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Forex News Timeline

Monday, August 10, 2020

The NZD/USD pair stayed relatively quiet near 0.6600 during the Asian session on Monday buıt lost its traction during the European trading hours. As o

NZD/USD trades at its lowest level since August 3 below 0.6600.US Dollar Index extends recovery beyond 93.50 on Monday.Disappointing business sentiment data from New Zealand weigh on kiwi.The NZD/USD pair stayed relatively quiet near 0.6600 during the Asian session on Monday buıt lost its traction during the European trading hours. As of writing, the pair was trading at its lowest level in a week at 0.6587, losing 0.25% on a daily basis. Dismal data hurt NZD At the start of the week, the disappointing data from New Zealand made it difficult for the kiwi to find demand. The ANZ Business Confidence Index slumped from -31.8 to -42.4 in August and the ANZ Activity Outlook Index worsened from -8.9 to -17 for the same period. On the other hand, after closing the previous week on a strong footing on the back of better-than-expected US Nonfarm Payrolls figures, the US Dollar Index (DXY) continues to edge higher on Monday. With the DXY clinging to modest daily gains near 93.60 on Monday, NZD/USD struggles to shake off the bearish pressure. In the second half of the day, JOLTS Job Openings will be the only data featured in the US economic docket. On Tuesday, REINZ House Price Index and Electronic Card Retail Sales will be released from New Zealand. Nevertheless, these data are unlikely to trigger a significant market reaction and the USD's market valuation could continue to drive the pair's movements. Technical levels to watch for  

EUR/USD starts the week on a soft note well below 1.18. EMU Sentix Index improved to -13.4 for the current month. Investors keep looking to US politi

 EUR/USD starts the week on a soft note well below 1.18.EMU Sentix Index improved to -13.4 for the current month.Investors keep looking to US politics, geopolitics for direction.EUR/USD is adding to Friday’s gains and drops to fresh 4-day lows in the 1.1750 region, at the beginning of the week. EUR/USD focused on USD, politicsEUR/USD is down for the second session in a row on Monday, coming under further selling pressure following the pick-up in the demand for the greenback. The decline, so far, met decent contention in the mid-1.1700s at the time of writing. As the pair comes down from the overbought territory, investors keep closely watching the US political scenario for any clues on another potential stimulus package, which remains in the centre of the debate between Democrats and Republicans. In the euro docket, the Investor Confidence in the euro bloc “bettered” to -13.4 for the month of August, surpassing previous estimates at the same time. Across the pond, the JOLTs Job Openings will be the sole release along with the speech by Chicago Fed C.Evans. What to look for around EUR EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering the ongoing leg lower to the 1.1750 region so far. The July rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery in the wake of the coronavirus fallout. Also lending wings to the momentum around the euro appear the recently clinched deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region. EUR/USD levels to watch At the moment, the pair is losing 0.19% at 1.1761 and faces immediate contention at 1.1695 (weekly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally). On the other hand, a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally).

British Prime Minister Boris Johnsons aid on Monday that they will not hesitate to reimpose quarantine measures if needed. Regarding the government's

British Prime Minister Boris Johnsons aid on Monday that they will not hesitate to reimpose quarantine measures if needed. Regarding the government's travel advice, "we will keep looking at the data on where people want to travel," Johnson noted and urged people to consider the government's guidance when making holiday plans. Market reaction These comments don't seem to be having a significant impact on market sentiment. As of writing, the UK's FTSE 100 Index was up 0.25% on a daily basis. Meanwhile, the GBP/USD pair was virtually unchanged on the day at 1.3055.

GBP/USD has been falling amid safe-haven dollar flows as Sino-American tensions remain elevated. What’s more, fears about mass UK firings are weighing

GBP/USD has been falling amid safe-haven dollar flows as Sino-American tensions remain elevated. What’s more, fears about mass UK firings are weighing on the pound, FXStreet’s analyst Yohay Elam reports. Key quotes “Britain's labor market is holding up well thanks to the government's successful furlough scheme. That emergency program has likely kept unemployment depressed in June. Tuesday's labor figures are set to paint a rosy picture – despite the hardship inflicted by the COVID-19 crisis.”  “The latest surge in safe-haven demand is coming from China's announcement that it will sanction US officials. The Chinese move came in response to Washington's sanctioning of Hong Leader Carrie Lam. The world's largest economies are also at loggerheads over Taiwan. China sent a fighter jet briefly across the median line of Taiwan Strait – expressing its anger to US Health Secretary Alex Azar in Taipei. Negotiators will meet late in the week to take stock of the trade deal.”  “The greenback is benefiting from the ongoing fiscal impasse in Washington. President Trump sought to break the deadlock by signing four executive orders, providing unemployment benefits and other support. His move – which may not have legal backing – may push Republicans and Democrats to strike a deal. However, the recent decline in the US coronavirus case curve and the upbeat jobs report could cause complacency among policymakers.”   

