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सोमवार , सितम्बर 20, 2021

GBP/USD is declining for the third day in a row, down 0.61%, trading at 1.3657 at the time of writing. The market sentiment remains downbeat as Chines

The British pound falls to monthly lows, trades around 1.3655.The market-mood is in risk-off mode, weighed by Chinese real-estate Evergrande and broad-based US dollar strength.Central banks of both countries, to hold its monetary policy meetings, on this week.GBP/USD is declining for the third day in a row, down 0.61%, trading at 1.3657 at the time of writing. The market sentiment remains downbeat as Chinese real estate developer Evergrande scrambles to fulfill its bond interest payments due this week, triggering a global sell-off of everything that has the “risk” word attached to it. Additionally, the possibility of a Federal Reserve announcement of reducing its bond asset purchases this week also weighed. Meanwhile, the US Dollar Index, which measures the buck’s performance against a basket of six currencies, is flat, sitting at 93.24.Central banks of both countries will hold their monetary policy meetings, this weekIn the US, the Federal Reserve will meet on September 21-22 to discuss monetary policy. On Wednesday will release its Summary of Economic Projections and the monetary policy statement, expected to keep the interest rates unchanged. The highlight of the meeting will be the QE’s reduction. If there is some sort of announcement on the statement, it could be positive on the US dollar, negative for the British pound, as most investors expect the Fed to reveal its bond taper intentions in the November meeting.  Meanwhile, in the UK, the Bank of England will meet on September 23. In the last meeting, Michael Saunders voted to finish the bank’s bond purchasing program, but most MPC members kept the pace unchanged. Concerning a raise of interest rates, the BoE’s Governor Andrew Bailey commented that four out of eight MPC members thought some initial conditions had been met to raise rates to explore the possibility of raising interest rates. Nevertheless, this seems remote by investors, as the market expects a rate hike by 2022.KEY TECHNICAL LEVELS TO WATCH 

The EUR/USD pair started the new week under modest bearish pressure and dropped to its lowest in more than three weeks at 1.1700. With the greenback s

EUR/USD remains on track to close the day flat.US Dollar Index lost its momentum amid plunging bond yields.Flight-to-safety continues to dominate financial markets at the start of the week.The EUR/USD pair started the new week under modest bearish pressure and dropped to its lowest in more than three weeks at 1.1700. With the greenback struggling to preserve its strength in the second half of the day, the pair managed to erase its losses and was last seen trading flat on the day at 1.1725. The risk-averse market environment, as reflected by heavy losses witnessed in major global equity indexes due to the Evergrande crisis, helped the USD outperform its rivals on Monday. However, the sharp decline in the US Treasury bond yields capped the US Dollar Index's (DXY) upside and allowed EUR/USD to rebound during the American session. Currently, the benchmark 10-year US T-bond yield is down 4.7% on a daily basis and the DXY is unchanged at 92.36. Meanwhile, the S&P 500 Index is losing 2.4%. There won't be any high-tier macroeconomic data releases featured in the European economic docket on Tuesday. Later in the day, August Housing Starts from the US will be looked upon for fresh impetus but the risk perception is likely to remain the primary driver of USD's valuation. EUR/USD near-term outlook Analysts at Credit Suisse think that EUR/USD could extend its slide with a  close below 1.1695.  “Key support remains seen at the 38.2% retracement of the 2020/2021 uptrend at 1.1695, a clear and closing break below which (ideally on a weekly basis) should confirm a major top," analysts explained. "Assuming we then also see the 1.1663 August low removed, which would be our base case we would look for a more meaningful turn lower with support seen next at 1.1612/04 and eventually back at 1.1495/93.” EUR/USD: Close below 1.1695 to confirm a major top, next support seen at 1.1663 – Credit Suisse.Technical levels to watch for  

Risk aversion and a rally of the US dollar ahead of the FOMC meeting on Wednesday boosted the USD/MXN. The breakout above 20.00 added more fuel to the

USD/MXN break above 20.00 and soars to 20.20.Mexican peso remains under pressure in the short term.The technical outlook now favors the upside in USD/MXN. Risk aversion and a rally of the US dollar ahead of the FOMC meeting on Wednesday boosted the USD/MXN. The breakout above 20.00 added more fuel to the rally. The Mexican peso is among the worst performers on Monday. The cross reached at 20.20 the highest level since late August. The 20.20/25 band now is the key resistance and a break higher should clear the way to more gains, targeting the August top at 20.45. Price is back above the 20, 100 and 200-day simple moving average. The road north has many resistance levels unit 20.65. Technical indicators now point to the upside in USD/MXN after the price broke a multi-day range. A slide back under 20.00 would negate the bullish short-term outlook. Below support levels might be seen at 19.97 and then the September low around 19.85. USD/MXN daily chart   

Oil is down for the third day in a row. WTI is trading around $70.72, down some 1.49%, at the time of writing. WTI falls on downbeat market sentiment

Oil falls for the third day in a row, on the back of broad US dollar strength.Market sentiment remains downbeat, weighing on stocks and commodities, benefitting safe-haven flows.WTI’s technical perspective is tilted to the upside.Oil is down for the third day in a row. WTI is trading around $70.72, down some 1.49%, at the time of writing.WTI falls on downbeat market sentimentThe market sentiment remains downbeat, with the US dollar trading higher, stocks and commodities lower as the market awaits the Fed decision later this week. Additionally, China’s Evergrande, the second-largest real-estate developer, is in financial distress, weighing on the market mood. The rise in US oil rigs count and the expectations of the possibility of resuming operations in on-shore and off-shore installations in the Gulf of Mexico weighed on WTI. Meanwhile, the US Dollar Index, which measures the greenback’s value against a basket of six peers, is flat, at 93.19, adding pressure on oil prices.WTI Price Forecast: Technical outlookWTI is trading well above the daily moving averages, suggesting the uptrend is intact. The recent dip could suggest there is an ongoing correction. The first support level would be $70.00. A daily close below the latter could pave the way for further losses. The next demand area would be the confluence of the 50 and the 100-day moving averages (DMA), around $69.35. A break below of that area would expose the September 9 low at $67.56. On the other hand, in the case of a daily close above $71.00, it could mean that WTI could resume its uptrend. The first supply zone on the way up would be $72.00. A decisive break of it could open the door for further gains. The following resistance would be the September 15 high at $73.11. The Relative Strength Index is at 55.30, heading slightly lower, but it supports the bullish bias as it remains above the 50-midline.KEY LEVELS TO WATCH 

Analysts at MUFG Bank expected the Central Bank of Turkey to keep the interest rate unchanged at the next meeting. They see the central bank cutting 2

Analysts at MUFG Bank expected the Central Bank of Turkey to keep the interest rate unchanged at the next meeting. They see the central bank cutting 200bp before year-end.  Key Quotes: “The Central Bank of Turkey (CBRT) is expected to keep rates on hold at 19%, in line with our (and consensus) expectations. Whilst expectations of a rate cut are rising, we view that the CRBT will not want to disappoint markets with an unexpected rate cut this month.” “We anticipate that the recent fall in core inflation will not be enough for the CBRT to start cutting rate this month.” “Looking ahead, we maintain our base case for a cumulative 200bp cut in the one-week repo rate before year-end, taking the policy rate to 17%.” “We see risks of the CBRT lowering rates as early as October but this will need to be delicately counterbalanced by financial conditions that are likely to tighten from this point on given the imminent Fed tapering announcement – which could thus limit how much the CBRT can ease.” “In general, we are firmly of the view that the “credit-fuelled, economic growth at all costs strategy” of the CBRT warrants an easing bias. Core to watch will be the communication post the 23 September rate meeting for any pivot in rhetoric that signals the CBRT believes that there is, or there will be, a material improvement in core inflation dynamics, which could skew the easing cycle to commence in October.”

The USD/CAD trimmed losses during the American session. After hitting a one-month high at 1.2895, the pair dropped back toward 1.2800. It still remain

Loonie recovers against US Dollar as markets stabilize.USD/CAD up for the third consecutive day.The USD/CAD trimmed losses during the American session. After hitting a one-month high at 1.2895, the pair dropped back toward 1.2800. It still remains with a gain of around 50 pips, but significantly off highs. A recovery in crude oil prices and a stabilization in equity markets, helped the loonie. Also, the greenback corrected lower, pushing USD/CAD to the downside. Election day in Canada Elections are taking place in Canada on Monday. So far, the Loonie remains unaffected by the event and is falling versus the US dollar like the AUD and NZD. PM Trudeau’s Liberals are likely to win around 155 of the 338 seats in the House of Commons. According to analysts at Brown Brothers Harriman, the failure to win 170 seats would leave Trudeau leading a minority government.  “In some ways, this may be the outcome that makes the most sense. That is, voters will reward Trudeau’s handling of the pandemic and allow him to stay in power but will punish him for calling an election in the middle of the pandemic and deny him an outright majority.  If so, then there are basically no implications for policy or for Canadian asset markets”. The USD/CAD is currently being driven by the US dollar and the overall market sentiment amid risk aversion. From Evergrande, attention will turn to the Federal Reserve’s two-day meeting that will start on Tuesday. Technical levels  

Economists at Danske Bank believe that weaker GDP growth and the Fed are set to underpin the US dollar. Therefore, they forecast EUR/USD at 1.13 by th

Economists at Danske Bank believe that weaker GDP growth and the Fed are set to underpin the US dollar. Therefore, they forecast EUR/USD at 1.13 by the end of the next year. USD to strengthen in 2022 “The USD depreciation in H2 20 reflected market optimism about economic recovery. We expect the USD to strengthen as this effect fades.”  “With the Federal Reserve likely to start noticeably tightening monetary policy in the period until end-2022, we expect the positive USD trend to return.” “EUR/USD Forecast: 1.17 (1M), 1.16 (3M),1.15 (6M), 1.15 (12M), 1.13 (end-2022).”  

The NZD/USD pair started the new week under bearish pressure and fell to its lowest level in three weeks at 0.7006 before staging a modest recovery. A

NZD/USD erased a portion of its daily losses in early American session.US Dollar Index struggles to preserve bullish momentum.Wall Street's main indexes are suffering heavy losses.The NZD/USD pair started the new week under bearish pressure and fell to its lowest level in three weeks at 0.7006 before staging a modest recovery. As of writing, the pair was down 0.15% on the day at 0.7030. DXY edges lower on falling T-bond yields The risk-averse market mood on Monday, due to the Evergrande financial crisis in China, made it difficult for the NZD to find demand. Moreover, the data from New Zealand showed that the Business NZ PSI declined sharply to 35.6 in August from 57.9 in July and caused NZD/USD to remain on the back foot. Although the greenback gathered strength in the first half of the day, falling US Treasury bond yields seem to be capping the currency's upside. The US Dollar Index (DXY), which rose to its highest level in a month at 93.45 earlier in the day, is currently flat at 93.27 and the benchmark 10-year US T-bond yield is losing 3% at 1.324%. In the meantime, the S&P 500 Index is falling 1.6% after the opening bell, suggesting that safe-haven flows are unlikely to allow NZD/USD to gather bullish momentum in the remainder of the day. On Tuesday, the Westpac Consumer Survey from New Zealand for the third quarter will be looked upon for fresh impetus. Meanwhile, investors will keep a close eye on the performance of major Asian equity indexes. Technical levels to watch for  

European recovery and inflation are supporting the Polish zloty. Therefore, economists at Danske Bank expect the EUR/PLN to grind lower towards 4.42 o

European recovery and inflation are supporting the Polish zloty. Therefore, economists at Danske Bank expect the EUR/PLN to grind lower towards 4.42 over the next months. Early Fed policy tightening could weigh on PLN “The Polish central bank will probably be forced to hike rates to dampen higher inflationary pressures. Combined with Poland’s relatively strong external balances, we expect PLN to gradually strengthen, even though markets are already pricing several rate hikes over the next year. However, higher inflation in Poland is likely to push EUR/PLN slightly higher in the longer term.” “A stronger USD resulting from earlier Fed policy tightening and/or global economic headwinds could weaken PLN.” “More aggressive policy tightening by the Polish central bank than in our baseline could strengthen PLN significantly.”  “EUR/PLN forecast: 4.54 (1M), 4.48 (3M), 4.42 (6M), 4.45 (12M), 4.45 (end-2022).”  

South Africa Business Confidence Index declined to 43 in August from previous 93.2

China FDI - Foreign Direct Investment (YTD) (YoY) down to 22.3% in August from previous 25.5%

Solid Swedish recovery is nearing its peak. Subsequently, economists at Danske Bank expect the krona to suffer a slow and steady decline. Riksbank wil

Solid Swedish recovery is nearing its peak. Subsequently, economists at Danske Bank expect the krona to suffer a slow and steady decline. Riksbank will keep policy soft for the foreseeable future “The Swedish economy is in the midst of a solid recovery and we foresee 2021 GDP growth in the ballpark of 3.5-4%. However, a somewhat softer global growth momentum during H2 may indicate that growth in the export-oriented Swedish economy is nearing its peak. For 2022, we see growth slightly lower at 3.4%.” “The SEK has gradually weakened year to date and we expect this trend to continue well into 2022 as the USD continues to strengthen.”  “As for SEK-specific factors, pricing on the Riksbank has adjusted on the downside which helps explain the weaker SEK. But given our call for multi-years of sub-Riksbank inflation, this might still weigh on the SEK in coming years.” “A weaker USD than forecasted, and more benign risk sentiment on the back of this, could help the SEK recover some ground. On the other hand, an even softer stance from the Riksbank in light on weak price pressures would in turn weigh even further on the SEK.” “EUR/SEK forecast: 10.20 (1M), 10.20 (3M), 10.30 (6M), 10.40 (12M), 10.40 (end-2022).”  

The UK economy has now fully reopened and although GDP has not yet returned to pre-crisis levels, the recovery is well underway. In the opinion of eco

The UK economy has now fully reopened and although GDP has not yet returned to pre-crisis levels, the recovery is well underway. In the opinion of economists at Danske Bank, sterling could strengthen further but at a slower pace than at the start of 2021. Stronger pound in the coming months “We continue to expect the GBP to strengthen, although at a more moderate pace than at the start of 2021.” “The UK economy appears to be growing faster than the eurozone, the Bank of England has come closer to the start of the hiking cycle and sterling is set to benefit from general investment sentiment, with the USD strengthening on Fed policy tightening and a peaking industrial cycle.”  “Sterling would be exposed to a scenario of growing market pessimism and/or the UK economy underperforming expectations.”  “Increasing political EU-UK tensions over the Northern Ireland protocol could also weaken the GBP – and so could a second referendum on Scottish independence.”  “Forecast: 0.85 (1M), 0.84 (3M), 0.84 (6M), 0.83 (12M), 0.83 (end-2022).”  

United States NAHB Housing Market Index came in at 76, above expectations (75) in September

The S&P 500 spotlight turns to its key 63-day average, which has essentially held every setback this year, now at 4407. A sustained close below here w

The S&P 500 spotlight turns to its key 63-day average, which has essentially held every setback this year, now at 4407. A sustained close below here would warn of a more significant but still corrective move lower with support seen next at the 4368 August low and potentially 4238/33, the Credit Suisse analyst team reports. VIX to rise towards 28.93 on a  close above the top of the three-month range at 24.74  “A sustained close below the rising 63-day average, now seen at 4407 would warn of a more concerted phase of corrective weakness and a test of the 4368 August low. Below this latter level we would see scope to test 4238/33.”  “Resistance moves to 4449 initially, with the immediate risk now seen staying lower whilst below 4476/87.”  “The VIX has gapped sharply higher following the close above its key 200-day average and a close above the top of the three-month range at 24.74 would warn of a further rise in volatility to 28.93 next.”  

The AUD/USD pair managed to recover its intraday losses and climbed back closer to daily tops, around the 0.7360 region during the early North America

Oversold RSI on hourly charts assisted AUD/USD to rebound from descending channel support.Hawkish Fed expectations, the risk-off impulse underpinned the USD and might cap the upside.Any further recovery might confront stiff resistance near the 0.7300 mark and remain capped.The AUD/USD pair managed to recover its intraday losses and climbed back closer to daily tops, around the 0.7360 region during the early North American session. Extremely oversold RSI on hourly charts assisted the pair to find decent support near the lower boundary of a near two-week-old descending trend channel. However, the prevalent strong bullish sentiment surrounding the US dollar – amid expectations for an imminent Fed taper announcement – might continue to act as a headwind for the AUD/USD pair. Apart from this, the risk-off impulse in the markets might further collaborate to cap gains for the perceived riskier aussie. Even from a technical perspective, last week's sustained break below the 0.7300 mark was seen as a fresh trigger for bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and are still far from being in the oversold territory, warranting some caution before positioning for any further recovery. Hence, any subsequent move up might still be seen as a selling opportunity near the 0.7300 mark. This, in turn, should cap the AUD/USD pair near the trend-channel resistance, currently near the 0.7315 region. The latter should act as a key pivotal point for short-term traders, which if cleared will negate the negative bias. On the flip side, the daily swing lows, around the 0.7220 area, now seems to have emerged as immediate support. Some follow-through selling will mark a fresh bearish breakdown and turn the AUD/USD pair vulnerable. The next relevant support is pegged near the 0.7100 round figure, or YTD lows touched on August 20. AUD/USD 4-hour chart Technical levels to watch  

EUR/USD now attempts a mild rebound to the 1.1710/15 band after bottoming out in the 1.1700 area earlier in the session on Monday. EUR/USD: Door open

EUR/USD tests once again the 1.1700 area on Monday.Risk aversion prevails and sustains the dollar’s upside.The NAHB Index comes next in the US calendar.EUR/USD now attempts a mild rebound to the 1.1710/15 band after bottoming out in the 1.1700 area earlier in the session on Monday. EUR/USD: Door open to extra decline EUR/USD loses ground for the third session in a row on Monday and intensifies the selloff to the 1.1700 neighbourhood, where some initial contention seems to have turned up so far. The leg lower in the pair once again comes on the back of the intense rally in the buck, this time hitting fresh monthly highs near 93.50 when gauged by the US Dollar Index (DXY). Also weighing on the pair aligns the increased risk aversion sentiment in response to heightened anxiety over China’s Evergrande crisis, which morphed into extra legs for the dollar and solid demand for US bonds, which rendered in lower yields. In the daily calendar, Producer Prices in Germany rose 1.5% MoM and 12.0% YoY in August, surprising consensus to the upside. Across the Atlantic, the NAHB Index and a 3m/6m Bills Auctions are due later. EUR/USD levels to watch So far, spot is losing 0.08% at 1.1716 and faces the next up barrier at 1.1845 (weekly high Sep.14) followed by 1.1909 (monthly high Sep.3) and finally 1.1922 (100-day SMA). On the other hand, a break below 1.1700 (monthly low Sep.20) would target 1.1663 (2021 low Aug.20) en route to 1.1602 (monthly low November 4 2020).

