Forex News Timeline

Tuesday, October 19, 2021

Major equity indexes in the US opened in the positive territory on Tuesday as the market mood remains upbeat ahead of key quarterly earnings figures.

Wall Street's main indexes continue to edge higher.Healthcare shares post strong gains after the opening bell.Major equity indexes in the US opened in the positive territory on Tuesday as the market mood remains upbeat ahead of key quarterly earnings figures. As of writing, the S&P 500 was up 0.3% on the day at 4,500, the Dow Jones Industrial Average was rising 0.2% at 35,310 and the Nasdaq Composite was gaining 0.4% at 15,079. Among the 11 major S&P 500 sectors, the Healthcare Index is up 0.8% as the top gainer after the opening bell. On the other hand, the Consumer Staples Index is losing 0.4%. Earlier in the day, the data from the US showed that Building Permits and Housing Starts decreased by 7.7% and 1.6%, respectively, in September but these prints don't seem to be having a noticeable impact on risk sentiment.Wake Up Wall Street: Risk is back, memes on the attack, but is Netflix set to crack?S&P 500 chart (daily)

EUR/USD has repeatedly failed to hold below the 1.1550 area this month. Some pullback or consolidation is not exceptional, therefore, economists at Ra

EUR/USD has repeatedly failed to hold below the 1.1550 area this month. Some pullback or consolidation is not exceptional, therefore, economists at Rabobank stick to the view of lower EUR/USD ahead. EUR/USD still seen at 1.15 on a three-month view “We are viewing the current pullbacks in the USD as corrective and continue to expect the USD to push higher over the medium-term.” “While the recent sell-off in the EUR suggests it may be more sensitive to hawkish remarks from ECB members in the build-up to forthcoming ECB meetings, the cautious stance of the policy guidance from the central bank suggests that room for a concerted recovery in the EUR is still limited.” “On the margin, the approach of the French Presidential election next year and the tensions regarding the rule of law between the EU and Poland and Hungary may also weigh on the EUR going forward.” “We retain our three-month forecast of EUR/USD 1.15.”  

The GBP/USD pair is making some clear headway above the 1.38 area. A test of the 200-day moving average (DMA) at 1.3848 is on the radar, economists at

The GBP/USD pair is making some clear headway above the 1.38 area.  A test of the 200-day moving average (DMA) at 1.3848 is on the radar, economists at Scotiabank report. Short-term cable bullish “OIS pricing does reflect a minor check in the recent firming in rate hike expectations but this likely reflects broader market moves rather than any real doubts about the BoE outlook at this point we remain constructive on the GBP on the crosses.” “We are cautious about reading too much into developments but the GBP enjoys the backing of solid trend oscillators on the intraday and daily studies and is trading well through key, short-term MA signals which puts the 200-DMA at 1.3848 on the radar.” “Key resistance is 1.3913, the mid-September high.”   

Another day, another all-time high in USD/TRY. This time, the pair advanced to the 9.3700 area after losing some upside traction. USD/TRY keeps lookin

USD/TRY clinches new all-time peak around 9.3700.The lira remains under heavy pressure ahead of the CBRT.Investors see the CBRT cutting rates on Thursday.Another day, another all-time high in USD/TRY. This time, the pair advanced to the 9.3700 area after losing some upside traction. USD/TRY keeps looking to the CBRT Curiously, the lira now manages to regain some composure and forces USD/TRY to abandon the area of recent all-time highs near 9.3700 and head lower towards the 9.3200 zone on Tuesday. The selloff in the greenback in combination with extreme overbought levels of the pair might have combined to spark the ongoing knee-jerk in spot, although it should be considered temporary, as the risk for TRY remains tilted well to the downside for the time being. Indeed, the broad consensus among investors expects the Turkish central bank (CBRT) to reduce further (100 bps?) the One-Week Repo Rate at its event on Thursday. It is worth recalling that the depreciation in the lira gathered unusual pace after President Erdogan removed three CBRT officials earlier in the month, undermining further the credibility around the monetary authority (if there still was some left). However, prospects for a reduction of the policy rate have been growing since CBRT Governor S.Kavcioglu announced some weeks ago that the core inflation rate will now be used to set the level of the key interest rate. So, all in all, the September’s interest rate cut should not have surprised anybody… USD/TRY key levels So far, the pair is losing 0.13% at 9.3163 and a drop below 9.0873 (10-day SMA) would aim for 8.9588 (20-day SMA) and finally 8.8317 (monthly low Oct.4). On the other hand, the next up barrier lines up at 9.3699 (all-time high Oct.19) followed by 10.0000 (round level).

The XAU/USD pair broke above $1,770 in the European session and climbed to a daily high of $1,785 in the last hour before edging slightly lower. As of

Gold is trading above $1,780 in early American session.10-year US Treasury bond yield rose into the positive territory above 1.6%.Greenback remains on the back foot after disappointing US data.The XAU/USD pair broke above $1,770 in the European session and climbed to a daily high of $1,785 in the last hour before edging slightly lower. As of writing, the pair was up 0.85% on the day at $1,780. Earlier in the day, the broad-based selling pressure surrounding the dollar and falling US Treasury bond yields fueled the gold's rally. With risk flows dominating the financial markets, the US Dollar Index (DXY) dropped to a multi-week low of 93.50. The data from the US showed on Tuesday that Housing Starts and Building Permits fell by 1.6% and 7.7%, respectively, in September. Although the initial market reaction to these readings was largely muted, the dollar started to find some demand on the back of recovering US T-bond yields. At the moment, the benchmark 10-year US T-bond yield is up 0.5% on the day at 1.61% and the DXY is down 0.28% at 93.68, capping gold's upside for the time being. Meanwhile, major equity indexes in the US remain on track to open in the negative territory, suggesting that the greenback is likely to remain on the back foot if the market mood remains upbeat in the second half of the day. There won't be any high-tier data releases from the US in the remainder of the day and investors will remain focused on the risk perception and yields. Gold technical outlook The Relative Strength Index (RSI) indicator on the four-hour chart is holding near 60, suggesting that there is more room on the upside before gold becomes technically overbought. Additionally, the previous two candles on the same chart closed above the 200-day SMA, confirming the bullish bias.  The initial resistance is located at $1,787 (September 22 high) ahead of $1,800 (psychological level, static resistance). On the downside, $1,770 (former resistance, 200-period SMA) aligns as the first support before $1,763/60 (static level, 100-period SMA) and $1,750 (static level).

EUR/USD’s bounce tests 1.1665 key resistance. Above here, the world’s most popular currency pair would move to the mid-1.17s but ECB policy makers sta

EUR/USD’s bounce tests 1.1665 key resistance. Above here, the world’s most popular currency pair would move to the mid-1.17s but ECB policy makers stay dovish, limiting euro’s upside potential. ECB members remarks the cautious stance of the policy guidance “ECB’s Rehn and Villeroy were speaking earlier and both senior policy makers reiterated the ECB’s dovish policy outlook. The broader dovishness among ECB policy makers gives us little confidence that the EUR rally will extend significantly in the near to medium term.” “The EUR/USD rally has extended to retest 1.1665 resistance so it will be pivotal in determining whether this EUR rebound extends or starts to fizzle out.” “A push above 1.1665 will drive the EUR on to the mid-1.17s.”  

United States Redbook Index (YoY) up to 15.4% in October 15 from previous 14.8%

Housing Starts in the US declined by 1.6% on a monthly basis in September after rising by 1.2% in August, the data published jointly by the US Census

Building Permits in US fell sharply in September.US Dollar Index stays in the negative territory, holds above 93.50.Housing Starts in the US declined by 1.6% on a monthly basis in September after rising by 1.2% in August, the data published jointly by the US Census Bureau and the US Department of Housing and Urban Development showed on Tuesday. Further details of the publication revealed that Building Permits, which rose by 5.6% in August, plunged by 7.7% in the same period. Market reaction The US Dollar Index managed to recover modestly from daily lows after the data and was last seen losing 0.3% on a daily basis at 93.65.

United States Building Permits Change declined to -7.7% in September from previous 6%

United States Building Permits (MoM) came in at 1.589M, below expectations (1.68M) in September

United States Housing Starts Change down to -1.6% in September from previous 3.9%

United States Housing Starts (MoM) came in at 1.555M below forecasts (1.62M) in September

The International Monetary Fund said on Tuesday that it expects the Chinese economy to grow by 8% in 2021 but added that the economic recovery remains

The International Monetary Fund said on Tuesday that it expects the Chinese economy to grow by 8% in 2021 but added that the economic recovery remains unbalanced, as reported by Reuters. Additional takeaways "Asia's economy to expand 5.7% in 2022, up 0.4% from April forecast." "Untimely policy normalization or misconstrued policy communications' by the US could trigger capital outflow, push up borrowing costs for Asian emerging economies." "Risks to Asia growth tilted down on pandemic uncertainty, supply chain disruptions, potential spillovers from fed policy normalisation." "Asia's economy to expand 6.5% in 2021, down 1.1% from April forecast." Market reaction This report doesn't seem to be having a noticeable impact on market mood. As of writing, the S&P Futures were up 0.5% at 4,500.

EUR/USD accelerates gains to the 1.1670 region on Tuesday, opening the door at the same time for the continuation of the move higher. That said, and a

EUR/USD advances for the second session in a row above 1.1600.The 1.1700 level and the 55-day SMA at 1.1719 come next.EUR/USD accelerates gains to the 1.1670 region on Tuesday, opening the door at the same time for the continuation of the move higher. That said, and after surpassing the previous top at 1.1624 (October 14), the pair could now attempt to retake the round level at 1.1700 the figure ahead of the interim hurdle at the 100-day SMA, today at 1.1719. Further north comes the short-term resistance line around 1.1740. A breakout of the latter should see the selling pressure mitigated and therefore allow for extra gains to the next relevant resistance in the mid-1.1700s. In the meantime, the near-term outlook for EUR/USD is seen on the negative side below the key 200-day SMA, today at 1.1924. EUR/USD daily chart  

After managing to close near 0.7400 on Monday, the AUD/USD pair regained its traction during the Asian trading hours on Tuesday and climbed to its hig

AUD/USD is clinging to strong daily gains on Tuesday.Upbeat market mood is helping AUD find demand.US Dollar Index remains on the back foot ahead of mid-tier data.After managing to close near 0.7400 on Monday, the AUD/USD pair regained its traction during the Asian trading hours on Tuesday and climbed to its highest level since early September at 0.7476 before going into a consolidation phase. As of writing, the pair was up 0.78% on a daily basis at 0.7468. DXY turns south as risk flows return The positive shift witnessed in market sentiment seems to be boosting AUD/USD on Tuesday. Reflecting the upbeat mood, US stock index futures are up between 0.4% and 0.5%, suggesting that Wall Street's main indexes remain on track to open in the positive territory. On the flip side, the greenback is struggling to find demand as a safe haven and the US Dollar Index (DXY) is losing 0.4% at 93.57. Earlier in the day, the Reserve Bank of Australia's (RBA) meeting minutes didn't offer any fresh insights into the bank's policy outlook. The RBA reiterated that the economic activity is expected to return to pre-pandemic levels in the second half of 2022 and added that they don't expect to reach the inflation target until 2024. Later in the session, September Housing Starts and Building Permits data from the US will be looked upon for fresh impetus.  On Wednesday, the Westpac Leading Index for September will be featured in the Australian economic docket. Technical levels to watch for  

DXY extends the downside for the fifth consecutive session on Tuesday and visits again the 93.50 region, where some initial contention turned up so fa

DXY accelerates losses and retests the 93.50 zone on Tuesday.There is an interim support at the 93.18, the 55-day SMA.DXY extends the downside for the fifth consecutive session on Tuesday and visits again the 93.50 region, where some initial contention turned up so far. In case the selling impulse gathers further steam, the 55-day SMA at 93.18 should offer some minor contention ahead of a deeper pullback to the 93.00 neighbourhood (low September 23). Further south comes the 100-day SMA, today at 92.57. Looking at the broader picture, the constructive stance on the index is seen unchanged above the 200-day SMA at 91.82. DXY daily chart  

In an interview with Reuters on Tuesday, European Central Bank (ECB) policymaker Bostjan Vasle said there are early signs that wage pressures in the e

In an interview with Reuters on Tuesday, European Central Bank (ECB) policymaker Bostjan Vasle said there are early signs that wage pressures in the euro area could become material and pose inflation risks. Additional takeaways "ECB should end the Pandemic Emergency Purchase Program (PEPP) in March if economic trends continue." "Real financing conditions remain favourable despite nominal yield rises." "Open to discussion on keeping some but not all of PEPP's flexibility." Market reaction The EUR/USD pair consolidates its impressive daily gains ahead of the American session and was last seen rising 0.45% on the day at 1.1660.