WTI (futures on Nymex) climbed nearly 1.50% in a bid to test the $42 mark on Monday, in the wake of the upbeat outlook painted by Saudi Aramco’s CEO N

WTI rallies 1.50% on Saudi’s upbeat demand view, Iraq output cut. Upbeat Chinese data also boost oil, with eyes set on $42.30. US oil holds above a bunch of healthy support levels. WTI (futures on Nymex) climbed nearly 1.50% in a bid to test the $42 mark on Monday, in the wake of the upbeat outlook painted by Saudi Aramco’s CEO Nasser and expectations that Iraq will cut output in August. Further, slowing Chinese factory deflation also added to the strength in the black gold, as China is the world’s second-largest oil consumer. From a short-term technical perspective, the price is forming higher lows on the hourly sticks while recovering above all the major hourly Simple Moving Averages (HMA). The next upside target for the bulls is the $42.30, the critical horizontal trend line resistance. A break above which could trigger an extensive rally in the US oil. Meanwhile, the recovery momentum remains intact as long as the price holds above the $41.77 level, the confluence of the rising trendline support and horizontal 21-HMA. WTI could then target the horizontal 200-HMA at $41.35 should the selling pressure intensify. WTI hourly chart WTI additional levels to watch  

EUR/USD is trading at around 1.1765, down -0.17% on the day, as the US dollar is correcting higher. Karen Jones, Team Head FICC Technical Analysis Res

EUR/USD is trading at around 1.1765, down -0.17% on the day, as the US dollar is correcting higher. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that RSI has diverged and expects a deep consolidation on the pair. Key quotes “EUR/USD last week rallied to and failed at the 1.1915 January 2018 low and last month's high at 1.1908. There is now a large divergence of the RSI and we would allow for a deeper correction lower.” “Initial support lies 1.1646/36 (a double Fibo) ahead of the three-month uptrend at 1.1500 and the March high at 1.1495.”  “Above 1.1915/20 we will just go with it and look for further gains to 1.2635/66, the 200-month ma.”  

Following the recovery from daily lows of $2019, Gold (XAU/USD) continues to probe the upside, keeping its range around $2030. The sentiment around th

Gold cheers fresh US-China tensions, dollar gains to cap the upside? Markets turn risk-averse after China’s likely sanctions on US officials. US-China updated eyed ahead of the Wall Street open. Following the recovery from daily lows of $2019, Gold (XAU/USD) continues to probe the upside, keeping its range around $2030. The sentiment around the yellow metal remains underpinned amid fresh US-China tensions over the Hong Kong issue. The latest Bloomberg report cited that China is set to impose sanctions on the US officials in a tit-for-tat response to the American sanctions on the Hong Kong leader Carrie Lam and other top officials on Sunday. However, the upside attempts in gold remain capped by the dollar gains, as the USD bulls continue to cheer the better-than-expected US NFP data. Markets also prefer to hold onto the world’s reserve currency, the US dollar, ahead of the scheduled trade talks between the US and China this Saturday. The ongoing spat between the world’s two biggest economies over several issues, including the tech war, Hong Kong and Taiwan, could likely jeopardize the trade deal. These concerns continue to bode well for the safe-haven US dollar, which keeps the corrective downside intact for the precious metal. Also, limiting the recovery in gold, speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Aug. 4, per CFTC data. Attention now remains on the developments around the US-China conflict amid a light US docket while traders also look forward to the cues on the Wall Street open. Gold: XAU/USD technical levels The XAU bulls will retest the daily highs of $2036. The next resistance awaits at $2039, where the Bollinger Band one-hour Middle and Fibonacci 23.6% one-day coincide. Further north, minor resistances en route the next key barrier at $2048 will be tested. The latter is the Fibonacci 23.6% one-week. To the downside, powerful support is aligned at $2024, below which Friday’s low of $2015 will be put to test. Gold: Additional levels to watch  

GBP/USD prints mild gains, up 0.20% on a day to 1.3077, while Monday's 4-hour chart is showing the cable is at the bottom of the uptrend channel, FXSt

GBP/USD prints mild gains, up 0.20% on a day to 1.3077, while Monday's 4-hour chart is showing the cable is at the bottom of the uptrend channel, FXStreet’s analyst Yohay Elam reports. Key quotes “GBP/USD is trading in an uptrend channel, setting higher highs and higher lows. However, the downdrift toward the bottom of the range has resulted in losing momentum on the 4-hour chart, as well as the 50 Simple Moving Average.”  “The uptrend support line is at 1.3025 at the time of writing, nearly converging with Friday's low. The next cushion is at 1.2985, followed by 1.29 and 1.2845.”  “Resistance is at 1.3085, the daily high, followed by 1.3115 and 1.3170, before August's high of 1.3183.”  

