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Forex نیوز ٹائم لائن

پير، 27 ستمبر، 2021

The outlook of analysts at Wells Fargo, for the Bank of Canada monetary policy, is mildly more hawkish than the consensus. They expect an initial rate

The outlook of analysts at Wells Fargo, for the Bank of Canada monetary policy, is mildly more hawkish than the consensus.  They expect an initial rate hike during the third quarter of 2022, compared to the consensus forecast which sees an initial rate increase in Q4-2022. They year-end 2023 target for the central bank's rate is 1.50%. Key Quotes:  “We expect the Bank of Canada's (BoC) steady progress towards less accommodative monetary policy to continue in the coming quarters. Our outlook is for the central bank to end its quantitative easing program by early 2022. The BoC is currently purchasing Canadian government bonds at a targeted pace of C$2B per week. We expect a further slowing in bond purchases to C$1B per week to be announced at the October 27 meeting, and for the BoC to announce an end to the quantitative easing program at the January 26 meeting next year.” “We also expect the Bank of Canada to begin raising its policy interest rates in 2022, starting with an initial 25 bps rate increase to 0.50% at the July 2022 monetary policy meeting and another 25 bps rate increase during Q4-2022. Regarding the initial rate hike, we believe the risks are tilted towards an earlier rather than later increase. We also see multiple rate hikes in 2023, and anticipate a cumulative 75 bps of tightening during that year.”
 

The Bank of England is about to start tightening monetary policy, explained analysts at Danske Bank. They see the pound gaining ground on the back of

The Bank of England is about to start tightening monetary policy, explained analysts at Danske Bank. They see the pound gaining ground on the back of the BoE and also from a positive USD environment. Key Quotes:  “We expect the UK recovery to continue (e.g. payroll employment is now higher than pre-covid) although delta still creates uncertainty about the outlook. Also the bottlenecks are hitting the UK hard, as the UK is not only affected by the global bottlenecks but also bottlenecks created by Brexit.” “Like the Fed, the Bank of England (BoE) is about to start tightening monetary policy. QE bond buying is set to end by the end of the year and markets are pricing in approximately two rate hikes before year-end 2022, which seems fair at the moment.” “EUR/GBP has moved down to 0.85 since our last update and overall traded very narrowly within the 0.85-0.86 range. We still have a bullish view on GBP, as the USD-positive environment is usually also benefitting GBP.” “We continue to target EUR/GBP at 0.83 in 12M. A risk to our forecast is a hit to global risk sentiment and/or if Bank of England keeps monetary policy accommodative for longer than currently expected. EU-UK tensions also remain a risk.”

Data released on Monday showed an increase above expectations in the Durable Goods Orders report. Analysts at Wells Fargo point out that despite a bac

Data released on Monday showed an increase above expectations in the Durable Goods Orders report. Analysts at Wells Fargo point out that despite a backdrop of a worsening supply chain crisis and rising material costs, core capital goods orders climbed in August even as unfilled orders stacked up. Key Quotes:  “Durable goods orders grew 1.8% in August, about three times the consensus-expected gain of 0.6%. The increase also comes on the heels of a substantial upward revision that flipped July's initially reported decline to an increase of 0.5%.” “A surge in aircraft orders was largely expected and while the more than $7 billion increase in bookings for civilian aircraft provided considerable lift, there were modest gains even after excluding aircraft. Signs of stronger business spending were evident in a 1.3% gain in electrical equipment and a 1.4% gain in computers and communications equipment orders.” “While this is no doubt a positive sign for real equipment spending in the third quarter, some of recent gain is likely due to rising prices.” “We continue to expect fairly resilient demand followed by the need to replenish depleted inventories will keep orders rolling in and the manufacturing sector humming for some time to come. The need to meet elevated levels of backlog should also keep production solid. The bottom line: even once bottlenecks ease, the manufacturing sector will still have plenty of work to chip away at.”

In a speech, given at the Society of Professional Economists Annual Dinner, Andrew Bailey, governor of the Bank of England, said the monetary policy r

In a speech, given at the Society of Professional Economists Annual Dinner, Andrew Bailey, governor of the Bank of England, said the monetary policy response, if needed to make one, to the inflation pressure should involve interest rates and not QE. Key Quotes: “The rate of recovery has slowed over recent months, and that slowing is continuing. Relative to the fourth quarter of 2019, on the latest data to July, the level of GDP was 3.5% lower.”  “Having been well below target last year and into this year, it has risen above rapidly, to 3.2% in August. Much of the latest rise reflects base effects from last year, but we have also seen unusually strong rises in some items, including some foodstuffs, used cars and accommodation.” “Our forecast in August had inflation rising to 4% by the end of this year, and developments since then mean that inflation is likely to rise to slightly above 4%. The major contributors to the further increase are not base effects but rather the strength we are now seeing in goods and energy prices.” “In considering how to use monetary policy, it is also important to understand the nature of the shocks that are causing higher inflation. The shocks that we are seeing are restricting supply in the economy relative to the recovery of demand (…) tightening monetary policy could make things worse in this situation by putting more downward pressure on a weakening recovery of the economy.” “Monetary policy should not respond to supply shocks which do not become generalised through their impact on inflation expectations.” “But all of this group were of the view that the stimulus to monetary policy enacted in response to Covid would need to start to unwind at some point, that unwind should be enacted by an increase in Bank Rate, and if appropriate would not need to wait for the end of the current asset purchase programme.”

United States 2-Year Note Auction climbed from previous 0.242% to 0.31%

The GBP/JPY resumed the upside, after a consolidation on Friday and climbed to 151.17, reaching the highest level since September 17. It remains near

GBP/JPY extended the rally from 149.00 after breaking 151.70.Bullish bias remains in place, next targets at 152.35 and 152.65.The GBP/JPY resumed the upside, after a consolidation on Friday and climbed to 151.17, reaching the highest level since September 17. It remains near the top, holding above 152.00 with a bullish tone intact. Technical indicators favor more gains over the next session, with the next target around 152.30. Above the next resistance stands at 152.60. A decline under 151.60 should alleviate the bearish pressure, while a break under 150.80 would expose 150.00. The pound is up for the fourth consecutive day versus the yen and it climbed above the 20 and 55-day simple moving average. A pause may look likely; still, a daily close above 151.50 should point to more gains. GBP/JPY 4-hour chart    

After closing in the back foot on the last week, the GBP/USD is recovering, trading at 1.3704 up 0.12% at the time of writing. Market-mood is upbeat,

GBP/USD hovers around 1.3709 as the European session closes.BoE’s hawkishness boosts the prospects of the British pound.US Durable Good Orders in August expanded 1.8%, more than July’s 0.5%.Chicago’s Fed President Evans commented that the US economy is close to meeting the Fed’s bar for bond tapering.After closing in the back foot on the last week, the GBP/USD is recovering, trading at 1.3704 up 0.12% at the time of writing. Market-mood is upbeat, as European indices are trading higher, while it is a mixed bag in the US. The Dow Jones Industrial Average (DJIA) is up to 35,041.12, gaining 0.70%, whereas the S&P 500 and the Nasdaq are down 0.09% and 0.95%, respectively. US Dollar Index holds to last week gainsThe US Dollar Index (DXY), which measures the greenback’s performance against a basket of six-peers, is steady up 0.14% at 93.40, underpinned by rising yields with the US 10-year Treasury yield recording gains of 1.20% at 1.478%.  In the UK, the economic docket is empty. However, wires reported that 50-90% of natural gas stations are running dry in some areas, and this shortage could derail the recovery.  On Thursday of last week, the Bank of England held interest rates and its bond purchases unchanged. Nevertheless, hinted that a hike might be on the cards, even before the central bank tapers its bond-buying program. The decision is influenced by rising prices, as the BoE expects inflation to rise to 4%. Meanwhile, the US Census Bureau released Durable Good Orders data for August, figures rose by 1.8% more than the 0.7% foreseen by analysts, smashing the previous month’s reading of 0.5%. Excluding defense, new orders increased 2.4% against the -0.5% expected. Demand for durable goods has expanded 15 of the last 16 months. Early during the New York session, Chicago’s Fed President Charles Evans crossed the wires. He commented that the US economy is close to meeting the Fed’s bar for beginning to reduce its bond purchase program. Further, an improvement in the labor market will likely meet the bar soon set by the central bank, and bond tapering can begin. Later during the day, New York’s Fed President John C. Williams and Fed’s Governor Lael Brainard will hit the wires.KEY TECHNICAL LEVELS TO WATCH
 

The Federal Reserve Bank of Dallas published the Texas Manufacturing Outlook Survey. The general business activity index remained in positive ground i

US Dallas Fed Manufacturing Business Index decreases to 4.6 in September from 9.US dollar modestly higher for the day, off highs.The Federal Reserve Bank of Dallas published the Texas Manufacturing Outlook Survey. The general business activity index remained in positive ground in September at 4.6 below the reading of 9 of the previous month. “Texas factory activity continued to increase in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose three points to 24.2. The reading was well above average and indicative of solid output growth”, according to the report. “Perceptions of broader business conditions were mixed in September. While both the company outlook and general business activity indexes moved down from their August readings, the company outlook index slipped into negative territory at -2.8, signaling a slight worsening of outlooks this month.” Expectations regarding future manufacturing activity were slightly less positive in September the report showed. “The future production index edged down to 41.8 but remained elevated, while the future general business activity index slipped four points to 11.5, a reading slightly below average.” Market reaction Market participants mostly ignored the report. The US Dollar remains off highs, with the DXY hovering around 93.30/35, up 0.07% for the day. US yields are off highs, still sharply higher for the day. The 10-year stands at 1.48%, up more than 2% for the day.

United States Dallas Fed Manufacturing Business Index down to 4.6 in September from previous 9

The Japanese yen has been dealt a serious blow in recent days. USD/JPY has rocketed higher in line with the move of the EDZ2-EDZ3 calendar spread. Tha

The Japanese yen has been dealt a serious blow in recent days. USD/JPY has rocketed higher in line with the move of the EDZ2-EDZ3 calendar spread. That could keep the pair elevated near its 2021 highs, according to economists at TD Securities. Funders feel the heat “One needs to look no further than the repricing euro/dollar curve where Z2Z3 has widened rather appreciably. While one could argue that policy tightening may be a bit premature, there isn't much in the way of a catalyst to material derail it.” The market seems to have gotten over its Evergrande craze. What's more, one could also argue that the lack of a terminal rate adjustment suggests that the risk is towards more hawkish repricing further out the curve that could further weaken the JPY. Taken in conjunction with our short US 10y real rates position (targeting -60bp), the yen seems like it will do nothing but struggle.  “The cyclical highs near 112 beckon in USD/JPY.”  

EUR/USD retakes the 1.1700 area after challenging monthly lows near 1.1680 during early trade. EUR/USD offered on USD-gains, looks to Sintra EUR/USD a

EUR/USD stays on the defensive near 1.1700.The bonds selloff pushes German yields to fresh tops.US Durable Goods Orders surprised to the upside in August.EUR/USD retakes the 1.1700 area after challenging monthly lows near 1.1680 during early trade. EUR/USD offered on USD-gains, looks to Sintra EUR/USD adds to Friday’s downtick and keeps the door open to a potential move to the YTD lows in the vicinity of 1.1660 (August 20). The leg lower in the pair comes in response to the strong improvement in the dollar, which is in turn underpinned by the sharp bounce in US yields. Indeed, yields of the US 10-year reference note approach the key 1.50% hurdle, levels last seen in late June, as investors continue to adjust the trading to the latest FOMC event and the hawkish message from Powell’s press conference. In the euro calendar, the ECB’s M3 Money Supply expanded 7.9% in the year to August and Private Sector Loans rose at an annualized 4.2%. Additionally, Chairwoman Lagarde said that the central bank will keep a close eye on both wages and supply narrowing, while he talked down the impact of the current high inflation on the long-run inflation expectations. The pair, in the meantime, will be vigilant on the upcoming ECB forum at Sintra on September 28-29, where C.Lagarde and other Board members are due to speak Data wise in the NA session, Durable Goods Orders expanded more than expected 1.8% MoM in August and 0.2% excluding the Transportation sector. Later in the NA session, the Dallas Fed Manufacturing Index will also be published. EUR/USD levels to watch So far, spot is losing 0.20% at 1.1697 and faces the next up barrier at 1.1755 (weekly high Sep.22) seconded by 1.1784 (55-day SMA) and finally 1.1845 (weekly high Sep.14). On the other hand, a break below 1.1683 (monthly low Sep.23) would target 1.1663 (2021 low Aug.20) en route to 1.1602 (monthly low Nov.4 2020).

Gold gained some positive traction on the first day of a new trading week, albeit lacked any follow-through and met with some fresh supply near the $1

A combination of factors failed to assist gold to capitalize on its modest intraday gains.Rallying US bond yields underpinned the already stronger USD and capped the upside.Worries about Evergrande’s debt crisis seemed to be the only factor lending support.Gold Price Forecast: Will XAU/USD sustain above $1750? Focus on Fedspeak, US dataGold gained some positive traction on the first day of a new trading week, albeit lacked any follow-through and met with some fresh supply near the $1,760 region. The intraday pullback was sponsored by a combination of factors and dragged the XAU/USD to fresh daily lows, around the $1,744 area during the early North American session. A generally positive tone around the equity markets turned out to be a key factor that capped the upside for the safe-haven precious metal. Apart from this, a modest US dollar strength further weighed on the dollar-denominated gold. The USD continued drawing some support from prospects for an early interest rate hike by the Fed and got an additional boost from a fresh leg up in the US Treasury bond yields. It is worth recalling that the so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. The repricing of the likely timing of the Fed's policy tightening pushed the yield on the benchmark 10-year US government bond to the 1.50% threshold for the first time since June. This was seen as another factor that acted as a headwind for the non-yielding gold. On the economic data front, the US Durable Goods Orders increased 1.8% in August and surpassed expectations for a 0.7% rise by a big margin. Adding to this, the previous month's reading was also revised higher to show a 0.5% growth as against a modest decline reported earlier. Additional details revealed that orders excluding transportation rose 0.2% vs. 0.5% expected. This, however, was offset by stronger non-defence capital goods orders excluding aircraft – a closely watched proxy for business spending plans. That said, persistent worries about potential risks from the debt crisis at China Evergrande Group helped limit deeper losses for the XAU/USD, at least for the time being. Nevertheless, gold prices remain well within the striking distance of the lowest level since August 11, around the $1,738 region touched last Thursday and remains vulnerable to slide further. However, it will be prudent to wait for a strong follow-through selling before positioning for an extension of the recent downward trajectory from the 1,832-34 heavy supply zone. Technical outlook From current levels, a subsequent slide below monthly swing lows is likely to find some support near the $1,730-28 horizontal zone. The next relevant support is pegged near the $1,700 round-figure mark, which if broken decisively will set the stage for a further near-term depreciating move for gold. On the flip side, momentum beyond the daily swing highs might confront stiff resistance near the $1,775-76 area ahead of the $1,780 horizontal support breakpoint. A sustained strength beyond has the potential to lift the XAU/USD further and allow bulls to aim back to reclaim the $1,800 mark. Levels to watch  

Economist at UOB Group Lee Sue Ann reviews the latest BoE monetary policy meeting. Key Takeaways “At its September meeting, the Bank of England (BOE)

Economist at UOB Group Lee Sue Ann reviews the latest BoE monetary policy meeting. Key Takeaways “At its September meeting, the Bank of England (BOE) judged that the existing stance of monetary policy remained appropriate…” “In the latest statement, the BOE noted that the ‘modest tightening’ in policy foreseen over their horizon in August, ‘some developments during the intervening period appear to have strengthened that case, although considerable uncertainties remain’.” “We have moved forward our rate hike forecast timing to end-2022 from mid-2023 to reflect a key change in the minutes, that all MPC members ‘agreed that any future initial tightening of monetary policy should be implemented by an increase in Bank Rate, even if that tightening became appropriate before the end of the existing UK government bond asset purchase programme’.”

Continuing with her testimony before the Committee on Economic and Monetary Affairs of the European Parliament, the ECB President Christine Lagarde sa

Continuing with her testimony before the Committee on Economic and Monetary Affairs of the European Parliament, the ECB President Christine Lagarde said that the PEPP program is effective. Have every reason to believe that base effect, energy inflation not resulting in lasting inflation. Will carefully monitor supply bottlenecks and wages, Lagarde added further. Market reaction: The dovish tilt did little to provide any respite to the shared currency or lend support to the EUR/USD pair, which remained on the defensive near the 1.1700 mark.

EUR/USD starts the week on the defensive and challenges the monthly lows near 1.1680. Extra losses appear likely in the short-term horizon, with the i

EUR/USD remains on the downside at/below 1.1700.Further downside faces the next support near 1.1660.EUR/USD starts the week on the defensive and challenges the monthly lows near 1.1680. Extra losses appear likely in the short-term horizon, with the immediate target at the 2021 low at 1.1663 (August 20) on a breach of 1.1683. A deeper pullback should expose the September 2020 low at 1.1612 followed by the November 2020 low in the 1.1600 neighbourhood. In the meantime, the near-term outlook for EUR/USD is seen on the negative side while below the key 200-day SMA, today at 1.1975. EUR/USD daily chart  

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the latest inflation figures in the Malaysian economy. Key Takeaways “Headl

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the latest inflation figures in the Malaysian economy. Key Takeaways “Headline inflation eased further to a 5-month low of 2.0% y/y in Aug (Jul: +2.2% y/y). This came in lower than our estimate (2.1%) and Bloomberg consensus (2.2%). It was a broad-based moderation, led by food, transport (particularly air flight), housing, utilities & other fuels (i.e. housing rental), and miscellaneous goods & services (especially personal effects) segments.” “We expect inflation to remain stable and hover around its long-term 20-year average level of 2.0% for the rest of 2021 and into 2022… We reiterate our full-year inflation forecasts of 2.5% for 2021 (BNM’s forecast: 2.0%-3.0%) and 2022.”