The GBP/USD pair continued to push higher during the European trading hours and reached its strongest level in a month at 1.3832. As of writing, the p

GBP/USD preserves its bullish momentum during the European session.US Dollar Index continues to push lower toward 93.50.Wall Street's main indexes remain on track to open higher.The GBP/USD pair continued to push higher during the European trading hours and reached its strongest level in a month at 1.3832. As of writing, the pair was up 0.75% at 1.3828. USD selloff picks up steam The heavy selling pressure surrounding the greenback on Tuesday seems to be fueling the pair's rally. In the absence of high-tier macroeconomic data releases, the risk-positive market environment is making it difficult for the dollar to find demand. The US Dollar Index was last seen losing 0.42% on the day at 93.55. Later in the session, September Housing Starts and Building Permits data will be featured in the economic docket. In the meantime, the US stock index futures are up between 0.35% and 0.45%, suggesting that risk flows are likely to continue to dominate the financial markets in the second half of the day. On the other hand, increasing Bank of England rate hike expectations ahead of Wednesday's September UK inflation report is allowing the British pound to outperform its rivals. UK September CPI Inflation Preview: Will rising price pressures boost British pound?Technical levels to watch for    

Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted that USD/IDR is unlikely to breach the key support at 14,000 for the time bein

Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted that USD/IDR is unlikely to breach the key support at 14,000 for the time being. Key Quotes “We highlighted last Monday (11 Oct, spot at 14,210) that ‘downward momentum has increased’. We added, ‘a break of September’s low at 14,170 would not be surprising but the next major support at 14,120 is unlikely to come under threat’. We underestimated the downward momentum as USD/IDR cracked both 14,170 and 14,120 (USD/IDR dropped to 14,050 on Friday before extending its decline earlier today). Not surprisingly, the rapid drop is severely oversold but with no signs of stabilization just yet, further weakness is not ruled out.” “That said, in view of the deeply oversold conditions, a break of the round-number support at 14,000 appears unlikely. On the upside, a breach of 14,140 would indicate that the current weakness has stabilized.”  

EUR/JPY extends the upside momentum and already surpasses the key barrier at 133.00 the figure on turnaround Tuesday. The sharp move higher shows no

EUR/JPY’s needle-like rally remains everything but abated on Tuesday.There is now scope for a visit to the 2021 highs past 134.00 near term.EUR/JPY extends the upside momentum and already surpasses the key barrier at 133.00 the figure on turnaround Tuesday. The sharp move higher shows no signs of exhaustion so far, although the current overbought condition of the cross could trigger some consolidation or even a corrective move in the short-term horizon. Once digested one or the other, the cross should be able to resume the uptrend and attempt an assault to the YTD high at 134.12 recorded on June 1. In the broader scenario, while above the 200-day SMA at 129.94, the outlook for the cross is expected to remain constructive. EUR/JPY daily chart  

EUR/USD has started to push higher. Analysts at Credit Suisse look for a deeper corrective rebound to 1.1671, then the 55-day average at 1.1720. See:

EUR/USD has started to push higher. Analysts at Credit Suisse look for a deeper corrective rebound to 1.1671, then the 55-day average at 1.1720. See: EUR/USD set to see further gains towards the 1.1750 level – SocGen Support at 1.1608 to hold  “EUR/USD’s strong rebound suggests a more concerted but still corrective recovery can emerge with resistance seen next at the 38.2% retracement of the September/October fall and price resistance at 1.1663/71. Whilst this should be allowed to cap at first our bias is now for a break in due course for a move to what we look to be tougher resistance from the 55-day average at 1.1720. We would start to look for signs of a fresh peak here.”  “Support is seen at 1.1625/20 initially, then 1.1608 which now ideally holds to keep the immediate bias higher. Below 1.1571/66 though is needed to suggest the rebound is over for a fall back to 1.1529/24, then our 1.1495 first objective.”  

USD/JPY has been capped at the 2018 highs at 114.55 as suspected and a pullback is seen underway. With a major base seen in place, weakness stays seen

USD/JPY has been capped at the 2018 highs at 114.55 as suspected and a pullback is seen underway. With a major base seen in place, weakness stays seen as corrective only ahead of an eventual break in due course for 117.12, economists at Credit Suisse report. A setback is looked for “With a major base in place above the 112.40 high of 2019, we maintain our view that weakness will be corrective and temporary only. A clear break of 113.99 should mark a near-term top to add weight to our view for a setback to 113.81/61 initially, with fresh buyers expected here for now. A break can see a deeper retreat towards 113.08/04 but this will ideally prove the limit of the downturn.” “Resistance is seen at 114.36 initially. Above 114.45/55 can quickly reassert the uptrend for the 114.73 high of November 2017 next ahead of the 78.6% retracement of the December 2016/March 2020 fall at 114.92 and then 117.12 in due course, the long-term downtrend from April 1990.”  

Tin (LME) is seen trading in new all-time highs. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, sees the metal striving for the psycholog

Tin (LME) is seen trading in new all-time highs. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, sees the metal striving for the psychological 40000 mark. Key support is located at the 31305/31250 area “Tin is trading in new all-time highs and is fast approaching the minor psychological level at 40000 with a 161.8% Fibonacci extension of the 2005-2008 advance projected higher from the 2008 low coming in at 41601.10.” “Support can be found between the August and September highs at 36830/35955. Further support comes in between the late August high and the 55-day moving average at 34640/34615.10.”  “Key support remains to be seen between the August and September lows at 31305/31250.”  

The GBP/JPY cross added to its intraday gains and shot to the highest level since June 2016, around the 157.60 region during the first half of the Eur

A combination of factors pushed GBP/JPY to fresh multi-year tops on Tuesday.The recent hawkish signals from BoE continued underpinning the British pound.The risk-on mood undermined the safe-haven JPY and contributed to the rally.The GBP/JPY cross added to its intraday gains and shot to the highest level since June 2016, around the 157.60 region during the first half of the European session. Following the previous day's consolidative price moves, the GBP/JPY cross caught fresh bids on Tuesday and resumed its strong bullish momentum witnessed since the beginning of this month. This marked the ninth day of a positive move in the previous ten and was supported by a combination of factors. The British pound was underpinned by the recent hawkish remarks from the Bank of England officials, signalling an imminent interest rate hike later this year. In fact, the BoE Governor Andrew Bailey said that the UK central bank will have to act amid increasing risks to medium-term inflation expectations. This comes on the back of a positive Brexit development, which continued acting as a tailwind for the sterling and provided a strong lift to the GBP/JPY cross. It is worth recalling that the European Union agreed to scrap most checks on goods arriving into Northern Ireland from the rest of the UK. On the other hand, the underlying bullish sentiment in the financial markets undermined the Japanese yen's relative safe-haven status. This was seen as another factor that contributed to the GBP/JPY pair's bullish trajectory, taking along some trading stops placed near the 157.35-40 area. In the absence of any major market-moving economic releases, the GBP/JPY cross seems all set to extend its appreciating move. However, extremely overbought conditions on short-term charts warrant some caution for bullish traders ahead of the latest UK consumer inflation figures on Wednesday. Technical levels to watch  

USD/MYR should keep the range bound theme unchanged between 4.1480 and 4.1760 so far, suggested Quek Ser Leang at UOB Group’s Global Economics & Marke

USD/MYR should keep the range bound theme unchanged between 4.1480 and 4.1760 so far, suggested Quek Ser Leang at UOB Group’s Global Economics & Markets Research. Key Quotes “Last Monday (11 Oct, spot at 4.1670), we highlighted that ‘downward pressure has increased’. We added, ‘there is room for USD/MYR to break 4.1600 but the next support at 4.1530 could be out of reach’. While our view for a weaker USD/MYR was not wrong, the subsequent weakness exceeded our expectations as USD/MYR plummeted to 4.1450 last Thursday (14 Oct).” “The rebound from the low amid oversold shorter-term conditions suggest that there is little scope for USD/MYR to break the next major support at 4.1400 (rising trend-line that started in April). For this week, USD/MYR is more likely to consolidate and trade between 4.1480 and 4.1760.”

Analysts at Commerzbank view the August peak at 8.8549 as an interim high for the USD/SEK pair. They look for a slide back to the base of the channel

Analysts at Commerzbank view the August peak at 8.8549 as an interim high for the USD/SEK pair. They look for a slide back to the base of the channel at 8.3253. USD/SEK has already failed at the 8.8549 August high “Market has failed at the top of its one year channel and August high at 8.8549.” “We would allow for a slide back to the base of the channel at 8.3253.”  

Base metals continue to look bid. Copper (LME) is seen surging higher towards its all-time high at 10747.50, Axel Rudolph, Senior FICC Technical Analy

Base metals continue to look bid. Copper (LME) is seen surging higher towards its all-time high at 10747.50, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. Dips to find support around the 9924.00/9755.50 region “LME Copper’s surge higher last week has taken us by surprise with the May all-time high at 10747.50 being within reach. If bettered, the minor psychological 11000.00 level would be in focus. Further up a 261.8% Fibonacci extension can be found at 12303.50.” “Slips should find support between the July and September highs at 9924.00/9755.50. Further minor support comes in between the early July and late August lows at 9632.50/9546.50 as well as at the 9431.00 late September high.”  

NZD/USD has broken above the 2021 downtrend and its 200-day moving average at 0.7101/04. The kiwi is expected to rally to the 0.7462/0.7559 long term

NZD/USD has broken above the 2021 downtrend and its 200-day moving average at 0.7101/04. The kiwi is expected to rally to the 0.7462/0.7559 long term pivot, according to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank. NZD/USD has reversed from its 200-week ma “NZD/USD yesterday broke above the 2021 downtrend and its 200-day ma and its 55-week ma at 0.7101/04, this was one tough nut to crack and the break above here should lead to some further dollar weakness.” “Target 0.7462/0.7559 long-term pivot.”  “Based ahead of the 200-week ma at 0.6765.”

The USD/CAD pair continued losing ground through the first half of the European session and fell to the 1.2320 region, or over three-month lows in the

A combination of factors prompted fresh selling around USD/CAD on Tuesday.The downfall has now dragged the pair to descending trend-channel support.Slightly oversold conditions warrant caution before placing fresh bearish bets.The USD/CAD pair continued losing ground through the first half of the European session and fell to the 1.2320 region, or over three-month lows in the last hour. The dominant risk-on mood in the financial markets prompted aggressive selling around the safe-haven US dollar, which fell to three-week lows on Tuesday. Conversely, a fresh leg up in crude oil prices underpinned the commodity-linked loonie and exerted some downward pressure on the USD/CAD pair. From a technical perspective, the pair has been trending lower along a downward sloping channel from September monthly swing highs, around the 1.2900 mark. Bearish trades might now wait for a sustained break through the channel support before placing fresh bets amid near-term oversold conditions. A convincing break below the trend-channel support, currently around the 1.2325 region, will set the stage for an extension of the depreciating move. The USD/CAD pair might then turn vulnerable to break below the 1.2300 mark and accelerate the slide towards the next relevant support near mid-1.2200s. On the flip side, any attempted recovery move might now confront immediate resistance near the 1.2370-75 region. This is closely followed by the overnight swing highs, around the 1.2400-1.2410 area, which if cleared decisively might trigger a near-term short-covering move around the USD/CAD pair. That said, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the key 1.2500 psychological mark. The latter represents a confluence barrier comprising of the very important 200-day SMA and the top end of the mentioned channel. USD/CAD daily chart Technical levels to watch  

“Some components are partly more persistent than previously thought.” “If elevated inflation lasts much longer, it will likely have an effect on expec

“Some components are partly more persistent than previously thought.” “If elevated inflation lasts much longer, it will likely have an effect on expectations.”