Major equity indexes in the US opened deep in the negative territory on Monday pressured by safe-haven flows amid the Evergrande crisis in China. As o

Wall Street's main indexes opened sharply lower on Monday.Energy and financial stocks suffer heavy losses after opening bell.S&P 500 Index Utilities Index posts modest gains.Major equity indexes in the US opened deep in the negative territory on Monday pressured by safe-haven flows amid the Evergrande crisis in China. As of writing, the S&P 500 was trading at its lowest level in two months at 4,368, losing 1.45% on a daily basis. The Dow Jones Industrial Average was down 1.55% at 34,044 and the Nasdaq Composite was falling 1.7% at 14,790. Among the 11 major S&P 500 sectors, the Energy Index is down 3.2% after the opening bell, dragged lower by a 1.6% decline seen in US crude oil prices. Additionally, the Financials Index is losing 2.2% due to the more-than-2% drop in the benchmark 10-year US Treasury bond yield. On the other hand, the defensive Utilities Index is the only major sector staying afloat in the positive territory in the early trade.Wake Up Wall Street (SPY) (QQQ): Seat buckles fastened, tray tables in their upright position.S&P 500 chart (daily)

Following the previous week's sharp upsurge, the USD/CHF pair edged higher during the Asian trading hours and touched its strongest level in more than

USD/CHF rose to its strongest level since April at 0.9334.Falling US T-bond yields and risk aversion weighs on USD/CHF.US Dollar Index stays in the positive territory above 93.00.Following the previous week's sharp upsurge, the USD/CHF pair edged higher during the Asian trading hours and touched its strongest level in more than five months at 0.9334. However, the pair reversed its direction amid the souring market mood and was last seen losing 0.4% on the day at 0.9285. Eyes on Wall Street Concerns over the Evergrande crisis in China crippling the global economic growth force investors to seek refuge at the start of the week. Currently, the S&P 500 Futures are down 1.7%, suggesting that Wall Street's main indexes will suffer heavy losses after the opening bell on Monday. Additionally, the benchmark 10-year US T-bond yield is down more than 3%, helping CHF find demand. On the other hand, the US Dollar Index stays in the positive territory above 93.30, limiting USD/CHF's downside for the time being. There won't be any high-tier data releases from the US in the remainder of the day and the risk perception is likely to continue to dominate USD/CHF's movements. USD/CHF near-term outlook Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, thinks that USD/CHF needs to drop below 0.9168 to alleviate the immediate upside pressure.USD/CHF is in five-month highs, 0.9337 next target on the upside – Commerzbank.Technical levels to watch for  

USD/MXN is recovering from its current September low at 19.8476. The pair is set to target the August high at 20.4650, Axel Rudolph, Senior FICC Techn

USD/MXN is recovering from its current September low at 19.8476. The pair is set to target the August high at 20.4650, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. USD/MXN to hover above June low at 19.5980 “USD/MXN levelled out above the 2020-2021 support line at 19.8355 and so far reached the 200-day moving average at 20.1146. Above it beckons the seven-month resistance line at 20.2756, the March low at 20.2823, May high at 20.3300 and also the August peak at 20.4650.”  “Below the 2020-2021 support line at 19.8355 lies the 19.8001/19.7061 support area which consists of the April and May as well as the late June to mid-August lows.”  “Key support sits at 19.5980/19.5488, made up of the January and June lows, and this we expect to continue to hold.” “Only an unexpected daily chart close below the 19.5488 January low would lead to the March 2019 low at 18.7482 being targeted. This is not our preferred scenario.”  

At first sight, the headlines stemming from this week’s Bank of England (BoE) meeting could bring mixed messages for GBP. As the market is likely comi

At first sight, the headlines stemming from this week’s Bank of England (BoE) meeting could bring mixed messages for GBP. As the market is likely coming to terms with diminishing expectations that the MPC could project a more confident tone, economists at Rabobank do not expect the pound to enjoy considerable gains following the rate decision. See – GBP/USD: Hawkish policy surprise from the BoE is required to fuel the pound – MUFG USD to remain well supported in the month ahead “Given our expectation that the USD is likely to remain on the front foot in the coming months, we are becoming less confident that the pound can achieve our long held target of EUR/GBP 0.84 by year-end. In turn, our three-month GBP/USD 1.39 forecast may prove out of reach for the pound.” “Despite the wave of hawkish speculation that was triggered by the sharp increase in August CPI inflation release (to 3.2% YoY), we remain reluctant to forecast an increase in the Bank’s policy rate until 2023. As this realisation trickles through the market, GBP could struggle into 2022.”  “In August the Bank’s guidance stated that ‘some modest tightening of monetary policy over the forecast period is likely to be necessary’. We expect that the appointment of Huw Pill as the Bank’s new Chief Economist means that there will be a majority in favour of this guidance this month. While it is likely that GBP could find initial support on such a headline, we would not construe such news as hawkish on its own.”  “Without some strong evidence of a shift towards a hawkish tone from the MPC, we would expect any initial GBP gains following the BoE meeting to lose steam.”  

The GBP/USD pair dropped to fresh four-week lows, around mid-1.3600s heading into the North American session, albeit quickly recovered few pips therea

GBP/USD witnessed heavy selling for the third straight day and dropped to near one-month lows.Extremely oversold RSI on hourly charts helped limit any further losses, at least for the time being.Bears might still aim to challenge the 1.3600 mark ahead of YTD lows, around the 1.3570 region.The GBP/USD pair dropped to fresh four-week lows, around mid-1.3600s heading into the North American session, albeit quickly recovered few pips thereafter. The pair was last seen trading around the 1.3675 region, still down nearly 0.50% for the day. The US dollar remained well supported by expectations for an imminent Fed taper announcement and got an additional boost from the risk-off impulse in the markets. This, in turn, was seen as a key factor that dragged the GBP/USD pair lower for the third successive day, also marked the fourth session of a negative move in the previous five. From a technical perspective, Friday's sustained break and acceptance below the 200-period SMA on the 4-hour chart was seen as a key trigger for bearish traders. A subsequent fall below the 1.3730-35 horizontal support and the 1.3700 mark aggravated the selling pressure, which further contributed to the ongoing sharp downward momentum. However, extremely oversold RSI on hourly charts helped limit any deeper losses amid absent relevant market-moving economic releases, either from the UK or the US. That said, the near-term bias remains tilted firmly in favour of bearish traders and supports prospects for an extension of the recent sharp pullback from levels beyond the 1.3900 mark. Hence, a subsequent fall towards the 1.3620 intermediate support, en-route the 1.3600 mark, remains a distinct possibility. The latter coincides with August monthly lows, below which the GBP/USD pair is likely to extend the downward trajectory further towards challenging YTD lows, around the 1.3570 region touched on July 20. On the flip side, any meaningful recovery attempted might now be seen as a selling opportunity near the 1.3700 round-figure mark. This, in turn, should cap the upside for the GBP/USD pair near the 1.3730-35 support breakpoint. A sustained move beyond might trigger a short-covering move and allow bulls to reclaim the 1.3800 mark. GBP/USD 4-hour chart Technical levels to watch  

The buying interest around the greenback remains well in place for yet another session and pushes the US Dollar Index (DXY) to fresh peaks near 93.50

The upbeat mood in the dollar remains well and sound.US 10-year yields drop further and approach 1.30%.The NAHB Index is due next in the US docket.The buying interest around the greenback remains well in place for yet another session and pushes the US Dollar Index (DXY) to fresh peaks near 93.50 on Monday. US Dollar Index focuses to the FOMC event The index trades in levels last seen in late August near the 93.50 level at the beginning of the week, extending the recovery for the third session in a row. Risk aversion kicked in on Monday in response to China’s Evergrande jitters and increasing fears of contagion to the real estate and financial markets, all rendering into fresh legs for the dollar. In the US bonds markets, yields of the 10-year reference note continue to grind lower and approach the key 1.30% level, coming down from last week’s tops above 1.38%. In the data space, the NAHB Index will close the day along with short-term auctions. US Dollar Index relevant levels Now, the index is gaining 0.08% at 93.32 and a break above 93.45 (monthly high Sep.20) would open the door to 93.72 (2021 high Aug.20) and then 94.30 (monthly high Nov.4 2020). On the flip side, the next down barrier emerges at 92.32 (weekly low Sep.14) seconded by 91.94 (monthly low Sep.3) and finally 91.78 (monthly low Jul.30).

AUD/USD is likely to continue lower now in the view of the analysts at Credit Suisse. A break below 0.7220 would open up a test of major long term sup

AUD/USD is likely to continue lower now in the view of the analysts at Credit Suisse. A break below 0.7220 would open up a test of major long term supports which start at 0.7118/06. Aussie to test of major support at 0.7118/06 “Next support is seen at a corrective price low at 0.7226/20, below which would open up a test of much more major support starting at 0.7118/06, which is the ‘neckline’ to a major potential top and stretching down through 0.7053 to 0.6991. This area includes the 38.2 retracement of the 2020/21 rise and the major November 2020 price low.”  “First resistance moves to 0.7317/23, then 0.7347, above which would negate the recent bearish ‘outside day’ and help to stabilize the market.” “Only above 0.7410/37 would turn the risks higher though.”  

After closing the last two days of the previous week in the positive territory, the USD/JPY pair turned south on Monday with safe-haven flows dominati

USD/JPY continues to edge lower ahead of the American session.Wall Street's main indexes remain on track to open deep in the negative territory.US Dollar Index clings to modest gains above 93.00.After closing the last two days of the previous week in the positive territory, the USD/JPY pair turned south on Monday with safe-haven flows dominating the financial markets. As of writing, the pair was down 0.45% on a daily basis at 109.48. Dismal market mood helps JPY find demand The sharp decline witnessed in major global equity indexes is providing a boost to the JPY at the start of the week. Reflecting the intense flight to safety, US stock index futures are losing between 1.8% and 1.5%. Moreover, the benchmark 10-year US T-bond yield is down nearly 4%, putting additional weight on USD/JPY's shoulders.  Fears over the financial crisis in Evergrande, the second-largest real-estate firm in China, causing the global economy to lose growth momentum seem to be forcing investors to seek refuge in safer assets. There won't be any high-impact data releases featured in the US economic docket and investors will remain focused on the performance of Wall Street's main indexes and fluctuations in the US T-bond yields. On Wednesday, the Bank of Japan (BoJ) and the US Federal Reserve will be announcing monetary policy decisions. Technical levels to watch for  

The USD/CAD pair continued scaling higher through the mid-European session and climbed to fresh one-month tops, beyond mid-1.2800s in the last hour. A

A combination of factors continued pushing USD/CAD higher for the third successive day.A broad-based USD strength, sliding oil prices remained supportive of the strong move up.The set-up supports prospects for a move towards retesting YTD tops, around mid-1.2900s.The USD/CAD pair continued scaling higher through the mid-European session and climbed to fresh one-month tops, beyond mid-1.2800s in the last hour. Against the backdrop of expectations for an imminent Fed taper announcement, a selloff in the global equity markets provided a strong boost to the safe-haven US dollar. Apart from this, a sharp decline in crude oil prices undermined the commodity-linked loonie and pushed the USD/CAD pair higher for the third successive day. From a technical perspective, Friday's sustained breakthrough a one-week-old trading range was seen as a key trigger for bulls and prompted strong follow-through buying on the first day of a new week. A subsequent strength beyond the previous monthly swing highs and the 1.2800 mark has already set the stage for additional gains. The constructive outlook is reinforced by the fact that technical indicators on the daily chart have been gaining positive traction and are still far from being in the overbought territory. That said, RSI on hourly charts is already flashing overbought conditions and warrants some caution before placing fresh bullish bets. Nevertheless, the USD/CAD pair seems all set to climb further towards reclaiming the 1.2900 mark en-route YTD tops, around mid-1.2900s touched on August 20. Worries that Canada’s federal election could result in a deadlock might continue to act as a headwind for the domestic currency and adds credence to the bullish bias. On the flip side, pullback below the 1.2830-25 region should find decent support near the 1.2800 mark. Any further decline below the 1.2765-60 area, should now be seen as a buying opportunity. This, in turn, should help limit the downside for the USD/CAD pair near the trading range resistance breakpoint, around the 1.2700 mark. USD/CAD 4-hour chart Technical levels to watch  

European Central Bank (ECB) Governing Council member Martins Kazaks said on Monday that the ECB will need to keep supporting the euro area economy eve

European Central Bank (ECB) Governing Council member Martins Kazaks said on Monday that the ECB will need to keep supporting the euro area economy even after the Pandemic Emergency Purchase Program (PEPP) comes to an end, per Reuters. "We will be very careful in phasing out monetary stimulus," Kazaks further added. Market reaction The shared currency continues to have a difficult time finding demand on Monday. As of writing, the EUR/USD pair was trading at 1.1710, where it was down 0.13% on a daily basis. 

European Central Bank Executive Board Member Isabel Schnabel said on Monday that they are seeing encouraging signs in the economy, as reported by Reut

European Central Bank Executive Board Member Isabel Schnabel said on Monday that they are seeing encouraging signs in the economy, as reported by Reuters. Additional takeaways "Happy that inflation is moving up." "What we're seeing is very much in line with our projections." "Premature policy tightening bigger mistake than waiting." "The inflation outlook brightens, it becomes less important how much a central bank buys or when a reduction in the pace of net asset purchases starts but rather when such purchases end." "It is the end date which signals that the conditions for an increase in policy rates are getting closer. " "The precise sequencing and timing will, of course, require careful guidance when the time has come." "Signalling channel is becoming more important as our measures succeed in dispelling tail risks and lifting the expected future path of inflation." "Our asset purchases – both under the PEPP and the APP – will remain crucial in the time to come, paving the way out of the pandemic and towards reaching our inflation target." "Stock of assets provides substantial and persistent policy stimulus." "Forward guidance cannot fully substitute for asset purchases." Market reaction These comments don't seem to be receiving a significant market reaction. As of writing, the EUR/USD pair was down 0.13% on the day at 1.1710.

The continuation of the buying pressure in the greenback puts the risk complex under extra pressure and drags EUR/JPY to the vicinity of the 128.00 ma

EUR/JPY sheds further ground and re-visit 128.30.China’s Evergrande fears of contagion dominate the mood.German Producer Prices came in above estimates in August.The continuation of the buying pressure in the greenback puts the risk complex under extra pressure and drags EUR/JPY to the vicinity of the 128.00 mark. EUR/JPY in multi-week lows The sour sentiment in the risk complex remains well in place on Monday and it has been exacerbated further as of late in response to fears of contagion following the Evergrande issue in China. Indeed, benchmark stock indices in the old continent navigate a “sea of red” at the beginning of the week, while gains in the dollar pushes the US Dollar Index (DXY) to fresh monthly highs near 93.50. The better mood in the buck stays unchanged despite yields of the US 10-year note drop to lows in the 1.33% area on Monday, some 5 bps lower than last week’s highs past 1.38%. In the domestic calendar, German Producer Prices rose 1.5% MoM in August and 12% from a year earlier, both prints coming in above consensus. Across the pond, the NAHB Index will be the sole release later. In japan, markets are closed due to the “Respect for the Aged Day” holiday. EUR/JPY relevant levels So far, the cross is down 0.47% at 128.27 and a surpass of 129.56 (200-day SMA) would aim for a move to 130.00 (psychological level) and then 130.74 (monthly high Sep.3). On the downside, the next support comes in at 128.24 (monthly low Sep.20) followed by 127.93 (monthly low August 19) and 125.85 (200-week SMA).

Mexico Private Spending (QoQ) climbed from previous 2.9% to 23.3% in 2Q

Mexico Private Spending (YoY): 22.6% (2Q) vs -4.2%

EUR/USD has removed support at 1.1757/26 to turn the spotlight back on major support at 1.1695. A sustained move below here should finally establish a

EUR/USD has removed support at 1.1757/26 to turn the spotlight back on major support at 1.1695. A sustained move below here should finally establish a large “head and shoulders” top to expose support at 1.1495, analysts at Credit Suisse report. See: EUR/USD set to challenge the 1.1665 August low – SocGen Resistance is seen at 1.1751 initially “Key support remains seen at the 38.2% retracement of the 2020/2021 uptrend at 1.1695, a clear and closing break below which (ideally on a weekly basis) should confirm a major top. Assuming we then also see the 1.1663 August low removed, which would be our base case we would look for a more meaningful turn lower with support seen next at 1.1612/04 and eventually back at 1.1495/93.”  “Resistance is seen at 1.1751 initially, with the immediate risk seen staying lower whilst below the aforementioned 13 and 55-day averages and high from Friday at 1.1789/99.”  