Adding to his earlier comments, Chicago Fed President Charles Evans noted that the unemployment rate could go below 4% before too long. Key quotes: Th

Adding to his earlier comments, Chicago Fed President Charles Evans noted that the unemployment rate could go below 4% before too long. Key quotes: The unemployment rate could go to 3.5% and be consistent with inflation still struggling to reach 2%. Still, early days to think that recent inflation increases will work their way into inflation expectations. Fed would have probably done what it did with asset purchases even without the new framework. Market reaction: The US Dollar Index held on to its modest intraday gains just below mid-93.00s, or one-month tops and was supported by the ongoing surge in the US Treasury bond yields/prospects for an early Fed rate hike.

DXY continues to regain ground lost during last week and retests the 93.50 area on Monday’s session. Immediate hurdle now emerges at recent peaks just

DXY adds to Friday’s advance and retests the 93.50 area.A move to 2021 high at 93.72 stays in the pipeline.DXY continues to regain ground lost during last week and retests the 93.50 area on Monday’s session. Immediate hurdle now emerges at recent peaks just past 93.50. A move above this level should favour another visit to the 2021 tops above 93.70 (August 20). Further north from here should come the round level at 94.00 ahead of November 2020 high at 94.30. 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 91.50. DXY daily chart  

GBP/USD remains capped at 1.3755/65. Analysts at Credit Suisse look for a retest of key range support at 1.3601/1.3567. Key support stays seen startin

GBP/USD remains capped at 1.3755/65. Analysts at Credit Suisse look for a retest of key range support at 1.3601/1.3567. Key support stays seen starting at 1.3601 and stretching down to 1.3571/67 “Support is seen at 1.3694/90 initially, ahead of 1.3633 and then a retest of key support from the lower end of converging range from late June, seen starting at 1.3601 and stretching down to 1.3571/67.” “An eventual move below 1.3571/67 should resolve the range lower for the completion of a bearish “triangle” continuation pattern. We would then look for a more meaningful decline with support seen initially at 1.3520/15, the December 2019 high, then the ‘neckline’ to the 2019/2020 base at 1.3451/36.” “Big picture, we would see scope for an eventual fall to a cluster of supports including the 38.2% retracement of the entire 2020/2021 bull trend at 1.3189/35.” “Above 1.3755 can see a deeper recovery to the 55-day average and further price resistance at 1.3788/1.3814, but with fresh sellers expected to show here.”  

The GBP/USD pair attracted some dip-buying on the first day of a new trading week and rallied over 50 pips from the daily swing lows, around the 1.366

GBP/USD regained positive traction on Monday and recovered a part of the previous session’s losses.The uptick was sponsored by some cross-driven strength stemming from a fall in the EUR/GBP cross.A goodish pickup in the USD demand might cap the upside near the 1.3710-15 confluence resistance.The GBP/USD pair attracted some dip-buying on the first day of a new trading week and rallied over 50 pips from the daily swing lows, around the 1.3660-55 region. The momentum pushed the pair above the 1.3700 mark, though bulls struggled to capitalize on the move. The intraday uptick lacked any obvious fundamental catalyst and was exclusively sponsored by some cross-driven strength stemming from a sharp decline in the EUR/GBP cross. That said, the emergence of some buying around the US dollar kept a lid on any further gains for the GBP/USD pair. Prospects for an early rate hike by the Fed continued underpinning the USD, which got an additional boost from a fresh leg up in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond shot beyond the 1.50% threshold for the first time since June. The USD maintained its bid tone near one-month tops following the release of mostly better-than-expected US Durable Goods Orders for August. Headline orders rose 1.8% in August and orders excluding transportation items recorded a modest 0.2% growth during the reported month. From a technical perspective, the positive move stalled just ahead of 200-hour SMA, around the 1.3710-15 region. The mentioned area coincides with the 23.6% Fibonacci level of the hawkish BoE-inspired rally from the 1.3600 mark and should now act as a key pivotal point for traders. Meanwhile, oscillators on hourly charts have been gaining some positive traction but are yet to confirm a bullish bias on the daily chart. This further makes it prudent to wait for a sustained move beyond the 1.3710-15 confluence hurdle before positioning for any further gains. This is followed by the post-BoE swing highs, around mid-1.3700s, above which the GBP/USD pair is likely to accelerate the move and aim to reclaim the 1.3800 mark. The next relevant resistance is pegged near the 1.3835-40 region ahead of the 1.3870-75 supply zone. On the flip side, the daily swing lows, around the 1.3660-55 region, now seems to protect the immediate downside. A convincing break below might prompt some technical selling and turn the GBP/USD pair vulnerable to slide back towards challenging the 1.3600 mark, or monthly lows. GBP/USD 1-hour chart Technical levels to watch  

According to the data published by the US Census Bureau revealed this Monday, Durable Goods Orders in the United States increased by 0.7% in August. T

US Durable Goods Orders increased by 1.8% in August from -0.1% previous.The US Dollar Index holds steady near one-month tops, just below mid-93.00s.According to the data published by the US Census Bureau revealed this Monday, Durable Goods Orders in the United States increased by 0.7% in August. This reading was well above market expectations pointing to a 0.5% growth and also marked a notable rebound from the previous month’s reading of -0.1%. Excluding transportation, new orders increased 0.2%, while Excluding defense, orders unexpectedly jumped 2.4% during the reported month, the publication further read. Market reaction This report remained supportive of the bid tone surrounding the US dollar, which was last seen hovering just below mid-93.00s, or one-month tops touched last week.

United States Durable Goods Orders ex Transportation below forecasts (0.5%) in August: Actual (0.2%)

United States Durable Goods Orders ex Defense came in at 2.4%, above expectations (-0.3%) in August

United States Durable Goods Orders came in at 1.8%, above forecasts (0.7%) in August

USD/MYR has likely moved to a consolidative 4.1700/4.2000 range in the short term, commented Quek Ser Leang at UOB Group’s Global Economics & Markets

USD/MYR has likely moved to a consolidative 4.1700/4.2000 range in the short term, commented Quek Ser Leang at UOB Group’s Global Economics & Markets Research. Key Quotes “While USD/MYR rose sharply late last week, it retreated without testing the round-number resistance at 4.2000 (high of 4.1990).” “Shorter-term upward momentum is beginning to wane and this coupled with overbought conditions indicate that USD/MYR is likely to consolidate for this week, expected to be within a 4.1700/4.2000 range.”

The upside momentum in EUR/JPY appears to have run out of steam in the boundaries of the key hurdle at 130.00 the figure on Monday. Further upside nee

EUR/JPY’s recovery falters just ahead of the 130.00 level.Extra gains seen above the short-term resistance line.The upside momentum in EUR/JPY appears to have run out of steam in the boundaries of the key hurdle at 130.00 the figure on Monday. Further upside needs to surpass the key short-term resistance line, today just above 130.00, to open the door to a move to the mid-130.00s in the near term ahead of the 100-day SMA at 130.82. While below the 200-day SMA at 129.63 the outlook for the cross should remain bearish for the time being. EUR/JPY daily chart  

Chicago Fed President Charles Evans crossed the wires in the last hour, saying that the US economy is close to having met the Fed's bar for beginning

Chicago Fed President Charles Evans crossed the wires in the last hour, saying that the US economy is close to having met the Fed's bar for beginning to reduce its bond purchase program. Additional quotes: If job market improvement continues, likely that the bar will be met soon and tapering can begin. A low unemployment rate should not dictate a change in policy rate if the inflation rate has not become undesirable. Inflation to date does not yet satisfy the Fed's overshooting criterion. Think long-run inflation expectations are still likely somewhat below target. The current surge in prices due to supply issues not leaving a worrisome imprint on long-run inflation expectations. Fed should focus on producing sustainable inflation that aligns longer-run inflation expectations with the 2% goal. Market reaction: The remarks remained supportive of the prevalent bullish sentiment surrounding the US dollar and pushed the yield on the benchmark 10-year US government bond closer to the 1.50% threshold.

We continue to view this inflation upswing as largely temporary, said the ECB President Christine Lagarde at the Hearing of the Committee on Economic

We continue to view this inflation upswing as largely temporary, said the ECB President Christine Lagarde at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament. Additional quotes: Inflation could prove weaker than foreseen if economic activity were to be affected by a renewed tightening of restrictions. Seeing limited signs of this risk of stronger price pressures so far. Our baseline scenario continues to foresee inflation remaining below our target over the medium term. There are some factors that could lead to stronger price pressures than are currently expected. It is evident that the economic recovery in the euro area is increasingly advanced. The growth outlook continues to be uncertain and heavily dependent on the evolution of the pandemic. We remain entirely committed to preserving these favourable financing conditions. This is necessary for a robust recovery that will restore inflation to its pre-pandemic level. Market reaction: The remarks undermined the already weaker shared currency. The EUR/USD pair was last seen trading just below the 1.1700 mark, well within the striking distance of monthly lows touched last week.

Monday's US economic docket highlights the release of Durable Goods Orders data for August. The US Census Bureau will publish the monthly report at 12

US durable goods orders overview Monday's US economic docket highlights the release of Durable Goods Orders data for August. The US Census Bureau will publish the monthly report at 12:30 GMT and is expected to show that headline orders rose 0.7% during the reported month. Orders excluding transportation items, which tend to have a broader impact, are anticipated to have increased by 0.5% in August. How could it affect EUR/USD? As Joseph Trevisani, Senior Analyst at FXStreet explains: “According to Fed Chair Jerome Powell, the FOMC members are agreed that the economy has met the criteria for a reduction in bond purchases to begin. Yet, at the Wednesday meeting, the Fed chose caution rather than action. A strong August Durable Goods number, especially in business spending, will help to reassure the governors that the economy is in full recovery. Durable Goods will likely cast their vote for the taper, higher Treasury rates and a higher dollar.” Meanwhile, Yohay Elam, FXStreet's own analyst, provided a brief technical outlook: “Euro/dollar is trading above 1.17 and benefiting from upside momentum on the four-hour chart, a positive development. On the other hand, the currency pair still trades below the 50, 100 and 200 Simple Moving Averages.” Yohay also offered important technical levels to trade the major: “Some resistance awaits at 1.1725, the daily high. It is followed by 1.1745, a line that separated ranges. Further above, 1.1790 and 1.1830 are eyed. Support awaits at 1.17, a swing low from Friday. It is followed by 1.1680, the September low, and 1.1660.” Key Notes   •   US Durable Goods Orders August Preview: Retail Sales have led the way   •   EUR/USD Forecast: Euro set to rise on calm from German elections, Evergrande, data eyed   •   EUR/USD adds to recent losses and drops below 1.1700, looks to Lagarde About US durable goods orders The Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation. The final figure shows the state of US production activity. Generally speaking, a high reading is bullish for the USD.

The sharp move lower in EUR/GBP this morning demonstrates that the dust is still settling after last week’s Bank of England policy meeting. In the vie

The sharp move lower in EUR/GBP this morning demonstrates that the dust is still settling after last week’s Bank of England policy meeting. In the view of economists at Rabobank, the pound could continue to be buffeted by the debate about the possibility of 2022 rate hikes for some time. Strong likelihood that the uncertainty will persist for some time “For some forecasters, the takeaway from last week’s meeting is that the MPC could announce a small rate hike as soon as February. This view has clearly encouraged GBP bulls. Others, including ourselves, expect that the UK economy will be too fragile for the Bank to hike rates before 2023. This view suggests there could be plenty of headwinds in store for the pound in the coming months.” “The initial assessment from Bank staff is that the recent fiscal announcements were likely to be broadly neutral for the growth outlook, as higher spending on health and social care would be funded by an increase in National Insurance Contributions and a rise in dividend tax rates. In our view, these fiscal changes could result in a drop in demand making a rate hike next year unnecessary or worse still a policy mistake. If rates are hiked too early, any initial gains made by the pound would almost certainly be temporary.” “We have a long standing year end forecast of EUR/GBP 0.84. However, given the fiscal headwinds and our view that the BoE will not be able to hike rates until 2023, this could prove overly optimistic for GBP.”    

Mexico Trade Balance s/a, $ registered at $-3.196B, below expectations ($-1.626B) in August

Mexico Trade Balance, $ below expectations ($-1.064B) in August: Actual ($-3.902B)

In opinion of Quek Ser Leang at UOB Group’s Global Economics & Markets Research, USD/IDR faces some consolidation in the near term, likely between 14,

In opinion of Quek Ser Leang at UOB Group’s Global Economics & Markets Research, USD/IDR faces some consolidation in the near term, likely between 14,220 and 14,280. Key Quotes “USD/IDR traded sideways and within relatively narrow ranges last week. Momentum indicators are mostly neutral and further quiet trading would not be surprising. Expected range for this week, 14,220/14,280.”

Julia Goh, Senior Economist at UOB Group, and Economist Loke Siew Ting, reviews the latest BSP event. Key Takeaways “As expected, Bangko Sentral ng Pi

Julia Goh, Senior Economist at UOB Group, and Economist Loke Siew Ting, reviews the latest BSP event. Key Takeaways “As expected, Bangko Sentral ng Pilipinas (BSP) continued to retain its accommodative monetary policy stance…  The central bank kept the overnight reverse repurchase rate unchanged at 2.00% for the seventh straight meeting. Likewise, both the overnight deposit rate and lending rate were also left untouched at 1.50% and 2.50% respectively.” “In today’s monetary policy statement (MPS), the Monetary Board (MB) acknowledged upside risks to the nation’s inflation outlook over the next few months… BSP projects the nation’s headline inflation to stay above its 2.0%-4.0% target range and hover near 5% levels up to Oct, before tapering off towards the upper bound of its target range from Nov onwards and back within target range in 2022-2023.” “Regarding the growth prospects, BSP continued to stress that the recovery will still hinge on timely measures to prevent deeper negative effects on the Philippine economy. The acceleration of the government’s vaccination program and a recalibration of existing quarantine protocols will be crucial in upholding economic activity while safeguarding public health and welfare.” “Also, the latest MPS did not signal any potential rate change in either direction even though the US Fed has effectively issued the much-awaited tapering signal and a more aggressive rate hike timeline starting 2022 (details in link). Hence, we stick to our view that BSP will remain on hold until mid-2022.”

The global recovery has lost momentum, and is facing three key headwinds: the spread of the Delta variant, persistent supply chain bottlenecks, and th

The global recovery has lost momentum, and is facing three key headwinds: the spread of the Delta variant, persistent supply chain bottlenecks, and the unwind of government support. But despite the headwinds, economists at ABN Amro expect growth to remain above trend, with a services recovery that still has a long way to go. The outlook for the global economy remains strong “We continue to expect above trend growth to continue well into 2022, and after the current soft patch we expect the recovery to regain some momentum next year.” “While goods consumption is due for a healthy correction, the services recovery has a long way to go before consumption returns to the pre-pandemic trend. The passing of the Delta wave is likely to give the services sector – which makes up the bulk of private consumption – a renewed boost.”  “Growth will be helped by higher government investment, with Biden’s infrastructure spending plans in the US likely to start kicking in, and with the Recovery Fund in the eurozone starting to disburse to member states.”  “While supply bottlenecks have proven more persistent than expected, they are still likely to ease to some extent in 2022, and this should give a new tailwind to the recovery, given the likely significant pent-up investment demand.” “The normalisation of labour markets should also aid the recovery, and by the end of the year many economies should be back near pre-pandemic levels of employment.”  

USD/ZAR continues to have the August peak at 15.3950 in its sights while remaining above 14.5682, Axel Rudolph, Senior FICC Technical Analyst at Comme

USD/ZAR continues to have the August peak at 15.3950 in its sights while remaining above 14.5682, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. August high is seen at 15.3950 “USD/ZAR’s steep ascent from its current September low at 14.0630 has now taken it above the July high at 14.9972 with the August peak at 15.3950 being next in line. This will be the case while the September 23 low at 14.5682 holds.”  “Further up the September 2018 and January 2021 highs can be spotted at 15.6645/6945.” “Minor support below 14.5682 is seen at the 14.4027 June 21 high. Much further down and below the 14.0206/13.9522 support area the June trough can be spotted at 13.4066.”  

As Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes, the USD/RUB pair slides back towards its current September low at 72.24 below wh

As Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes, the USD/RUB pair slides back towards its current September low at 72.24 below which sits the June trough at 71.55. Russian rouble looks solid “If USD/RUB were to be slipped through the current September low at 72.24 on a daily chart closing basis, the June trough at 71.55 would be back in sight, now that last week’s attempt of a rally failed at the current September high at 73.62.” “The current September high at 73.62 and the six month resistance line at 73.70 would need to be exceeded for the 200-day moving average at 74.09 to be back in play. Above it the August high can be spotted at 74.59. Further resistance can be seen between the 2020-2021 resistance line and the July high at 74.82/75.36.”  “A daily chart close above 75.36 is needed to reassert a bullish bias for a challenge of resistance seen between the mid-December and January as well as February highs at 76.06/49 to ensue.”  