Nathan Peterson from Charles Schwab remains bullish on the S&P 500 index after the index closed above the 3,350 mark last week, the highest close sinc

Nathan Peterson from Charles Schwab remains bullish on the S&P 500 index after the index closed above the 3,350 mark last week, the highest close since late February.   Key quotes “With roughly 85% of the S&P 500 companies having reported earnings so far, 64% have beat estimates on the top line while 84% have beat on the bottom line. This compares to the respective 59% and 65% seen in the prior quarter.” “It feels like the path of least resistance is still probably higher (perhaps traders want to see a fresh all-time cross the tape), but if there is a continued delay in a fiscal relief bill we may see some more downside first. In that scenario it appears that the first level of support would come in around the 20-day Simple Moving Average (3,254). Translation = bullish.” “At its current level of roughly 23, the VIX is suggesting daily changes in the S&P 500 of roughly 40 points. That seems a bit high when you look at the recent price action in the S&P 500, but remember that the VIX represents a 30-day future volatility estimate. A 23 VIX doesn’t seem unreasonable in my opinion given the high level of uncertainty in the current economic environment.”    

Andrew Sheets, Chief Cross-Asset Strategist at Morgan Stanley, discusses the case to be more optimistic in the near-term and why he thinks this remain

Andrew Sheets, Chief Cross-Asset Strategist at Morgan Stanley, discusses the case to be more optimistic in the near-term and why he thinks this remains a bull case outcome rather than his base case expectation. The strategist breaks this story down along three main themes: economic fundamentals, market valuations and supply versus demand. Key quotes "On economic fundamentals, the near-term bull case is that global economic data will continue to recover and really shrug off any new Autumn resurgence of the Coronavirus. We think the economic recovery has been greatly aided by government stimulus; stimulus that in the US may soon start to run out. As of this recording, there was still no sign that more federal spending would be on the way." "The US and global equity markets are now trading near their recent valuation highs in price-to-earnings and other metrics. And this is probably the most worrying element of today's market. But current valuations are also very bifurcated, with stocks in high growth segments like technology, very expensive, and other parts of the market, far more average versus history. The bull case is that the expensive parts of the market can manage to hang on to the valuations they have, and the rest of the market can see its valuations go higher." "The strongest argument for continued market strength is likely the idea that there remains a lot of 'cash on the sidelines,' so to speak. Central banks are continuing to buy assets in large numbers. Investors raised a lot of cash during February and March, as the virus hit, that they haven't fully put back into the market. The optimistic case is that this money finally relents and buys into the market in the face of heavy central bank intervention." "In the near-term, we simply think that people could hold onto their cash a little while longer. Whether it's the uncertainty over further government stimulus, or the coming US elections, or US-China trade tensions, or simply how the virus will evolve as schools try to reopen, there remain a host of uncertainties. With investors now enjoying year-to-date gains across many asset classes, they simply may not try to push their luck."

Turkey 3mth quarterly jobless average climbed from previous 12.8% to 12.9% in May

The eurozone Sentix Investor Confidence gauge has risen from -18.2 to -13.4 points in August, beating expectations for -15.2 points as the old contine

The eurozone Sentix Investor Confidence gauge has risen from -18.2 to -13.4 points in August, beating expectations for -15.2 points as the old continent emerges from the COVID-19 crisis.  The broad survey continues its uptrend from the lows seen in April when infections were at their peak. Nevertheless, it remains in negative territory, pointing to some pessimism.  EUR/USD is trading at around 1.1765, down on the day. Sino-American tensions are supporting the safe-haven dollar. US fiscal talks and reactions to Friday's Non-Farm Payrolls are in play.

European Monetary Union Sentix Investor Confidence came in at -13.4, above forecasts (-15.2) in August

Bloomberg is reporting that China is set to sanction US officials in response to Washington's move against Hong Kong's leader Carrie Lam. -- more to c

Bloomberg is reporting that China is set to sanction US officials in response to Washington's move against Hong Kong's leader Carrie Lam.  S&P 500 futures have turned down in response to the news. Earlier, authorities in the city-state arrested Jimmy Lai – a pro-democracy media mogul – under the Beijing-imposed security law. -- more to come A Chinese fighter jet has briefly crossed the median line of the Taiwan Strait, raising concerns in the island nation. The move is seemingly in response to the visit of US Health Secretary Alex Azar to Taipei.

EUR/USD has stalled its upward move in what seems like more than a correction. Yohay Elam, an analyst at FXStreet, points out three reasons why the do

EUR/USD has stalled its upward move in what seems like more than a correction. Yohay Elam, an analyst at FXStreet, points out three reasons why the dollar may extend its gains Key quotes “The Phase One trade deal remains intact – and that is what matters to markets. Negotiators from the world's largest economies will meet late in the week to take stock of the deal. Investors are certain the US and China will stick to the accord – yet China hinted it is in danger. Any nasty surprise may shake confidence and could boost the safe-haven dollar.”  “Talks between Republicans and Democrats on the next relief package broke down on Friday amid various disagreements. President Trump followed with four executive orders, most notably announcing $400/week in federal unemployment benefits, lower than $600/week previously provided.  It is unclear if these orders can withstand court scrutiny – as the power of the purse belongs to Congress. However, his move was an attempt to break the impasse. Talks are set to resume at some point, with aid to states being one of the most contentious points.”   “COVID-19 flareups seem to remain small but are less localized than beforehand. On the other hand, the US case curve is now clearly leaning lower, while the pace of new deaths from the disease is also showing tentative signs of dropping. The situation in America remains worse than in Europe, but that gap is narrower – and may weigh on the currency pair.”  