A troubled Chinese property development group, Evergrande, has given rise to contagion fears in financial markets. Stock markets have fallen and as us

A troubled Chinese property development group, Evergrande, has given rise to contagion fears in financial markets. Stock markets have fallen and as usual, the NOK has weakened. The Norwegian krone is no safe haven in troubling times and could easily weaken further if the sour sentiment persists, economists at Nordea report. See – China: Systemic risks to be avoided following the fall of Evergrande – Natixis  Evergrande troubles for NOK “Norges Bank’s rate hike this week could easily be overshadowed by the uncertainty arising from China. Evergrande, one of the largest Chinese property development groups, has financial troubles and is at risk of default.” “Markets don’t expect any clear signals from the Fed this week on the reduction of stimulus (tapering of QE), so any hawkish surprise could have a further negative effect on sentiment.” “EUR/NOK could see some resistance near 10.30 and then 10.37. However, if matters truly get worse then EUR/NOK could easily move above 10.50.  “USD/NOK is currently trading near the 50-day moving average at 8.80, which provides some resistance. However, troubled times usually correspond with a stronger USD and weaker NOK, so the upside is clearly there.”  

As a follow-up of the immediate spillover effect of Evergrande, strategists at Natixis focus on China’s real estate sector and analyze the future impl

As a follow-up of the immediate spillover effect of Evergrande, strategists at Natixis focus on China’s real estate sector and analyze the future implications. What’s next for China's real estate sector? “We expect more private and small real estate developers to fall with tighter regulations and weaker profit generation, especially for the firms with high leverage.” “A key question is whether the fall of Evergrande will trigger a domino effect and pose systemic risks. The answer is systemic risks will be avoided in the run-up to the 2022 Party Congress given its historical importance. However, this would also imply China Evergrande's debt crisis may snowball down the road considering economic growth will not be here to awash financial losses as was the case in the past.” “The most likely scenario is Evergrande may be forced to sell assets at a discounted price, but finding a white knight will be challenging given the large corporate size.”  

Portugal Current Account Balance declined to €-2.15B in July from previous €-1.937B

USD/ZAR’s steep descent has taken it close to the 14.0206/13.9522 support area, to the current September low at 14.0630, before rallying again. Now, t

USD/ZAR’s steep descent has taken it close to the 14.0206/13.9522 support area, to the current September low at 14.0630, before rallying again. Now, the pair has the August peak at 15.3950 in its line of sight, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. Support sits at 14.0206/13.9522 “The July high at 14.9972 is within reach above which the August peak can be found at 15.3950. Further up the September 2018 and January 2021 highs can be spotted at 15.6645/6945.  “Minor support is seen between the 55 and 200-day moving averages at 14.6069/5661. Much further down and below the 14.0206/13.9522 support area the June trough can be spotted at 13.4066.”  

The NZD/USD pair remained depressed through the first half of the European session and was last seen trading near three-week lows, just above the key

A combination of factors continued dragging NZD/USD lower for the third successive day.Hawkish Fed expectations pushed the USD to one-month tops and exerted some pressure.The risk-off mood further collaborated to drive flows away from the perceived riskier kiwi.The NZD/USD pair remained depressed through the first half of the European session and was last seen trading near three-week lows, just above the key 0.7000 psychological mark. The pair extended last week's bearish breakout momentum below the 0.7075 horizontal support and witnessed heavy selling for the third successive day amid a broad-based US dollar strength. Expectations for an imminent Fed taper announcement continued acting as a tailwind for the USD, which got an additional boost from the risk-off impulse in the markets. The incoming US macro data pointed to the continuation of the economic recovery and convinced investors that the Fed would begin rolling back its massive pandemic-era stimulus sooner rather than later. This, in turn, was seen as a key factor behind the recent strong rally in the US Treasury bond yields and lifted the key USD Index to near one-month tops on Monday. Meanwhile, investors remain worried about the fast-spreading Delta variant and a global economic slowdown. This, along with the looming catastrophe at indebted developer China Evergrande, took its toll on the risk sentiment. Politics added extra uncertainty ahead of this week's Federal elections in Canada and Germany and triggered a selloff in the equity markets. This further benefitted the greenback's relative safe-haven status and drove flows away from the perceived riskier kiwi. That said, oversold RSI on hourly charts held traders from placing fresh bearish bets. This, in turn, assisted the NZD/USD pair to find some support and defend the 50-day SMA amid absent relevant market moving economic releases from the US. The market focus remains on the outcome of a two-day FOMC monetary policy meeting starting on Tuesday for clues about the likely timing of the Fed's plan to taper its bond purchases. This will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the NZD/USD pair. Technical levels to watch  

DXY extends the advance past the 93.00 mark and clinches new September highs near the 93.50 level on Monday. The strong upside momentum in the greenba

DXY’s upside momentum reaches the 93.50 area.The 2021 highs above 93.70 comes next on the upside.DXY extends the advance past the 93.00 mark and clinches new September highs near the 93.50 level on Monday. The strong upside momentum in the greenback now targets the YTD high at 93.72 (August 20) ahead of the round level at 94.00. In the meantime, and looking at the broader scenario, the constructive stance on the dollar is seen unchanged while bove the 200-day SMA, today at 91.42. DXY daily chart  

USD/TRY has risen above the 8.6824 August high. The pair targets 8.8057 all-time high and 9.0000, Axel Rudolph, Senior FICC Technical Analyst at Comme

USD/TRY has risen above the 8.6824 August high. The pair targets 8.8057 all-time high and 9.0000, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. USD/TRY is approaching its all-time high at 8.8057 “USD/TRY’s advance above the 8.6824 August high is bullish and puts the all-time high at 8.8057 back in the frame. Ideally we would like to see a daily chart close above the 8.6824 high in order to confirm.”  “On the way up lies the early June high at 8.7532 and also the 8.8057 all-time high, also made in June. Once bettered, the psychological 9.0000 mark would be back in the frame.”  “Minor support comes in between the breached four month resistance line and the 55-day moving average at 8.85801/8.5018.”  “Key support remains to be seen between the June to current September lows at 8.2925/2605.”  

Having faced rejection at $73, WTI (NYMEX futures) extends its losing streak into a third straight session on Monday. WTI at the mercy of risk sentime

WTI risks losing the $70 mark amid China Evergrande woes-led risk aversion.Oil prices are also hurt by expectations of US Gulf oil output returning to markets.Stronger US dollar to keep the bearish pressure intact ahead of oil supplies reports.Having faced rejection at $73, WTI (NYMEX futures) extends its losing streak into a third straight session on Monday. WTI at the mercy of risk sentiment At the time of writing, WTI loses nearly 2.50% on the day, attacking the $70 level, as a risk-off wave has engulfed the financial markets amid concerns over a potential default by China’s Evergrande. The fears looming over the troubled Chinese property developer have ignited global slowdown concerns, which, in turn, weighs on the demand prospects for oil and its products. Amidst risk-aversion and Fed’s tapering expectations, the US dollar stands tall at monthly tops, making the greenback-denominated WTI expensive for foreign buyers. Exerting additional downward pressure on oil prices was a rise in US oil rigs count and expectations of returning US Gulf oil output after the two hurricanes. As of Friday, 23% of US Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, Reuters reported, citing the Bureau of Safety and Environmental Enforcement. Attention now turns towards the weekly US crude stockpiles data due to be published later in the week for fresh trading incentives. However, the US Federal Reserve (Fed) monetary policy decision will be the main event risk this week for dollar trades, eventually impacting WTI prices. WTI technical levels “In a case where WTI drops below $69.60, the bearish momentum can aim for the monthly low surrounding $67.00, also including 50% Fibonacci retracement of August-September upside. On the contrary, a downward sloping resistance line from last Wednesday, near $72.10, challenges the WTI recovery moves ahead of the monthly peak surrounding $72.90,” FXStreet’s Analyst, Anil Panchal, notes. WTI additional levels to watch  

EUR/JPY loses the grip further and extends the drop to new multi-day lows near the 128.30 region, opening the door at the same time to a deeper pullba

EUR/JPY accelerates the decline following the breach of 129.00.Next on the downside comes August lows in the sub-128.00.EUR/JPY loses the grip further and extends the drop to new multi-day lows near the 128.30 region, opening the door at the same time to a deeper pullback. Further south from here, sellers are expected to test the sub-128.00 region, where sits August’s low. There are no relevant support levels past this area until the January peaks in the mid-127.00s ahead of the YTD low at 125.08 (January 25). While below the 200-day SMA, today at 129.56, the outlook for the cross is expected to remain negative. EUR/JPY daily chart  

US 10-year Treasury yields are probing the upper band of the ascending triangle within which it has evolved since August. Strategists at Société Génér

US 10-year Treasury yields are probing the upper band of the ascending triangle within which it has evolved since August. Strategists at Société Générale expect to see higher Treasury yields.  Consolidation above 1.26% is crucial for further gains “Daily MACD has entered positive territory which points towards potential upside.”  “The bounce could extend towards projections of 1.45%/1.46% with the next hurdle at 1.63%.”  “Consolidation above the recent low at 1.26% would be important for further up move.”  

EUR/USD has extended its decline as the crisis around China's Evergrande deepens. As FXStreet’s Analyst Yohay Elam notes, critical support at 1.1705 i

EUR/USD has extended its decline as the crisis around China's Evergrande deepens. As FXStreet’s Analyst Yohay Elam notes, critical support at 1.1705 is eyed. See: EUR/USD set to challenge the 1.1665 August low – SocGen Fear has taken over markets and it is weighing on EUR/USD “Evergrande owes some $300 billion to lenders. Authorities have been reluctant to bail it out. Uncertainty about the implications for suppliers, other construction firms and further contagion casts a dark cloud over markets all over the world. The safe-haven dollar benefits from concerns about global growth.”  “The greenback is buoyed by tensions toward Wednesday's Federal Reserve decision. If Fed Chair Jerome Powell signals withdrawing stimulus already in November, it could further dampen the market mood.” “German finance minister Olaf Scholz remains in pole position to replace German Chancellor Angela Merkel. A coalition including the business-friendly FDP – potentially after long deliberations – would calm nerves. Nevertheless, uncertainty ahead of Sunday's vote is adding pressure on the euro.” “Critical support awaits at 1.1705, which cushioned the pair in mid-August and then capped. Further down, the next levels to watch are 1.1685, a temporary cap from August, and then the summer trough of 1.1660.”  “Resistance awaits at 1.1735, a swing low from last month, then 1.1750 and finally the round 1.18 level.”  

The Brazilian real recovered late Friday from a low of 5.3461 to below 5.30. Nonetheless, strategists at Société Générale expect the USD/BRL pair to s

The Brazilian real recovered late Friday from a low of 5.3461 to below 5.30. Nonetheless, strategists at Société Générale expect the USD/BRL pair to see a short-term up move. August low of 5.11 is short-term support “Local funds have reportedly boosted derivative bets to $5.5 B that the real will weaken because of pessimism over the growth outlook and political tensions between the president and the judiciary.” “USD/BRL has established itself above the daily Ichimoku cloud which denotes possibility of further upside. “The pair could inch higher towards projections of 5.46/5.48.” “August low of 5.11 is short-term support.”  

USD/ZAR is off the four-week highs of 14.82, as the bulls take a breather after the blistery five-day rally. Despite the pullback, the spot holds well

USD/ZAR is off four-week highs, as tide seems to turn in favor of bears. A bear cross spotted on the daily sticks, as upside stalls below $15.RSI has reversed from higher levels, backing the pullback. USD/ZAR is off the four-week highs of 14.82, as the bulls take a breather after the blistery five-day rally. Despite the pullback, the spot holds well above the 50-Daily Moving Average (DMA) at 14.63. Although the bulls appear to be losing conviction after a bearish crossover was spotted on the said time frame on Friday. The 21-DMA pierced through the 200-DMA from above, with the sellers taking note of the bear cross this Monday. The 14-day Relative Strength Index (RSI) has also eased off from higher levels, now turning flat, backing the latest leg down in the pair. However, the leading indicator still holds above the midline, suggesting that any retracement could be a good buying opportunity for the traders. If the price breaches the 50-DMA support, then strong support at 14.53 could guard the downside. At that point, the 21 and 200-DMAs coincide. Further, a drop towards the horizontal 100-DMA at 14.33 cannot be ruled out. USD/ZAR daily chart Alternatively, daily closing above the 15.00 level is needed to unleash the further upside towards the August highs of 15.39. The next relevant upside barrier for USD/ZAR is seen at 15.50, the psychological barrier.

USD/INR has staged a rebound after forming a low near 72.95 recently. In the view of economists at Société Générale, the pair is set to retest the 50-

USD/INR has staged a rebound after forming a low near 72.95 recently. In the view of economists at Société Générale, the pair is set to retest the 50-day moving average (DMA) at 74.00. Initial bounce is likely “The pair could retest 50-DMA near 74.00.” “Graphical level of 72.30/72.20 is a crucial support; a break below this will be essential for a larger downtrend.”  

The GBP/USD pair continued losing ground through the first half of the European session and dropped to near one-month lows, around the 1.3660 region i

GBP/USD witnessed heavy selling for the third successive day and dropped to multi-week lows.Hawkish Fed expectations and the risk-off impulse in the markets boosted the safe-haven USD.The FOMC decision should provide a fresh directional impetus ahead of the BoE on Thursday.The GBP/USD pair continued losing ground through the first half of the European session and dropped to near one-month lows, around the 1.3660 region in the last hour. The pair extended last week's retracement slide from levels just above the 1.3900 mark and witnessed heavy follow-through selling for the third successive session on Monday. This also marked the fourth day of a negative move in the previous five and was exclusively sponsored by a broad-based US dollar strength. The US dollar continued drawing support from firming market expectations the Fed would begin rolling back its massive pandemic-era stimulus sooner rather than later. This was evident from the recent spike in the US Treasury bond yields, which continued acting as a tailwind for the USD and dragged the GBP/USD pair lower. Apart from this, the risk-off impulse in the market provided an additional boost to the safe-haven greenback. Investors remain worried about the fast-spreading Delta variant and a global economic slowdown. This, along with concerns about the health of property giant China Evergrande Group, took its toll on the risk sentiment. With the latest leg down, the GBP/USD pair has now erased a major part of its strong recovery from August monthly swing lows, around the 1.3600 mark. The latter should now act as a key pivotal point for traders ahead of this week's key central bank event risks – the FOMC on Wednesday and the BoE decision on Thursday. Investors will keep a close eye on the outcome of a two-day FOMC meeting starting on Tuesday for clues about the likely timing of when the Fed would start tapering its bond purchases. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the GBP/USD pair. Technical levels to watch  

AUD/USD has retracted from a multi-month descending trend line near 0.7480. Signals of rebound are still not visible, in the view of economists at Soc

AUD/USD has retracted from a multi-month descending trend line near 0.7480. Signals of rebound are still not visible, in the view of economists at Société Générale. Jump above 50-DMA at 0.7350 is needed to see a rebound “Short-term support levels are at 0.7190 and August low of 0.7110.” “Overcoming 50-DMA at 0.7350 is essential to denote short-term bounce.”  

Gold price is making a minor recovery attempt from six-week lows of $1742 amid a retreat in the US Treasury yields, as the risk-off mood remains at fu

Gold price attempts a bounce from six-week lows, not out of the woods yet.USD holds firmer amid the Evergrande crisis, Fed’s tapering calls.Gold bears in driver's seat as focus shifts to FOMC.Gold price is making a minor recovery attempt from six-week lows of $1742 amid a retreat in the US Treasury yields, as the risk-off mood remains at full steam. The benchmark US 10-year yields are down about 2% so far. Escalating tensions surrounding indebted China’s property developer Evergrande and risks of a global economic slowdown weighs on the investors’ appetite for riskier assets. However, the further upside in gold price appears elusive, thanks to a broad-based US dollar strength, as the Fed’s tapering expectations and risk-aversion underpins the greenback’s safe-haven appeal. Looking forward, gold price will remain exposed to downside risks, as investors prefer to hold the US currency ahead of this week’s Fed policy decision. Read: Why XAU/USD appears vulnerable heading into the Fed showdown?Gold Price: Key levels to watchThe Technical Confluences Detector shows that gold price is challenged by stiff resistance around $1755 on its road to recovery. That level is the convergence of the Fibonacci 61.8% one-day and Bollinger Band one-hour Upper.   If the recovery gains momentum, then gold bulls could threaten the upside barrier at $1761, where the Fibonacci 38.2% one-day and Fibonacci 23.6% one-week coincide. The Fibonacci 23.6% one-day at $1764 could test the bearish commitments. The recovery is likely to remain limited so long as gold price holds below the critical $1770 resistance, which is the Fibonacci 38.2% one-week. Alternatively, the immediate downside appears cushioned by the previous day’s low of $1747, below which $1742 could come to the rescue of gold bulls. At that point, the previous low four-hour and Fibonacci 38.2% one-month intersect. A sustained move below the latter could expose the $1735 support area, which is the confluence of the Fibonacci 161.8% one-day and pivot point one-day S2. 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.