USD/TRY’s advance above the previous all-time high at 8.8057 has so far taken it to its new all-time high at 8.8999. Axel Rudolph, Senior FICC Technic

USD/TRY’s advance above the previous all-time high at 8.8057 has so far taken it to its new all-time high at 8.8999. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank , expects the pair to hit the 9.00 level. 2020-2021 resistance line at 8.9009 caps at present “USD/TRY is currently being capped by the 2020-2021 resistance line at 8.9009 but once bettered, the psychological 9.0000 mark and a daily 0.1 x 3 vertical Point & Figure target at 9.1000 will be targeted next.” “Minor support below the 8.7267/8.6824 August and September 20 high is seen between the breached four month resistance line and the 55-day moving average at 8.8618/8.5088.”  “Key support remains to be seen between the June to current September lows at 8.2925/2605. Support below the 8.2605 June low comes in at the 8.2056 May low with further support being seen at the 8.1300 late April low.”  

The USD/JPY pair shot to the highest level since July 5 during the first half of the European session, with bulls now eyeing a sustained move beyond t

USD/JPY attracted some dip-buying on Monday and turned positive for the fourth straight day.The risk-on mood continued weighing on the safe-haven JPY and extended support to the pair.A modest pickup in the USD demand provided an additional boost and remained supportive.The USD/JPY pair shot to the highest level since July 5 during the first half of the European session, with bulls now eyeing a sustained move beyond the 111.00 mark. Following an early dip to the 110.55-50 region, the USD/JPY pair caught some fresh bids on the first day of a new trading week and built on last week's solid rebound from the 109.10 support area. This marked the fourth successive day of a positive move and was sponsored by a combination of factors. The prevalent risk-on mood – as depicted by an extension of a rally in the equity markets – undermined the safe-haven Japanese yen. This, along with a goodish pickup in the US dollar demand, provided and an additional boost to the USD/JPY pair and remained supportive of the ongoing bullish trajectory. The USD remained well supported by prospects for an early interest rate hike by the Fed. It is worth recalling that the so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. This, to a larger extent, helped offset a modest pullback in the US Treasury bond yields. Apart from this, the positive momentum could further be attributed to some follow-through technical buying after last week's sustained break through the 110.25-30 supply zone. A subsequent move beyond the previous monthly highs and the 111.00 mark now seems to have set the stage for further gains. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data. This, along with scheduled speeches by a slew of influential FOMC members, might influence the USD price dynamics and produce some trading opportunities around the USD/JPY pair. Technical levels to watch  

Quek Ser Leang at UOB Group’s Global Economics & Markets Research suggests USD/THB is likely to navigate within the 33.10-33.60 range for the time bei

Quek Ser Leang at UOB Group’s Global Economics & Markets Research suggests USD/THB is likely to navigate within the 33.10-33.60 range for the time being. Key Quotes “USD/THB popped to a high of 33.60 last week before pulling back sharply. Upward momentum is beginning to wane and this coupled with overbought conditions indicate that USD/THB is unlikely to strengthen much further.” “For this week, USD/THB is likely to trade between 33.10 and 33.60. Looking ahead, there is room for USD/THB to strengthen further and only a breach of the rising trend-line support (currently at 33.03) would indicate that the current upward pressure has eased.”

The selling pressure around the single currency remains well in place and now drags EUR/USD to fresh lows near 1.1680 on Monday. EUR/USD looks to doll

EUR/USD trades on the defensive below the 1.1700 level.German 10-year yields trade closer to -0.20%, last seen in July.ECB’s C.Lagarde speaks later in the European afternoon.The selling pressure around the single currency remains well in place and now drags EUR/USD to fresh lows near 1.1680 on Monday. EUR/USD looks to dollar, ECB EUR/USD loses ground for the second session in a row and re-visits the sub-1.1700 region at the beginning of the week. The firm note in the greenback keeps putting the pair and the risk-associated galaxy under extra pressure, all against the backdrop of the intense selloff in the global bond markets, in particularly following the FOMC event and the Powell’s press conference last Wednesday. No impact on the FX space of the German elections on Sunday, which will likely see protracted negotiations between the winner party, the SPD, the Greens and the liberal FDP party in order to form a coalition government. The single currency derives extra downside pressure from Friday’s lower-than-expected Business Climate in Germany for the month of September, as per the IFO survey. This result adds to previous retracements seen in the flash PMIs and Economic Sentiment, among others, almost confirming the loss of momentum in the economic recovery. In the domestic docket, the ECB’s M3 Money Supply expanded 7.9% in the year to August and Private Sector Loans rose at an annualized 4.2%. Additionally, Chairwoman C.Lagarde and Board member F.Panetta are due to speak. Across the pond, Durable Goods Orders will take centre stage followed by the Dallas Fed Manufacturing Index and Fed-speakers. What to look for around EUR EUR/USD remains under pressure and puts the 1.1700 level once again to the test at the beginning of the week. The firm sentiment surrounding the dollar is expected to persist for the time being and particularly now that the Committee sees higher rates in 2022 and the QE tapering process kicking in “soon”. In the euro region, the loss of momentum in the recovery, as per some weakness seen in key fundamentals, continues to undermine the mood around the shared currency.Key events in the euro area this week: ECB’s Lagarde speech (Monday) – ECB Forum in Sintra, Germany’s GfK Consumer Confidence, ECB’s Lagarde speech (Tuesday) – ECB Forum in Sintra, final Consumer Confidence, ECB’s Lagarde speech (Wednesday) – German labour market report, German September flash inflation figures (Thursday) – German Retail Sales, final August PMIs, EMU preliminary inflation figures (Friday).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. 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 0.18% at 1.1698 and faces the next up barrier at 1.1755 (weekly high Sep.22) seconded by 1.1784 (55-day SMA) and finally 1.1845 (weekly high Sep.14). On the other hand, a break below 1.1683 (monthly low Sep.23) would target 1.1663 (2021 low Aug.20) en route to 1.1602 (monthly low Nov.4 2020).

In its latest statement released on Monday, the People’s Bank of China (PBOC) reiterated that they will make prudent monetary policy flexible, targete

In its latest statement released on Monday, the People’s Bank of China (PBOC) reiterated that they will make prudent monetary policy flexible, targeted and appropriate. Additional comments “Will keep liquidity reasonably ample.” “Will make credit growth more stable.” “Will safeguard legitimate rights and interests of housing consumers.”

The UK Environment Minister George Eustice said in a statement on Monday that there is no shortage of petrol. He added that the “most important thing

The UK Environment Minister George Eustice said in a statement on Monday that there is no shortage of petrol. He added that the “most important thing is for people to buy petrol as usual.” His comments come as the fuel crisis in the UK aggravates, with the Petrol Retailers Association (PRA) having warned that as many as two-thirds of its membership of nearly 5,500 independent outlets are out of fuel, with the rest of them "partly dry and running out soon".    more to come ...

USD/TRY finds stiff resistance at $8.90 and recedes from near-record tops, pausing the three-day uptrend this Monday. The Turkish lira crumbled last w

USD/TRY sits at record highs after last week’s CBRT surprise rate cut.Price could pull back amid overbought conditions on the daily chart.Impending bull cross suggests buying the dips for USD/TRY traders. USD/TRY finds stiff resistance at $8.90 and recedes from near-record tops, pausing the three-day uptrend this Monday. The Turkish lira crumbled last week, falling to the lowest levels ever posted on record after the Central Bank of the Republic of Turkey (CBRT) unexpectedly cut its benchmark interest rate by 100 basis points to 18% on Thursday. Markets view this surprise as negative, as the unexpected rate cut underscores the Turkish central bank’s fragile credibility, which continues to weigh on the lira. However, the risk-on mood-led broad US dollar weakness is seen saving the day for lira optimists for the time being. At the time of writing, USD/TRY trades almost unchanged on the day at $8.86, having recorded all-time highs at $8.8968 on Friday. From a near-term technical perspective, USD/TRY appears to take a breather amid overbought conditions showcased by the daily Relative Strength Index (RSI). However, any dip in the USD/TRY price could be seen as a good buying opportunity, suggested by an impending bull cross, which if materialized could signal buying resurgence. The 21-Daily Moving Average (DMA) has cut through the 50-DMA for the upside but traders await confirmation on a daily closing basis. USD/TRY: Daily chart On the upside, the 9.00 threshold needs to be cleared to head towards the 9.50 psychological level. Meanwhile, any retracement could see initial demand emerging at Friday’s low of 8.76. The next downside target is seen at around 8.60, the round number.

The emergence of heavy selling around the shared currency dragged the EUR/GBP cross to one-week lows, around the 0.8530-25 region during the first hal

EUR/GBP witnessed aggressive selling on Monday and dropped to one-week lows.Tight German election results prompted some selling around the shared currency.The fuel crisis in the UK could weigh on the sterling and limit losses for the cross.The emergence of heavy selling around the shared currency dragged the EUR/GBP cross to one-week lows, around the 0.8530-25 region during the first half of the European session. Following an early uptick to the 0.8575-80 region, the EUR/GBP cross witnessed aggressive selling on Monday and extended last week's retracement slide from the 0.8610-15 region, or monthly tops. The centre-left Social Democrats (SPD) registered a narrow victory over incumbent Chancellor Angela Merkel’s party in a closely contested German election on Sunday. The tightness of the result means that negotiations on coalition-building are likely to be complex and time-consuming, which, in turn, took its toll on the common currency. Apart from this, a goodish pickup in demand for the British pound turned out to be another factor that contributed to the heavily offered tone surrounding the EUR/GBP cross. That said, increasing signs of the fuel crisis in the United Kingdom might hold the GBP bulls from placing aggressive bets. In fact, the Association of petroleum retailers has said that 50-90% of its members reported having run out of fuel. Apart from this, a goodish pickup in demand for the US dollar might further collaborate to cap gains for the sterling and lend some support to the cross. Hence, any subsequent slide is more likely to find decent support and remain limited near the key 0.8500 psychological mark amid absent relevant market moving economic releases. Hence, it will be prudent to wait for a sustained break below the mentioned handle before positioning for any further depreciating move. Market participants now look forward to ECB President Christine Lagarde's speech for a fresh impetus. Later during the US session, comments by the Bank of England Governor Andrew Bailey might influence the GBP and also produce some short-term trading opportunities around the EUR/GBP cross. Technical levels to watch  

Last week the pound was the second worst performing currency after the yen. The latest developments are creating a more negative combination of weaker

Last week the pound was the second worst performing currency after the yen. The latest developments are creating a more negative combination of weaker growth and higher inflation in the UK which economists at MUFG Bank believe is a bad mix for pound performance.  UK supply side concerns set to continue “The recent underperformance of the pound can be partly explained by less favourable market conditions that have turned more risk averse over the last couple of weeks reflecting heightened concerns over downside risks to growth in China and globally.” “The pound’s failure recently to track higher UK yields could reflect concern that tightening policy so soon into the COVID-19 recovery is an unfavourable development for the UK economy. The BoE is clearly starting to put more weight on dampening upside inflation risks than continuing to support the recovery.” “Recent economic data has already shown a loss of growth momentum over the summer, and worsening supply side problems strongly suggest that growth could slow further heading into the winter.” “We expect cable to fall further especially once support at the 1.3600-level is broken.”    

In August, EUR/CHF was approaching 1.07, but lately the pair has moved higher and was briefly above 1.09. Although economists at Danske Bank have slig

In August, EUR/CHF was approaching 1.07, but lately the pair has moved higher and was briefly above 1.09. Although economists at Danske Bank have slightly downgraded their forecasts, they still expect to see EUR/CHF at 1.11 in 12 months.  See: EUR/CHF to head back to the 1.09 mark on high eurozone CPI – ING Lower US T-yields to lift EUR/CHF “We have revised down our EUR/CHF forecasts profile slightly but overall we still see a case for the cross moving higher.” “We still expect US 10-year Treasury yields will move lower over the coming year targeting 2.0% in 12M, which should lift EUR/CHF. We still forecast EUR/CHF will trade at 1.11 in 12M.” “The key joker for the pair is if global macro becomes so good in Europe that markets start talking about ECB rate hikes. Today, such a scenario is not in play. A setback in risk sentiment is another joker.”  

The euro has been little moved as widely expected by the release of the results from yesterday’s German election. Complicated talks to form governmen

The euro has been little moved as widely expected by the release of the results from yesterday’s German election. Complicated talks to form government are set to last for several months but the euro is expected to stay unnerved, in the view of strategists at MUFG Bank The race to succeed Chancellor Angela Merkel has resulted in a fragmented parliament “The wafer-thin margin of victory for the SPD creates even more uncertainty over the likely formation of the next government and leaves an array of potential coalition options still on the table. Coalitions talks are expected to take weeks and possibly months. The continued uncertainty is one reason why there has been limited euro reaction to the initial election results.”  “The close results further reinforce the need for political parties to compromise to form the next government. It most likely favours only a modest shift in policy direction in Germany and thereby more limited impact on the performance of the euro.”

The Federal Reserve’s statements suggest that it will reduce the size of its asset purchases from the end of 2021; those from the European Central Ban

The Federal Reserve’s statements suggest that it will reduce the size of its asset purchases from the end of 2021; those from the European Central Bank suggest that it will reduce them in 2022. If, in late 2021 and in 2022, there is a slowdown in growth and significant disinflation then it will be difficult for the Fed and the ECB to justify tapering, analysts at Natixis report. The fresh COVID-19 wave in the US from summer 2021 “The first obstacle to tapering concerns the US in particular: the rising number of COVID-19 cases due to a wave of the Delta variant, which is weakening the economy: declining production prospects, household confidence, job creation.” The risk of a growth slowdown in late 2021 and in 2022 “Growth at the end of 2021 and in 2022 may be slowed by the likely reduction in fiscal deficits between 2021 and 2022, the fall in real wages in 2021 and commodity supply bottlenecks, which are holding back growth in several sectors.” Disinflation, which could be significant between 2021 and 2022 “The central banks are forecasting significant disinflation between 2021 and 2022, but it could even be more pronounced, given the absence of a rise in unit labour costs and a change of the sign of the base effect of commodity prices, which, after having risen significantly between 2020 and 2021, will fall (even if only slightly) between 2021 and 2022.” “As has been all but announced, especially in the United States, the solution may be a partial and conditional tapering of securities purchases.”  

USD/CNH now looks to extend the consolidative mood within the 6.4350-6.4880 range in the next weeks, commented FX Strategists at UOB Group. Key Quotes

USD/CNH now looks to extend the consolidative mood within the 6.4350-6.4880 range in the next weeks, commented FX Strategists at UOB Group. Key Quotes 24-hour view: “USD traded between 6.4593 and 6.4730 last Friday, narrower than our expected consolidation range of 6.4500/6.4730. The quiet price actions offer no fresh clues and further consolidation appears likely. Expected range for today, 6.4520/6.4700.” Next 1-3 weeks: “There is not much to add to our update from last Friday (24 Sep, spot at 6.4610). As highlighted, USD is still in a consolidation phase and could trade between 6.4350 and 6.4880 for a period of time.”

The greenback, when tracked by the US Dollar Index (DXY), starts the week on the same upbeat mood that finished the last one and re-visits the 9240/50

DXY picks up pace and adds to Friday’s gains near 93.40.US 10-year yields pushes higher and approaches 1.47%.Fedspeak, Durable Goods Orders, Dallas Fed Index next on tap.The greenback, when tracked by the US Dollar Index (DXY), starts the week on the same upbeat mood that finished the last one and re-visits the 9240/50 band on Monday. US Dollar Index looks to data, Fedspeak, yields The index advances for the second session in a row on Monday and approaches the 93.50 area on the back of higher yields and broad-based softer note in the risk-associated universe. Indeed, yields of the US 10-year benchmark note pushe higher and gyrate around the 1.47% level, area last traded in late June. In the short-end of the curve, yields of the 2-year note climb to the 0.28% zone, last observed in April 2020. Furthermore, the renewed and moderate pick-up in US yields follow the hawkish tone from Chief Powell at the latest FOMC event (Wednesday). In the same line, Cleveland Fed L.Mester (2022 voter, hawkish) advocated on Friday for the start of the tapering process in November and finish in mid-2022. Later in the US data space, Durable Goods Orders for the month of August are due seconded by the Dallas Fed Manufacturing Index. In addition, speeches by NY Fed J.Williams (permanent voter, centrist), FOMC Governor L.Brainard (permanent voter, dovish) and Chicago Fed C.Evans (voter, centrist) will also be iin the limelight throughout the session. What to look for around USD The index flirts with recent tops in the 93.40/50 band, always with the attention on higher yields. The improved mood in the buck follows the unexpected hawkish message from Chief Powell while market participants continue to pencil in an interest rate hike by end of 2022. Positive results from US fundamentals coupled with alleviating concerns regarding the progress of the Delta variant should also remain supportive of a stronger dollar in the near/medium term.Key events in the US this week: Durable Goods Orders (Monday) – Advanced Goods Trade Balance, CB Consumer Confidence, Powell’s Testimony (Tuesday) – Powell’s speech (Wednesday) – Final Q2 GDP, Initial Claims (Thursday) – PCE, Final Manufacturing PMI, ISM Manufacturing, Personal Income/Spending, final Consumer Sentiment (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. Debt ceiling debate. Geopolitical risks stemming from Afghanistan. US Dollar Index relevant levels Now, the index is gaining 0.17% at 93.43 and a break above 93.52 (monthly high Sep.23) 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 92.98 (weekly low Sep.23) seconded by 92.73 (55-day SMA) and finally 91.94 (monthly Sep.3).  