In its latest policy paper, the Organisation for Economic Co-operation and Development (OECD) warned that the world is likely to face massive fiscal

 In its latest policy paper, the Organisation for Economic Co-operation and Development (OECD) warned that the world is likely to face massive fiscal difficulties in the coming decades, worse than the bloated public debt seen during the Covid-19 pandemic. Key takeaways “According to its long-term scenario, a deceleration in large emerging economies, demographic change and slowing productivity gains will drag trend economic growth among the OECD’s 38 members and the Group-of-20 nations to 1.5% in 2060 from around 3% currently. “ “At the same time, states will face rising costs, particularly from pensions and health care.” “To maintain public services and benefits while stabilizing debt in that environment, governments would have to raise revenues by nearly 8% of gross domestic product.” “Secular trends such as population aging and the rising relative price of services will keep adding pressure on government budgets.”  “Fiscal pressure from these long-run trends dwarf that associated with servicing Covid-legacy public debt.” Related readsForex Today: Dollar loses ground as risk flows dominate marketsOECD trims global growth forecast to 5.7% for 2021 from 5.8% in May

Gold price is rebounding 1% so far this Tuesday, reversing half the sell-off seen since Friday, as bulls aim for the $1800 barrier once again. The rel

Gold price jumps 1% as the US dollar keeps losing ground across the board.   Retreat in Treasury yields, risk-on mood aid the rebound in gold price.Gold: Sellers defend $1,800, all eyes on US T-bond yields.Gold price is rebounding 1% so far this Tuesday, reversing half the sell-off seen since Friday, as bulls aim for the $1800 barrier once again. The relentless decline in the US dollar across the board is helping gold price stage an impressive turnaround. The risk-on flows are weighing heavily on the dollar’s safe-haven demand, underpinning gold price. Expectations of strong corporate earnings reports from the US, especially from the tech sector, has overshadowed the concerns over rising inflation and global economic growth. The retreat in the US Treasury yields is also boding well for gold price amid a data-light Tuesday.   Read: Gold Price Forecast: XAU/USD rebounds towards key $1795 barrier but downside risks remain intactGold Price: Key levels to watch According to the Technical Confluences Detector, gold is on a steady road to recovery, now challenging the convergence of the pivot point one-day R3 and the previous high four-hour at $1783. The next stop for gold bulls is seen around $1791, where the Fibonacci 23.6% one-week coincides with the Fibonacci 61.8% one-month. Further up, the critical SMA200 one-day at $1795 will come into play. At that level, the pivot point one-week R1 intersects. The previous week’s high at $1801 will then test the bearish commitments. However, rejection at higher levels could recall the sellers to test the immediate support around $1778, the confluence of the SMA50 one-day and Bollinger Band four-hour Middle. The next crucial cushion is seen at $1772, the meeting point of the previous day’s high and SMA200 four-hour. A dense cluster of healthy support levels are placed around $1770, which will limit the additional downside in gold price. The demand area is comprised of the Fibonacci 61.8% one-week, SMA50 four-hour and SMA200 one-hour. The line in the sand for gold buyers appears at $1765, the convergence of the Fibonacci 38.2% one-month and one-day. Here is how it looks on the tool About Technical Confluences Detector The TCD (Technical Confluences Detector) 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.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.

The USD remained heavily offered through the first half of the European session and pushed the GBP/USD pair to one-month tops, closer to the 1.3800 ma

GBP/USD regained strong positive traction on Tuesday amid a broad-based USD weakness.The recent hawkish BoE signals underpinned the British pound and remained supportive.A sustained move beyond 100-day SMA will set the stage for a further appreciating move.The USD remained heavily offered through the first half of the European session and pushed the GBP/USD pair to one-month tops, closer to the 1.3800 mark in the last hour. Following the previous day's modest downtick, the GBP/USD pair caught some fresh bids on Tuesday and built on its recent strong rebound from the vicinity of the 1.3400 mark touched in late September. This marked the fourth day of a positive move in the previous five and was sponsored by aggressive selling around the US dollar. The greenback was weighed down by the overnight pullback in the US Treasury bond yields and dismal US Industrial Production data, which fell by the most in seven months. Apart from this, the dominant risk-on flow dragged the safe-haven USD to three-week lows and was seen as a key factor that provided a strong lift to the GBP/USD pair. Meanwhile, the ongoing USD corrective decline suggests that the markets have fully priced in the prospects for an early policy tightening by the Fed. It is worth recalling that the FOMC meeting released last Wednesday reaffirmed that the Fed remains on track to begin rolling back its massive pandemic-era stimulus by the end of 2021. On the other hand, the British pound was underpinned by the recent hawkish remarks from the Bank of England officials, signalling that an imminent interest rate hike later this year. In fact, the BoE Governor Andrew Bailey said that the British central bank will have to act amid increasing risks to medium-term inflation expectations. With the latest leg up, the GBP/USD pair has now moved back closer to 100-day SMA pivotal resistance, currently around the 1.3805 region. A sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for additional gains amid absent relevant market-moving economic releases, either from the UK or the US. That said, traders might take cues from scheduled speeches from the BoE Governor Andrew Bailey and BoE chief economist Catherine Mann for some impetus. Apart from this, comments by Fed Governor Michelle Bowman could influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair. Technical levels to watch  

Spain 9-Month Letras Auction declined to -0.599% from previous -0.589%

Spain 3-Month Letras Auction dipped from previous -0.641% to -0.667%

European Monetary Union Construction Output w.d.a (YoY) declined to -1.6% in August from previous 3.3%

European Monetary Union Construction Output s.a (MoM) fell from previous 0.1% to -1.3% in August

EUR/CHF pivots away from 1.07. However, the down move could persist with next support levels seen at 1.0660 and the 1.05 2020 low, economists at Socié

EUR/CHF pivots away from 1.07. However, the down move could persist with next support levels seen at 1.0660 and the 1.05 2020 low, economists at Société Générale report. Short-term bounce is on the cards “An initial bounce is not ruled out however daily Ichimoku cloud near 1.0830 should contain.” “Next potential support levels are at 1.0660 and 2020 low of 1.0500.”  

EUR/USD has reclaimed the 1.1650 level as a bounce is under way. Economists at Société Générale expect the pair to extend its advance to the 1.1750 re

EUR/USD has reclaimed the 1.1650 level as a bounce is under way. Economists at Société Générale expect the pair to extend its advance to the 1.1750 region. Next hurdle on the upside sits at 1.1670 “The pair could attempt a rebound towards 1.1670 and perhaps even towards 1.1750, the upper limit of a multi month descending channel.” “August/September high of 1.1910/1.1940 remains an important resistance zone near-term.”  “First support is located at 1.1570.”  

Quek Ser Leang at UOB Group’s Global Economics & Markets Research sees USD/THB navigating within the 33.20-33.70 range for the time being. Key Quotes

Quek Ser Leang at UOB Group’s Global Economics & Markets Research sees USD/THB navigating within the 33.20-33.70 range for the time being. Key Quotes “We highlighted last Monday (11 Oct, spot at 33.79) that ‘upward momentum has waned further and the chance for USD/THB to break the rising trend-line support has increased’. We added, ‘a break of the trend-line would indicate that the USD/THB strength from early September has run its course’.” “While our view for a break of the rising trend-line was not wrong, we did not anticipate the subsequent sharp sell-off that sent USD/THB plummeting to 33.15. Note that 33.15 was close to the 55-day exponential moving average.” “The rebound from 33.15 amid oversold shorter-term conditions indicates that USD/THB is unlikely to weaken further. For this week, USD/THB is more likely to trade between 33.20 and 33.70.”

The single currency extends the optimism seen at the beginning of the week and lifts EUR/USD to fresh tops past 1.1650 on turnaround Tuesday. EUR/USD

EUR/USD adds to Monday’s gains north of the 1.16 mark.The greenback loses traction across the board on Tuesday.ECB-speak, US housing data, Fedspeak next in the docket.The single currency extends the optimism seen at the beginning of the week and lifts EUR/USD to fresh tops past 1.1650 on turnaround Tuesday. EUR/USD up on USD-selling EUR/USD advances for the second session in a row and clinches new monthly peaks at the same time on the back of the continuation of the offered stance around the greenback, which forced the US Dollar Index (DXY) to record new monthly lows near 93.60. The broad-based retracement in US yields put the dollar under extra pressure and encouraged risk takers to return to the markets, motivating spot to extend the weekly rebound and leave behind former October peaks around 1.1640. Earlier in the session Bank of France’s F.Villeroy said he finds no reason for the ECB to raise rates before end of the next year, while he sees the French economy returning to pre-pandemic figures at some point by year end. In the calendar, ECB’s Board members F.Elderson, F.Panetta and P.Lane will all speak later in the session. Across the pond, housing data will take centre stage in the docket along with speeches by FOMC’s Daly, Waller, Bowman and Bostic. What to look for around EUR EUR/USD finally managed to close a session above 1.1600 on Monday and now moves further north to new monthly peaks near 1.1660. While the improvement in the sentiment surrounding the risk complex lent extra wings to the par, price action is expected to keep looking to dollar dynamics for the time being, where tapering chatter remains well in centre stage. In the meantime, the idea that elevated inflation could last longer coupled with the loss of momentum in the economic recovery in the region, as per some weakness observed in key fundamentals, are seen pouring cold water over investors’ optimism as well as bullish attempts in the European currency.Key events in the euro area this week: Final EMU CPI (Wednesday) – Preliminary PMIs in the euro zone (Friday).Eminent issues on the back boiler: Asymmetric economic recovery post-pandemic in the region. Sustainability of the pick-up in inflation figures. Probable political effervescence around the EU Recovery Fund. Investors’ shift to European equities in the wake of the pandemic could lend extra oxygen to the euro. ECB tapering speculations. EUR/USD levels to watch So far, spot is gaining 0.36% at 1.1651 and faces the next up barrier at 1.1657 (monthly high Oct.19) followed by 1.1718 (55-day SMA) and finally 1.1755 (weekly high Sep.22). On the other hand, a break below 1.1571 (low Oct.18) would target 1.1524 (2021 low Oct.12) en route to 1.1495 (high Mar.9 2020).  

The NZD/USD pair continued scaling higher through the early European session and shot to over one-month tops, around the 0.7145-50 region in the last

NZD/USD gained strong traction for the fifth consecutive session on Tuesday.Sustained break through the 0.7100 confluence hurdle favours bullish traders.Overbought conditions warrant some caution before placing fresh bullish bets.The NZD/USD pair continued scaling higher through the early European session and shot to over one-month tops, around the 0.7145-50 region in the last hour. The safe-haven US dollar witnessed aggressive selling on Tuesday and sank to three-week lows amid the dominant risk-on flow. This, in turn, provided a strong boost to the perceived riskier kiwi and assisted the NZD/USD pair to gain strong follow-through traction for the fifth successive day. The momentum confirmed a bullish breakout through the 0.7100 confluence, comprising the very important 200-day SMA and a descending trend-line extending from YTD tops touched in February. A subsequent move beyond the 50% Fibonacci level of the 0.7466-0.6805 downfall has set the stage for further gains. Meanwhile, technical indicators on hourly charts are already flashing overbought conditions. Moreover, RSI on the daily chart has moved on the verge of breaking into the overstretched territory, warranting some consolidation or a modest pullback before the next leg up for the NZD/USD pair. From current levels, September monthly swing highs, around the 0.7170 region, seems to act as immediate resistance. A sustained move beyond has the potential to push the NZD/USD pair towards the 0.7200 round-figure mark en-route the 61.8% Fibo. level, around the 0.7215-20 area. On the flip side, any meaningful retracement slide could attract some dip-buying near the 0.7100 confluence hurdle breakpoint. This, in turn, should help limit the downside near the 0.7070-60 region, which coincides with the 38.2% Fibo. level and act as a strong base for the NZD/USD pair. NZD/USD daily chart Technical levels to watch  

A deeper pullback is expected once USD/CNH clears 6.4240, commented FX Strategists at UO Group. Key Quotes 24-hour view: “Yesterday, we held the view

A deeper pullback is expected once USD/CNH clears 6.4240, commented FX Strategists at UO Group. Key Quotes 24-hour view: “Yesterday, we held the view that USD ‘could retest the 6.4230 level before stabilization can be expected’. Our expectations did not materialize as USD dropped to 6.4254 before closing little changed at 6.4289 (-0.08%). Downward momentum is beginning to improve and USD could weaken to 6.4180 but it is left to be seen if it could maintain a foothold below this level (next support is at 6.4100). Resistance is at 6.4300 followed by 6.4350.” Next 1-3 weeks: “Our view from last Thursday (14 Oct, spot at 6.4340) still stands. As highlighted, downward momentum is beginning to build but USD has to close below 6.4240 before a sustained decline can be expected (next support is at 6.4100). The chance for USD to close below 6.4240 is quite high as long as it does not move above the ‘strong resistance’ level at 6.4450 (level previously at 6.4540).”