Hong Kong SAR Consumer Price Index declined to 1.6% in August from previous 3.7%

The AUD/USD pair now seems to have entered a bearish consolidation phase and was last seen trading around the 0.7230-35 region, just above the four-we

A combination of factors dragged AUD/USD to four-week lows on Monday.Hawkish Fed expectations continued acting as a tailwind for the greenback.The risk-off mood further drove flows away from the perceived riskier aussie.The AUD/USD pair now seems to have entered a bearish consolidation phase and was last seen trading around the 0.7230-35 region, just above the four-week lows touched earlier this Monday. The pair prolonged its recent sharp pullback from the 0.7475-80 region and witnessed some follow-through selling on the first day of a new trading week. The downfall was sponsored by a strong bullish sentiment surrounding the US dollar and the risk-off impulse in the markets, which tends to weigh on the perceived riskier aussie. The USD remained well supported by expectations that the Fed would begin rolling back its massive pandemic-era stimulus sooner rather than later. This, along with worries about the fast-spreading Delta variant and a global economic slowdown, weighed on investors' sentiment and triggered a selloff in the equity markets. Apart from this, the re-escalation of tensions between China and Western countries, namely the US, UK and Australia, exerted additional pressure on the China-proxy aussie. That said, extremely oversold conditions on hourly charts held traders from placing fresh bearish bets and helped limit any further losses for the AUD/USD pair. There isn't any major market-moving economic data due for release from the US on Monday. Hence, the broader market risk sentiment and the US bond yields will play a key role in influencing the USD price dynamics. This, in turn, might provide some impetus to the AUD/USD pair ahead of the RBA meeting minutes on Tuesday. The key focus, however, will remain on the critical FOMC monetary policy meeting, starting on Tuesday. Investors will look for clues about the likely timing of when the Fed would begin tapering its bond purchases. This, in turn, will drive the USD and assist traders to determine the AUD/USD pair's near-term trajectory. Technical levels to watch  

The US dollar is staging a broad-based rally ahead of the Fed’s latest FOMC meeting this week. In the opinion of economists at MUFG Bank, the US Dolla

The US dollar is staging a broad-based rally ahead of the Fed’s latest FOMC meeting this week. In the opinion of economists at MUFG Bank, the US Dollar Index could reach new highs in case the DOTs surprise to the upside. USD rallied sharply when dots were last updated “Market participants are understandably wary of the Fed delivering another hawkish surprise like in June when the Fed last updated their projections for the Fed Funds rates, which is encouraging a stronger US dollar.” “We do not expect the Fed to announce their QE taper plans this week but we do expect Chair Powell to repeat that if the ‘economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year’. A message like this is unlikely to shift market expectations with the consensus for an announcement of tapering in either November or December.” “Short-term rates jumped in June after the FOMC meeting when the DOTs surprised to the upside. We don’t expect a repeat of that this week. A repeat of the June profile with a similar pace for 2024 as 2023 would be a relief to the market and likely see some modest USD depreciation.” “If the DOTs confirm a median hike in 2022 that would illicit the biggest FX reaction with the DXY likely to trade at new year to date highs. A 2022 median DOT would clearly undermine Powell’s attempts to break any link between tapering and rate hikes.”   

The single currency starts the week in the same bearish stance that closed the previous one and drags EUR/USD to challenge the key support at 1.1700 t

EUR/USD loses further momentum and trades closer to 1.1700.German Producer Prices surprised to the upside in August.US NAHB Index comes next in the NA calendar.The single currency starts the week in the same bearish stance that closed the previous one and drags EUR/USD to challenge the key support at 1.1700 the figure. EUR/USD risks a move to 1.1700 and below EUR/USD sheds ground for the third session in a row on Monday and puts the key support around 1.1700 to the test amidst the intense move higher in the dollar and the generalized softer note in the risk-linked universe. In the meantime, yields of the 10-year German Bund return to the -0.30% region following last week’s tops near -0.28%. The retracement in the German yields mirrors that one of the US, where yields of the 10-year benchmark note ease to sub-1.35% levels. As usual in past sessions, the solid march in the greenback in combination with Delta concerns and mixed results from the docket remain a drag for the risk complex, all aggravated by omnipresent market chatter around the Fed’s QE tapering. Earlier in the session, German Producer Prices rose above estimates at 1.5% MoM in August and 12% over the last twelve months. What to look for around EUR EUR/USD recorde new monthly lows in the vicinity of 1.1700 at the beginning of the week. The firm sentiment surrounding the dollar is expected to remain the almost exclusive headwind for the pair’s aspirations of any meaningful rebound, at least in the very near term and in light of the upcoming FOMC events. In the meantime, Delta concerns, the progress of the economic recovery in the region and views on potential tapering from the Fed (and the ECB?) should keep hovering around spot for the time being.Key events in the euro area this week: EMU Flash Consumer Confidence (Wednesday) – Flash September PMIs – German IFO (Friday) – German elections (Sunday).Eminent issues on the back boiler: Asymmetric economic recovery in the region. Sustainability of the pick-up in inflation figures. Progress of the Delta variant of the coronavirus and pace of the vaccination campaign. Probable political effervescence around the EU Recovery Fund. German elections in September could bring some political jitters to the scenario. Investors’ shift to European equities in the wake of the pandemic could lend extra oxygen to the single currency. ECB tapering speculations. EUR/USD levels to watch So far, spot is losing 0.12% at 1.1710 and faces the next up barrier at 1.1845 (weekly high Sep.14) followed by 1.1909 (monthly high Sep.3) and finally 1.1922 (100-day SMA). On the other hand, a break below 1.1705 (monthly low Sep.20) would target 1.1704 (monthly low Mar.31) en route to 1.1663 (2021 low Aug.20).

Greece Current Account (YoY) increased to €0.538B in July from previous €-1.338B

EUR/USD threatens return below 1.17. Economists at Société Générale, expect the pair to test the August low of 1.1665. See: EUR/USD to tick down towar

EUR/USD threatens return below 1.17.  Economists at Société Générale, expect the pair to test the August low of 1.1665. See: EUR/USD to tick down towards the August low at 1.1664 – Commerzbank Gradually drifting towards 1.1665 “EUR/USD is looking vulnerable for a retest of the summer low of 1.1665 if it fails to defend 1.1690.” “It would be interesting to see if it can carve out a higher trough as compared to the one in August at 1.1665. Next potential support is at projections of 1.1610.”  

These are good times for natural gas producers, which could extend into next year. Thus, the risks to Bank of Montreal's annual average forecast for H

These are good times for natural gas producers, which could extend into next year. Thus, the risks to Bank of Montreal's annual average forecast for Henry Hub of $3.50 for 2021 and $3.00 for 2022 remain skewed towards the upside. Demand from Asia is playing a key role in supporting global LNG demand/prices “Henry Hub has surged above$5.00/mmbtu, which is adding further fuel to the commodity supercycle debate. We do not think prices will remain at current levels for an extended period though they are unlikely to return to the pre-pandemic lows when it appeared as if the world was awash with natural gas.” “We expect temporary/weather-related factors, namely the global heatwave and the impact of Hurricane Ida, which have been largely responsible for the surge in price since early June, to ease. However, better weather, assuming the winter does not make an early arrival or prove to be colder than normal, may not pull the rug out from under the feet of Henry Hub due to effectively flat domestic production and, moreover, robust overseas demand for liquefied natural gas (LNG).” “Looking beyond the impact of weather and lower-than-normal inventories, European LNG demand should remain steady from a medium-term perspective, supported by the planned retirement of a large number of coal and nuclear power generation plants. Weaker supply may also be at work as Russia is rumoured to be constraining exports to Europe in an effort to expedite the start of the Nord Stream 2 pipeline to Germany, which still needs final approval.” “There is rising global competition for LNG, and it may persist in the short-term. However, there appears to be a limit to how much higher LNG prices could rise as there are rumours that Japan is considering reigniting oil-fired power plants, while the UK actually restarted an old coal-fired power plant earlier in the month.”  

The pound has regained some upward momentum on the back of building Bank of England (BoE) rate hike expectations but key resistance levels have not be

The pound has regained some upward momentum on the back of building Bank of England (BoE) rate hike expectations but key resistance levels have not been broken. In the view of economists at MUFG Bank, there is a high hurdle for the BoE to provide a hawkish policy surprise which should help dampen further GBP upside in near-term.  Cautious about chasing the GBP higher in the near-term “We believe that there is greater risk of disappointment which could trigger a temporary correction lower for the GBP. We expect the BoE to mainly stick to the policy message from August when they formally adopted a gradual tightening bias.” “We expect the BoE to acknowledge that Q3 GDP growth is likely to be weaker than expected (2.9%). There is more concern that supply constraints from Brexit and COVID-19 will place more of a dampener on the recovery.” “The combination of slower growth and higher inflation creates a less favourable mix for the GBP, and with BoE rate hike expectations already well priced in for the next year. A stronger hawkish signal from the BoE will be required for the GBP to break through key resistance levels.”  

The USD/JPY pair extended its steady intraday descent and dropped to fresh daily lows, around the 109.75-70 region during the early European session.

USD/JPY witnessed some selling on Monday and snapped two days of the winning streak.The risk-off impulse benefitted the safe-haven JPY and exerted some pressure on the pair.Hawkish Fed expectations acted as a tailwind for the USD and might help limit the downside.The USD/JPY pair extended its steady intraday descent and dropped to fresh daily lows, around the 109.75-70 region during the early European session. The pair met with some fresh supply on the first day of a new trading week and has now eroded a major part of its gains recorded on Friday. This marked the first day of a negative move in the previous three and was sponsored by the risk-off impulse in the markets, which tends to benefit the safe-haven Japanese yen. Investors remain worried about the fast-spreading Delta variant and a global economic slowdown. This, along with the looming catastrophe at indebted developer China Evergrande, took its toll on the risk sentiment. Politics added extra uncertainty ahead of this week's Federal elections in Canada and Germany. The flight to safety triggered a sharp decline in the US Treasury bond yields, which was seen as another factor that contributed to the intraday decline. That said, a strong follow-through US dollar buying – amid expectations for an imminent Fed taper announcement – could help limit the downside for the USD/JPY pair. Despite signs of easing inflationary pressures in the US, the incoming positive macro data pointed to the continuation of the economic recovery. The optimism has been fueling speculations that the Fed would begin rolling back its stimulus sooner rather than later, which, in turn, acted as a tailwind for the greenback. Hence, the market focus remains glued to the critical FOMC monetary policy meeting, starting Tuesday. Investors will look for clues about the likely timing of tapering the bond purchases, which will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the USD/JPY pair. In the meantime, the broader market risk sentiment and the US bond yields will be looked upon for some short-term trading opportunities amid absent relevant market-moving economic releases on Monday. Technical levels to watch  

Taro Kono, Fumio Kishida, Sanae Takaichi, and Seiko Noda will contest the election on Wednesday, September 29, and all are promising support for the C

Taro Kono, Fumio Kishida, Sanae Takaichi, and Seiko Noda will contest the election on Wednesday, September 29, and all are promising support for the COVID-19 weakened economy. Strategists at MUFG Bank analyze the LDP leadership election and its implications for the Japanese yen. BoJ changes coming too  “Three of the four candidates have promised explicit policies of some form of cash handouts but Taro Kono appears most conservative although he too is committed to supportive fiscal policy measures over the short-term to aid recovery from the covid shock. It is therefore tempting to conclude that policy continuation means limited market volatility ahead. This may be true very short-term, but the changes taking place could have medium-to-long-term consequences for the direction of the yen.” “We would certainly have Taro Kono as the candidate who could attempt the greatest change when it comes to BoJ policy. We can certainly surmise that Kono would be less likely to replace Kuroda with another reflationist, like say Takaichi, or even Kishida might be willing to do.” “Falling inflation expectations now do throw up questions over the success of ‘Abenomics’ and the changes coming at government level and at the BoJ could reinforce policy uncertainty beyond the short-term COVID-related fiscal support, which could become a factor supporting JPY at these near record weak levels.”  

Bank Indonesia (BI) will hold the monthly governor board meeting on Tuesday, September 21. As we get closer to the release time, here are the expectat

Bank Indonesia (BI) will hold the monthly governor board meeting on Tuesday, September 21. As we get closer to the release time, here are the expectations as forecast by the economists and researchers of six major banks, regarding the upcoming monetary policy decision. The consensus is that BI has no room for further rate cuts.  See – USD/IDR: Rupiah to gain support from surging exports – ING Standard Chartered “We expect BI to keep the 7-day reverse repo rate unchanged at 3.5% to support IDR stability while maintaining its accommodative policy mix to stimulate growth. Still-below target inflation (1.6% YoY in August) and an improved external balance (reflected in a wider trade surplus) to a record-high USD4.4 B in August should give BI room to focus on growth. We maintain our view that after increasing the reserve requirement ratio (RRR) by 150bps in H1, BI will start hiking late next year – by 25bps in Q4-2022 and another 25bps in Q1-2023.” TDS “We expect BI to continue with its accommodative stance, leaving the 7-day reverse repo rate unchanged at 3.5%. Given that state spending is likely to stay elevated into 2022, we think BI has reached the end of its easing cycle as fiscal policy takes center stage in supporting recovery. USD/IDR is likely to remain rangebound in a 14,200 and 14,400 range over the short-term. We don't foresee big moves in USD/IDR as investors are likely wary ahead of the Fed FOMC meeting on Wednesday, September 22, and are likely to stay on the sidelines.” ANZ “We expect BI to keep its policy rate unchanged at 3.50%. An improving virus situation and the associated easing in restrictions will lift economic activity, reducing the pressure for rate cuts. Meanwhile, the combination of benign price pressures and a strengthening external position will give the central bank scope to keep policy accommodative for longer.” ING “Central bank in Indonesia is expected to leave their rate policies on hold. Bank Indonesia’s Governor, Perry Warjiyo, recently indicated a sustained ‘pro-growth’ policy stance over the rest of this year as inflation has been below the central bank’s 2-4% policy target (1.6% YoY in August).”  SocGen “We believe that BI is done with its rate easing stance and will keep the policy rate unchanged at 3.5% while retaining an accommodative stance. While supportive monetary policy prevented a precipitous drop in economic activity, the inadequate fiscal response failed to prevent weakening of the economic foundation. Luckily for the central bank, extremely benign inflation (thanks in main to official spending on subsidies, especially on energy) means that monetary policy normalisation is not on the cards, at least for now. However, we do expect the policy rate to rise next year as base effect-driven inflation perks up. We in fact are less constructive on Indonesia’s medium-term growth prospects as monetary policy tightens (by end 2022) and Indonesia reverts to the 3% (of GDP) budget deficit limit in 2023.” UOB “With the current global developments, we are of the view that BI has little room to trim its benchmark rate further. Nonetheless, BI will keep its accommodative monetary policy via other monetary, macro-prudential, and liquidity-supporting measures to effectively transmit the lowering of the benchmark interest rate so far into the economy.”  

Economists at Natixis believe that growth in China will slow down significantly in the medium-term for demographic, economic and political reasons. Ch

Economists at Natixis believe that growth in China will slow down significantly in the medium-term for demographic, economic and political reasons. Chinese private companies will gradually become as inefficient as state-owned enterprises “Chinese growth is expected to slow as a result of: Population ageing; The shift in the capital structure to low-productive capital (in construction), as opposed to capital in capital goods; The decline in productivity gains, first of all due to the fact that it has now almost caught up with the lag in corporate modernisation; Excessive debt , which will amplify the fall in growth due to other causes; The difficulty and cost of the energy transition, from a situation where the weight of coal in electricity production is very high, and therefore where CO2 emissions are enormous.” “In the recent period, there has been increasing state intervention in the functioning of private companies in China: Stricter competition rules; Control of data; Control of earnings (online education sector); Refusal of foreign listings; Appointment of directors representing the state; Declarations on redistribution of wealth. These interventions explain the decline in stock market indices in China.” “There is concern because of the low efficiency of state-owned enterprises in China, which is well known, and because a weakening of private companies and a growing role for state-owned enterprises would result in a slowdown in productivity and total factor productivity.”  

The greenback, in terms of the US Dollar Index (DXY), looks to extend the recent breakout of the key 93.00 barrier at the beginning of the week. US Do

DXY extends the advance to the vicinity of 93.40 on Monday.US 10-year yields recede from recent peaks beyond 1.38%.NAHB Index will be the only release in the NA calendar.The greenback, in terms of the US Dollar Index (DXY), looks to extend the recent breakout of the key 93.00 barrier at the beginning of the week. US Dollar Index remains firm, looks to FOMC The index advances for the third session in a row on Monday and pushes further north of the key 93.00 hurdle following the softer note in the risk complex and amidst the corrective downside in US yields. In the meantime, yields of the key US 10-year reference note retreat to the 1.35% area on Monday after climbing as high as the area beyond 1.38% in the wake of the better-than-expected August’s Retail Sales (released last week). Still on the US, Friday’s publication of the flash U-Mich index showed the Consumer Sentiment is expected to improve a tad in September to 71.0 (from 70.3). The closely followed US 2y-10y yield gap showed the yield curve steepened by around 3 pts to 114 pts on Friday. Later in the US docket, the only release of note will be the NAHB Index for the month of September. What to look for around USD The index keeps pushing higher and extends the recent breakout of the 93.00 yardstick on Monday. Tapering speculations, risk aversion, higher yields and some auspicious results from US fundamentals kept the upbeat mood around the buck unchanged in past sessions. While developments around the Delta variant and the impact on the economy should also underpin the upside momentum in the dollar, cautiousness among investors could spark some consolidation in DXY ahead of the key FOMC event later in the week.Key events in the US this week: NAHB Index (Monday) – Building Permits, Housing Starts (Tuesday) – FOMC meeting, Existing Home Sales (Wednesday) – Initial Claims, Flash Manufacturing PMI, CB Leading Index (Thursday) – New Home Sales, Chairman Powell speech (Friday).Eminent issues on the back boiler: Biden’s multi-trillion plan to support infrastructure and families. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Debt ceiling debate. Geopolitical risks stemming from Afghanistan. US Dollar Index relevant levels Now, the index is gaining 0.11% at 93.35 and a break above 93.72 (2021 high Aug.20) would open the door to 94.00 (round level) and then 94.30 (monthly high Nov.4 2020). On the flip side, the next down barrier emerges at 92.32 (weekly low Sep.14) seconded by 91.94 (monthly low Sep.3) and finally 91.78 (monthly low Jul.30).