The USD/CAD pair managed to recover over 35 pips from near two-week lows and was last seen hovering near the top end of its daily trading range, aroun

A modest pickup in the USD demand assisted USD/CAD to bounce off the 1.2600 neighbourhood.Bullish oil prices continued underpinning the loonie and might keep a lid on any strong move up.Investors eye the US Durable Goods Orders and speeches by FOMC members for a fresh impetus.The USD/CAD pair managed to recover over 35 pips from near two-week lows and was last seen hovering near the top end of its daily trading range, around mid-1.2600s. The pair extended its recent retracement slide from the vicinity of the 1.2900 mark and dropped to the 1.2600 neighbourhood during the early part of the trading action on Monday. An extension of the recent bullish run in crude oil prices to the highest level since July continued underpinning the commodity-linked loonie and exerted some pressure on the USD/CAD pair. However, a modest pickup in the US dollar demand helped limit any further losses, rather assisted the pair to attract some dip-buying at lower levels. Worries about potential risks from the debt crisis at China Evergrande Group resurfaced after a deadline for paying $83.5 million in bond interest passed without any remarks from the company. Apart from this, prospects for an early rate hike by the Fed continued acting as a tailwind for the greenback. It is worth recalling that the Fed's so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. This helped offset a pullback in the US Treasury bond yields and revived the USD demand. It, however, remains to be seen if the USD/CAD pair is able to capitalize on the move or meet with some fresh supply at higher levels. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders later during the early North American session. Apart from this, the US bond yields and speeches by a slew of influential FOMC members will influence the USD. Traders might further take cues from oil price dynamics to grab some short-term opportunities around the USD/CAD pair. Technical levels to watch  

The GBP/USD pair shot to fresh daily tops during the early European session, though lacked any follow-through and remained below the 1.3700 mark. The

GBP/USD attracted some dip-buying on Monday amid a subdued USD price action.The risk-on mood, retreating US bond yields dented demand for the safe-haven USD.Bets for an early Fed rate hike helped limit the USD slide and capped gains for the pair.The GBP/USD pair shot to fresh daily tops during the early European session, though lacked any follow-through and remained below the 1.3700 mark. The pair attracted some dip-buying on the first day of a new trading week and rallied over 35 pips from the daily swing lows, near the 1.3660-55 region. The uptick allowed the GBP/USD pair to recover a part of Friday's losses and was sponsored by a subdued US dollar price action. The prevalent risk-on mood – as depicted by an extension of the bullish run in the equity markets – was seen as a key factor that dented demand for the safe-haven USD. Apart from this, a modest pullback in the US Treasury bond yields further acted as a headwind for the greenback. That said, worries about potential risks from the debt crisis at China Evergrande Group and prospects for an early rate hike by the Fed helped limit the USD losses. It is worth recalling that the Fed's so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. This, in turn, kept a lid on any meaningful gains for the GBP/USD pair, warranting caution for bullish traders. In the absence of any relevant market moving economic releases from the UK, it will be prudent to wait for some follow-through buying before positioning for any further gains. Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data. This, along with scheduled speeches by a slew of influential FOMC members, will influence the USD price dynamics and provide some trading impetus to the GBP/USD pair. Later during the US session, traders will further take cues from the Bank of England Governor Andrew Bailey's speech for some meaningful trading opportunities around the GBP/USD pair. Technical levels to watch  

European Monetary Union M3 Money Supply (3m) declined to 7.9% in August from previous 8.1%

Italy Trade Balance non-EU down to €1.58B in August from previous €6.85B

European Monetary Union Private Loans (YoY) came in at 4.2% below forecasts (4.3%) in August

European Monetary Union M3 Money Supply (YoY) above expectations (7.8%) in August: Actual (7.9%)

GBP/USD has been under pressure as a petrol shortage threatens the UK. However, the Bank of England’s hawkishness, optimism about Evergrande and US da

GBP/USD has been under pressure as a petrol shortage threatens the UK. However, the Bank of England’s hawkishness, optimism about Evergrande and US data could turn the pair around, according to FXStreet’s Analyst Yohay Elam. The pound has room to recover “The UK Petrol Retailers Association has said 50-90% of stations are running dry in some areas, and the crisis may derail the recovery. The longer the crisis lasts, the greater the pressure on the pound.” “The ‘Old Lady’ hinted that interest rates could rise even before the BoE completes its bond-buying scheme. Moreover, two members voted to cut short debt purchases already now after consumer prices rose more than estimates. Annual inflation hit 3.2% in August.”  “The greenback has room to fall as the Evergande crisis seems to be under control. While China's behemoth construction company is set to miss more debt payments, investors are less worried about the risks of contagion.” “US Durable Goods Orders are due later on Monday and are projected to show an increase in investment. While employment statistics disappointed last month, retail sales were robust. Upbeat figures could weigh on the safe-haven dollar, especially as the Fed decision is already out of the way.”  

The upside momentum in USD/JPY could push the pair to the 111.00 area in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “

The upside momentum in USD/JPY could push the pair to the 111.00 area in the next weeks, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted last Friday that ‘the USD rally has scope to extend to 110.55 but is unlikely to threaten the next resistance at 110.80’. Our view for USD to strengthen was not wrong even though the advance came close to taking out 110.80 (high of 110.79). In view of the strong momentum, further USD strength is not ruled but overbought conditions indicate that a break of 111.00 is unlikely. On the downside, a break of 110.35 (minor support is at 110.50) would indicate that the current upward pressure has eased.” Next 1-3 weeks: “We turned positive USD last Friday (24 Sep, spot at 110.30) even though we held the view that that the major resistance at 110.80 may not come into the picture so soon. We did not anticipate the rapid manner by which USD approaches 110.80 as it rose to 110.79 during NY session. While overbought, the current USD strength could extend to 111.00, with lower odds for extension 111.20. The positive outlook is deemed intact as long as 109.95 (‘strong support’ level was at 109.65 last Friday) is not breached.”

According to advanced prints from CME Group for natural gas futures markets, open interest shrank by around 7.4K contracts after two daily builds in a

According to advanced prints from CME Group for natural gas futures markets, open interest shrank by around 7.4K contracts after two daily builds in a row. In the same line, volume dropped by around 132.1K contracts, extending the choppiness seen as of late. Natural Gas now targets the YTD highs Prices of natural gas extended the bounce off the $4.70 area last Friday against the backdrop of shrinking open interest and volume. That said, extra gains appear unlikely in the very near term. This view is supported by the commodity approaching the overbought territory, as per the daily RSI. In the longer run, natural gas is expected to re-visit the 2021 tops above $5.60 per MMBtu.

Olaf Scholz, the Social Democratic Party (SPD) Chancellor candidate to succeed Angela Merkel at the helm of Europe’s largest economy said that he wins

Olaf Scholz, the Social Democratic Party (SPD) Chancellor candidate to succeed Angela Merkel at the helm of Europe’s largest economy said that he wins the election and has the mandate to form a government with Greens and Free Democratic Party (FDP). Additional quotes “Coalition agreement is possible between SPD, Greens, FDP.” “Also signaled CDU/CSU should go into opposition.”

As we edge toward a post-pandemic world, many investors are looking for ways to prepare for future uncertainties. A solution for some may include inve

As we edge toward a post-pandemic world, many investors are looking for ways to prepare for future uncertainties. A solution for some may include investing in precious metals, such as gold and silver. Here are five factors to consider when deciding to invest in gold or silver, economists at Morgan Stanley report. Silver may be more tied to the global economy “Half of all silver is used in heavy industry and high technology. As a result, silver is more sensitive to economic changes than gold, which has limited uses beyond jewelry and investment purposes. When economies take off, demand tends to grow for silver.” Silver may be a better inflation hedge “Historically, both gold and silver have made solid gains when US inflation is rising. Both metals are valued in US dollars, so when the dollar falls in value, gold and silver typically rise because they become less expensive to buy using other currencies. Given greater industrial demand, silver tends to rise more than gold with rising inflation and a falling dollar.” Silver is more volatile than gold “The volatility in silver prices can be two to three times greater than that of gold on a given day. While traders may benefit, such volatility can be challenging when managing portfolio risk.” Gold has been a more powerful diversifier than silver “Silver can be considered a good portfolio diversifier with moderately weak positive correlation to stocks, bonds and commodities. However, gold is considered a more powerful diversifier. It has been consistently uncorrelated to stocks and has had very low correlations with other major asset classes – and with good reason: Unlike silver and industrial base metals, gold is less affected by economic declines because its industrial uses are fairly limited.” Silver is currently cheaper than gold “Silver is much cheaper than gold, making it more accessible to small retail investors. For those who are just starting to build their portfolios, the cost of silver may make it a better investment choice.”  

AUD/USD is now expected to navigate within the 0.7220-0.7330 range for the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view:

AUD/USD is now expected to navigate within the 0.7220-0.7330 range for the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectations for AUD to ‘strengthen further’ was incorrect as it dropped to 0.7237 before closing on a soft note at 0.7257 (-0.54%).The rapid drop appears to be running ahead of itself and AUD is unlikely to weaken further. For today, AUD is more likely to trade sideways between 0.7245 and 0.7295.” Next 1-3 weeks: “Last Friday (24 Sep, spot at 0.7310), we indicated that the recent weak phase in AUD has ended and we expect the rebound in AUD to extend to 0.7360. Our expectation was proven wrong quickly as AUD dropped and cracked our ‘strong support’ level at 0.7245 (low of 0.7237). The price actions suggest that AUD is in a broad consolidation range and is likely to trade between 0.7220 and 0.7330 for now.”

CME Group’s flash data for crude oil futures markets noted traders added around 13.6K contract to their open interest positions on Friday, reaching th

CME Group’s flash data for crude oil futures markets noted traders added around 13.6K contract to their open interest positions on Friday, reaching the third consecutive daily build. Volume, instead, dropped by around 134.3K contracts, partially reversing the previous build. WTI now looks to 2021 highs near $77.00 The rally in crude oil prices remained unchanged on Friday, as the barrel of WTI finally surpassed the key $74.00 mark. Rising open interest coupled with positive price action allows for the continuation of the leg higher and now targets the YTD highs just below the $77.00 mark per barrel (July 6).

EUR/SEK has moved lower but continues to trade in the recent 10.15-10.25 range. With the peak in the global industrial cycle as well as fading support

EUR/SEK has moved lower but continues to trade in the recent 10.15-10.25 range. With the peak in the global industrial cycle as well as fading support from equities, economists at Danske Bank see headwinds for the export-exposed and pro-cyclical Swedish currency. They expect a weakening of SEK in the medium-term and forecast EUR/SEK at 10.50 in 12 months. A laughing dove errs on the side of caution “EUR/SEK remains in an orderly uptrend channel, which we expect will stick in the coming quarters.” “With the peak in the global industrial cycle, we see headwinds for the export-exposed and pro-cyclical Swedish currency. For risk-sensitive currencies like the SEK, slower growth also means fading support from equities.” “The Riksbank made clear that they will err on the side of caution. We deem outright and relative pricing on the Riksbank as being too aggressive. If markets align, relative rates momentum and carry suggest major SEK crosses will move higher.”  “We leave the shor-tend forecast profile unchanged at 10.20 in 1M, 10.20 in 3M, 10.30 in 6M and raise 12M to 10.50 (from 10.40) on the account of a stronger USD.”  

The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses, above mid-110.00s through the early European session.

Lingering concerns about China Evergrande benefitted the safe-haven JPY and capped USD/JPY.Retreating US bond yields kept the USD bulls on the defensive and further acted as a headwind.Rising bets an early Fed rate hike, breakout through the 110.25-30 hurdle favours bullish traders.The USD/JPY pair lacked any firm directional bias and seesawed between tepid gains/minor losses, above mid-110.00s through the early European session. A combination of diverging forces failed to assist the USD/JPY pair to capitalize on last week's positive move, instead led to a subdued/range-bound price action on the first day of a new trading week. Worries about potential risks from the debt crisis at China Evergrande Group resurfaced after a deadline for paying $83.5 million in bond interest passed without any remarks from the company. This, in turn, benefitted the safe-haven Japanese yen and acted as a headwind for the major. Bearish traders further took cues from a modest pullback in the US Treasury bond yields, which kept the US dollar bulls on the defensive and contributed to cap the USD/JPY pair. That said, the prevalent risk-on mood, along with the prospects for an early rate hike by the Fed continued lending some support to the USD and helped limit the downside for the pair. It is worth recalling that the Fed's so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. Even from a technical perspective, Friday's sustained break through the 110.25-30 supply zone and a subsequent strength beyond the previous monthly swing highs favours bullish traders. Some follow-through buying beyond the 110.80 region will reaffirm the constructive outlook and pave the way for an extension of the recent strong rebound from the 109.10 strong horizontal support. Market participants now look forward to the release of the US Durable Goods Orders for a fresh impetus. This, along with the US bond yields and scheduled speeches by a slew of influential FOMC members, might influence the USD price dynamics. Apart from this, the broader market risk sentiment will also be looked upon for some meaningful trading opportunities around the USD/JPY pair. Technical levels to watch  

EUR/JPY last week saw a decent rebound from the 127.94 August low. Downtrend at 130.05 is the initial resistance with the 130.74 expected to be a toug

EUR/JPY last week saw a decent rebound from the 127.94 August low. Downtrend at 130.05 is the initial resistance with the 130.74 expected to be a tougher barrier, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, reports. Below recent lows at 127.94/93 lies the 2020-2021 support line at 127.41 “Rallies will find initial resistance at the 130.05 resistance line. The 130.55/74 July and September highs are likely to act as tough overhead resistance and we would allow for this latter zone to again cap the rally.”  “Directly below recent lows at 127.94/93 lies the 2020-2021 support line at 127.41. A close below here would introduce scope to the 200- week ma at 125.88.”  

After opening the session on a higher note, EUR/GBP loses part of its earlier momentum and hovers in a narrow trade band. At the time of writing, EUR/

EUR/GBP tracks higher on Monday in the European session.    The German election poll attracted investors' attention.EUR/GBP remains subdued following the election outcome.After opening the session on a higher note, EUR/GBP loses part of its earlier momentum and hovers in a narrow trade band.  At the time of writing, EUR/GBP is trading at 0.8571, up 0.12% for the day. The shared currency losses the earlier gains following the outcome of the German elections update. In the latest development Germany’s centre-left Social Democrats (SPD) have marginally won the country’s federal elections, beating the ruling conservative party. The SPD gained 25.7% vote, while the existing conservative CDU/CSU block gathered 24.1%. Earlier in the week,the European Central Bank (ECB) President Christine Lagarde downplayed the inflationary concerns citing  most of the reasons as transitory. Brexit woes continued to pressurise the sterling prospects. The European Union (EU) warned  Britain that triggering a safeguard clause in its Brexit deal governing trade with Northern Ireland (NI) was “not helpful” and the country should pursue solutions as per Reuters. On the economic side, the UK Consumer Confidence fell 5 points to -13, the steepest decline since October 2020. As for now, traders are waiting for the Bank of England’s (BoE) Governor Andrew Bailey Speech, German Gfk Consumer Confidence to gauge market sentiment data. EUR/GBP additional levels  

EUR/CHF is steady after a quarterly Swiss National Bank meeting that was another non-event for FX markets. The eurozone will release Consumer Price In

EUR/CHF is steady after a quarterly Swiss National Bank meeting that was another non-event for FX markets. The eurozone will release Consumer Price Index data on Thursday, and a high reading could drag the EUR/CHF pair back to the 1.09 level, in the view of analysts at ING. Same old SNB, but how much FX did they buy in 2Q? “Suffice to say, the SNB slightly cut growth and raised inflation forecasts, but core policy remains unchanged. It will be one of the last central banks in the world to raise rates.” “This week sees the SNB release details on its FX intervention in 2Q21. These had dropped to just CHF296 M in 1Q. EUR/CHF was naturally bid through most of 2Q meaning that FX intervention will probably be as low – but 3Q will be another matter.” “We have noticed recently that EUR/CHF turned bid when the ECB hawks piped up. Another high Eurozone CPI figure this week could send EUR/CHF back to 1.09.”  

USD/JPY is right at the top of its range. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to break above the

USD/JPY is right at the top of its range. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to break above the 110.85 August high. See: USD/JPY to erode resistance at 110.80 towards the 111.00/20 zone – OCBC USD/JPY to head back into the range 109.10-110.85 on failure at 110.85  “USD/JPY saw a strong rebound last week from the 109.12/07 lows and is very bid in its range.” “The market looks set to tackle the 110.85 August high and above here should trigger gains to the July high at 111.66. This guards the more important 112.23/50 zone, which represents highs since 2019.” “Failure at 110.85 is likely to see the market head back into the range 109.10-110.85.”  

China’s market turmoil is inevitably hitting the kiwi dollar that, albeit to a smaller extent than AUD, also has a high beta to the Chinese sentiment.

China’s market turmoil is inevitably hitting the kiwi dollar that, albeit to a smaller extent than AUD, also has a high beta to the Chinese sentiment. Economists at ING expect the AUD/NZD to slide below the 1.03 level. NZD still looks like a safer bet than AUD in the short-term  “Like in Australia, the data calendar is very quiet in New Zealand, and external factors should continue to dominate NZD price action.” “NZD still looks like a safer bet than AUD in the short-term. An Evergrande default may hit AUD also through the iron ore channel; while the opposite – Evergrande’s situation stabilising, possibly thanks to government support – may see market sentiment improve: here NZD has a more attractive implied yield than AUD and may therefore perform better.” “We expect a break below 1.0300 in AUD/NZD soon.”  