The UK rate market moved to price in more front loaded rate hikes from the Bank of England (BoE) following the hawkish comments from Governor Bailey o

The UK rate market moved to price in more front loaded rate hikes from the Bank of England (BoE) following the hawkish comments from Governor Bailey over the weekend which has seen cable rise back to within touching distance of the 1.3800-level. Nonetheless, economists at MUFG Bank still expect GBP/USD to move downward into year-end due to slow growth and high inflation. BoE setting up rate hike at next policy meeting “The GBP is still not fully benefiting as much as expected from the ongoing sharp rise in UK yields. The UK rate market continued to adjust sharply higher yesterday to fully price in a rate hike by the BoE at their next policy meeting in November.” “We have brought forward our forecast for the timing of the first BoE rate hike to November when we expect the first 15 point hike to be delivered which we expect to be followed by a 0.25 point hike in February.” “The faster pace of tightening poses some upside risk to our pound forecasts in the near-term. However, we are still sticking to our view that the GBP is more likely to weaken heading into year-end given the more challenging backdrop of slowing global growth, higher inflation and tightening liquidity conditions which should be less supportive for risk assets and high beta currencies like the pound.” “More front-loaded BoE tightening could also be viewed as more of a policy mistake if the UK economy slows more notably heading into year end triggering a weaker pound.”   

Gold traded sharply higher, as US Treasury yields and the USD slipped after the US CPI release but further gains over the near term may be limited, in

Gold traded sharply higher, as US Treasury yields and the USD slipped after the US CPI release but further gains over the near term may be limited, in the view of analysts at HSBC. A gradually stronger USD, following the Fed’s path towards normalisation, may weigh mildly on the yellow metal. Gold faces gradual withdrawal of monetary and fiscal support “The latest US CPI data indicates that the inflation level remained elevated in September. While the CPI data, in addition to easing in US Treasury yields and the USD, may be supportive of gold, the degree to which gold rallied is a little hard to explain. As such, further gains over the near term may be hard to come by, short of a steeper decline in US Treasury yields or the USD.” “Comments on inflation from groups like the International Monetary Fund (IMF) may lend support to gold as they appear to be becoming more frequent. However, the scare over inflation could aid gold if US Treasury yields do not rise. Should yields move higher to offset inflation, the impact on gold would likely be more negative.” “Global monetary and fiscal policies are no longer outright supportive of gold in the US or globally. With the era of ultra-loose monetary policies coming to an end and fiscal stimulus being pulled back, gold investment is down.” “We still believe the USD is gradually transitioning to a stronger path due to the slowdown in global growth and the Fed’s path towards normalisation. A gradually stronger USD could be mildly negative for gold.”  

The US dollar has continued to weaken amidst fresh uncertainty over Fed policy. Disclosure documents reveal that the spectacle of Fed officials person

The US dollar has continued to weaken amidst fresh uncertainty over Fed policy. Disclosure documents reveal that the spectacle of Fed officials personally trading stocks extended to the chair himself. As Powell reappointment is a close call, this story could end tip the balance, potentially damaging the greenback, economists at MUFG Bank report. Fed Chair Powell faces reappointment amid tumult “The probability of Chair Powell being given a second term dropped yesterday on PredictIt.org to 65% from around 80% 24 hours earlier. At one point the probability dropped to an intra-day low just below 60%. It was triggered by an online report on Fed Chair Powell’s personal stock account dealings.” “Chair Powell remains the clear favourite to remain Fed Chair after his term ends in February of next year, which is our base case scenario supporting our outlook for stronger US dollar heading into next year. However, the decision does not appear as much as a done deal as before which has increased uncertainty and downside risks for the US dollar.”  

The greenback, when tracked by the US Dollar Index (DXY), added to recent losses and drops to new 3-week lows around 93.60. US Dollar Index weaker on

DXT losses the grip further and re-visits the 93.60 area.US 10-year yields ease to the 1.57% region on Tuesday.Building Permits, Housing Starts, Fedspeak next on tap.The greenback, when tracked by the US Dollar Index (DXY), added to recent losses and drops to new 3-week lows around 93.60. US Dollar Index weaker on risk-on mood The index extends the bearish move further and drops to the 93.60 region on turnaround Tuesday. The continuation of the downtrend in the dollar comes in response to the move lower in US yields across the curve, with the front end slipping back to sub-0.40% levels, the belly hovering around 1.60% and the long end flirting with the 2.04%. In addition, further improvement in the risk complex weighs on the buck, as the profit-taking mood surrounding the dollar appears still unabated. In the US docket, housing data due later in the session will include Building Permits and Housing Starts for the month of September along with speeches by San Francisco Fed M.Daly (voter, centrist), FOMC’s Governors M.Bowman and C.Waller (permanent voters, centrists) and Atlanta Fed R.Bostic (voter, centrist). What to look for around USD The index keeps correcting lower following new 2021 highs past 94.50 on October 12, with initial support so far emerging around 93.60. Supportive Fedspeak, an anticipated start of the tapering process, higher yields and the rising probability that high inflation could linger for longer continue to prop up the sentiment around the buck for the time being and keep sustaining the case for the resumption of the uptrend in DXY in the relatively short-term horizon.Key events in the US this week: Building Permits, Housing Starts (Tuesday) – Initial Claims, Philly Fed Index, CB Leading Index, Existing Home Sales (Thursday) – Flash Manufacturing PMI (Friday).Eminent issues on the back boiler: Persistent uncertainty around Biden’s multi-billion Build Back Better plan. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. Debt ceiling debate. Geopolitical risks stemming from Afghanistan. US Dollar Index relevant levels Now, the index is losing 0.31% at 93.65 and a break above 94.56 (2021 high Oct.12) would open the door to 94.74 (monthly high Sep.25 2020) and then 94.76 (200-week SMA). On the flip side, the next down barrier emerges at 93.58 (monthly low October 19) followed by 93.18 (55-day SMA) and finally 92.98 (weekly low Sep.23).

Treasury yields have risen across the curve since the end of September. For bond investors, a difficult investing environment has just gotten more dif

Treasury yields have risen across the curve since the end of September.  For bond investors, a difficult investing environment has just gotten more difficult. Economists at Charles Schwab continue to suggest keeping average duration low due to the expectation for yields to push higher.  Rising bond yields is not a reason for bond investors to be blue “We see the potential for 10-year Treasury yields to move up to 1.75% this year and above 2% in the first half of next year.” “Over the next six to 12 months, we suggest investors look for opportunities to extend duration if yields move higher, as anticipated.” “Over the long run, we don’t see rising bond yields as a reason for bond investors to be blue. Higher yields – in real terms – are good for income investors.”  

Silver caught aggressive bids on Tuesday and shot to one-month tops, around the $23.70 region during the early European session. From a technical pers

Silver rallied to over one-month tops during the early European session on Tuesday.The momentum seems strong enough to push the XAG/USD beyond the $24.00 mark.Silver caught aggressive bids on Tuesday and shot to one-month tops, around the $23.70 region during the early European session. From a technical perspective, the XAG/USD showed some resilience below the 200-period SMA on the 4-hour chart and managed to defend the $23.00 mark for the second consecutive session on Monday. The subsequent positive move validated the recent bullish breakout through an inverted head and shoulders neckline. This, in turn, supports prospects for a further near-term appreciating move. Silver 4-hour chart The constructive setup is reinforced by the fact that technical indicators on the daily chart have just started moving into the bullish territory and are still far from being in the overbought zone. Bulls might now be looking to build on the momentum further beyond a downward-sloping trend-line resistance, extending from July monthly swing highs, around the $26.75-80 region. Silver daily chart Nevertheless, the XAG/USD seems all set to extend its recent recovery move from YTD lows and aim to reclaim the $24.00 round-figure mark. This is followed by resistance near the $24.15-20 region, above which the momentum could further get extended towards the next relevant hurdle around the $24.75-80 region. The white metal could eventually climb to the key $25.00 psychological mark. On the flip side, the $23.50 region now seems to protect the immediate downside. Any subsequent pullback might still be seen as a buying opportunity near the $23.00 mark, which should act as a strong near-term base for the XAG/USD and a key pivotal point for traders. A convincing break below might prompt some technical selling and accelerate the corrective fall towards the $22.75-70 region. Technical levels to watch  

GBP/AUD has cratered from its late September 1.8961 highs. But any onward decline runs into a layer of robust support broadly in the 1.8304-1.8235 pat

GBP/AUD has cratered from its late September 1.8961 highs. But any onward decline runs into a layer of robust support broadly in the 1.8304-1.8235 patch, Benjamin Wong, Strategists at DBS Bank, reports. Prior overbought indicators are waning “The bearish divergences spotted on the technical indicators oiled the decline. However, the same set of indicators are now hinting of a likely turnaround in the cross’ fortunes.” “The 200-DMA at 1.8304 lurks just below recent 1.8417 lows, and in its proximity also rests the support offered by the 61.8% Fibonacci retracement of the 1.9154-1.7741 range grip that calibrates 1.8281. Both of these levels are buffered by 50-week and 200-week moving averages at 1.8235 and 1.8282, respectively. Hence, there is a layer of support coming into the 1.8304-1.8235 zone.” “A further decline is also likely to be tempered by the congestion zone we saw going through in June. That approximates and has barricaded a 1.82-1.85 support range, but of interest to us is where it runs into the trend support arising from 1.7417 lows. That axes 1.8330, while itself the trendline support is in a cradle position with 200-dma at 1.8304.”  

Indonesia’s central bank, Bank Indonesia (BI), announced no changes to the benchmark 7-day reverse repo, leaving it at 3.50% during the October moneta

Indonesia’s central bank, Bank Indonesia (BI), announced no changes to the benchmark 7-day reverse repo, leaving it at 3.50% during the October monetary policy meeting held this Tuesday. The central bank governor Perry Warijyo said that “global economic recovery is expected lower than previously estimated due to rising cases of COVID-19, higher energy prices.” Additional comments Global recovery to continue in 2022 but disruption in global supply chain needs to be monitored. Domestic economy shows continued improvement after COVID-19 curbs eased. Domestic economic recovery supported by high exports, improving consumption after easing COVID-19 restrictions. Keeps 2021 GDP growth outlook at 3.5% to 4.3%. Q3 current account balance seen in surplus. Continue to make sure rupiah reflects fundamentals.

Indonesia Bank Indonesia Rate meets forecasts (3.5%)

AUD/USD is the top gainer of the day so far alongside the kiwi. The aussie is trading close to the September high at 0.7477. Above here, the pair woul

AUD/USD is the top gainer of the day so far alongside the kiwi. The aussie is trading close to the September high at 0.7477. Above here, the pair would target the 200-day moving average at 0.7567, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank ,reports. AUD/USD maintains upside pressure “AUD/USD held steady yesterday and remains well-placed to tackle the September peak at 0.7477. The 55-week ma lies at 0.7513 and the 200-day ma 0.7567.” “Very near-term we would allow for a small retracement, but this is indicated to hold around 0.7350/25.”  “Dips should find interim support at 0.7313 (20-day ma) and this guards the 29th September low at 0.7171.”  

The S&P 500 rose 1.8% last week, its best weekly advance since July. Economists at UBS still believe the optimism in equity markets is justified, giv

The S&P 500 rose 1.8% last week, its best weekly advance since July. Economists at UBS still believe the optimism in equity markets is justified, given robust economic growth and earnings. Solid start to the US earnings season “We expect a drag on earnings per share from supply chain problems of just 1% for 2021 – a modest hit relative to our projection for 45% profit growth for the year.” “We continue to believe the Fed will look through the current spike in inflation. US average inflation data suggests the Fed doesn’t need to act: On two, three, and five-year rolling averages, core PCE inflation remains well below 2%.” “As the labor market continues to recover we expect yields to rise to 1.8% this year, a gradual increase that has historically been consistent with rising equities.” “Although the third quarter earnings season won’t match the second, we still expect roughly 30% earnings growth in the third quarter, representing a 5% beat of consensus expectations.”

The 55-day moving average (DMA) at 0.9208 is about to give way. Subsequently, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank,

The 55-day moving average (DMA) at 0.9208 is about to give way. Subsequently, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the USD/CHF pair to tick down towards the 2020-2021 uptrend at 0.9076. Offered below 0.9313 “USD/CHF’s bounce from the 55-DMA at 0.9208 has proved tepid and downside risks remain. The 55-DMA is about to give way and this leaves the market vulnerable to a deeper corrective sell off to the 0.9138 200-DMA and potentially the 2020-2021 uptrend at 0.9076.” “Rallies are expected to remain capped by the 0.9313 mid-October high. This guards 0.9357/69 (recent high).”  