After consolidating in a tight range around 105.80 in the Asian session this Monday, USD/JPY broke to the upside and conquered the 106 threshold. The

USD/JPY charts descending triangle breakout on the hourly chart.Hourly RSI spikes to test the overbought region.  Upside appears more compelling in the near-term. After consolidating in a tight range around 105.80 in the Asian session this Monday, USD/JPY broke to the upside and conquered the 106 threshold. The uptick in the spot can be explained by the descending triangle breakout spotted on the hourly chart following a break above the falling trendline resistance at 105.98. The spike in the hourly Relative Strength Index (RSI) towards the overbought territory also adds credence to the renewed upside bias. The spot has climbed above all the major HMAs, with the next upside target seen at 106.19 (August 4 highs), above which the August 3 high of 106.47 could be put to test. Alternatively, the 21-hourly Simple Moving Average (HMA) at 105.85 could limit any pullbacks. A break below the latter will call for a test of powerful support at 105.68, the confluence of the 50 and 100-HMAs. All in all, the path of least resistance appears to the upside. USD/JPY: Hourly chart USD/JPY additional levels  

These are the main highlights of the CFTC Positioning Report for the week ended on August 4: The speculative community kept the positive stance around

These are the main highlights of the CFTC Positioning Report for the week ended on August 4: The speculative community kept the positive stance around the European currency well and sound for yet another week, taking the net longs to the highest level since late December 2011. In fact, positive results from the domestic docket fuelled once again the likelihood of a ‘V’-shaped recovery in the region, while the recently clinched deal around the European Recovery Fund also underpins the solid tone in EUR. Net shorts in the British pound rose to 3-week highs on the back of the generalized rally in the risk complex. However, the prospects of extra gains in the sterling are expected to lose momentum in the near/medium-term, where stagnant EU-UK talks, potential extra easing from the BoE, Brexit jitters and the impact of the pandemic on the economy are all forecasted to keep weighing on the quid for the months to come. Regarding USD, net shorts eased a tad, probably in light of the extreme oversold conditions of the currency, which sponsored some gain in momentum towards the end of last week. Political effervescence, the unabated pandemic and the massive monetary stimulus running in the economy should all keep the pressure on the buck well in place. Still in the safe haven universe, outflows from the dollar appear to have benefited JPY and CHF, which net longs increased to the highest level since early June and early May 2014, respectively.

West Texas Intermediate (WTI), the North American oil benchmark, is nearing $42.00 per barrel. Strategists at TD Securities note that the demand side

West Texas Intermediate (WTI), the North American oil benchmark, is nearing $42.00 per barrel. Strategists at TD Securities note that the demand side is still a concern for investors but supply cuts should mean the market will rebalance by 2021. Key quotes “Amid large crude oil inventory draws in the US, money managers increased their long WTI crude oil exposure. But, specs also added shorts as OPEC+ production increases came near, at a time when demand growth remains a worry.” “While demand continues to be a concern, the supply side is providing more support as US production fell back down to 11 millon barrels per day, showing signs that a revival in shale supply in the US looks to be a long shot. This suggests the global market should rebalance into 2021 as demand normalizes and creates a set-up in which an eventual recovery in demand could see energy prices trade significantly higher in the future.”  

EUR/USD is trading around 1.1765, after Friday's 0.78% decline, the biggest single-day drop in over four months. Monday's 4-hour chart is painting a m

EUR/USD is trading around 1.1765, after Friday's 0.78% decline, the biggest single-day drop in over four months. Monday's 4-hour chart is painting a mixed picture with critical support looming at 1.17, Yohay Elam, an analyst at FXStreet, reports. Key quotes “EUR/USD has lost its upward momentum on the 4-hour chart and fell under the 50 Simple Moving Average – both bearish signs. Critical support is at 1.17, a support line from late July, and also where the 100 SMA hits the price.” “Ahead of 1.17, EUR/USD has some support at 1.1750, Friday's low. Further down, 1.1630 and 1.1545 await the currency pair.” “Resistance is at 1.1815, a support line from last week, followed by 1.1820, a temporary separator of ranges. The two-year high of 1.1915 is the upside target.”   