EUR/USD is attempting a tepid bounce from daily lows, but remains well within the trading range so far this Monday, as markets refrain from placing an

EUR/USD wavers in a tight range below 1.1700-1.1730, Lagarde eyed.German election wrangling and weaker US dollar leave the pair in limbo.EUR/USD’s hourly chart shows that downside remains more compelling for now.EUR/USD is attempting a tepid bounce from daily lows, but remains well within the trading range so far this Monday, as markets refrain from placing any fresh bets on the main currency pair after the German election outcome and ahead of the speech by the European Central Bank (ECB) Christine Lagarde. Markets also await the US Durable Goods Orders data for fresh dollar trades, as the risk-on mood appears to keep the USD bulls at bay in early Europe. Receding China Evergrande fears combined with the US infrastructure stimulus optimism has lifted the investors’ sentiments starting out a big week, with Fed Chair Powell’s testimony and the US NFP – the key highlights. Looking at EUR/USD’s one-hour chart, the price is teasing an ascending triangle breakdown, with an hourly candlestick closing below the rising trendline support at 1.1722 to validate the downside breakout. A test of the 1.1700 mark will be inevitable on a triangle breakdown, opening floors for a retest of the multi-week lows near 1.1680. The Relative Strength Index (RSI) is pointing south below the midline, backing the case for further downside. EUR/USD: Hourly chart Alternatively, recapturing of the triangle support now resistance at 1.1722 is critical to attempting a minor pullback towards the horizontal 100-Hourly Moving Average (HMA) at 1.1726. Further up, the mildly bullish 50-HMA at 1.1730 could be challenged by the bullish traders. The 1.1750 psychological level will come into play if the buying pressure intensifies. EUR/USD: Additional levels to consider  

EUR/USD is above 1.17. In the view of FXStreet’s Analyst Yohay Elam, the euro is set to rise as the market mood remains upbeat after the SPD came on t

EUR/USD is above 1.17. In the view of FXStreet’s Analyst Yohay Elam, the euro is set to rise as the market mood remains upbeat after the SPD came on top in Germany's elections and as the Evergrande crisis is moving out of sight. The Evergrande crisis, Fed speakers and Durable Goods Orders are set to move markets “The race to succeed long-serving Chancellor Angela Merkel has resulted in a fragmented parliament with finance minister Olaf Scholz leading the race to inherit the top job. The center-left candidate is moderate. Overall, the results are mostly as expected and provide hope for a euro-positive coalition.” “The safe-haven dollar will likely remain on the back foot as the Evergrande crisis gradually leaves the spotlight. China's second-largest property developer is unlikely to pay all its debt, but would probably squeeze in an orderly fashion.” “Investors feel comfortable with the Federal Reserve's upcoming tapering of bond buys announced last week. Fed members Lael Brainard, Charles Evans and John Williams will likely reiterate messages conveyed last week. Chair Jerome Powell testifies on Tuesday.” “US Durable Goods Orders data for August could rock markets amid mixed economic figures from the world's largest economy. The economic calendar is pointing to an increase, in line with robust retail sales but in contrast to weak jobs data.”  

The AUD/USD pair maintained its bid tone through the early European session, albeit has retreated few pips from daily tops and was last seen hovering

The risk-on mood undermined the safe-haven USD and assisted AUD/USD to regain traction.Hawkish Fed expectations acted as a tailwind for the greenback and capped gains for the pair.Investors now eye US Durable Goods and speeches by FOMC members for a fresh impetus.The AUD/USD pair maintained its bid tone through the early European session, albeit has retreated few pips from daily tops and was last seen hovering near the 0.7270-75 region. The pair managed to gain some positive traction on the first day of a new trading week and reversed a major part of Friday's retracement slide from the 0.7315-20 region. The prevalent risk-on mood undermined the safe-haven US dollar and provided a modest lift to the perceived riskier aussie. However, a combination of factors acted as a tailwind for the greenback and capped any meaningful gains for the AUD/USD pair, at least for the time being. Investors remain worried about risks from the debt crisis at China Evergrande Group, especially after a deadline for paying $83.5 million in bond interest passed without any remarks from the company. Apart from this, prospects for an early rate hike by the Fed should help limit any deeper losses for the greenback. It is worth recalling that the Fed's so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. Meanwhile, the AUD/USD pair, so far, has been struggling to find acceptance, or build on the momentum beyond the 0.7300 mark. This further makes it prudent to wait for a sustained strength beyond the 0.7315-20 region before traders start positioning for any further appreciating move. Market participants now look forward to the release of the US Durable Goods Orders data and speeches by a slew of influential FOMC members for a fresh impetus. Technical levels to watch  

Gold is recovering, changing hands above $1750. But as FXStreet’s Dhwani Mehta notes, technical setup on the 4H chart casts doubt on the bullish poten

Gold is recovering, changing hands above $1750. But as FXStreet’s Dhwani Mehta notes, technical setup on the 4H chart casts doubt on the bullish potential. Focus on central bankers’ speeches, US data “Gold traders refrain from placing fresh long bets on the metal ahead of the critical US Durable Goods data and a slew of central bankers’ speeches due later in the day. The ECB President Christine Lagarde is scheduled for an appearance, followed by the Fedspeak and BoE Governor Andrew Bailey’s speech.” “The bearish 21-Simple Moving Average (SMA) at $1760 is challenging the renewed upside. If gold bulls succeed to find a strong foothold above the latter, then the 50-SMA at $1765 could be immediately probed. A fresh upswing will be initiated on a four-hour candlestick closing above the 50-SMA, opening doors towards the 100-SMA at $1783.”   “Rejection at the 21-SMA hurdle could recall the sellers, targeting the $1750 psychological level initially. The next downside target will be then aligned at six-week troughs of $1738, below which the falling trendline support at $1735 would be put to test.”  

USD/JPY moved through the first resistance at 110.50 before stalling at 110.80. Terence Wu, FX Strategist at OCBC Bank, expects the pair to march forw

USD/JPY moved through the first resistance at 110.50 before stalling at 110.80. Terence Wu, FX Strategist at OCBC Bank, expects the pair to march forward following higher US Treasury yields. USD/JPY flexing against key resistance at 110.80 “With back-end UST yields finally reactive higher, bias may now be higher for the pair.” “110.80 is still the immediate target, with 111.00/20 the next waypoint higher.”  

Gold closed the third straight week in the negative territory. In the view of FXStreet’s Eren Sengezer, XAU/USD remains vulnerable amid hawkish Fed ou

Gold closed the third straight week in the negative territory. In the view of FXStreet’s Eren Sengezer, XAU/USD remains vulnerable amid hawkish Fed outlook. Hawkish FOMC policy outlook, rising US T-bond yields weighed on gold “FOMC Chairman Jerome Powell clarified that the language in the statement meant to flag the bar for taper could be met as soon as the next meeting. Additionally, Powell said that they are planning to conclude the taper around mid-year 2022.” “Investors will keep a close eye on the US T-bond yields' movements and the general risk sentiment. 1.5% aligns as key resistance for the benchmark 10-year US T-bond yield and a break above that level could trigger a rally and pave the way for another leg lower in the yellow metal.” “Static support seems to have formed at $1,740 ahead of $1,730 and $1,720.”  “A daily close above $1,770 (Fibonacci 61.8% retracement of April-June uptrend) could attract buyers and gold could target $1,790 (20-day SMA, 50, day SMA) before $1,800 (psychological level) and $1,805 (200-day SMA).”  

Denmark Retail Sales (YoY): 4% (August) vs previous 4.8%

One-month risk reversal (RR) on USD/CAD, a measure of the spread between call and put prices is up for printing the first monthly shortfall since in f

One-month risk reversal (RR) on USD/CAD, a measure of the spread between call and put prices is up for printing the first monthly shortfall since in five, 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 monthly RR drops to -0.050 by the press time of early Monday. The options market signal justifies the USD/CAD price performance as the Loonie pair prints a five-day downtrend with an intraday loss of 0.22%, around 1.2623 at the latest. Considering the firmer oil prices and risk-on mood weighing down the US dollar, USD/CAD seems to have a further downside to track. However, Fed tapering and a three-month-old ascending support line near 1.2590 could restrict short-term declines of the pair.  Read: USD/CAD drops towards 1.2600 on firmer oil, risk-on mood

WTI prices are in no mood to slow down its previous week's momentum on the first trading day in the initial European trading hours. The supply-chain b

WTI continues to rally following the previous week’s upside momentum.Bulls face resistance near the  multi-top formation around $75.00.Momentum oscillator holds onto the overbought zone with underlying bullish sentiment.WTI prices are in no mood to slow down its previous week's momentum on the first trading day in the initial European trading hours. The supply-chain bottlenecks underpins the demand for the crude oil. At the time of writing, WTI is trading at $74.87, up 1.38% for the day. WTI daily chart On the daily chart, WTI has been in the continuous uptrend after testing the low of $61.79 on August 20. The prices are now facing some pressure near the multiple top formation around $75.00, which makes it a crucial level to trade. If WTI sustained above the intraday high it would retest the all time high of $76.40. The Moving Average Convergence Divergence (MACD) indicator trades in the overbought zone. Any uptick in the MACD could fuel the upside rally toward the $80.00 mark in the coming few sessions. Alternatively, if prices move lower, it would lookout for  $73.09 as the first downside target and then march toward the low made on Thursday at $71.54. Next, the bears would attempt to meet the $70.95 horizontal support level. WTI additional levels  

Commenting on the Japanese economic outlook, Bank of Japan (BOJ) Governor Haruhiko Kuroda said that the recovery will become clearer as the impact of

Commenting on the Japanese economic outlook, Bank of Japan (BOJ) Governor Haruhiko Kuroda said that the recovery will become clearer as the impact of the pandemic subsides. Additional comments Japan's economy remains in severe state but picking up as a trend. Mechanism driving Japan’s economic recovery not broken. Exports, output continue to increase. Consumption likely to rebound ahead with support from pent-up demand. Timing of consumption recovery to depend largely on developments regarding pandemic. Exports, output likely to slow near-term as factory shutdowns in southeast Asia affect Japan manufacturers. Japan prices to rise ahead but pace likely to be moderate. BOJ won't hesitate to take additional easing steps if needed. BOJ must continue focusing on pandemic response as economic uncertainty remains high.

FX option expiries for September 27 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1715-20 457m 1.1750 789m 1.17

FX option expiries for September 27 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1715-20 457m 1.1750 789m 1.1765 450m 1.1800 715m - GBP/USD: GBP amounts         1.3740 454m - USD/JPY: USD amounts          109.85 880m - AUD/USD: AUD amounts 0.7330-40 632m - USD/CAD: USD amounts        1.2700 670m 1.2875 750m

USD/CHF renews intraday high to 0.9260, up 0.14% intraday as European traders brace for Monday’s task. The Swiss currency (CHF) pair jostles with a do

USD/CHF takes the bids to refresh intraday high, extends Friday’s recovery moves.Firmer RSI favor bulls to battles with short-term key hurdle.Three-week-old rising trend line, 100-SMA add to the downside filters.USD/CHF renews intraday high to 0.9260, up 0.14% intraday as European traders brace for Monday’s task. The Swiss currency (CHF) pair jostles with a downward sloping trend line from September 21 while printing a two-day uptrend. Given the upbeat RSI conditions, not overbought, as well as the pair’s sustained trading beyond 100-SMA and a three-week-old rising trend line, USD/CHF is likely to extend the latest recovery beyond the 0.9260 immediate hurdle. Following that, 0.9285 and 0.9310 may entertain the pair buyers before challenging them with a monthly high of 0.9332. Alternatively, pullback moves may aim to retest the support line from early September, near 0.9230, a break of which will direct the USD/CHF sellers towards a 100-SMA level of 0.9218. It should be noted, however, that the pair’s weakness past 100-SMA will target the area near the 0.9190 mark, including multiple levels marked since late August and 61.8% Fibonacci retracement of August 30 to September 20 upside. USD/CHF: Four-hour chart Trend: Further upside expected  

Cable is still seen within the 1.3650-1.3810 rangebound theme for the time being, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Our exp

Cable is still seen within the 1.3650-1.3810 rangebound theme for the time being, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “Our expectation for ‘further GBP strength’ last Friday was incorrect as it dropped to 1.3659 before settling on a soft note at 1.3670 (-0.36%). While downward momentum has not improved by much, the decline has room to dip below 1.3650. That said, a sustained decline below 1.3650 is unlikely (next support at 1.3610). Resistance is at 1.3695 followed by 1.3725.” Next 1-3 weeks: “Last Friday (24 Sep, spot at 1.3730), we highlighted that GBP is in a consolidation phase and is likely to trade between 1.3650 and 1.3810 for a period of time. We did not anticipate the rapid manner by which GBP approaches 1.3650 as it dropped to 1.3659 during NY session. Despite the decline, downward momentum has not improved by much. Looking ahead, GBP has to close below 1.3610 before a sustained decline can be expected.”

Open interest in gold futures markets rose for the third consecutive session on Friday albeit by just 91 contracts in light of preliminary figures fro

Open interest in gold futures markets rose for the third consecutive session on Friday albeit by just 91 contracts in light of preliminary figures from CME Group. On the other hand, volume reversed two daily builds in a row and shrank by around 77.5K contracts. Gold appears supported around $1,740Gold prices bounced off the $1,740 region on Friday amidst a small uptick in open interest, closing the session with decent gains. That said, further upside remains on the card and face an interim hurdle at last week’s peak near $1,790 per ounce troy.

Gold (XAU/USD) floats around $1,760, up 0.50% intraday, during the second consecutive daily upside ahead of Monday’s European session start. In doing

Gold extends Friday’s recovery moves from monthly low.Risk-on mood weighs on US dollar, stimulus, covid headlines entertain optimists.China’s Evergrande, German Election, US Durable Goods Orders eyed for fresh impulse.Gold Weekly Forecast: XAU/USD remains vulnerable amid hawkish Fed outlookGold (XAU/USD) floats around $1,760, up 0.50% intraday, during the second consecutive daily upside ahead of Monday’s European session start. In doing so, the metal cheers US dollar weakness amid the risk-on mood. However, the recent consolidation in the market sentiment seems to poke the buyers by the press time. Market optimism takes clues from US stimulus and welcome covid headlines from Japan, India and Australia. Also, the China-Canada prisoner swap recently eased the Sino-American tension by allowing Huawei founder’s daughter, also the firm’s Chief Financial Officer (CFO) to go home. It’s worth noting that the absence of Evergrande news and a bit of silence over the Fed tapering concerns add to the brighter risk appetite. Meanwhile, China’s power cuts and energy crisis in the UK weigh on the sentiment. Further, fears that the Eurozone’s powerhouse will be in political limbo, due to the German election, challenge the risk-on mood. Amid these plays, the US 10-year Treasury yields pull back from a three-month high whereas the S&P 500 Futures rise 0.38% intraday by the press time. Further, the US Dollar Index (DXY) snaps a three-week uptrend with a 0.05% intraday loss, recently easing to 93.20. Given the major attention over the risk catalysts, today’s US Durable Goods Orders may fall short of entertaining the gold traders. However, optimistic forecasts for August can renew Fed’s tapering concerns and weigh on the gold prices. Technical analysis Gold keeps rebound from the golden Fibonacci retracement (Fibo.) level of 61.8% amid firmer RSI. However, multiple levels marked since early August joins 50% Fibo. to restrict the metal’s immediate upside to around $1,760. Even if the gold prices rally beyond $1,760, a downward sloping trend line from September 03 and 38.2% Fibonacci retracement near $1,778 will precede the 200-SMA, near $1,788, to challenge bulls. Meanwhile, pullback moves need to sustain below the 61.8% Fibo. level surrounding $1,743. Following that, $1,724 and $1,718 may offer intermediate halts during the gold bears’ rush towards the $1,700 threshold, a break of which will highlight the yearly low of $1,687. Gold: Four-hour chart Trend: Pullback expected  

In opinion of FX Strategists at UOB Group, EUR/USD remains poised to keep the consolidation between 1.1700 and 1.1800 in the next weeks. Key Quotes 24

In opinion of FX Strategists at UOB Group, EUR/USD remains poised to keep the consolidation between 1.1700 and 1.1800 in the next weeks. Key Quotes 24-hour view: “Our expectations for EUR to ‘trade between 1.1720 and 1.1760’ last Friday was incorrect as it slipped to 1.1690 before settling at 1.1714 (-0.19%). Despite the decline, downward momentum has not improved by much and EUR is likely to trade between 1.1700 and 1.1745 for today.” Next 1-3 weeks: “There is no change in our view from last Friday (24 Sep, spot at 1.1745). As highlighted, the recent weak phase in EUR has ended and EUR is likely to trade between 1.1700 and 1.1800 for now. While EUR subsequently dropped to 1.1699, downward momentum has not improved. That said, looking ahead, the downside risk is greater but EUR has close below 1.1680 before a sustained decline can be expected.” 

Here is what you need to know on Monday, September 27: The market mood remains upbeat after the SPD came on top in Germany's elections, as expected an

Here is what you need to know on Monday, September 27: The market mood remains upbeat after the SPD came on top in Germany's elections, as expected and as the Evergrande crisis is moving out of sight. Several Fed members will speak after last week's explicit taper signal and Durable Goods Orders are of interest. Germany: Finance minister Olaf Scholz is on course to lead Europe's largest economy. after his center-left SPD came on top in Germany's federal elections. He will have to collaborate with kingmakers FDP and the Greens, which differ on several critical issues. Outgoing Chancellor Angela Merkel's CDU party may still lead to remain in power but would also need to collaborate with the kingmarkers. Talks to form a new government are set to last for long months. The probable participation of the business-friendly FDP soothes markets fearing substantial regulation. Moreover, the ex-communist Die Linke party has barely entered parliament and a strictly left-leaning coalition is not feasible. EUR/USD is rising above 1.17. Apart from reactions to the German elections, European Central Bank President Christine Lagarde is set to speak. The ECB is set to phase out one bond-buying scheme, the PEPP, but ramp up another, the APP. Evergrande: China's highly indebted property developer continues struggling to pay its dues but the company's efforts and Beijing's massive liquidity injections seem to have convinced investors that the crisis will remain local rather than systemic. Last week's recovery in global stocks was substantially tied to calm on that front. S&P 500 futures are up.Fed speeches: John Williams, Lael Brainard, and Charles Evans of the Federal Reserve are slated to speak on Monday, several days after the bank's taper announcement. Fed Chair Powell indicated a reduction in bond-buying is coming in November and would end by mid-2022.He will testify on Tuesday.  The move was well-received by markets and supported the dollar.  Gold is recovering, changing hands above $1,750. The Fed wins another round, but the endgame has not changedDebt ceiling: American lawmakers have yet to make progress on raising the preventing default by raising the debt ceiling. A showdown is due in Congress on this sensitive issue which markets are currently dismissing. The fate of the $3.5 trillion infrastructure bill is also set to be sealed, potentially on Thursday. GBP/USD is trading closer to 1.37 after the Bank of England hinted it could raise rates in response to rising inflation – and could do that before concluding its bond-buying scheme. Two members voted for an early end to debt purchases. BPE Governor Andrew Bailey speaks late in the day. Britain is facing a potential drying-up of fuel at gas stations due to a Brexit-related shortage of truck drivers. US Durable Goods Orders figures for August stand out on the economic calendar. An increase in both headline and core figures is on the cards.  US Durable Goods Orders August Preview: Retail Sales have led the wayCryptocurrencies have been rising, with Bitcoin trading around $44,000, Ethereum above $3,100 and ADA at around $2.25. Enthusiasts are dismissing China's announcement that all digital assets would be considered illicit financial activity. 