In the view of the economists at Bank of America (BofA), the Reserve Bank of India (RBI) is unlikely to make any changes to its monetary policy settin

In the view of the economists at Bank of America (BofA), the Reserve Bank of India (RBI) is unlikely to make any changes to its monetary policy settings in October while maintaining a dovish stance. Key quotes “India’s lower-than-expected August inflation should give Monetary Policy Committee room to strike a dovish pause when it meets next month amid an economic rebound.” MPC decision due on Oct.” “India’s overall activity continued to improve in August after surprising on the positive side in July. “While some indicators, such as railway freight, petrol demand and power generation, continued to do better than pre-pandemic levels, momentum in passenger vehicles, two-wheelers, tractor sales and diesel demand weakened.” “Vaccinating critical mass of population continues to remain a tall task.”

The USD/CAD pair added to its strong intraday gains and climbed to one-month tops, further beyond the 1.2800 mark heading into the European session. A

A combination of factors pushed USD/CAD higher for the third successive day.Weaker oil prices undermined the loonie and remained supportive of the move.Hawkish Fed expectations, the risk-off impulse benefitted the safe-haven USD.The USD/CAD pair added to its strong intraday gains and climbed to one-month tops, further beyond the 1.2800 mark heading into the European session. A combination of factors assisted the USD/CAD pair to build on last week's positive move from the 1.2600 round figure and continue scaling higher for the third successive day. A weaker tone around crude oil prices undermined the commodity-linked loonie ahead of the Canadian federal election on Monday. This, along with a broad-based US dollar strength, provided an additional boost to the major. Despite signs of easing inflationary pressures in the US, the incoming macro data pointed to the continuation of the economic recovery. The optimism has been fueling speculations that the Fed would begin rolling back its massive pandemic-era stimulus sooner rather than later. This was evident from the recent surge in the US Treasury bond yields, which continued acting as a tailwind for the USD. Apart from this, the risk-off impulse – as depicted by a selloff in the equity markets – further benefitted the greenback's relative safe-haven status. Investors remain worried about the fast-spreading Delta variant and a global economic slowdown. This, along with the re-escalation of tensions between China and Western countries, namely the US, UK and Australia, took its toll on the risk sentiment. With the latest leg up, the USD/CAD pair reaffirmed Friday's bullish breakout through the 1.2700 mark and seems poised to climb further. Investors, however, might turn cautious ahead of the political uncertainty and the key central bank event risk. The Fed is scheduled to announce its decision on Wednesday, which will influence the USD price dynamics and provide a fresh directional impetus. Moreover, RSI on hourly charts is already flashing slightly overbought conditions. This makes it prudent to wait for some consolidation or a modest pullback before positioning for any further appreciating move. Nevertheless, the bias still seems tilted in favour of bullish traders amid absent relevant market-moving economic releases, either from the US or Canada. Technical levels to watch  

USD/CHF is approaching the 2019-2020 downtrend at 0.9337. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to

USD/CHF is approaching the 2019-2020 downtrend at 0.9337. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to run out of steam at this mark. Break below 0.9168 to alleviate immediate upside pressure “USD/CHF has rallied into 5-month highs following the break above the 0.9274 July high. Directly above here lies the 2019-2020 downtrend at 0.9337, where we suspect that the market will struggle. This guards the 0.9472 March peak.” “The pair will have to slide back below the 55-day ma at 0.9168 to alleviate immediate upside pressure.”  

GBP/USD is attacking 1.3700, reaching the lowest levels in four weeks, as the buying pressure around the US dollar remains unabated amid the risk-off

GBP/USD extends a three-day downtrend, downside risks persist.Rising wedge breakdown was confirmed on the daily sticks last Friday.RSI points south below the midline, suggesting more weakness ahead.GBP/USD is attacking 1.3700, reaching the lowest levels in four weeks, as the buying pressure around the US dollar remains unabated amid the risk-off market mood. The safe-haven US dollar continues to benefit from a potential default story of China’s Evergrande, which could lead to a financial crisis in the world’s second-largest economy. Meanwhile, the Fed’s tapering expectations combined with the UK-US spat over the Northern Ireland (NI) protocol adds to the downward pressure on the cable. Looking at GBP/USD technically, the price is extending its losing streak into the third straight session, as sellers now target the August 28 low of 1.3680. The sell-off gathered traction after the pair closed Friday below the critical rising trendline support at 1.3788, validating a rising wedge breakdown on the daily chart. A daily closing below the 21-DMA, then at 1.3780, added credence to the move lower. The 14-day Relative Strength Index (RSI) points south below the midline, suggesting that the weakness is likely to extend in the near term. If the abovementioned support gives way, then a sharp drop towards the 1.3650 psychological level cannot be ruled out. GBP/USD: Daily chart Alternatively, the GBP bulls need to recapture the 21-DMA, now at 1.3783, to unleash the additional upside. Further up, the 1.3800 figure will challenge the bearish commitments. That level is the confluence of the wedge support, 50-DMA. The next significant hurdle is aligned at the 200-DMA of 1.3838. GBP/USD: Additional levels to consider  

Gold remains on the back foot, changing hands at around $1,750. FXStreet’s Dhwani Mehta explains why XAU/USD appears vulnerable as focus shifts to FOM

Gold remains on the back foot, changing hands at around $1,750. FXStreet’s Dhwani Mehta explains why XAU/USD appears vulnerable as focus shifts to FOMC. The path of least resistance for gold appears to the downside “The Federal Reserve is likely to announce its tapering plans, starting by the end of this year, at its September 21-22 monetary policy meeting. The Bank of England may also hint at tapering, given the rising inflation in the UK. A potential withdrawal in the monetary policy stimulus will continue to bode ill for gold.” “A failure to defend the monthly lows of $1742, a fresh leg down could initiate towards the $1700 psychological magnate. Alternatively, the pattern support now resistance at $1753 could challenge gold’s road to recovery.”  

GBP/JPY edges lower on Monday in the early European trading hours. The pair opened higher but surrendered all the initial gains as global risk sentime

GBP/JPY extends the previous week’s decline on Monday.The sterling remains pressured on Brexit, mixed economic data and general risk-off sentiment.Pre-Fed market volatility, coronavirus fears keep the yen demand intact.GBP/JPY edges lower on Monday in the early European trading hours. The pair opened higher but surrendered all the initial gains as global risk sentiment sours on Chinese regulatory crackdown and the rising coronavirus cases in the Asia-pacific region. At the time of writing, the GBP/JPY pair is trading at 150.70, down 0.23% for the day. A combination of factors assisted the current downside movement in the pair. The key factor remained the detrition of risk sentiment owing to the concerns over slowing global growth and tighter regulation of Chinese firms. The Hang Seng Index slumped almost 4%, near an 11-month low as shares of Evergrande Group skid over 15% to their lowest level in 11 years. On the pandemic side, Australia’s Victoria state reported its biggest daily rise in new coronavirus infections this year with 567 cases on Sunday. Furthermore, the British pound struggles with the recent threat from the US House Speaker Nancy Pelosi that there will be no US-UK trade deal unless the British policymakers resolve post-Brexit disagreements with European Union (EU). It is worth noting that the S&P 500 Futures is trading at 4,432.0 with 0.91% losses. On the other hand, the Japanese Yen finds some ground amid hopes for new leadership in Japan that would propose a fresh stimulus to support domestic economic recovery. As for now, the market dynamics continue to influence the pair’s performance. GBP/JPY levels to watch  
 

The safe-haven dollar has been extending its gains, pushing EUR/USD toward 1.17. Karen Jones, Team Head FICC Technical Analysis Research at Commerzban

The safe-haven dollar has been extending its gains, pushing EUR/USD toward 1.17. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to test the 1.664 August low though a small rebound on Monday is on the cards. Attention is on the August low at 1.1664 “EUR/USD last week sold off and has now eroded the 1.1752 mid-July low. We have negative Elliott wave counts and a sell signal on the DMI so are biased to the downside.” “We look for losses to the 1.1704 March low and the 1.1664 August low.” “We note the 13 count on the 240 minute chart and may see a small rebound today towards 1.1785.” “The August low at 1.1664 guards the 200-week ma at 1.1576 and the previous downtrend now at 1.1424.”  

XAU/USD struggled to stage a convincing rebound ahead of the weekend and closed the second straight week in the negative territory, losing nearly 2%.

XAU/USD struggled to stage a convincing rebound ahead of the weekend and closed the second straight week in the negative territory, losing nearly 2%. Gold has more room on the downside heading into the Fed showdown, FXStreet’s Eren Sengezer briefs. XAU/USD bears in driver's seat as focus shifts to FOMC “On Wednesday, the Federal Reserve will announce monetary policy decisions alongside the updated Summary of Projections following the FOMC’s two-day meeting. In case Powell unveils that the Fed will start reducing asset purchases before the end of the year, the USD is likely to gather strength and force XAU/USD to turn south. On the other hand, a dovish outlook with the chairman refraining from delivering a tapering timeline could trigger a heavy USD selloff and fuel a gold rally.” “A daily close below $1,750 (static level) could open the door for additional losses toward $1,730 (static level) and $1,720 (static level). However, in case the RSI breaks below 30 with such a move, there could be a technical correction before the next leg down.” “Unless XAU/USD makes a daily close above $1,810, where the critical 200-day SMA is located, buyers are unlikely to dominate gold's action. Ahead of that level, $1,770 (Fibonacci 61.8% retracement of April-June uptrend) and $1,800 (psychological level) align as interim resistances.”  

Germany Producer Price Index (YoY) registered at 12% above expectations (9.2%) in August

Germany Producer Price Index (MoM) registered at 1.5% above expectations (0.8%) in August

Here is what you need to know on Monday, September 20: Markets are in risk-off mood, benefiting the dollar and weighing on stocks, commodities and als

Here is what you need to know on Monday, September 20: Markets are in risk-off mood, benefiting the dollar and weighing on stocks, commodities and also cryptocurrencies. The woes of China's Evergrande stand out ahead of the Fed decision later this week. Evergrande, the second-largest real-estate firm in the world's second-largest economy is in financial distress and authorities are uneager to bail it out. While markets in China are closed due to a holiday, stocks all over the world are down in fear of a wider crisis in China's real-estate, and implications for global growth. The embattled firm is already offering unfinished property as payment for its huge $300 billion debt mountain and may miss a substantial debt payment on ThursdayCommodities used in construction are falling and also gold remains on the back foot, changing hands at around $1,750. WTI Crude Oil is trading around $71, off the highs.The safe-haven dollar has been extending its gains, pushing EUR/USD toward 1.17 and GBP/USD 1.37. The rout has also extended to cryptocurrencies, with Bitcoin changing hands at aroudn $45,000, Ethereum to $3,200 and Ada to $2.20.  Worries about soaring gas prices and even potential blackouts during the winter have been weighing on both the euro and the pound. Several small British energy firms have collapsed while European policymakers are stuggling with higher costs and public anger.  The Federal Reserve is set to leave its policy unchanged on Wednesday, but signal when it intends to taper its $120 billion/month bond-buying scheme. Tensions are mounting ahead of the decision, with analysts divided over the taper timing, November or December. Somewhat softer inflation and a hiccup jobs report contrast robust retail sales.  See Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plotElections: Canadians go to the polls on Monday in a snap election. Prime Minister Justin Trudeau is set to prevail, but to lead a minority government once again. Voters are angry with the PM over his decision to call them to vote and the pro-business Conservatives could surprise and return to power. USD/CAD is trading close to 1.28. Later in the week, the Bank of England and preliminary Purchasing Managers' Indexes are eyed. Germans go to the polls on Sunday, with finance minister Olaf Scholz leading to succeed to long-serving Chancellor Angela Merkel.     

FX option expiries for September 20 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1725-30 885m 1.1800 825m - GB

FX option expiries for September 20 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1725-30 885m 1.1800 825m - GBP/USD: GBP amounts         1.3650 389m 1.3750 402m - USD/JPY: USD amounts          109.00 1.1b - EUR/GBP: EUR amounts 0.8475 410m

Copper prices on Comex remain pressured around $4.1765, down 1.64% intraday as European traders brace for Monday’s tasks. The red metal recently broke

Copper refreshes multi-day bottom on breaking 17-day-old support.Bearish MACD, sustained trading below 50-DMA also favors sellers.Copper prices on Comex remain pressured around $4.1765, down 1.64% intraday as European traders brace for Monday’s tasks. The red metal recently broke a horizontal area comprising lows marked since August 26, also extending Thursday’s downside break of 50-DMA to refresh the monthly low. Given the bearish MACD, copper prices are likely declining further towards the next key support, namely the 200-DMA level near $4.1300. However, a break of which will challenge the commodity traders with an ascending support line from late January, as well as 61.8% Fibonacci retracement of January-May upside, near $4.0000. Meanwhile, the corrective pullback may aim for the support-turned-resistance line near $4.2100 before the 50-DMA level near $4.3220. It’s worth noting that copper bears remain in control unless the quote rises past a downward sloping resistance line from May, near $4.4500. Price of copper: Four-hour chart Trend: Further weakness expected

According to advanced figures for natural gas futures markets from CME Group, traders trimmed their open interest positions for the second session in

According to advanced figures for natural gas futures markets from CME Group, traders trimmed their open interest positions for the second session in a row on Friday, this time by nearly 10K contracts. Volume followed suit and shrank for the second straight session, now by around 154.5K contracts. Natural gas faces support around $5.00 Prices of natural gas retreated further at the end of last week. The corrective downside from YTD highs, however, was against the backdrop of declining open interest and volume, hinting at the view that further losses look unlikely in the very near term at least. That said, the $5.00 mark per MMBtu remains as a key contention area for the time being.

CME Group’s preliminary readings for crude oil futures markets noted open interest dropped for the second session in a row on Friday, this time by aro

CME Group’s preliminary readings for crude oil futures markets noted open interest dropped for the second session in a row on Friday, this time by around 9.3K contracts. In the same direction, volume added to the previous drop and went down by around 141.8K contracts. WTI could re-test $70.00 Prices of the WTI extended the rejection from recent 2021 tops on Friday. The rebound from daily lows, however, was in tandem with diminishing open interest and volume, removing strength from the probable continuation of the bounce and leaving the prospects for further downside unchanged in the very near term. The next support of note, in the meantime, emerges at the key $70.00 mark per barrel.

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, rises for the first time in three days, not to forget mention

One-month risk reversal on USD/CAD, a measure of the spread between call and put prices, rises for the first time in three days, not to forget mentioning about portraying the strongest bullish bias in a week, according to data source Reuters.  A call option gives the holder the right but not obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option represents a right to sell. That said, the daily difference between them jumps to the +0.054 level heading into Monday’s European session, per Reuters. The options market scenario backs the USD/CAD bulls ahead of today’s Canada Federal Elections. The Loonie pair prints a three-day uptrend, also poking the monthly peak, despite recently easing from the multi-day top of 1.2801 to 1.2790. Read: Canadian Federal Elections: A not very crucial vote While the Canadian elections are less likely to offer any meaningful directions to the USD/CAD prices, the US dollar’s safe-haven demand ahead of Wednesday’s Federal Open Market Committee (FOMC) may keep the buyers hopeful. Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot

Palladium (XPD/USD) takes a negative start on the fresh trading week. The metal prices hover in a broader trade band on the daily chart, with a bearis

Palladium nose dives on Monday with more than 1% fall.Price moves in a broader consolidating trading range of $1,960 and $2,080.XPD/USD has been in a continuous downward trend since early May.Palladium (XPD/USD) takes a negative start on the fresh trading week. The metal prices hover in a broader trade band on the daily chart, with a bearish sentiment. At the time of writing, XPD/USD is trading at $1,966, down 1.57% for the day. Palladium daily chart Technically speaking, the metal remained in medium-term downside price movement since the beginning of May. Now, the metal took shelter near $1,960, below the 10-day Simple Moving Average (SMA) at $2,048. Having said that, prices could test the low made in the previous week at $1,939 on Tuesday. Palladium weekly chart Any downtick in the Moving Average Convergence Divergence (MACD) would amplify the selling pressure toward the levels last seen in July 2020 around $1,900. Alternatively, if price reverses the direction, it could coil back towards the previous session’s high at $2,041 followed by the $2,080 horizontal resistance level. Next, the bulls would attempt a retest of the $2,100 psychological level. Palladium additional levels  

Gold (XAU/USD) bears regain controls ahead of the key weekly events, down 0.36% intraday near $1,748 heading into Monday’s European session. In doing

