reuters, during the weekend. The dragon leader shrugged off risks from external catalysts while citing economic strength. Key quotes The basic characteristics of China’s economy with sufficient potential, great resilience, strong vitality, large space for manoeuvre and many policy instruments have not changed. We must seek our development in a more unstable and uncertain world. China has strong manufacturing capacity, very large domestic markets and huge investment potentials, Xi said. Xi reaffirmed a “dual circulation” strategy that would help steer the economy towards greater self-reliance, as U.S. hostility and a global pandemic increase external risks. The great rejuvenation of the Chinese nation can never be achieved easily with the beating of gongs and drums. FX implications The news seems to have played the role in helping AUD/USD to regain 0.7300 at the week’s start. However, broad challenges to risk catalysts seem to weigh on the risk-on mood. Read: AUD/USD: Challenges to risk probe the bulls attacking 0.7300

The Finacial Times reports that British Finance Minister Rishi Sunak will extend business support loans as COVID-19 spread worsens. Sunak is expected

The Finacial Times reports that British Finance Minister Rishi Sunak will extend business support loans as COVID-19 spread worsens. Sunak is expected to unveil plans to extend its four loan schemes for applications until the end of November, with banks allowed to process loans until the end of the year, the newspaper said. Government weighs whether more aggressive measures needed to control virus in UK. The prime minister Boris Johnson confirmed last week that the UK is seeing a second wave coming in.  Speaking about measures, the PM said, “We want to keep the schools open – that’s going to happen. And we’ll try and keep all parts of the economy open, as far as we possibly can. I don’t think anybody wants to go into a second lockdown. “We’ll be looking at the local lockdowns we’ve got in large parts of the country now, and see what we can do to intensify things.” With cases doubling in the space of a week and positive tests surpassing 4,000 on Friday, Downing Street is considering a “circuit-breaker” that could see pubs and restaurants forced to close early or go takeaway-only for a short fixed period, and families told not to mix. Market implications The pound is vulnerable to a position clear out with the CFTC data showing that longs have decreased by 11K. With the technical indicators still showing cable in bullish territory, there needs to be some further confirmation on the 4HR time frame that a phase of distribution is underway, in the spot market at least.  The spread of the virus, to a large extent, has been expected and if it not for the recent weakness in the dollar, the pricing in of COVID-19 risk would likely be more visible.  However, price action will continue to be dominated by the UK-EU trade negotiations news flow as well, with the next round of talks scheduled for this week. The odds of a no-deal Brexit are high and the full extent of that risk premia likely has more room to go which would hamstring cable on rallies, no matter what stimulus measures might come of Sunak's unveiling in coming days.  Since the following analysis, GBP/USD Price Analysis: Testing strong resistance area, bears waiting to fade, the pound has been a fade on rallies and bearish prospects are mounting. 

AUD/USD seesaws around 0.7290 after the initial 16-pip rise to 0.7303 amid Monday’s Asian session. In doing so, the pair begins the week on the positi

AUD/USD jumps 15-pips at the week’s start after ignoring the red line during the previous week.Upbeat comments from Aussie PM Morrison and Chinese President Xi Jinping favored the early bulls despite virus woes, Brexit worries.US election jitters, Sino-American tussle and the stimulus deadlock challenge the optimists.No major data on the radar but Fed Chair Powell’s speech and risk catalysts will be the key.AUD/USD seesaws around 0.7290 after the initial 16-pip rise to 0.7303 amid Monday’s Asian session. In doing so, the pair begins the week on the positive side following a minor miss to the negative weekly close printed during the first two weeks of September. The quote seems to have initially cheered upbeat comments from the Aussie Prime Minister Scott Morrison and Chinese President Xi Jinping published during the weekend. However, fears of the coronavirus (COVID-19) and downbeat catalysts from America, not to forget the UK, weigh on the risk catalysts and also to the Aussie major. Domestic fundamentals overrule macro challenges… With Aussie PM Morrison’s expectations that the recovery in COVID-19 conditions in Victoria will strengthen the job numbers seem to have helped AUD/USD to extend the last week’s mildly positive attitude. Also supporting the bulls could be comments from China’s Xi who said, “China’s economy remains resilient and there are ample policy tools at Beijing’s disposal despite the rising external risk.” As Beijing be the largest customer of Canberra, positive statements from the dragon nation are always welcomed by the pair buyers. On the contrary, the UK is heading towards stricter virus-led restrictions amid fears of heavy resurgence whereas the US and Iran are again at loggerheads. Further, the American congress members are still undecided over the much-awaited stimulus package while China-US tension keeps flashing mixed clues with the latest one-week stop to the TikTok-Oracle deal offering a sigh of relief to the dragon. During the last weekend, the Fed-led optimism joined upbeat employment data from Australia to keep AUD/USD on a positive side. Though, Wall Street had to suffer and so do the US 10-year treasury yields. Moving on, the economic calendar has nothing major to cheer and hence the key risk catalysts like a virus, Brexit, US stimulus and the Sin-American tussle will be in the spotlight. Though, Federal Reserve’s Chairman Jerome Powell’s speech at 14:00 GMT will be the key to watch. Traders will look for additional clues of the Fed’s optimism while the subject matter is rule-making for the Community Reinvestment Act. Technical analysis Unless breaking the 0.7340-46 area, comprising August 31 low and highs marked since September 03, the risk of AUD/USD price drop to refresh the monthly low of 0.7191 can’t be ruled out. However, a 21-day SMA level of 0.7277 can offer intermediate strong support during the pair’s weakness.

Reuters, citing a senior US official, reports that the United States on Monday will sanction more than two dozen people and entities involved in Iran'

Reuters, citing a senior US official, reports that the United States on Monday will sanction more than two dozen people and entities involved in Iran's nuclear, missile and conventional arms programs. Speaking on condition of anonymity, the official said Iran could have enough fissile material for a nuclear weapon by the end of the year and that Tehran has resumed long-range missile cooperation with nuclear-armed North Korea. He did not provide detailed evidence regarding either assertion. Key notes US to impose sanctions on more than 24 people, entities involved in Iran's nuclear, missile and conventional arms programs on Monday, senior US the official says. US believes Iran may have enough fissile material for a nuclear bomb by end of the year, US official says. Iran, North Korea have resumed collaboration on long-range missile project, US official says. Trump to issue an executive order on Monday allowing US to sanction non-US actors who trade conventional arms with Iran - US official confirms. US taking these steps to enforce UN sanctions it argues have been restored, believes foreign companies will wish to avoid risk of US penalties - US official says.
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