Japan Leading Economic Index remains unchanged at 104.1 in July

Japan Coincident Index declined to 94.4 in July from previous 94.5

Asian shares took a cautious start on Monday following Wall Street higher price action on Friday. Investors remain cautious as oil prices skyrocketed

Asian stocks track Wall Street previous week’s action and opened on a higher note.Risk seniment improves on contained China’s group Evergrande default risk, oil jumped to three-year highs fuels inflation concerns. China warns of accelerating military efforts in response to the US-Australia submarine deal.Asian shares took a cautious start on Monday following Wall Street higher price action on Friday. Investors remain cautious as oil prices skyrocketed near to their three-year highs fueling the inflation fears and aggravating the recent hawkish tone by major central banks. Crude oil prices soared on supply-chain disruptions that forced energy companies to pull large amounts of crude out of stockpiles coupled with shortage of natural gas in Europe that pushed costs up across the old continent. WTI is trading near $75.00 with 1.23% gains on Monday. MSCI’s broadest index of Asia-pacific shares outside Japan rose 0.5% on Monday followed by three consecutive weeks of losses. The Shanghai Composite Index declined 0.16%, down for the second straight session, after the debt-ridden China Evergrande missed interest payment deadline without any notification. The risk appetite was also hurted after the PBoC banned cryptocurrencies on Friday, calling all digital currencies doubtful. Japan’s Nikkei 225 rose 0.21% on the improved local COVID-19 situation.The state of emergency is set to end at the end of the month. The ASX 200 rose 0.57% on Monday after losing 0.8% in the previous week.
 

China’s iron ore futures trading on the Dalian Commodity Exchange for January crosses 715 yuan level per ton, portraying a three-day uptrend heading i

Dalian iron ore prints three-day uptrend, underpins Australian dollar recovery amid risk-on mood.Prices of steel rebar, hot-rolled coils rise as climate crackdown joins power cuts in China.China’s iron ore futures trading on the Dalian Commodity Exchange for January crosses 715 yuan level per ton, portraying a three-day uptrend heading into Monday’s European session. On the same line, Construction used rebar rises around 1.0% to 5,562 yuan a ton whereas hot-rolled coils print 0.4% gains to 5,583 yuan per ton by the press time. China’s recently aggressive push for climate controls measures by the industrial players has already favored the metal buyers. Adding to that were the later power cuts in the dragon nation. Production curbs were used to tame the power usage by the industries. “Prices for steel rebar and hot-rolled coils on the Shanghai Futures Exchange also increased due to production curbs as major steel producing regions are restricting power usages,” said Reuters. Bloomberg also quotes Nomura Holdings Ltd. and China International Capital Corp. (CICC) while citing woes over China’s economic growth due to the energy crisis. “The power supply shock will have a large impact on short-term production, especially in September, with industrial output growth in the month likely dropping to 4%-4.5%, they (CICC) wrote,” per the news. “The stringent measures to cut electricity use in economic powerhouses like Jiangsu, Zhejiang and Guangdong provinces will probably cause the purchasing managers index, scheduled for release later this week, to drop below 50, Nomura said in a report Monday,” adds Bloomberg. While the power cuts are likely helping the industrial metals, Reuters said that the stainless steel futures on the Shanghai bourse plunged 5.1% to 20,250 yuan a ton, the reason could be linked to Evergrande fears. Moving on, China’s economic transition and the Fed tapering concerns will be the key to forecast the near-term metal outlook.

USD/INR stays pressured around 73.73, down 0.10% on a day during early Monday. In doing so, the Indian rupee (INR) pair drops for the third consecutiv

USD/INR prints three-day downtrend, holds lower ground near intraday low of late.India’s leaping vaccinations underpin hopes for a better festive season, favoring economic recovery hopes.US stimulus chatters, absence of Evergrande news supercede Fed tapering woes.US data, risk catalysts eyed amid a light calendar day.USD/INR stays pressured around 73.73, down 0.10% on a day during early Monday. In doing so, the Indian rupee (INR) pair drops for the third consecutive day. While a broad risk-on mood weighs on the US dollar’s safe-haven demand and drags the quote, COVID-19 related headlines from India also play their part to keep the pair sellers hopeful. Among them are the latest government figures suggesting the lowest active virus cases since March 20. That said, the daily rise in the coronavirus cases eased to 26,041 versus 28,326 cases reported the previous day. However, the virus-led deaths increased from 260 to 276. Also favoring the INR buyers is the Reuters news saying, “Indian shares have outperformed peers in emerging markets, helped by flush liquidity and as progress in the country's vaccination campaign has bolstered sentiment ahead of the festive season.” On the other hand, optimism towards US stimulus, recently backed by House Speaker Nancy Pelosi, as well as headlines concerning the US-China relations, mainly due to the Canada-China prisoner swap, seems to play a major role help brighten the sentiment. Further, talks over easing virus-led activity restrictions from Japan and Australia add to the risk-on mood. Furthermore, the absence of Evergrande news and a little silence over the Fed tapering concerns add to the brighter risk appetite. Amid these plays, the US 10-year Treasury yields pull back from a three-month high whereas the S&P 500 Futures rise 0.38% intraday by the press time. While the sentiment-linked headlines may remain as the key driver for the USD/INR prices, the US Durable Goods Orders for August, expected +0.6% versus -0.1% prior, will offer intermediate clues. Technical analysis USD/INR remains trapped between a downward sloping resistance line from July 19 and a three-week-old support line, respectively around 73.90 and 73.65. Also acting as a downside filter is the 200-DMA level near 73.58.  

GBP/USD picks up to 1.3675, down 0.08% intraday heading into Monday’s London open. Even as the US dollar pullback, amid broad risk-on mood, underpins

GBP/USD picks up bids during second consecutive day of downside.UK PM Johnson to consider using army to overcome petrol crisis, Britain suspends competition laws.Brexit results in workforce problems, turkey shortages feared on Christmas.Market sentiment improves over US stimulus hopes, covid updates but German elections, US Durable goods orders eyed.GBP/USD picks up to 1.3675, down 0.08% intraday heading into Monday’s London open. Even as the US dollar pullback, amid broad risk-on mood, underpins the cable pair’s latest rebound, pessimism surrounding Brexit-led challenges, recently over UK petrol supply, keeps the pair sellers hopeful. The US Dollar Index (DXY) snaps a three-week uptrend with a 0.05% intraday loss, recently easing to 93.20 amid market optimism, also tracking a pullback of the US 10-year Treasury yields from a three-month high. While tracing the catalysts for market optimism, hopes over the US stimulus and welcome covid headlines from Japan, as well as Australia, could be linked. Also, the China-Canada prisoner swap recently eased the Sino-American tension by allowing Huawei founder’s daughter, also the firm’s Chief Financial Officer (CFO) to go home. It’s worth noting that the absence of Evergrande news and a little silence over the Fed tapering concerns add to the brighter risk appetite. At home, the rise in the UK’s virus-led death tolls and manpower shortages due to the Brexit weigh on the British pound (GBP). However, the German election hints at a power vacuum in the bloc after Angela Merkel’s 16-year-old reign, which in turn allows the UK to benefit unless someone else, likely France, takes command of the Brexit decisions. “Business Secretary Kwasi Kwarteng met industry executives on Sunday to try to find a way through supply chain pressures that have led to panic-buying of fuel,” said Sky News. To overcome the energy crisis, UK PM Boris Johnson and his team are up for taking military support. “Ministers to discuss emergency plan Operation Escalin after BP reveals a third of its forecourts have shortages,” said The Guardian. Although the risk appetite restricts GBP/USD downside, a shift in the sentiment will double-down the quote amid Brexit worries. For that, today’s US Durable Goods Orders for August can also play their role. Read: US Durable Goods Orders August Preview: Retail Sales have led the way Technical analysis Although the early July low surrounding 1.3730 guards the quote’s short-term upside, a two-month-old ascending support line near 1.3630 challenges the GBP/USD sellers.  

AUD/USD prints gains on the first trading day of the week. The pair opened lower but recovered swiftly to touch the intraday high 0.7291. At the time

AUD/USD edges higher on Monday in the Asian trading hour.Strong support for the pair near 61.8% Fibonacci retracement with multiple bottom formations.The bulls remain hopeful above 0.7300 despite a neutral MACD.AUD/USD prints gains on the first trading day of the week. The pair opened lower but recovered swiftly to touch the intraday high 0.7291. At the time of writing,  AUD/USD is trading at 0.7285, up 0.33% for the day. AUD/USD daily chart On the daily chart, after testing the YTD lows at 0.7105 on August 24, the AUD/USD pair tested the high of 0.7478 on September 3. The pair failed to preserve the momentum and traced back to the lower levels while consolidating near 0.7220 since the past week. Currently, if price sustains the intraday high , then it could move back to the psychological 0.7300 level, which also coincides with the 50% Fibonacci retracement that extends from the low of 0.7105. A daily close above the mentioned level would take AUD/USD bulls toward the 0.7350 horizontal resistance level The Moving Average Convergence Divergence (MACD) indicator trades below the midline. Any uptick in the MACD would amplify the buying pressure toward the high made on September 10 at 0.7410. Alternatively, if price reverses direction and breaks the multiple support formation near 0.7250, it would drag the pair toward the 0.7200 horizontal support line. Next, the market participants would aim for the 0.7150 horizontal support level followed by the yearly lows at 0.7105. AUD/USD additional levels
 

The EUR/USD pair has been tracking minor gains in the Asian session on the first trading day of the fresh week. After spending the previous week near

EUR/USD prints minute gains on Monday in the Asian session.The US Dollar Index  turns slightly negative but still remains above 92.70.Germany’s election result weighs on the euro, ECB's Lagarde speech eyed.The EUR/USD pair has been tracking minor gains in the Asian session on the first trading day  of the fresh week. After spending the previous week near 1.1750, the pair opened lower and hovered in a narrow trade band of less than 10-pips movement. At the time of writing,  EUR/USD is trading at 1.1719, up 0.05% for the day. The US Dollar Index (DXY), which tracks the performance of the greenback against the six majors, pares some of its initial gains, Nevertheless still looks strong above 92.20, which keeps EUR/USD gains limited. Investors digested the latest Fed’s monetary policy update. The central bank hinted stimulus could start being reduced in November and interest rates could rise as soon as next year, while trimming growth forecasts and hiking inflation projections for this year. The reduced risk appetite on the renewed concerns of China’s group Everngrandes default risk after the  interest payment deadline passed without any notification from the company and the People’s Bank of China (PBoC) remark on cryptocurrency by calling all digital currencies related activities as illegal, supported the greenback. Meanwhile, the US House Speaker Nancy Pelosi announced a vote on the infrastructure bill would be cast  on Thursday as earlier she warned not to expect a Monday vote despite her confidence about the passage of the $1 trillion infrastructure stimulus package. Traders refrained from positioning in the shared currency after Germany’s Social Democrats marginally won Sunday’s national election as per the projected results, and claimed a “clear mandate” to lead a government for the first time since 2005 and to end 16 years of conservative-led under Angela Merkel. Investors turn their attention to the European Central Bank President Christine Lagarde speech, and US Durable Goods Orders  data to take trade insight.  EUR/USD additioanl levels
 

Analysts at Citigroup offer their price forecasts for gold and oil, with a bearish outlook on the bright metal for the next year. Key quotes “We are b

Analysts at Citigroup offer their price forecasts for gold and oil, with a bearish outlook on the bright metal for the next year. Key quotes “We are bearish spot and forward gold markets, forecasting a sub-$1,600/oz average in 2022.” “See brent crude oil prices averaging $69/bbl in 2021, $67/bbl in 2022.” “WTI crude oil prices averaging $66/bbl in 2021, $64/bbl in 2022.” Related readsOil rally will continue, with year-end Brent forecast of $90 – Goldman SachsGold, Chart of the Week: XAU/USD bearish bias forecast below $1,760

According to the provisional count, Germany's Social Democrats (SPD) won the federal election by a narrow margin, Reuters reports. With this, the cent

According to the provisional count, Germany's Social Democrats (SPD) won the federal election by a narrow margin, Reuters reports. With this, the center-left SPD has a ‘clear mandate’ to lead a government for the first time since 2005, bringing an end to 16 years of conservative-led rule under Angela Merkel. Additional details “Conservative CDU/CSU bloc under Armin Laschet also vows to seek coalition.” “The Greens and the pro-business Free Democrats to form a majority.” “Chancellor Angela Merkel is not seeking a fifth term.” But, until a new chancellor is sworn in, Merkel will continue to run the government in a caretaker capacity with her current cabinet.  Related readsGerman election outcome: A cliff-hanger – ING German Social Democrats (SPD) in pole position to lead

Ahead of the final German Federal election outcome, analysts at ING bank note that “the current result also means that there will now be long coalitio

Ahead of the final German Federal election outcome, analysts at ING bank note that “the current result also means that there will now be long coalition talks.” Additional quotes “Germany doesn't have a prefab mechanism for these coalition talks and the strongest party does not have an automatic right to lead the next government. “ “In fact, all parties can have exploratory talks in whichever combination they want until they have found a constellation which would have a parliamentarian majority.” “In the past, there were actually two national elections after which the largest party did not lead the government coalition. With the current results, three coalitions would be possible: an SPD, Greens and FDP coalition, a CDU, Greens and FDP coalition, or another revival of the grand coalition but then under the leadership of the SPD.”  “The option of a left-wing coalition of SPD, Greens and Left Party is no longer possible.”

NZD/USD reverses Friday’s downside while picking up the bids to refresh intraday top near 0.7035 during early Monday. In doing so, the Kiwi pair keeps

NZD/USD picks up bids to refresh intraday high, consolidates Friday’s losses.Firmer Momentum line, rebound from 50% Fibonacci retracement favor buyers.100-SMA, 23.6% Fibonacci retracement guard recovery moves, pullback may eye for fresh monthly low.NZD/USD reverses Friday’s downside while picking up the bids to refresh intraday top near 0.7035 during early Monday. In doing so, the Kiwi pair keeps the last week’s rebound from the 50% Fibonacci retracement (Fibo.) of late August to early September upside, around 0.6985, amid an upward sloping Momentum line supporting the recovery moves. That said, the NZD/USD prices aim for a one-week-old horizontal hurdle surrounding 0.7060 during the further advances. However, 100-SMA and 23.6% Fibo. confluence near 0.7085 will be a tough nut to crack for the pair buyers afterward. Also acting as an upside filter is a three-week-old resistance line near 0.7125. On the contrary, the pair’s pullback moves may gain little attention unless staying beyond the stated 50% Fibonacci retracement level near 0.6985, as well as the monthly low of 0.6981. Should NZD/USD sellers retake controls past 0.6981, the late August levels surrounding 0.6930 may return to the chart. Overall, NZD/USD is in a recovery mode but the bulls have a bumpy road ahead. NZD/USD: Four-hour chart Trend: Further recovery expected  

USD/INR continues to drift higher towards 74 the figure. However, there is a lack of conviction and the weekly charts spell a different outlook for th

USD/INR bulls continue to target the 74 figure. Bears on the weekly time frame are lurking. USD/INR continues to drift higher towards 74 the figure. However, there is a lack of conviction and the weekly charts spell a different outlook for the Indian rupee.  USD/INR daily chart The daily chart is bullish while the price attempts to move in on the 74 figure. However, it is making hard work of the upside, despite the support from the 73.70s.  USD/INR weekly chart With that being said, the price is being restricted due to the 61.8% Fibonacci retracement on the weekly time frame and there are prospects of a downside impulse back to test the weekly lows near 72.32. 

Russell Hardy, Chief Executive Officer of Vitol Group, expressed his take on the global oil and gas price and demand outlook, in a pre-recorded interv

Russell Hardy, Chief Executive Officer of Vitol Group, expressed his take on the global oil and gas price and demand outlook, in a pre-recorded interview for the annual Platts APPEC 2021 conference. Vitol Group is the world's largest independent oil trader. Hardy said, “global oil demand remained 4 million barrels per day behind the pre-COVID-19 levels of 2019,” per Reuters. Additional comments “Global gas prices are at “extreme levels” due to low inventories and strong demand in Europe and China.” “The market is set for a reasonably bullish five-year outlook.” WTI reaction WTI was last seen trading at $75.22, rising 1.69% so far, thanks to the improved market mood amid the US stimulus optimism. The US oil is trading close to the two-month highs of $75.31 reached in the last minutes.