Gold rejects Friday’s corrective pullback, pressured around mid-August lows.China’s Evergrande joins pre-Fed anxiety to weigh on the risk appetite.US stimulus, debt limit chatters exert additional downside pressure amid off in China, Japan.Gold Weekly Forecast: XAU/USD bears in driver's seat as focus shifts to FOMCGold (XAU/USD) bears regain controls ahead of the key weekly events, down 0.36% intraday near $1,748 heading into Monday’s European session. In doing so, the yellow metal refreshes the five-week low, recently bouncing off the intraday bottom, amid the risk-off mood. Despite banking holidays in Japan and China, Evergrande-linked equity woes and the pre-Fed caution weigh on the market sentiment, which in turn underpin the US Dollar Index (DXY) and weigh on gold prices. Also challenging the mood is the COVID-19 fears and concerns over the US stimulus, as well as the debt limit. Increasing optimism towards the US stimulus and extending US debt limits, not to forget slow but gradual economic recovery, brighten the odds of the Fed tapering and favor the pair bears in turn. Further, escalating tensions between China and the Western allies, namely the US, Australia and the UK, also weigh on the market sentiment and underpin the US dollar’s safe-haven demand. Recently, Axios reported that US Senator Manchin back the delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. Further, US Treasury Secretary Janet Yellen recently renewed her call for Congress to raise or suspend the debt ceiling sometime in October, Bloomberg reported, citing her editorial op-ed in the Wall Street Journal (WSJ). Hence, doubts over the US money flow and spending limits challenge the mood. Elsewhere, fears of a Lehman-like collapse of China’s Evergrande amid $300 billion debt and 1,300 projects in over 280 cities, as well as multiple linkages abroad, challenge the sentiment. Read: No Lehman risk with Evergrande but why is the market still worried? – The Standard Amid these plays, S&P 500 Futures drop 0.80% intraday by the press time while the US Dollar Index (DXY) refreshes one-month high, up 0.10% on a day near 93.33 by the press time. Looking forward, an off in China and Japan may trigger the metal’s corrective pullback near the short-term key support but the bearish view remains intact ahead of Wednesday’s Federal Open Market Committee (FOMC). Read: The week ahead: Fed meeting, Bank of England, Canada and Germany elections, Kingfisher, Nike, Fedex Technical analysis Although receding bearish bias of MACD and oversold RSI line challenges gold sellers of late, a downward sloping trend line from last Wednesday, around $1,750 now, keeps them hopeful. Hence, fresh selling awaits a clear downside break of 61.8% Fibonacci retracement of August-September recovery, near $1,744. Following that, August 09-10 lows near $1,723 and the $1,700 round figure will challenge gold bears ahead of directing the commodity prices to the yearly low near $1,687. Alternatively, corrective pullback beyond the stated resistance line near $1,750 will aim for the latest peak surrounding $1,768 before heading towards the late August lows near $1,780. It’s worth noting that the $1,800 and $1,822-23 may entertain bulls prior to highlighting the monthly top, also tested in July, near $1,834. Gold: Four-hour chart Trend: Corrective pullback expected  

These are the main highlights of the CFTC Positioning Report for the week ended on September 14th: Speculative bullish bets in the dollar increased fo

These are the main highlights of the CFTC Positioning Report for the week ended on September 14th: Speculative bullish bets in the dollar increased for the fourth consecutive week and now reached levels last seen back in late February 2020, on the verge of the coronavirus pandemic. In addition, the net longs/open interest ratio approached the 55% level, last seen in mid-May 2020. The US Dollar Index (DXY) traded within a consolidative mood during the week under scrutiny, as market participants were digesting the latest Payrolls figures, while Fed-speakers insisted on a sooner-than-anticipated QE tapering and US yields corrected lower from tops. Net longs in the EUR climbed to 4-week highs and the percentage of net longs to open interest also rose to multi-week highs (above 4%), all in spite of the dovish “re-calibration” of the ECB at its meeting on September 9, as well as improved projections of inflation and growth for the next couple of years. EUR/USD, however, receded further from monthly tops and gyrated around the 1.1800 yardstick, which will eventually break in the subsequent sessions. Looking at the safe haven universe, JPY net shorts shrank to the lowest level since early August, while speculators shifted to the bearish side on CHF for the first time since May 25. After three weeks of navigating within the negative territory, GBP’s positioning turned positive. Cable managed to bounce off lows around 1.3730 sustained by market chatter surrounding a potential hawkish shift in the BoE tone at its next meeting. The EU-UK front coupled with Delta concerns continued to cap any serious bullish attempts the pair. In the commodities’ galaxy, net longs in the WTI and gold rose to 2-week highs.

Open interest in gold futures markets shrank by around 1.1K contracts on Friday, partially reversing the previous build according to flash data from C

Open interest in gold futures markets shrank by around 1.1K contracts on Friday, partially reversing the previous build according to flash data from CME Group. In the same line, volume partially offset the previous daily build and dropped by around 74.2K contracts. Gold: Further decline on the cards Friday’s inconclusive price action in gold was amidst shrinking open interest and volume, hinting at the idea that some consolidation could emerge in the very near term, although it does persist the probability of extra pullbacks. Occasional bullish attempts in the yellow metal keeps targeting the key $1,800 mark per ounce troy.

Lee Sue Ann, Economist at UOB Group, expects the Bank Indonesia (BI) to stick to the accommodative stance at its event later this week. Key Quotes “Wi

Lee Sue Ann, Economist at UOB Group, expects the Bank Indonesia (BI) to stick to the accommodative stance at its event later this week. Key Quotes “With the current global developments, we are of the view that BI has little room to trim its benchmark rate further.” “Nonetheless, BI will keep its accommodative monetary via other monetary, macro-prudential, and liquidity-supporting measures to effectively transmit the lowering of the benchmark interest rate so far into the economy.”

USD/INR extends the previous session’s gains in the early European trading hours on Monday. The pair picks up the pace and composes a 20-pips movement

USD/INR moves higher on Monday for the third straight session.Price moves in the ascending channel, looking for additional gains.Momentum oscillator holds into the oversold zone warns of any aggressive bets. USD/INR extends the previous session’s gains in the early European trading hours on Monday. The pair picks up the pace and composes a 20-pips movement. At the time of writing, USD/INR is trading at 73.79, up 0.13% for the day. USD/INR daily chart On the daily chart, USD/INR trades in the ascending trend channel from the lows of 72.89 made at the beginning of September. The formation of multiple tops near 73.83 makes it a crucial level to trade. Having said that, a daily close above the mentioned level would make further progress toward the 74.00 horizontal resistance level. The Moving Average Convergence Divergence (MACD) indicator holds onto the oversold zone. Any uptick in the MACD could push USD/INR to the high of August 27 at 74.20. Next, USD/INR bears would likely touch the August 20 high at 74.47. Alternatively, on the lower side, the bears would like to retest the 73.55 horizontal support level followed by Thursday’s low of 73.35. The market participant would then keep an eye on the 73.00 horizontal support level. USD/INR additional levels  

WTI justifies Thursday’s Doji candlestick while taking offers around $71.15, down 0.90% intraday, heading into Monday’s European session open. Althoug

WTI remains pressured around intraday low, extends pullback from early August highs.Monthly support line, 100-SMA challenge sellers amid bearish MACD.Weekly resistance line, 12-day-old rising trend line adds to the upside filters.WTI justifies Thursday’s Doji candlestick while taking offers around $71.15, down 0.90% intraday, heading into Monday’s European session open. Although a short-term falling trend line and bearish MACD hints at the black gold’s further weakness, an ascending trend line from August 22 near $70.10 and the $70.00 threshold, not to forget the 100-SMA level of $69.90, will challenge the bears. In a case where WTI drops below $69.60, the bearish momentum can aim for the monthly low surrounding $67.00, also including 50% Fibonacci retracement of August-September upside. On the contrary, a downward sloping resistance line from last Wednesday, near $72.10, challenges the WTI recovery moves ahead of the monthly peak surrounding $72.90. If the oil buyers keep reins past $72.90, an ascending trend line from September 02 near $73.70 will flash on their radars. WTI: Four-hour chart Trend: Pullback expected  

NZ PM Ardern: Auckland lockdown to be eased starting from midnight Tuesday more to come ...

NZ PM Ardern: Auckland lockdown to be eased starting from midnight Tuesday  more to come ...

Asian equity bears tighten controls without traders China and Japan to kick-start the key week. While the pre-Fed caution becomes the headline factor

Asian shares remain pressured amid fears of wider crackdown on real-estate markets, pre-Fed anxiety.US stimulus, debt limit chatters add to the negative factors even as off in China, Japan limit market moves.Fed, BOE in the focus, Chinese efforts to safeguard investors will be the key.Asian equity bears tighten controls without traders China and Japan to kick-start the key week. While the pre-Fed caution becomes the headline factor for the risk-off mood, fears over default of China’s real-estate giant Evergrande and chatters concerning the US stimulus, as well as debt limits, underpin the sour sentiment. That said, MSCI’s index of Asia-Pacific shares outside Japan drops 1.80% by the press time of the pre-European session on Monday. That said, stocks in Australia are down 1.9% whereas those from New Zealand drop 1.40% at the latest. Although China and Japan both enjoy a banking holiday, fears of a wider crackdown on Hong Kong reality firms after Evergrande's fiasco drag the Hang Seng 4.0%. It’s worth noting that the Markets in South Korea are off as well whereas those in Indonesia track macro clues to print 1.25% intraday fall by the time of the press. It’s worth noting that India’s BSE Sensex seems to be the least infected down 0.30% on a day, among the group amid cautious optimism at home. Other than the fears emanating from Chinese firms and taper tantrums, uncertainty over the US covid stimulus also weighs on the market sentiment. “Senior Democrats said on Sunday that they will likely need to scale back President Joe Biden's $3.5 trillion social spending bill while the passage of the linked bipartisan infrastructure bill may slip past a Sept. 27 deadline,” per Reuters. On the contrary, US Treasury Secretary Janet Yellen’s push for another extension to the US debt limit, as the current limit goes off from October, challenges the bears. Amid these plays, S&P 500 Futures drop 0.80% intraday while the US Dollar Index (DXY) weighs on commodity prices by the press time. Moving on, the market sentiment is likely to remain dull ahead of the key weekly events but an absence of traders from China and Japan may limit market moves. Read: The week ahead: Fed meeting, Bank of England, Canada and Germany elections, Kingfisher, Nike, Fedex

AUD/USD remains pressured around the monthly low of 0.7226, down 0.68% intraday ahead of Monday’s European session. In doing so, the Aussie pair exten

AUD/USD holds lower ground near monthly low, prints three-day downtrend.Sustained trading below 200-DMA, descending RSI, not oversold, back the bears.78.6% Fibonacci retracement can trigger corrective pullback, two-month-old hurdle guards recovery moves.AUD/USD remains pressured around the monthly low of 0.7226, down 0.68% intraday ahead of Monday’s European session. In doing so, the Aussie pair extends Friday’s downside break of one-month-old horizontal support, now resistance, amid a bearish RSI line. Given the absence of oversold RSI, AUD/USD prices can continue extending the south-run towards the 0.7200 threshold, comprising 78.6% Fibonacci retracement level of November 2020 to February 2021 upside. It should be noted, however, that any further downside past 0.7200 may be challenged by the RSI conditions, likely to turn oversold around then, if not then the yearly low near 0.7105 and a descending support line from April close to 0.7015 will be in focus. Meanwhile, the corrective pullback will be ignored unless crossing a horizontal area comprising July’s low, surrounding 0.7290. Even so, 50-DMA and 61.8% Fibonacci retracement levels, respectively around 0.7340 and 0.7340, challenge the AUD/USD bulls. AUD/USD: Daily chart Trend: Further weakness expected  

GBP/USD edges lower on Monday following the previous week’s downside momentum. The pair opened higher but failed to capitalize the upside momentum and

GBP/USD extends the previous week’s delines and trades lower on Monday.Supply-chain disruptions, limp economic recovery took a toll on sterling performance.Broad-based US dollar gains keep pressure on GBP/USD.GBP/USD edges lower on Monday following the previous week’s downside momentum. The pair opened higher but failed to capitalize the upside momentum and skids towards the multi-month low near 1.3700. As of writing, GBP/USD is trading at 1.3709, down 0.23% for the day. The movement in GBP/USD is primarily sponsored by the gains in the greenback. Buoyed by the better-than-expected economic data and the concerns about the rapid increase of the Delta variant of coronavirus cases globally pushed demand for the US dollar owing to its safe-haven appeal. The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, trades above 93.00 ahead of the FOMC two-day meeting later in the week. On the other hand, the sterling remained on the back foot as investors remained nervous about the UK inflation growth. A higher inflation reading could force the Bank of England (BOE) to raise interest rates and crunch the already ailing economy.  The data released earlier in the month revealed that the UK economy grew by just 0.1% in July, the pace of the growth was lower than the 1% growth in the previous month.     Meanwhile, US House of Representatives Speaker Nancy Pelosi warned Britain on destabilizing Northern Ireland’s (NI) peace and said there will be no US-UK trade deal before the British government resolved Brexit disagreement with the European Union (EU). GBP/USD additional levels  

EUR/USD stays on the back foot around 1.1715, the monthly low, heading into Monday’s European session. In doing so, the major currency pair drops for

EUR/USD prints three-day downtrend to renew multi-day low, holds lower ground of late.Risk-off mood underpins US dollar’s safe-haven demand even as Treasury yields struggle amid off in Japan, China.A light calendar challenges momentum traders but covid woes, China headlines and geopolitics join Fed hawks to favor bears.EUR/USD stays on the back foot around 1.1715, the monthly low, heading into Monday’s European session. In doing so, the major currency pair drops for the third consecutive day, down 0.10% intraday at the latest, to kick-start the key week. Sour sentiment weighs on the EUR/USD prices even as the baking holiday in China and Japan restricts the market moves. Increasing optimism towards the US stimulus and extending US debt limits, not to forget slow but gradual economic recovery, brighten the odds of the Fed tapering and favor the pair bears in turn. US Dollar Index (DXY) rises to the highest since August 23, extending last week’s run-up as the market sentiment sours. The COVID-19 fears and chatters that the US Federal Reserve (Fed) will hint tapering during this week’s Federal Open Market Committee (FOMC) could be highlighted as the main catalysts behind the moves. Additionally, escalating tensions between China and the Western allies, namely the US, Australia and the UK, also weigh on the market sentiment and underpin the US dollar. Recently, concerns over the stimulus and debt limit gained attention after Axios reported that US Senator Manchin delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. Further, US Treasury Secretary Janet Yellen recently renewed her call for Congress to raise or suspend the debt ceiling sometime in October, Bloomberg reported, citing her editorial op-ed in the Wall Street Journal (WSJ). It’s worth noting that the European Central Bank (ECB) policymakers seem divided over the future tapering of the bond purchases and rate hike, per their latest speech. While Vice President Luis de Guindos keeps suggesting higher inflation and challenges for easy money in turn, governing council member Gabriel Makhlouf said on Friday that the ECB will probably end the quantitative easing program before raising interest rates but refrained from commenting on timing, as reported by Reuters. Additionally, Governing Council member Martins Kazaks said, per Reuters, “(He) Doesn't see the 2% price goal reached in the medium-term.” Amid these plays, S&P 500 Futures drop 0.80% intraday by the press time. Looking forward, an absence of China and Japan restricts the market’s reaction to Evergrande relating bearish headlines but the USD still benefits from the risk-off mood and the pattern may continue even as the German Producer Price Index (PPI) for August disappoint with softer figures than 0.8% expected and 1.9% prior. The reason could be linked to the pre-Fed anxiety and indecision over the US stimulus. Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot Technical analysis Until crossing the late July low surrounding 1.1750, not to forget 50-DMA level near 1.1800, EUR/USD bears remain directed towards the yearly bottom close to 1.1665.  

The Hong Kong-based media outlet, The Standard, shrugs off another Lehman Brothers-like crisis from the troubled Chinese property developer Evergrande

The Hong Kong-based media outlet, The Standard, shrugs off another Lehman Brothers-like crisis from the troubled Chinese property developer Evergrande after speculations last week over the company’s more than US$300 billion debt (HK$2.34 trillion) problem. However, The Standard goes on to explain why the market is still worried. Key takeaways “The main reason is that Evergrande debts are equivalent to 2 percent of China's GDP.” “What's more, investors are worried about a domino effect, sharp drops in property prices and the impact on other firms.” “It may also affect the enterprises' ability to finance and issue bonds, thus bringing further havoc to China's real estate market and another "Lehman storm." “However, unlike the US market in 2007 to 2008, China's does not have too many complicated financial products that can affect housing market operations and Beijing's ability to control and monitor the market is better than the United States.” “Therefore, an Evergrande collapse may have a short-term impact, but in the long run, the market may have many opportunities.”

US Treasury Secretary Janet Yellen renewed her call for Congress to raise or suspend the debt ceiling sometime in October, Bloomberg reported, citing

US Treasury Secretary Janet Yellen renewed her call for Congress to raise or suspend the debt ceiling sometime in October, Bloomberg reported, citing her editorial op-ed in the Wall Street Journal (WSJ). Key quotes “The overwhelming consensus among economists and Treasury officials of both parties is that failing to raise the debt limit would produce widespread economic catastrophe.” A US default “would likely precipitate a historic financial crisis that would compound the damage of the continuing public health emergency,” throw the US into recession and leave it a “permanently weaker nation.” “Neither delay nor default is tolerable” and lawmakers must act quickly.” Market reaction Markets are in a risk-off mood, thanks to the looming Fed’s tapering plan and China’s Evergrande risks, with the US dollar sitting at monthly tops near 93.35, as of writing.