The Kiwi has recovered from yesterday’s dip. NZD/USD trades at fresh multi-week highs and is up nearly 1%. Rapidly rising expectations for more OCR hi

The Kiwi has recovered from yesterday’s dip. NZD/USD trades at fresh multi-week highs and is up nearly 1%. Rapidly rising expectations for more OCR hikes are set to underpin the New Zealand dollar, economists at ANZ Bank report. The RBNZ is at the front of the pack in the global monetary tightening phase “Given some of the themes ripping through global markets like stagflation, tapering and spiraling energy prices, more volatility is likely.” “The rise in inflation will keep the RBNZ at the beginning of the pack in this hiking cycle, which should cement rather than question its commitment to low and stable inflation, and growing market expectations of more OCR hikes will likely help rather than hinder the NZD.” “There is no talk of letting inflation run, and temporarily high inflation shouldn’t weigh on the NZD.”  

The USD selling bias picked up pace heading into the European session and pushed the AUD/USD pair back closer to September monthly swing highs, around

AUD/USD gained strong positive traction on Tuesday amid a broad-based USD weakness.Slightly overbought conditions on hourly charts warrant some caution for bullish traders.The USD selling bias picked up pace heading into the European session and pushed the AUD/USD pair back closer to September monthly swing highs, around the 0.7470-75 region in the last hour. The resource-linked Australian dollar remained well supported by the recent widespread rally in commodity prices. This, along with the emergence of aggressive US dollar selling, assisted the AUD/USD pair to gain strong positive traction during the first half of the trading action on Tuesday. The greenback was weighed down by the overnight pullback in the US Treasury bond yields and dismal US Industrial Production data, which fell by the most in seven months. Apart from this, a positive risk tone further undermined the safe-haven USD and benefitted the perceived riskier aussie. Meanwhile, technical indicators on hourly charts are already flashing overbought conditions. Moreover, RSI (14) on the daily chart have moved on the verge of breaking about the 70 mark. This, in turn, warrants some caution for bulls and before positioning for any further appreciating move. That said, some follow-through buying should pave the way for an extension of the recent strong positive move witnessed over the past four weeks or so. The momentum, however, could pause at higher levels and struggle to lift the AUD/USD pair further beyond the key 0.7500 psychological mark. On the flip side, any meaningful pullback now seems to find decent support near the 0.7435 region. This is followed by the 0.7400 round-figure mark and the overnight swing lows, around the 0.7380-75 region, which should act as a strong near-term base for the AUD/USD pair. The latter coincides with a short-term ascending trend-line support, which if broken will negate the positive bias and prompt some technical selling. The AUD/USD pair might then accelerate the fall towards the 0.7320-15 strong resistance breakpoint turned support en-route the 0.7300 mark. AUD/USD daily chart Technical levels to watch  

The Reserve Bank of Australia (RBA) has been among the central banks where market pricing has diverged to a clearly more hawkish path compared to the

The Reserve Bank of Australia (RBA) has been among the central banks where market pricing has diverged to a clearly more hawkish path compared to the official forward guidance. The aussie was little affected by the RBA’s October meeting Minutes, heading higher. However, economists at Danske Bank expect the AUD/USD pair to edge lower. No rate hikes until 2024 “In its October minutes, RBA dovishly stated that while wage pressures were emerging in certain parts of the world, this was not the case in Australia.” “It continues to signal no rate hikes until 2024, even though market prices in the first hike already by H2 2022” “We continue to see market pricing as too aggressive, and expect to see lower AUD/USD also on the back of Chinese-driven weakness in key Australian export commodity prices and broad USD strength.”  

Governor Andrew Bailey’s comments over the weekend made clear that a hike to Bank Rate is coming soon. Subsequently, economists at Standard Chartered

Governor Andrew Bailey’s comments over the weekend made clear that a hike to Bank Rate is coming soon. Subsequently, economists at Standard Chartered expect a 15bps hike in November. They also see two further 25bps hikes in February and May, taking base rate to 0.75% by end-2022. Hawks speak loudest “We bring forward our expectation of a 15bps rate hike to 4 November (from February 2022 prior), taking the base rate to 0.25% by end-2021 (0.10% previously).” “We do think there is now scope for two more 25bps rate hikes next year (likely in February and May), taking the base rate to 0.75% by end2022 (0.50% previously); but this is still well below what the market is pricing in (base rate at 1.25% by end-2022.”  “Despite inflation likely exceeding 4% by year-end, we think the BoE will be constrained from moving further or faster than our forecasts. The two metrics the MPC will be following closely remain underlying wage growth and inflation expectations – these will provide the strongest indication of any adjustment in thinking.”  

There is no reason that ECB should increase rates between now and the end of next year There is still big difference in terms of rising energy prices

There is no reason that ECB should increase rates between now and the end of next year There is still big difference in terms of rising energy prices and overall total inflation. Total overall inflation should get back to below 2 percent by end of next year. We remain very vigilant on inflation.   more to come ...

Here is what you need to know on Tuesday, October 19: As risk flows return to markets early Tuesday, the greenback continues to weaken against its riv

Here is what you need to know on Tuesday, October 19: As risk flows return to markets early Tuesday, the greenback continues to weaken against its rivals with the US Dollar Index dropping to fresh three-week lows near 93.60. Moreover, the benchmark 10-year US Treasury bond yield is down more than 1%, putting additional weight on the USD’s shoulders. September Housing Starts and Building Permits will be featured in the US economic docket. Christopher J. Waller and Michelle Bowman, members of the Board of Governors of the Fed, will be delivering speeches as well. Nevertheless, investors will remain focused on the US T-bond yields and the overall risk perception. Supported by strong gains seen in the Consumer Discretionary, Technology and Communication Services sectors, the S&P 500 rose 0.35% on Monday and the tech-heavy Nasdaq added 0.85%. The Nikkei 225 and the Shanghai Composite indexes rose 0.75% and 0.68%, respectively, on Tuesday, mirroring the improving market mood.Gold started the week on the back foot and spent the majority of the day moving sideways above $1,760. However, falling the US T-bond yields seem to be helping XAU/USD gain traction on Tuesday. At the time of press, the pair was up more than 0.7% at $1,778.EUR/USD managed to hold above 1.1600 during the Asian trading hours and started to push higher. Currently, the pair is trading at its highest level since late September around 1.1650. August Construction Output data from the Eurozone will be published later in the session but the dollar's valuation is likely to continue to drive the pair's action.GBP/USD is edging higher toward 1.3800 on Tuesday. The UK and the EU will be discussing the Northern Ireland Protocol later in the week and the UK’s Office for National Statistics will release the September Consumer Price Index data on Wednesday, which could have a significant impact on the Bank of England’s rate hike expectations. Risk-sensitive AUD/USD and NZD/USD are the top gainers of the day so far. Both of these pairs were trading at fresh multi-week highs and were up nearly 1% in the early European session. USD/JPY reached its highest level in three years at 114.47 on Monday but reversed its direction pressured by the falling US T-bond yields. However, the risk-positive market atmosphere is not allowing JPY to continue to gather strength, causing USD/JPY to stay in a consolidation phase around 114.00.Cryptocurrencies: Bitcoin trades above $60,000 and continues to close in on the all-time high it set near $65,000 back in April. Ethereum keeps the bullish bias in the near term but needs to clear $4,000 in order to target a new record top.
 

ECB’s Villeroy: Should get back to pre-pandemic levels of activity by year-end more to come ...

The European Central Bank (ECB) Governing Council member and Bank of France Head Francois Villeroy de Galhau said that the French economy should get back to pre-pandemic levels of activity by year-end. Additional quotes “Reaffirms earlier French economic growth forecast.” “French auto sector underperforming but other areas of the economy are doing well.” “Some French companies highlighting difficulties in hiring staff.”

Yao Jingyuan, a special researcher at the Counselor’s Office of the State Council said on Tuesday, the People’s Bank of China (PBOC) has room to lower

Yao Jingyuan, a special researcher at the Counselor’s Office of the State Council said on Tuesday, the People’s Bank of China (PBOC) has room to lower the Reserve Requirement Ratio (RRR) and, therefore, should cut the ratio to support the economic growth. Key quotes The reserve requirement ratio “can be lowered by 1 percentage point in the fourth quarter.” “We don’t need to worry about whether releasing more money will push inflation higher because we still have room.” “Consumer inflation is likely to be 1% for the full year.” “A 1 percentage-point cut would unleash 1 trillion yuan ($156 billion) of liquidity. Based on on-the-ground investigations, the liquidity condition of companies remains generally quite tight.”

EUR/USD has eroded its accelerated downtrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to head towards

EUR/USD has eroded its accelerated downtrend. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to head towards the 1.1746 four-month downtrend. Accelerated downtrend eroded “EUR/USD has broken higher through the accelerated downtrend as suspected.” “The intraday Elliott wave counts remain positive and we would allow for a deeper retracement to 1.1746 four-month downtrend.” “Dips lower are indicated to hold around 1.1565. Below 1.1522 (last week's low) lies the 50% retracement of the move from 2020 and the March 2020 high at 1.1492/95.” “Key support is the previous downtrend (from 2008) which is now located at 1.1395.”  

EUR/USD is consolidating around 1.1650, having staged an impressive bounce from the daily lows of 1.1610, as the pullback in the US dollar amid the ri

EUR/USD is breaking higher from a three-week-old descending triangle on the daily chart. Tuesday’s close is critical to unleashing additional upside towards the 50-DMA at 1.1715.Daily RSI pierces through the midline, recaptures 50.00 and backs more gains. EUR/USD is consolidating around 1.1650, having staged an impressive bounce from the daily lows of 1.1610, as the pullback in the US dollar amid the risk-on mood underpinned the pair. The major extends its recovery from 15-month lows of 1.1524 into the fifth straight day on Tuesday, as the bulls remain in complete control. EUR/USD’s daily chart shows that the price has broken higher from a three-week-old descending triangle formation, although the bulls need a daily closing above the falling trendline resistance at 1.1602 to confirm an upside breakout from the pattern. The 14-day Relative Strength Index (RSI) has pierced through the midline, now back onto the positive territory, suggesting that there is more room to the upside. The triangle confirmation will trigger a fresh advance towards the downward-sloping 50-Daily Moving Average (DMA) at 1.1715. Ahead of that the 1.1700 round number could be a tough nut to crack for the EUR bulls. EUR/USD: Daily chart Meanwhile, any retracement will meet the 21-DMA support at 1.1622, below which the triangle resistance now support at 1.1602 would be tested once again. Further south, Monday’s low of 1.1571 could be threatened if the selling pressure intensifies. EUR/USD: Additional levels to consider  

USD/JPY could move into a consolidative phase in the near term ahead of a probable move to 115.00, noted FX Strategists at UOB Group. Key Quotes 24-ho

USD/JPY could move into a consolidative phase in the near term ahead of a probable move to 115.00, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘deeply overbought conditions coupled with some early signs of slowing momentum suggest that USD is unlikely to strengthen much further’ and we expected USD to ‘trade sideways between 113.90 and 114.50’. USD subsequently traded between 114.00 and 114.44. The underlying tone has improved somewhat and USD could edge higher from here. That said, the major resistance at 114.55 is unlikely to come into the picture. Support is at 114.00 followed 113.85.” Next 1-3 weeks: “There is not much to add to our update from yesterday (18 Oct, spot at 114.20). As highlighted, USD is still strong but overbought conditions could lead to consolidation first. The next resistance is at 114.55 followed by 115.00. The current USD strength is deemed intact as long as 113.50 (no change in ‘strong support’ level from yesterday) is not breached.”

Open interest in natural gas futures markets went down by around 8.7K contracts at the beginning of the week, reaching the second daily drop in a row

Open interest in natural gas futures markets went down by around 8.7K contracts at the beginning of the week, reaching the second daily drop in a row considering advanced prints from CME Group. In the same line, volume resumed the recent downside and dropped by around 11.5K contracts. Natural Gas looks supported around $4.70Natural gas prices extended the corrective downside and broke below the $5.00 mark per MMBtu on Monday. The strong pullback came in tandem with diminishing open interest and volume, removing momentum from further downside and instead allowing for a rebound in the very near term. Prices of the commodity, in the meantime, remain supported by the $4.70 region per MMBtu.

Gold price managed to defend the critical rising trendline support at $1765, despite a brief dip below it, as the bulls found fresh bids at the horizo

Gold price managed to defend the critical rising trendline support at $1765, despite a brief dip below it, as the bulls found fresh bids at the horizontal 21-Daily Moving Average (DMA) at $1760. Although XAU/USD rebounds towards the key $1795 barrier, downside risks remain intact, according to FXStreet’s Dhwani Mehta. Bullish potential appears limited due to impending bear cross “The broader market sentiment and the yields’ price action will be closely watched for placing fresh bets on gold price.” “On the road to recovery, XAU/USD is likely to face immediate resistance at the horizontal 50-DMA at $1778. A sustained move above the latter could call for a retest of the 100 and 200-DMAs confluence zone at $1795. However, an impending bear cross, with the 100-DMA set to cut the 200-DMA from above, warrants caution for gold bulls.” “If the 21-DMA support at $1760 gives way convincingly, then the previous week’s demand area at $1750-$1745 would be back into play. Further south, the multi-week lows of $1722 could be on the sellers’ radars.”  