Deputy Premier John Barilaro said December 1 is when all restrictions in NSW will be lifted. "That is when we release all restrictions and apply a two

Deputy Premier John Barilaro said December 1 is when all restrictions in NSW will be lifted. "That is when we release all restrictions and apply a two square metre rule across the board and allow a level of freedom for both vaccinated or unvaccinated," he said. "The message to the unvaccinated is you will not achieve any further freedom until you get vaccinated. "The 70 per cent road map does apply to the whole state so there will be individuals in regional and rural NSW who choose not to be vaccinated who will lose their freedoms on 11 October." On Monday, it was reported that there are 787 new local cases and 12 deaths. Victoria records 705 new local cases. Meanwhile, the New South Wales premier, Gladys Berejiklian, said the state won’t have a “freedom day” but will instead work “step by step” towards reopening. As the premier announced that a couple of days ago, the state had crossed the 84% mark in first Covid vaccine doses and 56% in second doses, she asked residents to be patient with the government’s reopening plan. “It must be done cautiously and we must remember that even though people may be fully vaccinated if you are vulnerable and have other conditions, you can still succumb and get the disease in a serious way, or worse,” Berejiklian said. “So while we are all looking forward, [it’s] almost a gallop to the finish line in terms of the double dose, we need to make sure that what we do at 70 and 80% is done cautiously and also moderately. Market implications AUD/USD would be expected to remain under pressure all while the uncertainties of covid and Evergrande continue.  For the immediate future, there are prospects of a downside test of the 0.7220 area:AUD/USD bears looking to break 0.7220, bulls eye a test of 4-hour 61.8% golden ratio 

USD/CAD stands on the slippery ground near 1.2615 as sellers attack mid-September lows during early Monday. In doing so, the loonie pair drops for the

USD/CAD takes offers to refresh intraday low, prints five-day losing streak.Oil cheers firmer sentiment, economic recovery hopes amid demand-supply fears.China-Canada prisoner swap, US stimulus hopes exert additional downside pressure amid fewer Evergrande news.US Durable Goods Orders, sentiment-related headlines will be prone for fresh impulse.USD/CAD stands on the slippery ground near 1.2615 as sellers attack mid-September lows during early Monday. In doing so, the loonie pair drops for the fifth consecutive day, down 0.30% intraday by the press time. While checking the catalysts, the double whammy of the US Dollar Index (DXY) weakness and firmer prices of Canada’s biggest export item, WTI crude oil, gains major attention. The US Dollar Index (DXY) pauses a three-week uptrend, recently easing to 93.23, down 0.05% on a day, amid risk-on mood. On the contrary, WTI refreshes a three-month high by piercing the $75.00 threshold of late. The DXY pullback could be linked to the risk-on mood taking clues from US policymakers’ hints over the much-awaited infrastructure spending bill. US House Speaker Nancy Pelosi steps back from her initial hints of Monday voting on the bill by preferring Thursday for the House floor test. Her optimism towards passage seems to underpin the market optimism. Furthermore, chatters over easing the virus-led activity restrictions from Japan and Australia also favor the market bulls, weighing on the US dollar’s safe-haven demand. On the same line was the weekend news that China and Canada did a prisoner swap during the weekend, resulting in the release of Meng Wanzhou, daughter of Huawei's founder and the CFO of the company, indirectly eased the tension between the US and China. The aforementioned risk catalysts not only weigh on the US dollar but also underpin the WTI. Also favoring the black gold are the hope of the economic recovery and geopolitical tension that challenge the oil supplies. Amid these plays, S&P 500 Futures rise for the fourth consecutive day to refresh one-week high, up 0.36% around 4,461 at the latest whereas the US 10-year Treasury yields ease from the highest since June, snapping a five-week uptrend. Moving on, USD/CAD traders may pay higher attention to the risk catalysts for further direction while the US Durable Goods Orders for August may also help for an additional guide. Technical analysis Although 50-DMA challenges USD/CAD sellers around 1.2615, bulls are less likely to return until the quote stays below the 1.2700 mark surrounding multiple highs flashed from late August.  

The US-based Fitch Ratings is out with its latest report, assessing the impact of potential default by China Evergrande property developer group on ra

The US-based Fitch Ratings is out with its latest report, assessing the impact of potential default by China Evergrande property developer group on rated Chinese construction issuers. Key quotes “The impact from a China Evergrande Group (CC) credit event on rated Chinese construction issuers will be manageable because they have limited exposure to Evergrande.” “The scale advantage of Fitch-rated engineering and construction (E&C) companies mitigates their risk of a single customer default or project failure incident.” “That said, E&C companies with material exposure to housing projects and property development business may be affected in the unlikely event that a default disrupts the broader property market.” “We expect the potential effect of a slowdown in property market to be partially offset by a revival in the infrastructure business, which is a key instrument for government to support the economy.”  Related readsS&P 500 Futures take bids, US Treasury yields ease amid stimulus optimismChina’s economic growth is still very strong despite Evergrande crisis – Standard Chartered

Market sentiment improves during early Monday as hopes of US stimulus joins positive news concerning the coronavirus from Australia and Japan. Also fa

S&P 500 Futures print four-day uptrend, refresh one-week top.US 10-year Treasury yields step back from three-month high.US House Speaker Pelosi teases infrastructure spending passage despite delaying vote to Thursday, US-China tensions ease after Huawei CFO release.US Durable Goods Orders, China’s Evergrande and US stimulus headlines are important for intraday moves.Market sentiment improves during early Monday as hopes of US stimulus joins positive news concerning the coronavirus from Australia and Japan. Also favoring the mood were chatters surrounding the release of Huawei CFO and economic optimism, not to forget the fewer highlights over China’s Evergrande. While portraying the mood, US 10-year Treasury yields ease from the highest since June, snapping a five-week uptrend, whereas the S&P 500 Futures rise for the fourth consecutive day to refresh one-week high, up 0.36% around 4,461 at the latest. US House Speaker Nancy Pelosi steps back from her initial hints of Monday voting on the US infrastructure spending bill. However, her preference for Thursday and optimism towards passage seem to underpin the market’s risk-on mood. Further, the hopes that the US Democrats will use diplomatic power to rule out Republicans if they stick to their demands over the debt limit as it expires on October 01 also favor the sentiment. Elsewhere, Japanese media announcement of removing all the virus-led emergencies this week and recently steady covid counts from Australia, not to forget hints of easing local lockdowns from early October, add to the market’s optimism. Additionally, news that China and Canada did a prisoner swap during the weekend, resulting in the release of Meng Wanzhou, daughter of Huawei's founder and the CFO of the company, indirectly eased the tension between the US and China and favor the sentiment. It should, however, be noted that the US Federal Reserve (Fed) officials remain in support of the tapering and the start of a rate hike, which in turn challenge the market bulls ahead of today’s US Durable Goods Orders for August. Read: US Durable Goods Orders August Preview: Retail Sales have led the way

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.4695 vs the last close of 6.4669. About the fix China maintains stric

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.4695 vs the last close of 6.4669. About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

The price of USD/JPY is technically expensive relative to the W-formation's neckline and the daily channel. The following illustrates where a downside

USD/JPY is meeting channel resistance near 110.80 and eyes are on the downside. Hourly bearish divergence opens the risk of a break of critical hourly support. The price of USD/JPY is technically expensive relative to the W-formation's neckline and the daily channel. The following illustrates where a downside opportunity could present itself according to the market's structure.  USD/JPY daily chart The W-formation, as a reversion pattern, has a high completion rate to the neckline. In this case, the neckline comes in at 110.10. Before there, however, there is prior resistance that has a confluence with the 38.2% Fibonacci level that could offer some support o the way there. This comes in at 110.17.  USD/JPY hourly bearish divergence The hourly bearish divergence of the RSI adds conviction to the downside bias. However, the bears would be prudent to wait for the price action to play out to the downside before engaging at an optimal price entry.  A break of the support near 110.57 and below the 20 EMA would be significant and bearish. 

AUD/NZD kick starts the fresh trading week on a higher note on Monday. The pair opened higher albeit fizzled out rather quickly on to travel to intrad

AUD/NZD posts fresh daily gains on Monday in the Asian session.Additional gains are envisioned for the pair if the price breaks 1.0370.The momentum oscillator holds onto the oversold zone and signalled underlying buying pressure.AUD/NZD kick starts the fresh trading week on a higher note on Monday. The pair opened higher albeit fizzled out rather quickly on to travel to intraday high of. At the time of writing, AUD/NZD is trading at 1.0361, up 0.17% for the day. AUD/NZD daily chart On the daily chart, the AUD/NZD pair has been trading in the short-term downside trends since July 13, which is confirmed by the 20-day and 50-day Simple Moving Average (SMA) confluence at 1.0735. After testing the yearly low at 1.0278 on September 16, the pair began to consolidate the losses and took a recovery road to 1.0371, a session’s high. The descending trendline from the high of July 13 at 1.0753 acts as a resistance for the bulls. If the price breaks the bearish sloping line, it could move back to the 1.0400 horizontal resistance level. The Moving Average Convergence Divergence (MACD) indicator trades in the oversold zone. Any uptick in the MACD would accelerate the buying pressure toward the high made on September 7 at 1.0455 followed by the 1.0550 horizontal resistance level. Alternatively, if the price moves lower, it could retest the previous session’s low of 1.0337 followed by the 1.0295 horizontal support level. AUD/NZD additional level
 

GBP/JPY consolidates recent gains, takes offers around 151.30 during Monday’s Asian session. In doing so, the cross-currency pair drops 0.10% intraday

GBP/JPY remains pressured towards refreshing intraday low after three-day advances.Failures to cross fortnight-old falling trend line, break of 61.8% Fibonacci retracement favor sellers.200-SMA, MACD signals highlight need for bearish confirmation.GBP/JPY consolidates recent gains, takes offers around 151.30 during Monday’s Asian session. In doing so, the cross-currency pair drops 0.10% intraday, marking the first daily negative in four. The pair bears cheer sustained dominance below a descending resistance line from September 14, as well as a downside break of 61.8% Fibonacci retracement level of September 14-21 fall. However, bullish MACD and 200-SMA level near 151.20 challenges the immediate downside. Hence, a clear break of 151.20 becomes necessary for the GBP/JPY bears to keep the reins. Following that, September 21 high near 150.15 and the monthly low close to 148.95 should lure the sellers. Meanwhile, corrective pullback needs to cross the stated resistance line, around 151.70, to recall the GBP/JPY buyers. Though, the same will confirm the inverse head-and-shoulder- bullish chart pattern suggesting the pair’s theoretical run-up towards July’s top around 154.00. During the rise, the monthly peak of 152.85 and August month’s high near 153.35 may entertain the bulls. GBP/JPY: Four-hour chart Trend: Pullback expected  

AUD/USD consolidates three-week losses, taking the bids to renew intraday high with 0.7276 during Monday’s Asian session. The Aussie pair seems to che

AUD/USD takes the bids to refresh intraday high after a three-week downtrend.US stimulus chatters, geopolitical headlines battle Fed tapering concerns.China’s Evergrande, fears over US debt ceiling and covid headlines challenge the bulls.US Durable Goods Orders will decorate calendar but risk catalysts are the key to follow.AUD/USD consolidates three-week losses, taking the bids to renew intraday high with 0.7276 during Monday’s Asian session. The Aussie pair seems to cheer the recently positive market sentiment, up 0.15% intraday, while ignoring the previous challenges concerning the Fed tapering and China’s Evergrande. The reason for the latest optimism could be linked to the US stimulus hopes and expectations of economic recovery. Although US House Speaker Nancy Pelosi steps back from her initial hints of Monday voting on the US infrastructure spending bill, her preference for Thursday and optimism towards passage seems to underpin the market’s risk-on mood. On the same line could be the hopes that the US Democrats will use diplomatic power to rule out Republicans if they stick to their demands over the debt limit as it expires on October 01. Elsewhere, chatters that Japan will remove all virus-led emergencies this week and recently steady covid counts from Australia also favor the AUD/USD bulls. It’s worth noting that Aussie Prime Minister Scott Morrison signaled during the weekend, per ABC News, that the virus-led border restrictions among the states won’t be eased unless the nation hits 80% double-vaccination targets. On a distant note, news that China and Canada did a prisoner swap during the weekend, resulting in the release of Meng Wanzhou, daughter of Huawei's founder and the CFO of the company, also favor the market sentiment. Alternatively, the US central bank officials, namely Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George, back the tapering decision of the Federal Reserve (Fed) in their latest appearances. Fed Chair Jerome Powell spoke for supply chain issues and labor market shortages on the other hand.  Furthermore, China’s Evergrande is a problem for the Dragon nation despite the government and People’s Bank of China (PBOC) trying to safeguard the monetary policy. Fears emanating from the real-estate giant have recently started hurting the power sector and hints at a major challenge for Beijing. Against this backdrop, US 10-year Treasury yields ease from a three-month high near 1.458% while the S&P 500 Future rise 0.30% by the press time. Moving on, US Durable Goods Orders for August, expected +0.6% versus -0.1% prior, may entertain AUD/USD traders but the risk catalysts will be the key to follow for fresh impulse. Technical analysis Despite stepping back from 10-DMA immediate hurdle around 0.7280 on Friday, the AUD/USD prices remain above the previous resistance line from September 03 near 0.7220, which in turn keeps buyers hopeful.  

EUR/GBP is being accumulated on the weekly and daily charts and the following illustrates the bullish bias towards daily targets. EUR/GBP weekly chart

EUR/GBP bulls move in from critical daily support area. Bulls eye 0.820 ahead of 0.8650-0.8680 zone. EUR/GBP is being accumulated on the weekly and daily charts and the following illustrates the bullish bias towards daily targets. EUR/GBP weekly chart The price is moving higher following a typical Wycoff methodology fakeout during the phase of accumulation. This gives rise to the prospects of last week's bullish weekly candle stick's wick being filled in the following days on a lower time frame to take out the 21-week moving average.  EUR/GBP daily chart From a daily perspective, the price is riding the support of a dynamic trendline after a correction of the prior daily impulse to the 61.8% golden ratio. That move also completed a run to test the neckline of the W-formation which gives extra confluence to the bullish bias for the week ahead. Bulls can target an initial test of 20 July lows near 0.8620 which would be expected to offer resistance.  

US Dollar Index (DXY) retreats towards 93.00, drops to 93.26 during Monday’s Asian session. In doing so, the greenback gauge portrays a struggle to ex

DXY bulls take a breather after three-week uptrend, step back from monthly high.Friday’s Doji, sluggish Momentum line favor short-term weakness.50-SMA, three-week-old support line challenge bears ahead of 200-SMA.Bulls need to cross weekly horizontal resistance for fresh entry.US Dollar Index (DXY) retreats towards 93.00, drops to 93.26 during Monday’s Asian session. In doing so, the greenback gauge portrays a struggle to extend the previous three-week uptrend while extending late Friday’s pullback moves. It’s worth noting that the bearish Doji candlestick around the one-week-old horizontal line joins downbeat Momentum to hint at further consolidation of the recent gains towards retesting 50-SMA near the 93.00 threshold. However, any further weakness will be challenged by an ascending support line from September 03 and 200-SMA, respectively around 92.88 and 92.84. In a case where the US Dollar Index drops below 92.84, the mid-month bottom of 92.32 will be in focus. On the flip side, recovery moves will be doubted unless crossing the stated horizontal resistance near 93.42. Following that, the monthly high of 93.52 and the yearly peak, marked in August, close to $93.72, should return to the charts. DXY: Four-hour chart Trend: Pullback expected  

The USD/CHF continues to portray the familiar moves in the Asian session on Monday. The pair hoveres in a very narrow trade band with no meaningful tr

USD/CHF trades modestly higher on Monday in the early Asian trading hours. The US Dollar Index remains strong near 93.00.Swiss franc remains on backfoot on improved risk-sentiment.The USD/CHF continues to portray the familiar moves in the Asian session on Monday. The pair hoveres in a very narrow trade band with no meaningful traction. At the time of writing, USD/CHF is trading at 0.9248, up 0.11% for the day. The buying pressure in the greenback keeps USD/CHF on the higher side. The US Dollar Index (DXY), which measures the performance of the greenback against the basket of six major currencies, stays strong near 93.00 following the  US benchmark 10-year Treasury yields. Investors digested the Federal Open Market Committee (FOMC) announcement of  a reduction in its $120 billion monthly bond purchase this year during its two-day policy meeting. In addition to that, the US Fed Chair Jerome Powell hinted that tapering could occur as soon as in November or end in mid-2022.  In the latest development, the US House Speaker Nancy Pelosi set Thursday for the infrastructure bill vote, earlier she warned no voting would be expected on Monday despite expressing her confidence on the passage of the $1 trillion stimulus package. It is worth noting that, S&P 500 Futures is trading at 4,451 with 0.13% gains. On the other hand, the Swiss franc struggled to maintain the recent gains after the Swiss National Bank (SNB) lingered with ultra-low interest rates and indicated no sign to change its ultra-accommodative monetary policy amid lower inflation and a “ high valued “ currency. Furthermore, the SNB Chairman Thomas Jordan warned of the debt problems of China’s Evergrande group and its potential knock-out effect on Switzerland. As for now. Investors turn their attention to the US Durable Goods Orders, and Dallas Fed Manufacturing Index September to take fresh trading impetus. USD/CHF additional levels     
 

The price of gold is steady in the opening session on Monday, albeit weighed by a firmer US dollar. The DXY index, a measure of the US dollar vs a bas

Gold is under pressure as the US dollar resurges. Evergrande remains a thorn in the side for risk-sensitive assets. XAU/USD remains vulnerable amid hawkish Fed outlook The price of gold is steady in the opening session on Monday, albeit weighed by a firmer US dollar. The DXY index, a measure of the US dollar vs a basket of currencies, posted its third straight week of gains on Friday as the uncertainty over beleaguered Chinese property developer Evergrande helped the greenback bounce back from a sharp decline in the prior session. At the time of writing, gold is trading at $1,749 and near to where it left off on Friday. US dollar better-bid DXY is sitting in the bullish territory near 93.29 following a bullish hourly 20/50 EMA cross-over after it rose through the 200-hour smoothed MA. Investors will be keenly watching critical resistance of 94 level: The safe-haven US dollar recovered from its biggest one-day percentage drop in about a month on Thursday after Beijing injected new cash into the financial system. At the same time, the Evergrande Group that owes $305 billion and has run short on cash, announced it would make interest payments on an onshore bond, boosting risk sentiment. However, Evergrande missed a Thursday deadline for paying $83.5 million and left investors questioning whether it will make the payment before a 30-day grace period expires. The fears are that a default of the company could create systemic risks to China's financial system and wider markets off-shore. The Evergrande debt resolution story is far from clear and until a full debt restructuring is announced, markets are likely to remain on edge and vulnerable to the headlines surrounding the debacle. This is expected to keep the greenback underpinned.  Meanwhile, the US dollar has picked up a safe-haven bid while the Federal Reserve moves closer to tapering and rates lift-off. On Friday, Kansas City Fed President Esther George said the US labour market has already met the central bank's test to pare its monthly bond purchases. This echoed words from the Fed chair Jerome Powell who spoke in a virtual press conference following last week's Fed meeting. That meeting was especially hawkish owing to the Fed Dots that showed a tightening cycle that is way above anything priced in money markets. This has sparked substantial ETF liquidations of gold contracts in a delayed response and rising US 10-year yield has crimped demand for the non-yielding asset.  Additionally, Cleveland Fed President Loretta Mester on Friday echoed the sentiment for tapering this year, and said the central bank could start raising rates by the end of next year should the job market continue to improve as expected. In this regard, a whole host of Fed speakers attending conferences on both sides of the Atlantic this week. Meanwhile, US data this week focuses on consumer confidence, personal income and the September ISM Manufacturing.  ''Looking forward, the 'stagflation' narrative is still 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.  Gold technical analysis (4-hour chart) As per this week's Chart of the Week, gold is trading in bearish territories while below a confluence zone near to $1,760.''From a 4-hour study, the price is in a bearish trend while below the 200 EMA and the divergence of the 50 and 20 EMAs. The price is attempting to restest the 20 EMA which might play out a little longer. However, so long as the price remains below 1,760 and the RSI below 50, then the bias is to the downside.''