USD/CAD extends its side trend into the European session, consolidating Friday’s to just shy of the 1.3400 level. At the press time, the spot trades m

USD/CAD consolidates the post-NFP gains below 1.3400.CAD bulls look to capitalize on the WTI rally.  Dollar dynamics, US stimulus talks will remain of note. USD/CAD extends its side trend into the European session, consolidating Friday’s to just shy of the 1.3400 level. At the press time, the spot trades modestly flat at 1.3390, having found solid bids near the 1.3365 region earlier in the Asian session. The latest leg up in the major can be attributed to the fresh buying interest seen in the US dollar across its main peers, as the sentiment continues to remain underpinned by the upbeat US Non-Farm Payrolls data. Payrolls for July increased by 1.8 million vs. 1.6 million expected. However, the bulls struggle to extend the upside above the 1.3400, as the Canadian dollar continues to find support from the rally in WTI prices. The US oil jumped over 1% to regain $41.50 after Saudi Aramco’s CEO said that oil demand recovery is picking up amid easing lockdowns worldwide. Looking ahead, amid an absence of significant US and Canadian macro data, the focus will remain on the risk trends and US dollar dynamics ahead of the US fiscal stimulus talks. USD/CAD technical levels To the upside, the spot needs to take out 1.3400 (round number), in order to test 20-DMA at 1.3413. On the flip side, 5-DMA at 1.3347 will be the immediate cushion. The next downside target is seen at 1.3300 (round figure). USD/CAD additional levels  

Perceptions and reality on the US economy are dictating direction in the USD/CAD, as FXStreet’s analysts Joseph Trevisani notes. The USD/CAD rallied o

Perceptions and reality on the US economy are dictating direction in the USD/CAD, as FXStreet’s analysts Joseph Trevisani notes. The USD/CAD rallied on Friday’s better than expected US employment report after reaching its lowest level since late February earlier in the week. Weaker pricing for WTI also put a drag on the loonie despite the positive Employment Change report out of Ottawa.  Key quotes “Despite the improving North American and global economic picture West Texas Intermediate (WTI) is stalled below the $42 resistance line which had marked the pricing bottom for four years. It will be difficult for the Canadian dollar to strengthen until this major component of its economy is again profitable.” “The current but perhaps waning scenario has the US recovery in serious straits from the second wave of the coronavirus. There are good reasons to doubt the accuracy of that picture. Caseloads, hospitalizations and fatalities in the affected states have been declining rapidly. The forward-looking new orders indexes in manufacturing and services were very strong in July. The labor market is the crux of the economic situation and new business equals new hiring.” “If US statistics continue to improve the USD/CAD will follow them higher. The area between 1.3400 and 1.3625 was well traded from the second week of June until the third week of July and offers plentiful resistance lines. The area below 1.3330 is similar though the support comes from the pre-pandemic ranges from June 2019 through March 2020.”   

GBP/USD has failed to hold onto the highs amid the BoE decision and Sino-American tensions. For this week, the UK jobs report, GDP, the US consumer an

GBP/USD has failed to hold onto the highs amid the BoE decision and Sino-American tensions. For this week, the UK jobs report, GDP, the US consumer and geopolitics are all eyed, Yohay Elam, an analyst at FXStreet, informs. Key quotes “With coronavirus raising its ugly head in Europe, is Britain also seeing a similar increase? So far, the UK's recent figures are better, but any increase would raise the chances of a lockdown on London – perhaps the most significant threat to the recovery.”  “Brexit and US-UK trade talks both carry low expectations for a breakthrough in the near future, allowing for any piece of good news to boost sterling. On the other hand, the Sino-British front has calmed, but if London is dragged by Washington to a fresh fight with Beijing, the pound could suffer.” “Two top-tier economic indicators await cable traders. Tuesday's jobs report will likely remain robust. The unemployment rate is set to remain at 3.9% in June – exactly where it was in January before coronavirus grabbed the headlines. The second event is GDP figures for the second quarter. Economists foresee a bounce in June to mitigate the crash already reported for April and May – resulting in a minor decline of 1.8%, similar to -2.2% in the first quarter. That would be excellent news. Any disappointment would pressure PM Johnson to prolong emergency policy schemes for longer.” “The clash between the world's largest economies will probably garner even greater attention – as American and Chinese trade negotiators meet to take stock of the Phase One deal. Any threat to the accord may already trigger more significant jitters. The upcoming party conventions – key events in the electoral calendar – may push the Trump administration to take bolder steps, especially if he remains behind in the polls.”  “Friday features two critical events. Retail sales statistics for July will likely show a slowdown in the recovery – and perhaps a downward turn. Consumption is central to the US economy and any change is critical. Apart from the headline figure, markets will eye the Control Group. The second significant release is the University of Michigan's preliminary Consumer Sentiment Index for August. The forward-looking indicator has the last word of the week.”   