USD/JPY intensifies the selling downside momentum as the European trading hours begin. The pair remained under pressure since it touched November, 201

USD/JPY stalls the previous three sessions’ gains on Tuesday in the European session.The formation of the evening star on Monday indicates the upcoming downside momentum.The Momentum oscillator holds onto the overbought zone warrants caution for the pair.USD/JPY intensifies the selling downside momentum as the European trading hours begin. The pair remained under pressure since it touched November, 2018 highs on Friday. At the time of writing, USD/JPY is trading at 114.12, down 0.17% so far. USD/JPY daily chart On the daily chart, the USD/JPY pair has been riding higher after testing the low of 109.12 on September 22. The pair rallied toward a four-year high near 114.50. The divergence in the Relative Strength Index (RSI) forces bulls to take a step back. If the price sustains below the Intraday’s low it would test the 113.50 horizontal support level. A break below the 23.6% Fibonacci retracement, which extends from the low of the mentioned level at 113.12, will bring the possibility of the 112.50 horizontal level followed by the psychological 112.00 mark. Alternatively, on the reverse side, a daily close above 114.50 would bring November, 2017 high at 114.73 back in action, allowing bulls to dominate the trade again. USD/JPY additional levels
 

Further upside in NZD/USD is expected to face the next hurdle at the 0.7130 level in the next weeks, suggested FX Strategists at UOB Group. Key Quotes

Further upside in NZD/USD is expected to face the next hurdle at the 0.7130 level in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “NZD traded between 0.7050 and 0.7105 yesterday, narrower than our expected sideway-trading range of 0.7040/0.7110. Upward momentum has firmed somewhat but the bias for NZD is on the upside. However, any advance is unlikely to challenge the major resistance at 0.7130 (minor resistance is at 0.7110). Support is at 0.7075 followed by 0.7060.” Next 1-3 weeks: “There is not much to add to our update from yesterday (18 Oct, spot at 0.7080). As highlighted, while NZD is still strong, the recent rapid rise is overbought and the pace of any further advance is likely to be slower. The next resistance is at 0.7130. The upside risk is deemed intact as long as NZD does not move below 0.7020 (‘strong support’ was at 0.7000 yesterday).”

Switzerland Imports (MoM) up to 17050M in September from previous 15055M

Switzerland Exports (MoM) increased to 22102M in September from previous 20111M

Switzerland Trade Balance: 5052M (September) vs previous 5055M

According to flash data from CME Group for crude oil futures markets, traders scaled back their open interest positions by around 7.7K contracts on Mo

According to flash data from CME Group for crude oil futures markets, traders scaled back their open interest positions by around 7.7K contracts on Monday, reversing the previous daily build. Volume, instead, went up by around 201K contracts after four consecutive daily pullbacks. WTI focused on $84.00 and above After hitting fresh 2021 highs at the beginning of the week, prices of the WTI ended up in the negative territory amidst shrinking open interest. That said, a sustainable retracement appears out of favour for the time being while the commodity re-targets the $84.00 mark per barrel and above in the near term.

FX option expiries for October 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1545-55 876m 1.1600 559m 1.1670

FX option expiries for October 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1545-55 876m 1.1600 559m 1.1670 428m - GBP/USD: GBP amounts         1.3525 738m 1.3685 774m - USD/JPY: USD amounts                      113.50 370m 114.00 300m - USD/CHF: USD amounts         0.9270 757m - AUD/USD: AUD amounts 0.7350 664m - USD/CAD: USD amounts        1.2550 751m

In opinion of FX Strategists at UOB Group, Cable could edge higher and re-visit 1.3800 ahead of 1.3850 in the short-term horizon. Key Quotes 24-hour v

In opinion of FX Strategists at UOB Group, Cable could edge higher and re-visit 1.3800 ahead of 1.3850 in the short-term horizon. Key Quotes 24-hour view: “Yesterday, we highlighted that ‘the rapid advance appears to be running ahead of itself and GBP is unlikely to strengthen much further’ and we expected GBP to ‘trade between 1.3710 and 1.3780’. Our view was not wrong even though GBP traded within a narrower range than expected (1.3710/1.3765). The underlying tone has improved somewhat but while GBP could edge higher, it is unlikely to break the resistance at 1.3770. Support is at 1.3710 followed by 1.3690.” Next 1-3 weeks: “There is not much to add to our update from yesterday (18 Oct, spot at 1.3765). As highlighted, GBP is likely to advance further to 1.3800. Further extension to 1.3850 is not ruled out but the odds are not high for now. Only a break of the ‘strong support’ at 1.3655 (no change in level from yesterday) would indicate that GBP is not ready to head higher to 1.3800.”

CME Group’s preliminary readings for gold futures markets noted open interest shrank for the second session in a row on Monday, this time by nearly 3K

CME Group’s preliminary readings for gold futures markets noted open interest shrank for the second session in a row on Monday, this time by nearly 3K contracts. Volume, followed suit and dropped by around 51.2K contracts. Gold re-targets $1,800 near-term Monday’s downtick in gold prices met support around $1,760 amidst shrinking open interest and volume. That said, further losses appear unlikely, and a rebound could gather traction with the next target at the key $1,800 mark per ounce troy.

FX Strategists at UOB Group still remain of the view that EUR/USD could extend the upside momentum in the next weeks. Key Quotes 24-hour view: “We exp

FX Strategists at UOB Group still remain of the view that EUR/USD could extend the upside momentum in the next weeks. Key Quotes 24-hour view: “We expected EUR to ‘trade sideways between 1.1575 and 1.1620’ yesterday. EUR subsequently traded within a range of 1.1570/1.1622 before closing little changed at 1.1609. Upward momentum has improved a tad and the bias for today is on the upside. That said, a break of the major resistance at 1.1640 appears unlikely. Support is at 1.1595 followed by 1.1580.” Next 1-3 weeks: “Our latest narrative from last Thursday (14 Oct, spot at 1.1595) still stands. As highlighted, EUR is likely trade with an upward bias towards 1.1640. Further advance is not ruled out but 1.1640 may not be easy to crack. The upward bias is deemed intact as long as EUR does not move below 1.1540 (no change in ‘strong support’ level). Looking ahead, the next resistance above 1.1640 is at 1.1680.”

GBP/USD shrugs of the previous session’s dull performance and trades higher on Tuesday. The pair jumped nearly 50-pips after opening lower as the tra

GBP/USD records fresh daily gains on Tuesday in the early European trading hours.Lower US Treasury yields undermine the demand for the US dollar.Sterling enjoys increasing bet of BOE rate hike expectation and Brexit optimism led gains. GBP/USD shrugs of the previous session’s dull performance and trades higher on Tuesday. The pair jumped nearly 50-pips after opening lower as the trading session began. At the time of writing, GBP/USD is trading at 1.3771, up 0.32% for the day. The move is primarily sponsored by the selling pressure in the greenback. A number of factors assisted the recent pullback in the buck. A weaker US data along with global rate hike expectations weigh on the prospects of the US dollar. The US Industrial Production fell 1.3% in September due to supply-chain constraints and Hurricane Ida. The US benchmark 10-year bond yields retreat toward 1.57% as investors digested Fed’s tapering. On the other hand, the British pound gained following the hawkish comments from the Bank of England (BOE) Governor Andrew Bailey. He was quoted as saying that the Bank of England (BOE) is set to raise interest rates as inflation risks arise. Nevertheless, BOE’s members Silvana Tenreyro and Catherine Mann retreated their view on inflation as “transitory”. Meantime, UK’s Prime Minister Borris Johnson promised to fix a solution to Brexit’s Northern Ireland Protocol. This, in turn, uplift the British pound in recent trades. As for now, traders keep their focus on the US Building Permits, Housing Starts to gauge market sentiment. GBP/USD additional levels
 

The USD/CAD pair extended its steady intraday descent through the Asian session and dropped back closer to over three-month lows touched last Friday.

USD/CAD edged lower on Tuesday and dropped back closer to multi-month lows.A combination of factors weighed on the USD and exerted pressure on the major.The recent run-up in oil underpinned the loonie and contributed to the selling bias.The USD/CAD pair extended its steady intraday descent through the Asian session and dropped back closer to over three-month lows touched last Friday. The pair was last seen trading just below mid-1.2300s, down over 0.20% for the day. Having struggled to preserve the overnight recovery gains to levels beyond the 1.2400 mark, the USD/CAD pair met with some fresh supply on Tuesday and was pressured by a combination of factors. The recent strong bullish run in crude oil prices continued underpinning the commodity-linked loonie. This, along with the emergence of fresh selling around the US dollar, exerted some downward pressure on the major. The markets now seem to have fully priced in the prospects for an imminent Fed taper announcement later this year. Apart from this, Monday's weaker US data – showing that Industrial Production fell by the most in seven months in September – and a modest pullback in the US Treasury bond yields acted as a headwind for the USD. Bulls even shrugged off a softer risk tone, which tends to benefit the safe-haven greenback. Meanwhile, fears about a faster-than-expected rise in inflation have been fueling speculations about a Fed rate hike move in 2022. This might help limit any deeper USD losses and extend some support to the USD/CAD pair amid slightly oversold conditions on short-term charts. This, in turn, warrants some caution for bearish traders and before positioning for an extension of a near one-month-old downward trajectory. In the absence of any major market-moving economic releases from the US, traders on Tuesday will take cues from a scheduled speech by Fed Governor Michelle Bowman later during the US session. This, along with the US bond yields and the broader market risk sentiment, might influence the USD. Apart from this, oil price dynamics should provide some impetus to the USD/CAD pair and allow traders to grab some short-term opportunities. Technical levels to watch  

The GBP/JPY cross-currency pair edges higher on Tuesday. The pair remains pressured near 157.40. At the time of writing, GBP/JPY is trading at 157.11,

GBP/JPY remains firm on Tuesday in the initial European session.Bulls negate the previous day’s sluggish momentum.The momentum oscillator holds onto the overbought zone, throws caution for aggressive bids.The GBP/JPY cross-currency pair edges higher on Tuesday. The pair remains pressured near 157.40.  At the time of writing, GBP/JPY is trading at 157.11, up 0.11% for the day. GBP/JPY daily chart On the daily chart, the GBP/JPY cross currency pair has been trading in a broad trading range of 149.00 and 154.00 for six months, before breaking the range on October 11. The pair peaked near a four-year high of 157.41 in a span of 5 days on Friday.  If the price breaks above the intraday’s high it could again test the high of 157.41. The  Moving Average Convergence and Divergence (MACD) trades in the overbought zone. Any uptick in the MACD would bring the June 2016 high of 160.67 nearer to the GBP/JPY bulls. Alternatively, on the reverse side of the trade, the downside target appears at 156.00 and the 155.00 horizontal support zone. Next, the GBP/JPY bears would seek Thursday’s low around 154.65.   GBP/JPY additional levels
 

Fresh bids emerged near 1.1610 in early Asia, triggering a fresh upswing in EUR/USD towards 1.1650, as the US dollar runs into fresh supply amid the r

EUR/USD catches fresh bids in early Asia after finding support near 1.1610.The pair cheers risk-on mood-led decline in the USD, Treasury yields pullback.Focus on ECB and Fedspeak as poor US data tempers hawkish Fed’s expectations.Fresh bids emerged near 1.1610 in early Asia, triggering a fresh upswing in EUR/USD towards 1.1650, as the US dollar runs into fresh supply amid the risk-on market mood. The Asian markets cheer the Wall Street tech advance amid prospects of robust corporate earnings reports, which cooled off concerns over rising inflationary risks and thier impact on the economic recovery. The retreat in the US Treasury yields and a pause in the yield curve flattening, in the face of disappointing American Industrial Production data, add legs to the recovery momentum in the main currency pair. However, the divergent monetary policy outlooks between the Fed and the European Central Bank (ECB) could likely pose a downside risk to EUR/USD’s further upside. The Fed is well on track to withdraw the pandemic stimulus as early as November while the ECB calls for keeping a high degree of flexibility in the post-crisis stimulus measures.  “I think flexibility should remain -- we certainly have to discuss how to adjust our purchase programs,” ECB policymaker Ignazio Visco said on Monday. In the day ahead, the pair will remain at the mercy of the US dollar price action and the risk trends amid a data-light economic calendar. The speeches from the ECB and Fed policymakers will hog the limelight. EUR/USD: Technical levels to consider  