Japan Corporate Service Price Index (YoY) declined to 1% in August from previous 1.1%

WTI extends a five-week uptrend to refresh multi-day high with a $74.52 mark during Monday’s Asian session. In doing so, the black gold cheers mildly

WTI picks up bids during five-day uptrend, refreshes multi-day high.Hopes of US stimulus, economic recovery underpin oil demand, geopolitical challenges test supplies.OPEC+, energy reserve offload and Evergrande fears fail to tame the bulls.US Durable Goods Orders, risk catalysts should be observed for fresh impulse.WTI extends a five-week uptrend to refresh multi-day high with a $74.52 mark during Monday’s Asian session. In doing so, the black gold cheers mildly positive market sentiment while paying a little heed to the US dollar strength and challenges to risk appetite from China. Optimism surrounding US stimulus and debt limit seems to have recently favored oil buyers. Although US Republicans challenge Democratic demand of $3.5 trillion stimulus, as well as pushing the debt limit further to the north, House Speaker Nancy Pelosi sounds optimistic of late. However, she did say to the ABC News during the weekend, per Reuters, “I'm never bringing a bill to the floor that doesn't have the votes.” Also, concerns over the actual size of the stimulus, recently trimmed with a $1 trillion infrastructure bill, add to the market’s confusion. Even so, the aid package is likely to be rolled out soon as the US government inches closer to the October 01 budget expiry. Elsewhere, hurricanes and typhoons have already damaged Gulf output and hence some among the key oil producers are planning to shift their production houses to either Canada or Iraq. The same joins tensions between the West and the Middle East to flag the geopolitical fears and test the supplies. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) noted in its monthly report that it forecasts the world oil demand to exceed pre-pandemic levels and average 100.8 million barrels per day (bpd), as reported by Reuters on September 13. On the contrary are the looming fears over the default of China’s real estate biggie Evergrande and the chatters over Eurozone economic uncertainty due to German election polls to challenge the demand concerns. Also on the negative side is the US dollar strength amid the Fed tapering concerns. That said, the US Dollar Index (DXY) remains firmer around the yearly peak marked in August. It’s worth noting that the US equities and stock futures remain firmer of late and add strength to the oil prices upside. Looking forward, US Durable Goods Orders for August, expected +0.6% versus -0.1% prior, may entertain oil traders but the risk catalysts will be the key to follow for fresh impulse. Technical analysis With a clear upside break of the late July tops surrounding $73.90, WTI is ready to challenge $75.00 and $75.70 intermediate halts during the run-up to the yearly peak of $76.40.  

Silver (XAG/USD) remains pressured near $22.40, down 0.08% intraday, amid Monday’s Asian session. In doing so, the bright metal fades the previous day

Silver struggles to keep Friday’s corrective pullback from yearly low.Bearish trend lines, SMA favor sellers but oversold RSI conditions portray intermediate bounces.Silver (XAG/USD) remains pressured near $22.40, down 0.08% intraday, amid Monday’s Asian session. In doing so, the bright metal fades the previous day’s bounce off the yearly low. Not only failures to keep the corrective pullback but sustained trading below key resistance lines from early September and June, not to forget 50-DMA, also keep bears hopeful. However, oversold RSI conditions trigger consolidation. Hence, the silver sellers remain directed towards the $22.16-22.00 area comprising the latest lows, also the yearly bottom, but any further weakness becomes less likely. Should the metal drops below $22.00 on a daily closing, lows marked during November and September 2020, respectively around $21.90 and $21.65, add to the downside filters. On the contrary, a three-week-old descending trend line near $23.00 guards immediate upside ahead of a bit broader resistance line from June 11, close to $23.70. Even if the silver buyers cross the $23.70 hurdle, the 50-DMA level near $23.95, as well as the $24.00 threshold, will challenge the further upside, following that the monthly high of $24.86 will be in focus. Silver: Daily chart Trend: Bearish  

USD/CAD trades with a cautious tone on Monday in the early Asian trading hours. The pair confides in a narrow trade band with no meaningful traction.

USD/CAD remains supported near 1.2640 in the Asian session on Monday.Multiple support near 1.2640 and 1.2645 makes bulls hopeful.Price clings near to ascending trendline, needs confirmation to place aggressive bid.USD/CAD trades with a cautious tone on Monday in the early Asian trading hours. The pair confides in a narrow trade band with no meaningful traction. At the time of writing, USD/CAD is trading at 1.2654, up 0.02% for the day. USD/CAD daily chart On the daily chart, USD/CAD has been consolidating in the range of  1.2640 and 1.2645 for the past few sessions. The rising trendline from the low made on the beginning of September series near 1.2495 (September 3) acts as defensive for the bulls. If price breaks the 20-day Simple Moving Average (SMA) at 1.2668 it could trace back to the 1.2725 horizontal resistance level. Next, USD/CAD bulls would attempt to test the Thursday’s high of 1.2796 followed by the 1.2850 horizontal resistance level. Alternatively, the Moving Average Convergence DIvergence  (MACD) indicator holds onto the overbought zone with a bearish crossover. Any downtick in the MACD would trigger a fresh round of selling for the pair seeking the first downside target at the 1.2620 horizontal support level. The bears would further be encouraged to move toward the low of September 10 at 1.2582. Furthermore, a daily close below  the mentioned level would make the possibility that USD/CAD can retest the low made on September 3 at 1.2493. USD/CAD additional levels
 

Goldman Sachs (GS) revises up Brent oil price forecasts to $90.00 per barrel, up by $10 versus $80.00 previous forecasts, during the latest reports. T

Goldman Sachs (GS) revises up Brent oil price forecasts to $90.00 per barrel, up by $10 versus $80.00 previous forecasts, during the latest reports. The US bank cites the larger-than-expected current global oil demand-supply deficit, coupled with the “recovery in global demand from the Delta impact even faster,” as the key concerns. GS adds “with global supply remaining short of our below consensus forecasts,” as the additional catalyst to weigh on the oil prices. That said, Brent oil prices refresh the highest level since October 2018 with the recent uptick to $77.84. Also read: WTI is gaining for the fifth-straight week, eye $74.00 heading into the weekend

EUR/USD bears remain at the loggerheads with the bulls after a three-week downtrend around 1.1720 amid early Monday morning in Asia. In doing so, the

EUR/USD fades bounce off five-week low flashed last week.German election polls challenge Angela Merkel’s reign, dim bloc’s economic reform hopes.Risk-off mood underpins US dollar’s safe-haven demand, US Treasury yields cheer Fed tapering concerns.US Durable Goods Orders, risk catalysts eyed for fresh impulse, updates from Germany, Evergrande are the key.EUR/USD bears remain at the loggerheads with the bulls after a three-week downtrend around 1.1720 amid early Monday morning in Asia. In doing so, the major currency pair remains pressured near August month’s low as fears over a political deadlock in Germany, the bloc’s powerhouse, challenge the economic recovery hopes. As per the latest poll, Angela Merkel’s center-right Christian Democratic Union (CDU) lags a bit behind center-left Social Democrats (SPD). ''The center-left Social Democrats (SPD) were on track for 25.5% of the vote, ahead of 24.5% for Merkel's CDU/CSU conservative bloc, projections for broadcaster ARD showed, but both groups believed they could lead the next government,'' Reuters reported. Although a coalition government is a sure outcome, SPD’s more power over Merkel’s resignation after 16 years of performance question the region’s future due to Germany’s powerhouse status. Reuters expressed the conditions while saying, “Nothing happens in Europe without German leadership, according to an old adage. That makes Sunday’s tight election in the region’s biggest economy particularly disconcerting.” Read: German Elections Preview: Three EUR/USD scenarios for the post-Merkel dawnElsewhere, US Federal Reserve (Fed) policymakers reiterate tapering concerns and back the US 10-year Treasury yields to refresh a three-month top. Also favoring the US dollar are the concerns over China’s Evergrande and uncertainty over US budget allocations and the debt ceiling. Recently, US House Speaker Nancy Pelosi stepped back from her previous hints to put the stimulus bill on the House floor on Monday. Amid these plays, equities manage to stay firmer on Friday while the S&P 500 Futures print mild gains by the press time. In addition to the German Election updates, US Durable Goods Orders and the risk catalyst are also important to watch for near-term EUR/USD direction. Technical analysis In addition to a downward sloping trend line from September 03, a convergence of 50-DMA and 20-DMA, respectively near 1.1760 and 1.1785, also challenges the EUR/USD buyers.  

USD/JPY consolidates gains following the previous week’s rally in the Asian trading hours on Monday. The pair rose from multi-month lows near 109.10 a

USD/JPY started the new trading week on a muted note.Higher US Treasury yields underpins the demand for the US dollar.FOMC tapering optimism, China’s Evergrande default fears, and upbeat economic data remain vocal points.USD/JPY consolidates gains following the previous week’s rally in the Asian trading hours on Monday. The pair rose from multi-month lows near 109.10 and peaked at 110.79 in a more than 150-pips movement in the past week backed by the  greenback strength. At the time of writing, USD/JPY is trading at 110.70, up 0.01% for the day. The US benchmark 10-year Treasury yields rose by 4 basis points to 1.45% on Friday as investors digested the Federal Reserve announcement to start reducing its emergency pandemic stimulus in its two-day policy meeting on Wednesday. The US Fed Chairman Jerome Powell said that the central bank would taper its $120 billion monthly bond purchases “soon”, which the market believed it could be as soon as November.This would eventually follow interest rate hike in next year. In addition to that, the greenback remained elevated near 93.00 following the upbeat economic data and hawkish Fed’s official members. The US New Home Sales gained 1.5% in August for the second consecutive month as per the US Census Bureau latest report. Furthermore, Kansas City Fed President Esther George said that the US job market has already met the Fed’s criteria to reduce its monthly asset-purchase and it's now time to discuss the size of the balance sheet. The sentiment was further supported by the US House of Representatives Speaker Nancy Pelosi stance on the passage of the $1 trillion infrastructure bill but was a bit doubtful about bringing it to the House floor on Monday. The gains were limited for USD/JPY on the renewed fears of China’s property giant Evergrande default risk as interest payment deadline expired without any announcement from the company. This, in turn, aids the safe-haven asset yen. Traders are now waiting for the Bank of Japan (BOJ) Governor Haruhiko Kuroda speech, US Durable Goods Orders to gauge market sentiment. USD/JPY additional levels
 

“I'm never bringing a bill to the floor that doesn't have the votes,” said U.S. House of Representatives Speaker Nancy Pelosi to ABC News on Sunday, p

“I'm never bringing a bill to the floor that doesn't have the votes,” said U.S. House of Representatives Speaker Nancy Pelosi to ABC News on Sunday, per Reuters. The news adds, "Let me just say that we're going to pass the bill this week," said Pelosi. Previously, the Democrat hinted to bring the bill to the House floor for voting on Monday, the news hints while, “expressed confidence on Sunday that the $1 trillion infrastructure bill will pass this week,” as per Reuters. Additional quotes Pelosi also said that it was ‘self-evident’ Biden's larger $3.5 billion social welfare and climate bill - whose massive cost has divided the Democratic party - might shrink in size. Republicans say they oppose the bill because it includes a temporary suspension of the debt limit, and while they oppose allowing the U.S. government to default, they want Democrats to suspend the debt limit without their votes. Pelosi accused Republicans of being irresponsible and said the failure to extend the debt ceiling could have a broader impact on the U.S. economy. FX reactions Given the mixed hints from the news, S&P 500 Futures begins the week mostly unchanged after Wall Street benchmarks closed in the green on Friday.

GBP/USD stays pressured around 1.3670 during the early Asian session on Monday. The cable pair kept Thursday’s pullback from 50-SMA to contribute towa

GBP/USD holds lower ground, fading the bounce off monthly low.Pullback from 50-SMA, easing bullish bias of MACD favor sellers.Five-week-old support line, previous resistance from mid-September offer key support.GBP/USD stays pressured around 1.3670 during the early Asian session on Monday. The cable pair kept Thursday’s pullback from 50-SMA to contribute towards a three-week downtrend by the end of Friday. In addition to the failures to cross a short-term moving average, the signal line of the MACD teasing a bear cross and also adds to the expectations of witnessing the pair’s further downside. However, a confluence of an ascending trend line from August 20 and the previous resistance line from September 14, around 1.3600 becomes a tough nut to crack for the GBP/USD sellers. Should the pair bears keep reins past 1.3600, lows marked during February and July, near 1.3570-65, add to the downside filters. Meanwhile, a corrective pullback will be immediately challenged by the 50-SMA hurdle of 1.3720, a break of which will highlight 200-SMA near 1.3765. In a case where GBP/USD bulls manage to cross the 1.3765 resistance, the 1.3800 threshold will be crucial for the cable pair’s further advances. GBP/USD: Four-hour chart Trend: Further weakness expected  

NZD/USD sellers flirt with the 0.700 threshold as they begin the week’s task during early Monday morning in Asia. This keeps the kiwi pair in the vici

NZD/USD bears refrain from easing controls after three-week downtrend.Fed tapering chatters, China’s Evergrade woes join US debt limit expiry fears to underpin US dollar’s safe-haven demand.Lack of key catalysts ahead of next week’s RBNZ, virus woes at home also favor sellers.Risk catalysts keep the driver’s seat amid a light calendar.NZD/USD sellers flirt with the 0.700 threshold as they begin the week’s task during early Monday morning in Asia. This keeps the kiwi pair in the vicinity of the bears after posting a three-week south-run amid broad US dollar strength. Be it the US Federal Reserve’s (Fed) tapering hints, backed by Friday’s Fedspeak, or fears of China’s Evergrande, not to forget anxiety over US budget allocations and debt ceiling near the expiry, everything helps the King Dollar to keep the throne due to its risk-safety status. Having heard the much-awaited tapering hints from the Fed, the US central bank officials, namely Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George, back the consolidation of asset purchases. Fed Chair Jerome Powell spoke for supply chain issues and labor market shortages on the other hand. China’s Evergrande is a fireball problem for the Dragon nation despite the government and People’s Bank of China (PBOC) trying to safeguard the monetary policy. Fears emanating from the real-estate giant have recently started hurting the power sector and hints at a major challenge for Beijing. Elsewhere, US policymakers do push for the $3.5 trillion stimulus, as well as the debt limit, but nothing concrete has been rolled out. As the latest funding expiry before October 01 comes closer, anxious traders seek solace in the USD. At home, the Reserve Bank of New Zealand (RBNZ) is widely anticipated to hike the benchmark rate during the next week’s monetary policy meeting. However, challenges from China and relating to the coronavirus-led local lockdowns, which remain present with lighter controls, keep NZD/USD traders on their toes. Despite the aforementioned challenges to the risk appetite, equities manage to stay firmer on Friday while the US 10-year Treasury yields refreshed three-month top while piercing the 1.45% mark. Looking forward, NZD/USD may remain depressed amid the gamut of challenges to the market sentiment and a light calendar for the day. Technical analysis Unless crossing a convergence of 200-SMA and a seven-month-old resistance line, around 0.7115-20, NZD/USD is likely to retest March’s low surrounding 0.6945.  
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