Slovakia Industrial Output (YoY) above expectations (-18%) in June: Actual (-8.5%)

The dollar is likely to remain weak until the US economy resumes stronger recovery. Resistance at 106.00 capped the USD/JPY rally after better than ex

The dollar is likely to remain weak until the US economy resumes stronger recovery. Resistance at 106.00 capped the USD/JPY rally after better than expected US payrolls provide respite for the greenback on Friday and remains strong, FXStreet’s analyst Joseph Trevisani reports. Key quotes “Markets will now have to decide if the July payrolls were the confirmation of a deepening slowdown, a normal deceleration from June’s torrid hiring  pace or a one-month reflection of the already retiring Covid-19 surge in June and early July.” “If US statistics point to a resumption of the pace in May and June then the dollar will soon adopt that energy and rally. Absent that improvement the greenback will continue to sag even though the recovery in Japan is likely to be even weaker and more questionable”. “Resistance at 106 is the immediate consideration. If that holds there is limited support to 105.00 and little beneath. The area above 106, especially above 106.50 occupied trading for four months and is replete with resistance and then support lines.”  

The latest Bank of France economic forecasts showed that the economy contracted in line with expectations in the second quarter of 2020. Key highlight

The latest Bank of France economic forecasts showed that the economy contracted in line with expectations in the second quarter of 2020. Key highlights “French economy in July ran 7% below the level expected had there been no coronavirus crisis.” “The euro zone's second-biggest economy contracted 13.8%, in line with its forecast.” "The rebound continued in July, at a more moderate rhythm, in line with the trajectory anticipated last month." “In the manufacturing industry, capacity utilization in July rose 3 points to 72%.” “Manufacturing and service sector activity would be stable in August.” EUR/USD capped by 1.1800 The EUR/USD pair remains under mild bearish pressure in early Europe, trading at 1.1781, at the time of writing. The euro remains unperturbed by the above forecasts.

The yellow metal dropped nearly 1.50% and settled at $2035 on Friday. Heading into a fresh week, gold remains on the defensive amid a broadly subdued

The yellow metal dropped nearly 1.50% and settled at $2035 on Friday. Heading into a fresh week, gold remains on the defensive amid a broadly subdued US dollar. Technical indicators signal further correction in the offing but gold’s downside remains capped as the US dollar struggles with its recovery, FXStreet’s Dhwani Mehta reports. Key quotes “The haven demand for the US currency could resurface, as uncertainty over the US fiscal aid looms even after President Trump signed coronavirus relief orders on Saturday. House Speaker Pelosi and Treasury Secretary Steven Mnuchin said they were open to restarting COVID-19 aid talks.” “The escalation in the US-China tensions following the ban on the Chinese tech-titans could likely bode well for the US dollar and cap the upside attempts in gold. Also, investors remain wary ahead of the US CPI release and August 15 trade talks between the world’s two biggest economies.” “A potential bear pennant formation is spotted on the hourly chart, which is a bearish continuation pattern. Acceptance under $2023 will confirm the pattern, opening doors for a test of Friday’s low at $2015. The next support at Wednesday’s low of $2009 will be tested, as the sellers eye for a break below $2000. The hourly-RSI remain in the bearish territory at 41.00, suggesting more room for losses.” “Gold bulls need clearance above the bearish 21-hourly Simple Moving Average (HMA) at $2040 to regain control. However, a sustained move above the horizontal 50-HMA at $2050 is needed to revive last week’s bullish momentum for a rally towards the record highs above $2075.”  

Lee Sue Ann, Economist at UOB Group, sees the RBNZ sticking to the current monetary conditions at its meeting on August 12. Key Quotes “We cannot rule

Lee Sue Ann, Economist at UOB Group, sees the RBNZ sticking to the current monetary conditions at its meeting on August 12. Key Quotes “We cannot rule out the possibility of negative interest rates in time, but that will come with considerable baggage and we do not expect the RBNZ to employ that option for now.” “It will continue to use volume announcements (eg the programme is currently NZD60bn in size) as it fine-tunes its policy stance.” “We expect QE to be expanded to a cap of NZD90bn by August. Another option for the RBNZ is to adjust the QE programme to a type of ‘yield curve control’.”

AUD/USD is looking to break the Asian consolidative phase to the upside, as the bulls target the 0.7200 barrier, taking cues from a broadly subdued US

AUD bulls struggle to extend the recovery momentum. US dollar clings onto NFP-backed gains amid US fiscal impasse. US-China tensions, Australian jobs to remain in focus this week. AUD/USD is looking to break the Asian consolidative phase to the upside, as the bulls target the 0.7200 barrier, taking cues from a broadly subdued US dollar and positive US stock futures. The US dollar consolidates Friday’s recovery against its major peers, induced by the upbeat NFP data and US-China flare-up over the former banning Beijing’s tech titans. Meanwhile, the S&P 500 futures trade with moderate gains, as US President Donald Trump’s coronavirus relief orders and slowing factory deflation in China lifted the market sentiment. The aussie draws support from the gains in the higher-yielding S&P 500 futures. However, it remains to be seen if the spot could sustain the upside, as the looming US fiscal stimulus talks and US-China escalation could revive the recovery momentum in the US dollar. On the data front, the US docket is light this Monday and therefore, the focus remains on the US CPI, Australian jobs data and US-China trade talks due later in the week ahead. AUD/USD technical levels The immediate upside will be tested at 0.7200 (round figure). The next resistance is aligned at 0.7244 (Aug 7 high). On the flip side, the immediate support is seen at 0.7150 (psychological level), below which the 20-DMA at 0.7124 could be tested. AUD/USD additional levels  

The greenback, when tracked by the US Dollar Index (DXY), has started the week on the negative footing around the 93.30 region at the time of writing.