The emergence of fresh selling around the USD pushed the AUD/USD pair to near six-week tops, closer to mid-0.7400s during the Asian session. Following

AUD/USD caught some fresh bids on Tuesday amid a broad-based USD weakness.Monday’s disappointing US data, Retreating US bond yields undermined the USD.A softer risk tone might cap any meaningful upside for the perceived riskier aussie.The emergence of fresh selling around the USD pushed the AUD/USD pair to near six-week tops, closer to mid-0.7400s during the Asian session. Following the previous day's two-way price moves, the AUD/USD pair caught some fresh bids on Tuesday and now seems all set to prolong a near three-week-old bullish trajectory. The US dollar was pressured by retreating US Treasury bond yields and the overnight data, showing that US Industrial Production fell by the most in seven months in September. This, in turn, was seen as a key factor that provided a goodish lift to the major. This comes on the back of the recent widespread rally in commodity prices, which was seen as another factor that continued underpinning the resources-linked Australian dollar. That said, a combination of factors might hold bullish traders from placing aggressive bets and keep a lid on any runaway rally for the AUD/USD pair. A softer risk tone might act as a headwind for the perceived riskier aussie amid hawkish Fed expectations. Fears that a faster-than-expected rise in inflation could derail the global economic recovery weighed on investors' sentiment. The concerns were further fueled by Monday's disappointing Chinese data, showing that the economic growth decelerated sharply from 7.9% to 4.9% during the third quarter. Moreover, growing acceptance for an early policy tightening by the Fed could help limit the USD losses and cap the AUD/USD pair. The FOMC meeting minutes released last Wednesday reaffirmed that the Fed remains on track to begin rolling back its massive pandemic-era stimulus by the end of this year. The markets might have also started pricing in the possibility of an interest rate hike in 2022 to counter growing inflation risks. Nevertheless, the AUD/USD pair still seems poised to retest September monthly swing highs, around the 0.7475-80 region. In the absence of any major market-moving economic releases from the US, trades on Tuesday will take cues from a scheduled speech by Fed Governor Michelle Bowman. This, along with the US bond yields and the broader market risk sentiment, might influence the USD price dynamics and produce some trading opportunities around the AUD/USD pair. Technical levels to watch  

Western Texas Intermediate (WTI) consolidates gains on Tuesday in the Asian session. After recording a fresh 7-year high, WTI closed lower in the prev

Western Texas Intermediate (WTI) pares part of its initial losses on Tuesday.Demand worries and OPEC’s failure to add more supply weigh on crude oil.US Dollar Index records fresh daily low around 93.73, US yields retreat too.Western Texas Intermediate (WTI) consolidates gains on Tuesday in the Asian session. After recording a fresh 7-year high, WTI closed lower in the previous session. At the time of writing, WTI is trading at $81.62, up 0.04% for the day. Crude oil prices fail to sustain the upside momentum after the US and China data highlighted the risk of the global growth recovery, ultimately affecting the demand scenario. China’s Gross Domestic Product (GDP) expanded by 4.9% in Q3 on yearly basis amid significant headwinds from power shortages and the coronavirus outbreak, which hindered the supply chain. China’s daily crude oil production rate fell again in the previous month to the lowest level since May 2020.  In addition to that, the US Factory Output dropped 1.3% in September, the most in the seven months, resulting from the impact of Hurricane Ida. Furthermore, OPEC and its allies have been struggling to add crude back to the market as oil cuts fell slightly to 115% in Septembember.  Angola and Nigeria failed to add more production due to lack of investment and exploration. As for now, the US dollar dynamics and the demand-supply constraint continue to influence WTI prices. WTI additional levels
 

The NZD/USD pair surged past the 0.7100 round figure during the Asian session and shot to one-month tops, around the 0.7125 region in the last hour. T

NZD/USD gained strong follow-through traction for the fifth consecutive session on Tuesday.Retreating US bond yields prompted fresh USD selling and provided a goodish lift to the pair.A softer risk tone did little to hinder the momentum beyond the 0.7100 confluence barrier.The NZD/USD pair surged past the 0.7100 round figure during the Asian session and shot to one-month tops, around the 0.7125 region in the last hour. The pair built on its recent strong rally from the vicinity of the 0.6900 mark and gained strong follow-through traction for the fifth consecutive session on Tuesday. Following the previous day's two-way price moves, the US dollar met with some fresh supply amid a further pullback in the US Treasury bond yields. This, in turn, was seen as a key factor that provided a goodish lift to the NZD/USD pair. Bulls seemed rather unaffected by a generally softer tone around the equity markets, which tends to undermine the perceived riskier kiwi. Fears that a faster-than-expected rise in inflation could derail the global economic recovery weighed on investors' sentiment. The concerns were further fueled by Monday's disappointing Chinese data, showing that the economic growth decelerated sharply from 7.9% to 4.9% during the third quarter. Nevertheless, the NZD/USD pair finally broke through a confluence barrier, comprising of the very important 200-day SMA and a downward sloping trend-line extending from YTD tops touched in February. This could be seen as a fresh trigger for bullish traders and might have already set the stage for a further near-term appreciating move. That said, prospects for an early policy tightening by the Fed might help limit any deeper USD losses and cap the upside for the NZD/USD pair. Investors seem convinced that the Fed will begin tapering its bond purchases in 2021 and have been pricing in the possibility of a rate hike in 2022 to counter growing inflation risks. This, in turn, warrants some caution for aggressive bullish traders amid absent relevant market-moving economic releases on Tuesday. Traders now look forward to a scheduled speech by Fed Governor Michelle Bowman. This, along with the US bond yields and the broader market risk sentiment, might influence the USD and provide some impetus to the NZD/USD pair. Technical levels to watch  

Japanese Prime Minister Fumio Kishida confirmed in a statement on Tuesday, “North Korea fired two ballistic missiles.” He added: “Regrettable North K

Japanese Prime Minister Fumio Kishida confirmed in a statement on Tuesday, “North Korea fired two ballistic missiles.” He added: “Regrettable North Korea has fired missiles successively since last month.”

Gold edged higher during the Asian session on Tuesday and moved back above the $1,770 level in the last hour. The XAU/USD, for now, seems to have snap

Gold gained some positive traction on Tuesday and snapped two days of the losing streak.Retreating US bone yields undermined the USD and extended some support to the metal.Hawkish Fed/BoE might cap gains and warrants some caution for aggressive bullish traders.Gold edged higher during the Asian session on Tuesday and moved back above the $1,770 level in the last hour. The XAU/USD, for now, seems to have snapped two days of the losing streak and was supported by a combination of factors. The uptick was sponsored by the emergence of fresh selling around the US dollar, which tends to benefit dollar-denominated commodities, including gold. Following the previous day's good two-way price moves, the USD met with some fresh supply amid a modest pullback in the US Treasury bond yields. This, in turn, was seen as a key factor that acted as a tailwind for the dollar-denominated commodity. Apart from this, a generally softer tone around the equity markets extended additional support to the safe-haven precious metal. Worries that the recent widespread rally in commodity prices will stoke inflation and derail the global economic recovery continued weighing on investors' sentiment. The market concerns were further fueled by Monday's disappointing Chinese macro data, showing that the economic growth decelerated sharply from 7.9% to 4.9% during the third quarter. That said, hawkish signals by major central banks might hold traders from placing aggressive bullish bets around the non-yielding gold and cap gains. Market participants seem convinced that the Fed will begin rolling back its massive pandemic-era stimulus by the end of this year. Investors have also started pricing in the possibility of an interest rate hike in 2022 amid fears about a faster than expected rise in inflation. Adding to this, the Bank of England Governor Andrew Bailey sent a fresh signal that the British central bank is gearing up to raise interest rates to counter growing inflation risks. Growing market acceptance about the prospects for a policy tightening by the Fed/BoE warrants some caution before positioning for any further appreciating move for gold. There isn't any major market-moving economic data due for release on Tuesday, leaving gold at the mercy of the broader market risk sentiment and bond yields. That said, scheduled speeches by BoE MPC Member Catherine Mann and Governor Andrew Bailey might provide some impetus to gold. Later during the US session, comments by Fed Governor Michelle Bowman will influence the USD price dynamics and produce some meaningful trading opportunities around gold. Technical outlook From a technical perspective, last week's sharp rejection slide from the 100/200-day SMA confluence near the $1,800 mark stalled near the $1,760 static support. This makes it prudent to wait for some follow-through selling before confirming that the recent move up has run out of steam and placing fresh bearish bets. The next relevant support is pegged near the $1,750 region, below which gold prices could accelerate the fall towards September monthly swing lows, around the $1,722-21 zone. On the flip side, immediate resistance is pegged near the $1,780-82 region, which if cleared decisively should allow bulls to make a fresh attempt to conquer the $1,800 mark. Some follow-through buying has the potential to lift the XAU/USD back towards the $1,832-34 heavy supply zone. The $1,810 area, followed by the $1,818 region could act as an intermediate hurdle on the way up. Gold daily chart

The Goldman Sachs economist predicts three rate hikes at alternate meetings from next month, taking BOE’s benchmark rate to 0.75% by May, before a mov

The Goldman Sachs economist predicts three rate hikes at alternate meetings from next month, taking BOE’s benchmark rate to 0.75% by May, before a move to 1% by the end of next year, per Bloomberg. Key quotes "I continue to believe that higher inflation will be temporary because it is in the nature of the underlying causes.” “But the energy story particularly means that it will last longer and it will, of course, get into the annual numbers for longer as a consequence of that.” “And that, of course, raises for central banks the fear and concern of embedded inflation expectations.” “As I've said before, monetary policy cannot solve supply-side problems, but it will have to act and must do so if we see a risk particularly to medium-term inflation and to medium-term inflation expectations, and that is why we at the BOE have signaled - and this is another such signal - that we will have to act.” “But of course, that action comes in our monetary policy meetings."UK 2-year gilt yield jumps to highest level since May 2019 at 0.74%

As per the prior analysis, ''USD/INR Price News: Rupee firms at critical daily resistance, eyes 75 the figure,'' the price has continued to deteriorat

USD/INR bulls move in for the kill and eye a fresh daily high. USD/INR stalled at firm support and bulls stay in control. As per the prior analysis,  ''USD/INR Price News: Rupee firms at critical daily resistance, eyes 75 the figure,'' the price has continued to deteriorate as forecasted as follows, but has now moved higher in what would be expected to lead to a fresh daily higher high: USD/INR prior daily analysis The price of USD/INR met the daily support zone and was in the process of consolidation. It was stated that if the price fails to move higher from here, there would be an argument for a long term consolidation with 74.50 eyed as a downside target.  USD/INR daily chart However, the price has indeed moved higher and this is a bullish development from critical support that will be monitored for prospects of a higher daily high for the forthcoming days, if not next week. 

GBP/USD trades on a higher note on Tuesday. The pair opened lower but swiftly recovered to claim 1.3750, where it currently hovers. GBP/USD daily char

GBP/USD edges higher on Tuesday in the Asian trading hours.The pair faces strong resistance near the 1.3770-1.3780 zone below the bearish slopping line.MACD signals upside momentum with the underlying bullish sentiment.GBP/USD trades on a higher note on Tuesday. The pair opened lower but swiftly recovered to claim 1.3750, where it currently hovers. GBP/USD daily chart On the daily chart, the GBP/USD pair has been in the continuous downward trend since the high made on July 30 at 1.3983. The descending trendline from the mentioned level act as a strong barrier for GBP/USD. The spot trades above the 50-day Simple Moving Average (SMA) at 1.3716 makes bulls hopeful of some recovery.  If the pair sustains the intraday high along with the break of the bearish slopping line that would mean GBP/USD bulls can test the psychological 1.3800 mark. A successful break of the 100-day SMA at 1.3812 could pave way for the 1.3850 horizontal resistance level.  The Moving Average Convergence Divergence (MACD) indicator holds onto the oversold zone. Any uptick in the MACD could bring some upside momentum for the spot. The bulls would approach the psychological 1.3900 level in that case.  Alternatively, a daily close below the 50-day SMA at 1.3714 would result in the continuation of the prevailing trend with the first downside target at Friday’s low of 1.3667 followed by the 1.3555 horizontal support zone. Next, the bears would not mind to takeout the 1.3500 horizontal support level. GBP/USD additional levels  

In another demonstration of military might, N. Korea fires yet another unidentified projectile towards East Sea. More to come...

In another demonstration of military might, N. Korea fires yet another unidentified projectile towards East Sea. More to come...

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.4307 vs the estimated 6.4275 and the prior 6.4300. About the fix Chin

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.4307 vs the estimated 6.4275 and the prior 6.4300. About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.  