EUR/GBP refreshes intraday low to 0.8546, up 0.12% on a day during early Monday. The cross-currency pair recently pierced a downward sloping trend lin

EUR/GBP takes the bids to refresh intraday top, crosses fortnightly resistance line.Firmer Momentum, sustained break of immediate hurdle directs bulls to 100-SMA.Key Fibonacci retracement levels, monthly low challenge bears.EUR/GBP refreshes intraday low to 0.8546, up 0.12% on a day during early Monday. The cross-currency pair recently pierced a downward sloping trend line from September 07, extending a rebound from the monthly low. Given the upbeat Momentum line favoring the break of immediate resistance, now support, EUR/GBP is ready for further upside towards another key hurdle, namely 100-SMA near 0.8565. It should be noted that the pair’s upside past 0.8565 will enable it to aim for the 0.8600 threshold, comprising the early month peak. Meanwhile, pullback moves below the stated resistance-turned-support, near 0.8538, will direct the quote to 61.8% Fibonacci retracement of August 10 to September 07 upside close to 0.8510. Also acting as a downside filter is the monthly low of the 0.8500 psychological magnet. To sum up, EUR/GBP is up for a north-run towards the monthly low but 100-SMA will challenge the bulls. EUR/GBP: Four-hour chart Trend: Further recovery expected  

At the same time as Australia’s police were reported to have arrested 235 people in Melbourne and 32 in Sydney at unsanctioned anti-lockdown rallies,

At the same time as Australia’s police were reported to have arrested 235 people in Melbourne and 32 in Sydney at unsanctioned anti-lockdown rallies, the Australian government has revealed the road map out of lockdown.  Australia's second-largest city will exit its coronavirus lockdown in late October if vaccine targets are met under an official roadmap released Sunday. About five million people in Melbourne have been under stay-at-home orders since August 5, the sixth lockdown they have endured so far during the Covid-19 pandemic. Officials in Victoria state, which includes Melbourne, announced those orders would be lifted when 70 percent of over-16s are fully vaccinated. They projected that target would be reached around October 26. "Lockdown will end. The (limited) reasons to leave your home and the curfew will no longer be in place," Victoria premier Dan Andrews said, adding that a raft of restrictions would still be enforced. The Premier announced all healthcare workers would be required to have received at least the first dose of their COVID-19 vaccine by October 155. He pointed to the “power” of mandatory jabs in the aged care sector where 98 per cent of the workforce had received at least one dose of the COVID-19 vaccine. “It remains a tightrope between ensuring that our health system is not overwhelmed but also being able to sustain us in our wellbeing and to protect us from those other harms that come from lockdown,” Mr Andrews said. Meanwhile, AUD/USD is pressured from all sides with the Evergrande story gaining traction this week: Evergrande: Risk-off tone for APAC, a USD win-win scenario, bad for AUD

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data dropped back towards the

US inflation expectations, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data dropped back towards the monthly low teased on September 14 by the end of Friday’s North American trading. In doing so, the risk barometer extends pullback from the monthly top, also the highest since early August. That said, the gauge last flashed 2.33% as a quote. During the last week, the New York Fed survey showed that the three-year inflation expectations jumped to the highest since 2013, raising the case for the Fed’s tapering. However, a mixed bunch of consumer-centric data challenged the hawks afterward. Even so, odds of the US Federal Reserve (Fed) to tease the taper during Wednesday’s Federal Open Market Committee (FOMC) are high, which in turn weigh on the market sentiment even as off in China and Japan restricts the mood. It should be noted that the chatters over China’s Evergrande and US debt ceiling add downside pressure onto the risk appetite amid a quiet start to the key week. Read: The week ahead: Fed meeting, Bank of England, Canada and Germany elections, Kingfisher, Nike, Fedex

NZD/USD sellers attack the key support around 0.7025 while refreshing September’s low during early Monday. Although a three-day-old descending trend l

NZD/USD remains pressured around monthly low, retreats of late.Oversold RSI, key SMA support hints at a corrective pullback towards short-term resistance line, bears have a bumpy road ahead.NZD/USD sellers attack the key support around 0.7025 while refreshing September’s low during early Monday. Although a three-day-old descending trend line portrays the pair’s immediate downtrend, 200-SMA challenges the bears amid oversold RSI conditions. Hence, a short-covering move towards the stated resistance line near 0.7060 can’t be ruled out. However, any further upside needs to cross the 0.7080 hurdle to convince the NZD/USD buyers. Following that, the 0.7100 round figure and the monthly high near 0.7170 will be in focus. On the flip side, a clear break of 200-SMA level near 0.7025 will direct NZD/USD sellers toward a horizontal area established since August 25, surrounding 0.6990-85. In a case where the pair bears refrain from stepping back and conquer the 0.6985 support, a one-month-old region close to 0.6930 will be in focus. Overall, NZD/USD remains on the back foot but the odds of a corrective pullback seem brighter. NZD/USD: Four-hour chart Trend: Corrective pullback expected  

It is a critical week for GBP/USD traders as we have both the Ban of England and the Federal Reserve central bank meetings. At the time of writing, GB

GBP/USD awaits the outcome of this week's crucial central bank meetings. GBP/USD holds above 200 EMA despite firmer US dollar. It is a critical week for GBP/USD traders as we have both the Ban of England and the Federal Reserve central bank meetings. At the time of writing, GBP/USD is moving sideways in a consolidated market, hugging a bullish 200 EMA channel, albeit pressured by a firm US dollar as investors survey the conditions of the market's risk profile.  GBP/USD hit fresh lows on Friday as some investment banks brought forward their forecast for a Bank of England rate rise. The general consensus is that while the BoE's rate-setters could be seen to be on the verge to vote for an early end to their COVID-19 stimulus plans, they are likely to hold off for now. ''Inflation is higher and the labour market tighter than the MPC expected in its August MPR,'' analysts at TD Securities explained. ''While we don't look for a change in policy itself (or even much of a change in the outlook), the MPC (with two new members) will find it hard to ignore these developments. A constructive tone is therefore likely, reinforcing market expectations of a 2022 hike.'' US dollar on firmer grounds ahead of Fed Meanwhile, the US dollar climbed to three-week peaks on Friday, still benefiting from better-than-expected US Retail Sales data released on Thursday. the data lifted prospects of a hawkish tilt at this week's Fed meeting and it is expected that officials will likely signal that they are almost ready to taper. ''We expect a formal announcement in Dec, not Nov, but will reassess after the meeting,'' the analysts at TD Securities said. 'While median 2022-23 dot-plot projections will likely be unchanged, the math makes any changes more likely to be up than down. Median inflation/growth projections for 2021 will have to be raised/cut.'' GBP/USD technical analysis GBP/USD Price Analysis: Sellers seek validation below 61.8% Fibonacci near 1.3720  

AUD/USD takes offers around 0.7250, down 0.44% intraday while declining to the lowest levels since August 27 amid Monday’s Asian session. In doing so,

AUD/USD takes offers to refresh multi-day low, prints three-day downtrend.Market sentiment worsens amid coronavirus fears, pre-Fed anxiety and Evergrande woes.Light calendar, off in China, Japan restrict moves but bears stay hopeful amid tapering tantrums.AUD/USD takes offers around 0.7250, down 0.44% intraday while declining to the lowest levels since August 27 amid Monday’s Asian session. In doing so, the risk barometer pair reacts to the sour sentiment amid a light calendar day. Fears of a Lehman-like collapse of China’s Evergrande and mixed coronavirus updates weigh on the risk appetite of late. Also challenging the mood could be the uncertainty over the US stimulus and debt limit edit, as well as the latest pact among the UK, Australia and the US. Above all, the cautious mood ahead of Wednesday’s Federal Open Market Committee (FOMC) keeps bears hopeful. Australia marks a third day of easing in the coronavirus infections, recently at 1,506 cases, while Japan also braces to end the virus-led emergency in the key prefectures including Tokyo. However, COVID-19 numbers from New Zealand and China, not to forget India and the UK have been slightly worrisome and hence back the risk-off mood. Additionally, Friday’s preliminary readings of the US Michigan Consumer Sentiment Index for September eased below 72.20 forecast to 71.0 but stayed above 70.30 prior readouts. The same joins the previously released US Consumer Price Index (CPI) and the escalating Delta covid variant cases to challenge the Fed hawks. Even so, firmer Retail Sales and factory-gate inflation data join the hopes of further stimulus to challenge the easy-money supporters. That said, Axios recently reported that US Senator Manchin delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. Amid these plays, S&P 500 Futures drop 0.30% intraday, down for the third day near the one-month low, by the press time. Moving on, bears are likely to keep the reins but may be hesitant amid a lack of major data/events and off in China, as well as Japan. It’s worth noting that the Federal Reserve (Fed) monetary policy decision is the key event of the week. Technical analysis AUD/USD remains pressured towards 0.7220 support, comprising a one-month-old horizontal line, unless rising back beyond July lows surrounding 0.7290.  

AUD/NZD prints fresh daily losses on the first trading day of the new trading week. The pair travelled to the intraday high of 1.0330 but the momentum

AUD/NZD begins the new trading week on a negative note in the Asian trading session.Further downside expected for the pair if price breaks the ascending trendline.Momentum oscillator holds onto oversold zone with receding momentum.AUD/NZD prints fresh daily losses on the first trading day of the new trading week. The pair travelled to the intraday high of 1.0330 but the momentum fizzled out rather quickly to test the lower levels. At the time of writing, AUD/NZD is trading at 1.0320, down 0.22% for the day. AUD/NZD daily chart On the daily chart, the AUD/NZD pair has been trading inside the ascending triangle technical formation from the low of 1.0278 made on Thursday. Now, if the spot breaks the bullish sloping line, which also coincides with the 20- day Simple Moving Average (SMA) at 1.0315, more downside momentum in the pair can not be ruled out. That being said, the first downside target could be found at the 1.0300 horizontal support level. The Moving Average Convergence Divergence (MACD) indicator trades in the oversold zone. Any downtick in the MACD would accelerate the downside momentum toward the 1.0285 horizontal support level Furthermore, daily close below Thursday’s low would bring multi-year lows level last seen in April back into action. Alternatively, if the price moves higher, it could test the previous session’s high of 1.0336 followed by the 1.0350 horizontal resistance level. AUD/NZD additional levels
 

The USD/INR price is consolidated at the start of the week following a series of range-bound candles on the daily chart. The following illustrates the

USD/INR remains trapped in a sideways channel in daily chart consolidation. The price has met a 61.8% and a 50% mean reversion point on the weekly chart. The USD/INR price is consolidated at the start of the week following a series of range-bound candles on the daily chart.  The following illustrates the market structure in a top-down analysis and potential scenarios for the week ahead.  USD/INR weekly chart The price has corrected to a 61.8% golden ratio and has stalled. This leaves the downside favourable for a downside continuation although the bullish weekly close is a cautionary feature for bears.  USD/INR daily chart The price is range-bound on the daily chart between support and resistance, or 73.20 and 73.80 in the main. The price needs to break these levels one way or the other with a daily close or two to confirm the bias. In doing so, the next support and resistance structures will be targetted near 72.80 and 74.20. 

S&P 500 Futures stay depressed around monthly low, down 0.15% intraday near 4,415 during Monday’s Asian session. The risk barometer dropped during the

S&P 500 Futures print three-day downtrend, pressured around one-month low.Evergrande headlines, virus woes and West versus China keep sellers hopeful amid anxiety ahead of FOMC.Off in China, Japan and a light calendar challenges momentum traders.S&P 500 Futures stay depressed around monthly low, down 0.15% intraday near 4,415 during Monday’s Asian session. The risk barometer dropped during the last two days amid risk-off mood but remains idle of late, still on the bear’s radar, as a baking holiday in China and Japan joins a light calendar elsewhere. Also challenging the trades is the cautious sentiment ahead of Wednesday’s Federal Open Market Committee (FOMC). Even so, fears of a Lehman-like collapse of China’s Evergrande and mixed coronavirus updates weigh on the risk appetite. Also challenging the mood could be the uncertainty over the US stimulus and debt limit edit, as well as the latest pact among the UK, Australia and the US. China’s Evergrande isn’t only flashing red signals due to $300 billion debt but 1,300 projects in over 280 cities and multiple linkages abroad also make it the key challenge to the global economy when the pandemic is taking a toll of late. Although the Chinese policymakers are trying their hard to rescue the firm and shareholders, risks remain high. Elsewhere, New Zealand reports new cases outside Auckland but Japan stays ready to end the virus-led emergency. Further, Australia's covid count also eases of late. It’s worth noting that Friday’s preliminary readings of the US Michigan Consumer Sentiment Index for September eased below 72.20 forecast to 71.0 but stayed above 70.30 prior readouts. The same joins the previously released US Consumer Price Index (CPI) and the escalating Delta covid variant cases to challenge the Fed hawks. Even so, firmer Retail Sales and factory-gate inflation data join the hopes of further stimulus to challenge the easy-money supporters. That said, Axios recently reported that US Senator Manchin delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. Given the lack of major data/events, as well as an off in Japan and China, global markets may offer a lackluster start to the key week. Read: The week ahead: Fed meeting, Bank of England, Canada and Germany elections, Kingfisher, Nike, Fedex

USD/CAD retreats from the monthly high to 1.2760 amid Monday’s Asian session. In doing so, the Loonie pair justifies overbought RSI conditions staying

USD/CAD grinds higher after refreshing monthly peak during early Asia.Three-week-old resistance line, a horizontal area from July challenge further upside.Overbought RSI conditions suggest a pullback but fortnight-long support line, 200-SMA restrict bear’s entry.Canadian Federal Elections: A not very crucial voteUSD/CAD retreats from the monthly high to 1.2760 amid Monday’s Asian session. In doing so, the Loonie pair justifies overbought RSI conditions staying above the short-term support line and 200-SMA. Hence, a pullback towards 16-day-old horizontal support near 1.2710 can’t be ruled out before directing the quote to an ascending support line from September 03, around 1.2645 by the press time. Even so, a 200-SMA level surrounding 1.2620 and the 1.2600 threshold will question the USD/CAD bears afterward. Alternatively, a convergence of a horizontal area established since late July and an ascending resistance line from August 27, around 1.2810-15, will be a strong resistance for the pair buyers to watch during the further upside. In a case where the USD/CAD bulls keep reins past 1.2815, the yearly peak close to 1.2950 and the 1.3000 psychological magnet will be in focus. Overall, USD/CAD remains in the uptrend but profit booking moves on the key Canada election day can’t be ruled out. USD/CAD: Four-hour chart Trend: Pullback expected  

Crude oil prices extend the previous week’s submissive moves on Tuesday. The prices opened higher but failed to preserve the momentum. At the time of

WTI kickstarts the fresh trading week on a lower note.Coronavirus jitters and demand-supply worries weigh on WTI.Higher US dollar valuations continue to  exert pressure at the higher level. Crude oil prices extend the previous week’s submissive moves on Tuesday. The prices opened higher but failed to preserve the momentum. At the time of writing, WTI is trading at $71.51, down 0.40% for the day. The appreciative move in the US Dollar Index (DXY), which indicates the performance of the greenback against six major rivals, keeps the gain limited for the black gold for the time being. The US dollar was last seen trading at 93.22, up 0.33% for the day. Crude oil prices are being pressurized amid the uncertainty regarding US and China trade negotiations and relations.  Meanwhile, as per Iraq’s oil minister, OPEC and its allies will try to keep oil prices at $70 per barrel in the Q1 of 2022. Furthermore, the group is expected to stick to its current production agreement in its October meeting but on the condition of price stability. Additionally, the tropical storm Nicholas did not hurt Texas refineries, which allowed companies to fix the infrastructure as they recover from Hurricane Ida. In the previous week, WTI touched a six-week high near $73.20 on a drop in US crude stockpiles, supply-chain disruptions and the prospects of higher demand on better-than-expected economic data in US and China. As for now, the US dollar dynamics continue to influence WTI prices. WTI additional levels  

Gold is flat during holiday thin markets with both Tokyo and China out today. Gold vs the US dollar has traded in a narrow range between $1,751.27 low

Gold remains consolidated ahead of the Fed this week.US dollar remains favoured for its safe-haven allure and prospects of Fed tapering. Gold is flat during holiday thin markets with both Tokyo and China out today. Gold vs the US dollar has traded in a narrow range between $1,751.27 low and a $1,755.29 high.   The price is correcting from last week's low of $1,745 that was made o the back of a firmer greenback.  The dollar scaled three-week peaks on Friday, supported by better-than-forecast US Retail Sales data released on Thursday ahead of this week's Federal Reserve meeting.  Investors have not fully discounted a reduction of asset purchases by the Federal Reserve before the end of the year which is giving the US dollar a lift which is a headwind to the price of gold. Moreover, there are risk factors that are supportive of the mighty greenback:  Evergrande: Risk-off tone for APAC, a USD win-win scenario, bad for AUD The dollar index, a gauge of the greenback's value against six major currencies, rose to 93.259, the highest since the third week of August. It was last trading flat on the day at 93.24 For the week, the dollar index gained 0.6%, its largest weekly percentage rise since mid-August. Looking ahead for the week, the Fed holds a two-day monetary policy meeting next week and is expected to open discussions on reducing its monthly bond purchases, while tying any actual change to US job growth in September and further out.  The two-day FOMC meeting No change is expected but traders are in anticipation of a slightly more hawkish note considering the Fedspeak of late. All in all, a hawkish hold is on the cards for this meeting as the official statement and the minutes should continue to lay the groundwork for tapering this year, analysts at Brown Brothers Harriman argued: ''The Fed is likely to wait until the November 2-3 meeting to make an official tapering announcement, with a likely start in December.  Consensus sees the Fed starting to taper in late 2021 or early 2022 and then starting to hike rates in early 2023, which are ultimately dollar-supportive if underpinned by economic recovery and not just rising inflation and inflation expectations,'' analysts at Brown Brothers Harriman said. No bid in gold ''The 'stagflation' narrative is capturing the market's share of mind, as participants look to a period of high inflation and slowing growth, but this has yet to translate into additional interest for gold,'' analysts at TD Securities said. ''In fact, the yellow metal is struggling to find additional buyers as central banks slow their purchases, while ETF holdings remain broadly unchanged. In this context, liquidations from the top holders of SHFE gold catalyzed a reversal in flows from CTA trend followers, in response to waning upside momentum.'' ''In this context,'' the analysts argue, ''a dry-powder analysis argues that while gold bugs aren't widespread, they hold bloated position sizes, creating an opportune set-up for the de-risking observed in the last session.'' ''However, considering that Shanghai gold length is nearing historical lows, a cleaner discretionary and trend-following positioning slate argues that the shake-out observed is unlikely to morph into a rout.'' Gold technical analysis At this juncture, consolidation would be expected as traders weigh additional data for the week and global economic conditions ahead of the Fed this week: While there is room to go to the downside into $1,730 and 10 Aug highs, the price would be expected to stall and correct given the length of last week's drop beyond the daily ATR of $22. The 23.6-50% ratios can be eyed into old the support that has been expected to act as resistance on a restest of the area. 