DXY eases from Friday’s highs in the 93.60/65 band.US politics and another stimulus package remain in centre stage.JOLTs Job Openings, Fed’s Evans next on tap in the calendar.The greenback, when tracked by the US Dollar Index (DXY), has started the week on the negative footing around the 93.30 region at the time of writing. US Dollar Index looks to politics, data The index is posting modest losses on Monday, starting its eighth consecutive week in the negative territory. The last time the dollar experienced this price action performance was in the June-August period, where it closed in the red territory for nine consecutive weeks. In the meantime, the unremitting advance of the pandemic combines with efforts to keep the economic recovery well and sound, rising hopes of a COVID-19 vaccine and the ongoing stalemate in the US political arena around an extra stimulus package to dictate the price action not only in around the dollar but also in the rest of the global assets. It will be a light session data-wise in the US, with June’s JOLTs Job Openings only due later seconded by the speech by Chicago Fed C.Evans (2021 voter, centrist). What to look for around USD The dollar clinched fresh lows near 92.50 in the second half of the last week, albeit managing to reclaim the 93.00 mark and above afterwards. Occasional bullish attempts, however, appears to have run out of favour in the 94.00 region (August 3). Looking at the broader picture, investors keep the bearish stance on the currency unchanged against the usual backdrop of a dovish Fed, the unabated advance of the pandemic and somewhat diminishing momentum in the economic recovery. Also weighing on the buck, market participants seem to have shifted their preference for other safe havens instead of the greenback on occasional bouts of risk aversion. On another front, the speculative community remained well into the negative territory for yet another week, adding to the idea of a more serious bearish trend in the dollar. US Dollar Index relevant levels At the moment, the index is losing 0.04% at 93.35 and faces the next support at 92.52 (2020 low Aug.6) seconded by 91.80 (monthly low May 18) and finally 89.23 (monthly low April 2018). On the flip side, a break above 93.99 (weekly high Aug.3) would target 94.20 (38.2% Fibo of the 2017-2018 drop) en route to 96.03 (50% Fibo of the 2017-2018 drop).

CME Group’s advanced readings for Natural Gas futures prices noted open interest resumed the downside on Friday, this time decreasing by around 20.7K

CME Group’s advanced readings for Natural Gas futures prices noted open interest resumed the downside on Friday, this time decreasing by around 20.7K contracts. Volume, instead, reversed three pullbacks in a row and rose by nearly 128.4K contracts. Natural Gas still targets $2.50/MMBtu Friday’s uptick in prices of Natural Gas was amidst declining open interest, which is a sign that further upside could lack conviction in the short-term horizon. Looking at the broader picture, the key target emerges at the 2020 high aroun $2.50 mark per MMBtu (May 5).

Norway Consumer Price Index (MoM) above forecasts (0.4%) in July: Actual (0.7%)

Norway Core Inflation (MoM) above forecasts (0.5%) in July: Actual (0.9%)

Norway Consumer Price Index (YoY) below expectations (1.4%) in July: Actual (1.3%)

Denmark Consumer Price Index (YoY) climbed from previous 0.3% to 0.5% in July

Norway Producer Price Index (YoY) registered at -13.3%, below expectations (-11.7%) in July

Denmark Current Account: 14.7B (June) vs 13.3B

Denmark Inflation (HICP) (YoY) up to 0.4% in July from previous 0.2%

Denmark Trade Balance: 8.6B (June) vs previous 9.2B

EUR/JPY remains on the back foot for the second consecutive day as it takes rounds to the intraday low of 124.67, currently around 124.73, while headi

EUR/JPY seesaws near intraday low of 124.67 while extending Friday’s losses.Bearish MACD, pullback from 15-month high keep sellers hopeful.Only a fresh monthly high can convince buyers for return.EUR/JPY remains on the back foot for the second consecutive day as it takes rounds to the intraday low of 124.67, currently around 124.73, while heading into the European session on Monday. During the last week, the pair failed to extend its north-run beyond the late-April 2019. The pullback activated on Friday gains support from bearish MACD to suggest further downside. Even so, the quote needs to break an ascending trend line from July 10, at 124.70 now, to revisit July 29 top near 124.30. Not only the late-July top but July 24 trough near 122.85 and 200-bar SMA level of 122.60 can also lure the sellers past-124.70. Alternatively, 125.20 and the monthly top near 125.60 could entertain the intraday buyers during the pair’s fresh pullback moves. Though, any more upside past-125.60 will easily break 126.00 to challenge April 2019 top near 126.80. EUR/JPY four-hour chart Trend: Pullback expected  