AUD/USD is picking up the bid, following the release of the Reserve Bank of Australia (RBA) minutes. The pair opens lower and touched an intraday high

AUD/USD prints gain on Tuesday in the initial Asian session.The US Dollar Index breaks 94.00 amid risk-on sentiment.RBA minutes, higher commodity prices, and risk-on mood aid aussie gains.AUD/USD is picking up the bid, following the release of the Reserve Bank of Australia (RBA) minutes. The pair opens lower and touched an intraday high of 0.7248 before testing the low of 0.7406. At the time of writing, AUD/USD is trading at 0.7421, up 0.12% for the day. The Reserve Bank of Australia (RBA) in its latest monetary policy meeting minutes showed that the central bank remained optimistic about the economic growth. The economy is expected to recover by  December 2021 and to the pre-pandemic level in the second half of 2022. The board members acknowledged that the delta variant interrupted the economic recovery. Despite higher growth projects, the central bank retreated its no interest hike rate stance until the inflation is stable within the 2-3% target band. In addition to that, China’s growth concerns weighed on the sentiment. Chinese Q3 Gross Domestic Product (GDP) fell 4.9% on a YoY basis, falling below the market consensus of 5.2%. Nevertheless, higher commodity prices provide some support as AUD held six-week highs on the back of higher commodity prices. It is worth noting that the S&P 500 Futures is trading at 4,477, up 0.02% for the day. The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals fell briefly below 94.00. As for now, traders await US Housing Start, and Building Permits to gauge the market sentiment.  AUD/USD additional levels  

The RBA’s October meeting Minutes have stated that the inflation target of 2-3% that is required before the central bank will lift the cash rate will

The RBA’s October meeting Minutes have stated that the inflation target of 2-3% that is required before the central bank will lift the cash rate will not be until 2024. AUD/USD is giving back short term gains. More to come... AUD/USD technical analysis Earlier, the bulls took out the resistance on the retest and now bears need another break of 0.7410/0.7400 of face stringer bullish momentum from trendline support:  Further bullish AUD reading: AUD/NZD Price Analysis: Traders, don't get caught out! About the Minutes The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.

USD/CHF accumulated mild losses on Tuesday in the early Asian session. After testing the high near 0.9280 in the US session, the pair traded lower to

USD/CHF edges lower, erasing the previous session’s gains.Higher US Treasury yields underpin the demand for the US dollar.Fed tapering and higher inflationary concerns influence traders' decisions. USD/CHF accumulated mild losses on Tuesday in the early Asian session. After testing the high near 0.9280 in the US session, the pair traded lower to close below 0.9250. At the time of writing, USD/CHF is trading at 0.9233, down 0.05% for the day. The US benchmark 10-year Treasury yields trade at 1.59% with 0.88% gains. The greenback follows the US bond yields and remains steady near 94.00. Investors reacted to the prospects of higher interest rates by selling across the board global government bonds. Higher energy prices along with the existing supply-chain bottlenecks and labor shortages check traders nerves.  On the other hand, the Swiss franc loses momentum as traders turn to the riskier asset in the anticipation of higher returns.  It is worth noting that, S&P 500 Futures is trading at 4,478, up 0.01% for the day. As for now, traders are looking for the US Housing Starts, and Building Permits data to take fresh trading insight. USD/CHF additional levels  

The RBA’s October meeting Minutes will provide additional colour around emerging risks as well as their baseline views. However, the focus for markets

The RBA’s October meeting Minutes will provide additional colour around emerging risks as well as their baseline views.  However, the focus for markets and the AUD will remain on global front ends and offshore equities. With that being said, the Aussie has ridden on the coattails of New Zealand's surprise inflation data yesterday that came in much hotter than expected and highest in a decade. The Consumers Price Index rose 2.2 per cent in the September 2021 quarter, the biggest quarterly movement since a 2.3 per cent rise in the December 2010 quarter. Nonetheless, analysts at ANZ Bank are not so sure that this can be expected of the Australian economy just yet: ''We are not anticipating Australia’s inflation to be anywhere near as strong as New Zealand’s,'' the analysts said. ''If trimmed mean inflation surprises on the upside, then the composition of the price increases will matter. If most of the strength was driven by tradable prices rather than non-tradable, the RBA will likely be more willing to look through it rather than take it as an indication that we are starting to see evidence of more widespread sustained inflation.'' The RBA reiterated its dovish stance in the Oct statement that it does not expect to hike the cash rate before 2024 and the Minutes today should not surprise.  Instead, more focus will be on the Governor's panel participation on "Central Bank Independence, Mandates and Policies" on Thurs/Fri which likely makes for a mundane event around the Minutes today as traders hold off for bigger fish and more meat on the bone. How might the Minutes impact AUD? The event is unlikely to move the dial too much, but surprises can happen. Nevertheless, AUD/USD is at the mercy of external factors more so as the markets have priced in the RBA for the meanwhile. Further reading: AUD/NZD Price Analysis: Traders, don't get caught out! About the Minutes The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.

In an article recently published by Bloomberg, the IK's PM Boris Johnson has been quoted saying "we'll fix" Brexit’s Northern Ireland Protocol, in a s

In an article recently published by Bloomberg, the IK's PM Boris Johnson has been quoted saying "we'll fix" Brexit’s Northern Ireland Protocol, in a sign that a compromise will be reached with the E. ''UK Prime Minister Boris Johnson promised to find a solution to Brexit’s Northern Ireland Protocol, a sign that a compromise will be reached with the European Union in a dispute that had threatened to spiral into a trade war,'' the article read, quoting further comments as follows: “Is there a problem with the Northern Irish protocol? Yes there is -- but we’ll fix that,” Johnson said in an interview with Bloomberg News’s editor-in-chief, John Micklethwait, on Monday. “I don’t think that’s going to be the end of the world.” Market implications GBP price action is far more centred around the Bank of England at the moment.  GBP steadied near a 20-month high versus the euro on Monday after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank is gearing up to raise interest rates as inflation risks mount. GBP/AUD has added around 5.5% this year as traders price in the BoE and the prospects that the Old lady will be one of the first central banks to raise rates as a major factor supporting the pound. However, there are concerns that the BoE will be cutting off the nose despite the face as the British economy has struggled with a shortage of labour, an energy crisis and rising COVID-19 cases of late. Some of these factors have been leading to inflation but the concern is for stagflation. With that being said, it's a dilemma for global central banks in general as supply chain disruptions sweeping major economies have reawakened an old nemesis for them. 

USD/CAD remains muted on Tuesday in the early Asian trading hours. The pair trades in a very narrow price band of 1.2340 and 1.2400 for the past two s

USD/CAD trades cautiously on Tuesday in the early Asian session.Bulls remain hopeful to catch a bid around 1.2400 for more gains.Momentum oscillator holds onto oversold zone, warns caution against aggressive bids.USD/CAD remains muted on Tuesday in the early Asian trading hours. The pair trades in a very narrow price band of 1.2340 and 1.2400 for the past two sessions with no meaningful traction. At the time of writing, USD/CAD is trading at 1.2380, up 0.01% for the day. USD/CAD daily chart On the daily chart, after testing the high of 1.2896 on September 20, the USD/CAD pair came under selling pressure. The pair then took solace at 50-day Simple Moving Average (SMA) at 1.2616 and moved back to the high made on September 29, at 1.2774. Once again a break of the mentioned SMA resulted in a downside movement for the pair toward the multi-month support near 1.2330.  If the price sustains the intraday high it could easily test the 1.2450 horizontal resistance level followed by the psychological 1.2500 mark. The Moving Average Convergence Divergence  (MACD) trades in the oversold zone. Any uptick in the MACD would trigger a fresh round of buying opportunities for the pair. USD/CAD bulls would look out for October 8 high at 1.2562. Alternatively, a break of multi-month support will bring more pain to the pair with the first downside target at a low of July 6 at 1.2303 followed by the 1.2270 horizontal support level. Next, the market participant will test the low made on June 16 at 1.2157. USD/CAD additional levels
 

AUD/NZD is on the verge of a downside breakout below the recent phase of accumitlaiton. However, there is a caveat to such a forecast —The daily M-for

AUD/NZD is making a fresh low in the Asian session, expended the bearish trend. Bears should be aware and take precautions against a significant bullish correction, however. AUD/NZD is on the verge of a downside breakout below the recent phase of accumitlaiton. However, there is a caveat to such a forecast —The daily M-formation.  The following is a top-down analysis between the daily and hourly chart and goes as a reminder that when trading lower time frames, it is always prudent to zoom out to the higher time frames for the bigger picture.  AUD/NZD hourly chart  Despite the fresh low, lower close and bearish tendency of the trend, the price could be faking out here according to the daily chart's analysis below.  AUD/NZD daily chart The M-formation is a bullish reversion pattern that would be expected to draw in the price for a test of the formation's neckline. In this case, that level is the 8 Oct low at 1.0524.  AUD/NZD hourly chart So, instead of looking for an immediate downside extension, the bulls could be accumulating here and on a break of near term resistance, the bulls can target the M-formation's neckline near 1.0520.  With all this being said, there is still every chance that the price will melt to fresh lows from here. But how far can it go before meeting an old demand area and expected support?

USD/JPY extends the previous session’s declines on Tuesday in the early Asian trading session. The pair stays in a relatively narrow price band, after

USD/JPY accumulates minor losses on Tuesday in the initial Asia session.US dollar remains steady near 94.00 on firmer US T-bonds yields.US debt limit, inflationary pressure, higher Wall Street Index contains the movement in the greenback.USD/JPY extends the previous session’s declines on Tuesday in the early Asian trading session. The pair stays in a relatively narrow price band, after hovering near the daily highs in the  US session. At the time of writing, USD/JPY is trading at 114.27, down 0.02% for the day. The US benchmark 10-year Treasury bond yields trade at 1.59% after rising trading near 1.61% on Monday, levels are last seen in early June. As the recent, Retail Sales and Initial Jobless Claims suggest ongoing economic recovery despite persistent pricing pressure. The greenback remains steady around 94.00. The US Treasury Secretary Janet Yellen said that Congress needs to act to protect US credit. In addition to that, US President Joe Biden will speak to US Senator Joe Manchin, the centrist Democrat from coal-rich West Virginia whose vote is critical to the passage of the budget reconciliation bill pending in Congress.  On the other hand, the Japanese yen gained on its safe-haven appeal amid higher pricing pressure due to soaring energy prices. It is worth noting that, S&P 500 Future is trading at 4,473.50, down 0.09% for the day. As for now, traders are waiting for the US Housing Starts, and Building Permits data to gauge the market sentiment. USD/JPY additional levels
 

The AUD/JPY pair is down 0.02% as the Asian session begins, trading at 84.69 at the time of writing. On Monday, the pair traded within the 84.27-90 ra

Despite a strong upside move in US stocks, the market mood is a mixed bag, as Asian equity futures are mixed.AUD/JPY: The prevailing trend still tilted to the upside on the back of the interest rate differentials.AUD/JPY: Doji on Monday’s price action and RSI in overbought levels could spur a corrective leg-down.AUD/JPY: An upside break opens the door to 2018 highs around 89.00.The AUD/JPY pair is down 0.02% as the Asian session begins, trading at 84.69 at the time of writing. On Monday, the pair traded within the 84.27-90 range. The market sentiment is upbeat, even though China’s third-quarter GDP and Industrial production have grown below expectations. Also, heightened inflationary pressures and central banks’ monetary policy tightening weighed on investors’ mood at one time on Monday. At press time, Asian equity futures are mixed. The Hang-Seng and the Nikkei 225 print gains between 0.01% and 0.32%, while the Australian S&P/ASX 200, the Japanese Topix, and the Chinese China A50 record losses of 0.36%, 0.44%, and 1.83%, respectively.AUD/JPY Price Forecast: Technical outlookIn the last couple of weeks, the AUD/JPY rallied from 81.00 to 85.00, on the back of risk appetite in the financial markets and the interest rate differential between both countries. From a technical perspective, the daily chart portrays an overextended upside move, which shows that Monday’s price action formed a doji, meaning that indecision surrounds the pair, so it could consolidate before resuming the prevailing upward trend. Furthermore, the Relative Strength Index (RSI), close to 79, in overbought levels, confirms the abovementioned. A daily break below the 84.27 prices could lead to a downward move towards the before resistance-now support area around 83.80. A breach of the latter would expose the 200-day moving average (DMA) at 82.47. On the flip side, a clear break above the 84.90 level might see the pair rally towards the May 10 high at 85.80. If buyers could break that supply zone, a test to the 2018’s highs around 89.00 is on the books.  
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