US Dollar Index (DXY) stays firmer around 93.25, the highest level since August 23, during Monday’s Asian session. The greenback gauge remains on the

DXY stays on the front foot amid a quiet start to the key week.Tapering tantrum looms despite mixed data, covid-led economic challenges.China headlines can entertain traders, off in Tokyo, Beijing questions momentum traders.US Dollar Index (DXY) stays firmer around 93.25, the highest level since August 23, during Monday’s Asian session. The greenback gauge remains on the front foot after a two-week uptrend amid a risk-off mood. However, the pre-Fed anxiety and a bank holiday in China, as well as Japan, restrict the DXY momentum of late. The COVID-19 fears and chatters that the US Federal Reserve (Fed) will hint at tapering during this week’s Federal Open Market Committee (FOMC) could be cited as the key catalysts behind the DXY’s latest run-up. Additionally, escalating tensions between China and the Western allies, namely the US, Australia and the UK, also weigh on the market sentiment and underpin the US dollar. On Friday, the preliminary readings of the US Michigan Consumer Sentiment Index for September eased below 72.20 forecast to 71.0 but stayed above 70.30 prior readouts. The same joins the previously released US Consumer Price Index (CPI) and the escalating Delta covid variant cases to challenge the Fed hawks. However, firmer Retail Sales and factory-gate inflation data join the hopes of further stimulus to challenge the easy-money supporters. That said, Axios recently reported that US Senator Manchin delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. While portraying the risk-off mood, S&P 500 Futures drop 0.15% intraday by the press time. Moving on, a light calendar at home and abroad, except for the Canadian Federal Elections, may restrict DXY moves. However, the Fed-linked chatters and the covid updates may entertain the greenback traders. Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot Technical analysis US Dollar Index bulls may struggle between 93.20 and 93.45 area comprising multiple tops marked since July and April 2021 high respectively. Also challenging the buyers is the upper band of the Bollinger and sluggish Momentum line.  

GBP/USD turns south in a 30-pips movement on Monday’s morning in the Asian trading session. The pair came under fresh selling pressure on Friday, once

GBP/USD edges lower on Monday in the early Asian trading hours. The pair is under renewed selling pressure below 20-day SMA. Bears lookout for some fresh upcoming selling opportunities. GBP/USD turns south in a 30-pips movement on Monday’s morning in the Asian trading session. The pair came under fresh selling pressure on Friday, once bears took the 20-day Simple Moving Average (SMA) at 1.3780 out. At the time of writing, GBP/USD is trading at 1.3727, down 0.10% for the day. GBP/USD daily chart Technically speaking, after testing the high of 1.3913 on Tuesday, GBP/USD bears dominated the trade and refreshed weekly lows near 1.3730 on Friday. Furthermore, a daily close below the 20-day SMA strengthens the negative outlook for the pair. Now, a break of the 61.8% Fibonacci retracement level, which extends from the low of 1.3602 at 1.3719 would entice fresh rounds of selling for the spot. In doing so, the first downside target would appear to be the 1.3690 horizontal support level. The Moving Average Convergence Divergence (MACD) indicator slips below the midline. This would mean that the bears would easily take out the 1.3660 horizontal support level followed by the low of August 23 low of 1.3612. Alternatively, on the reverse side, with a sustained move above the 50% Fibonacci level at 1.3754, the bulls would attack the 20-day SMA at 1.3788. GBP/USD bulls above the psychological level of 1.3800, make a journey toward the 1.3840 horizontal resistance level and then the high made on September 10 at 1.3888.    

AUD/USD stays depressed around 0.7260, down 0.28% on a day while fading bounce off intraday low amid Monday’s Asian session. The Aussie pair flirts wi

AUD/USD remains pressured around three-week low, inside bullish chart pattern.Oversold RSI, immediate support line hints at corrective pullback.200-SMA adds filters to the upside, 61.8% Fibonacci retracement challenges the bears.AUD/USD stays depressed around 0.7260, down 0.28% on a day while fading bounce off intraday low amid Monday’s Asian session. The Aussie pair flirts with the support line of a bullish chart pattern called falling wedge amid nearly oversold RSI conditions. Hence, a corrective pullback towards the 0.7300 threshold can’t be ruled out. However, the upper line of the stated wedge, near 0.7315, followed by the 200-SMA level of 0.7321, will challenge the AUD/USD recovery moves afterward. It should be noted, however, that a clear run-up beyond 0.7321 enables bulls to aim for the monthly top near 0.7480 with the 0.7400 psychological magnet acting as an intermediate halt. Meanwhile, a downside break of 0.7255 nearby support line will have a 61.8% Fibonacci retracement level of August-September upside, around 0.7245, as an extra filter to the south. Following that, August 27 swing low near 0.7220 and the 0.7200 round figure may entertain AUD/USD bears before directing them to August lows near 0.7105. AUD/USD: Four-hour chart Trend: Short-covering expected  

USD/CHF remains sidelined around 0.9320 after poking the April 2020 tops during Monday’s Asian session. In doing so, the quote keeps the previous week

USDCHF bulls take a breather after three-week uptrend to refresh multi-day top.Risk appetite worsens amid pre-Fed cautious, virus-led challenges to economic growth, fears concerning China.Bank holidays in China, Japan could restrict intraday moves.USD/CHF remains sidelined around 0.9320 after poking the April 2020 tops during Monday’s Asian session. In doing so, the quote keeps the previous week’s upside break of the key resistance line, now support, but awaits more strength to tackle the key SMA hurdle amid a quiet start to the key week. Worsening market sentiment underpins the US dollar’s safe-haven demand and provides a tailwind to the USD/CHF bulls. However, the Swiss currency’s (CHF) risk-safety allure test the upside momentum amid a light calendar and off in China, as well as Japan. US Dollar Index (DXY) rose to the highest since August 23 on Friday as the risk-off mood escalates. The COVID-19 fears and chatters that the US Federal Reserve (Fed) will hint tapering during this week’s Federal Open Market Committee (FOMC) could be highlighted as the main catalysts behind the moves. Additionally, escalating tensions between China and the Western allies, namely the US, Australia and the UK, also weigh on the market sentiment and underpin the US dollar. Recently, concerns over the stimulus and debt limit gained attention after Axios reported that US Senator Manchin delay President Joe Biden’s spending package vote to 2022. On the contrary, US House Speaker Pelosi said to expect a bipartisan approach to address the debt limit, per Reuters. Elsewhere, the virus woes escalate and challenge the economic growth momentum but the Fed is likely teasing taper announcements this week. Amid these plays, the US Treasury yields remained firmer and the Wall Street benchmarks closed in the red by the end of Friday while the S&P 500 Futures drop 0.29% intraday at the latest. Given a lack of major data/events, except for Canada Federal Elections, USD/CHF may remain lackluster around the multi-day top with eyes on the Fed decision. Technical analysis Despite crossing a 1.5-year-old descending trend line, around 0.9265 by the press time, USD/CHF bulls need to piece the 100-week SMA level of 0.9330 before heading towards a downward sloping resistance line from September 2019 near 0.9370.  

EUR/USD has stalled and is steady in the open. The bears have been in control to this point after breaking back below the 200-hour EMA. There are pros

EUR/USD bears in control below the 200-hour EMA.A bullish correction could play out in the forthcoming hours. EUR/USD has stalled and is steady in the open. The bears have been in control to this point after breaking back below the 200-hour EMA. There are prospects of lower lows, although the following analysis identifies bullish RSI divergence.  EUR/USD hourly charts The bulls are being pressured with the price recently falling below the 200-hour EMA. Traders are looking for shorts in a bearish trending market. However, optimal entry points are what matter and bears might need to consider the following analysis that cautions a near-term bullish correction.  EUR/USD bullish divergence The price is crawling across the prior day's closing but we have bullish divergence. This would be expected to equate in the price correcting towards at least the 38.2% Fibonacci retracement level prior to extending to the downside. 

United Kingdom Rightmove House Price Index (YoY) increased to 5.8% in September from previous 5.6%

United Kingdom Rightmove House Price Index (MoM) climbed from previous -0.3% to 0.3% in September

USD/JPY treads water in the early Asia session on Monday morning. The pair tested the low of 109.21 in the previous week and remained pressured near 1

USD/JPY kickstarts fresh trading week in a muted tone.US Dollar Index remains strong above 93.00 on mixed economic data.Coronavirus jitters, geopolitical tensions keep inflow to safe-haven Yen.USD/JPY treads water in the early Asia session on Monday morning. The pair tested the low of 109.21 in the previous week and remained pressured near 110.00, only to trade in a very narrow trade band. At the time of writing, USD/JPY is trading at 109.97 down 0.01% for the day. USD/JPY failed to capitalize on the gains in the greenback, which rallies above 93.00 and touches the highest level since August 22.  The US Dollar Index (DXY), which tracks the performance of the buck against the basket of six major currencies, remains elevated near 93.20 with 0.03% gains. The US benchmark 10-year Treasury yields rose by 4 basis points to 1.37% as investors tighten their seat belts ahead of the Federal Reserve meeting this week. The University of Michigan’s consumer sentiment index jumped 71 in September from a decade low 0f 70.3 in August, below the market consensus of 72, the readings fuel the uncertainty on Fed timing on rolling back of stimulus. Meantime, as per the latest report, US Senator Manchin wanted a vote on the budget reconciliation package this month. He thinks Congress should delay US President Joe Biden's $3.5 trillion stimulus package until 2022. On the other hand, the Japanese Yen found some bidding over the rising concerns of the Delta variant in the Asia-Pacific region. Furthermore, the stock market in China and Japan closed today, thus squeezing liquidity out of the market. In the absence of any major economic data, the market dynamics and risk-catalyst would influence the pair’s performance in the short term. USD/JPY additional levels
 

Silver (XAG/USD) sellers tease the yearly low surrounding $22.15-20 amid the initial Asian session on Monday. In doing so, the white metal battles wit

Silver prints three-day downtrend near yearly low, recently off multi-day low.Bearish MACD signals further downside but Momentum seems to dwindle of late.Corrective pullback needs to regain $23.00 to recall the buyers, key Fibonacci retracement and 200-week SMA lure bears.Silver (XAG/USD) sellers tease the yearly low surrounding $22.15-20 amid the initial Asian session on Monday. In doing so, the white metal battles with the 100-week SMA amid bearish MACD signals and a weaker Momentum line. Although the strong SMA and less-favorable Momentum for further downside challenge the silver bears, the rebound needs to cross the support-turned-resistance line from September 2020, around $23.00, to convince buyers. Even so, April’s low around $23.80 and the monthly peak near $24.85 adds to the upside filters. Meanwhile, a clear break of the $22.23 SMA level will direct the CAG/USD prices towards 50% Fibonacci retracement of March 2020 to February 2021 upside, near $20.82. In a case where the silver sellers keep reins past $20.82, the $20.00 threshold and 200-week SMA near $19.00 will challenge them afterward. Silver: Weekly chart Trend: Short-covering move expected  

New Zealand Business NZ PSI dipped from previous 57.9 to 35.6 in August

USD/CAD rises to the fresh monthly top, recently wobbling near 1.2775, as Canadian citizens brace for Monday’s Federal elections. While the loonie pai

USD/CAD bulls take a breather after two-week uptrend, grinds higher of late.No major policy change expectations keep bulls hopeful unless any surprises.Risk-off mood, WTI pullback adds to the bullish catalysts.Canadian election results become the key amid light calendar, off in China, Japan.USD/CAD rises to the fresh monthly top, recently wobbling near 1.2775, as Canadian citizens brace for Monday’s Federal elections. While the loonie pair’s previous upside could be linked to the firmer US dollar, caution ahead of today’s Canada elections seem to challenge the bulls of late. Even so, the pullback in oil prices, Canada’s key export and Fed tapering tantrum, coupled with no major hopes from Canadian elections favor USD/CAD buyers. US Dollar Index (DXY) rose to the highest since August 23 on Friday as the risk-off mood escalates. The main catalysts behind the moves are the COVID-19 fears and chatters that the US Federal Reserve (Fed) will hint tapering during this week’s Federal Open Market Committee (FOMC). Additionally, escalating tensions between China and the Western allies, namely the US, Australia and the UK, also weigh on the market sentiment and underpin the US dollar. At home, Canadian Federal Elections fail to probe the traders as Prime Minister Justin Trudeau's Liberals and Erin O'Toole's Conservatives brace for a tough battle. “The Canadian election, whatever its political outcome, will change almost nothing in Ottawa. Economic and monetary policy will remain, the general approach to the pandemic will continue and if the Conservatives win they will govern in a tacit or overt coalition. The scope for substantive policy changes will be close to nil,” said FXStreet’s Joseph Trevisani. Against this backdrop, US Treasury yields remained firmer and the Wall Street benchmarks closed in the red while the S&P 500 Futures drop 0.29% intraday at the latest. It’s worth mentioning that the risk aversion and firmer USD weigh on the WTI prices and propel the USD/CAD. That said, remains pressured for the fourth consecutive day by the press time. Looking forward, Canadian elections may entertain the USD/CAD traders ahead of Wednesday’s Fed meeting. However, an off in China and Japan, coupled with a lack of major data/events from abroad, can challenge the momentum traders. Technical analysis USD/CAD bulls need a clear upside break of 1.2807-12 area, comprising a two-month-old horizontal resistance, to challenge the yearly peak of 1.2949, marked last month. Alternatively, the 1.2700 threshold including multiple tops marked since late August restricts the short-term downside of the pair.  

Early Monday morning in Asia, US House Speaker Nancy Pelosi crossed wires, via Reuters, saying that the Congress commitment to US creditworthiness iro

Early Monday morning in Asia, US House Speaker Nancy Pelosi crossed wires, via Reuters, saying that the Congress commitment to US creditworthiness iron-clad. The news also adds Pelosi saying, “Expect bipartisan approach to addressing debt limit.” FX implications With the US Federal Reserve and China headlines being the market favorites, reaction to the news over the debt limit gain a little response. Read: Evergrande: Risk-off tone for APAC, a USD win-win scenario, bad for AUD

NZD/USD begins the key week with the same old sour tone around 0.7035, after declining for the last two weeks. Fresh COVID-19 infections outside Auckl

NZD/USD kick starts the key week around Friday’s close, keeps two-week downtrend.New cases in Waikato, headlines concerning China and Evergrande join tapering tantrums to back the bears.Bank holidays in China and Japan could join light calendar to restrict intraday moves, risk catalysts are important for fresh impulse.NZD/USD begins the key week with the same old sour tone around 0.7035, after declining for the last two weeks. Fresh COVID-19 infections outside Auckland adds to the downside pressure on the quote while the cautious mood ahead of the US Federal Reserve (Fed) monetary policy meeting and Sino-American tussles, not to forget Evergrande, already weighs on the quote. However, a banking holiday in China and a lack of major data/events at home seem to restrict the Kiwi pair’s immediate moves. During the weekend, Waikato registers an uptick in covid infections outside New Zealand’s COVID-19 epicenter Auckland. The Pacific nation was up for easing the virus-led emergency alert level for Auckland from currently the highest of 04 to 03 from September 22. However, the latest virus outbreak renews chatters over heightened activity restrictions in Waikato. Previously, firmer US Retail Sales and softer-than-expected Michigan Consumer Sentiment Index join softer US inflation data to confuse markets over the Fed’s next moves. Before the blackout for policymakers, most of them were pushing for the tapering despite the recent softening of the jobs report. Read: Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot Elsewhere, the signing of a defense deal by the UK, Australia and the US indirectly teases China and escalates the tension between the western friends and Beijing, which in turn should weigh on the NZD/USD prices due to fears relating to the main customers. Further, China’s Evergrande is flashing red signals for not only domestic markets but to the global real estate developers and the Kiwi pair as well. Amid these plays, Wall Street closed in red and the US 10-year Treasury yields were firmer by the end of Friday. Moving on, a bank holiday in China and Japan should restrict intraday moves of the NZD/USD pair. On the same line is an absence of any major data/events at home, which in turn highlights risk catalysts for fresh directions. Technical analysis Unless regaining 100-DMA around 0.7075, NZD/USD remains vulnerable to drop towards 50-DMA near 0.7010.  

The Daily Telegraph came out with the news, relying on the sources, suggesting that UK Prime Minister (PM) Boris Johnson’s US visit aims to convince U

The Daily Telegraph came out with the news, relying on the sources, suggesting that UK Prime Minister (PM) Boris Johnson’s US visit aims to convince US President Joe Biden over travel ban. More to come…
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