Here is what you need to know on Monday, August 10: The US dollar is holding onto Friday's gains, triggered by upbeat Non-Farm Payrolls and escalating

Here is what you need to know on Monday, August 10: The US dollar is holding onto Friday's gains, triggered by upbeat Non-Farm Payrolls and escalating Sino-American tensions. The focus is on fiscal stimulus talks, which remain stuck despite presidential intervention. Gold is on the back foot and Bitcoin is trading higher. The US economy gained 1.763 million jobs in July, with the unemployment rate falling to 10.2%. The figures beat estimates but still point to a slowdown in hiring amid a resurgence of coronavirus. The JOLTS Job Openings statistics for June are due out on Monday. US fiscal stimulus: President Donald Trump signed four executive orders that include federal unemployment benefits worth around $400/week, deferring of payroll tax, and other measures. It is unclear if he has the authority to act and the move seemed to break the deadlock between Republicans and Democrats. Both sides remain apart on jobless benefits and on state aid. Markets remain optimistic that a deal will be reached. However, support will likely be less ambitious that earlier thought. Safe-haven flows could boost the dollar if the probability for a large package diminishes. Sino-American tensions remain elevated after Washington announced sanctions against Hong Kong leader Carrie Lam. Authorities in the city-state arrested Jimmy Lai, a prominent pro-democracy media mogul. US Health Secretary Alex Azar visited Taiwan, angering Beijing. US and Chinese trade negotiators will meet to take stock of the trade deal – what genuinely interests markets. So far, the world's largest economies have been sticking to the Phase One accord signed in January. Gold was knocked off the all-time high of $2,075 on Friday and consolidates around $2,030. Silver is consolidating around $28 after nearing $30 last week. Bitcoin is trading around $12,000 after a swift move higher. Ethereum is somewhat more stable at around $400 while XRP is holding up near $0.30. EUR/USD is trading around 1.18, off last week's highs. The increase in the old continent's coronavirus cases seems to remain under control. The SEntix Investor Confidence is eyed. GBP/USD is trading below 1.31 ahead of this week's UK jobs and growth figures. A survey suggests that up to a third of British employers are set to cut jobs by October. AUD/USD is holding up above 0.7150, as COVID-19 cases in Melbourne are showing signs of stabilization. US coronavirus cases have topped five million and deaths are over 162,000. Nevertheless, the infections' curve is bending lower while mortalities have stabilized.  See 2020 US Election: August is for calculating, September for campaigning

FX option expiries for Aug 10 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 3.0bn - GBP/USD: GBP amounts 1

FX option expiries for Aug 10 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1800 3.0bn - GBP/USD: GBP amounts         1.2900 353m  - USD/JPY: USD amounts          105.00 675m 105.03 400m 105.50 1.7bn 107.05 400m - USD/CAD: USD amounts         1.3315 715m

Switzerland Unemployment Rate s.a (MoM) came in at 3.3%, above forecasts (3.1%) in July

Economists at Barclays noted that the Turkish lira is still under that level, which could prompt the central bank to consider a rate hike. Key quotes

Economists at Barclays noted that the Turkish lira is still under that level, which could prompt the central bank to consider a rate hike. Key quotes (via Bloomberg) “Unless the dollar-lira pair exceeds 7.50, Turkey’s central bank will “keep its policy rates stable and manage the volatility by moving within the corridor and reducing TRY liquidity in the system.” Turkey’s policy rate to remain on hold at 8.25% for the rest of the year; “however, the risks are clearly to the upside following the recent volatility” in the lira. The main factors behind the lira’s volatility are local demand for hard currency and a “relatively muted reaction” from the central bank in terms of foreign-exchange sales. Even if the central bank shifts to using the Late Liquidity Window to fund all lending at 11.25%, Barclays says it “may not be sufficient enough to limit locals’ FX demand, ceteris paribus” Policy makers will likely raise the blended funding rates toward 11.25% while evaluating the effect of their measures over the next few days; the central bank is set to continue to “intervene verbally if needed” until the next meeting of the Monetary Policy Committee on Aug. 20.”

Traders scaled back their open interest positions in Crude Oil futures markets by around 13.1K contracts following three builds in a row on Friday, in

Traders scaled back their open interest positions in Crude Oil futures markets by around 13.1K contracts following three builds in a row on Friday, in light of flash data from CME Group. In the same line, volume went down for the second session in a row, this time by around 39.2K contracts. WTI still appears capped by $44.00/bbl Prices of the West Texas Intermediate extended the consolidative fashion for yet another session on Friday amidst shrinking open interest and volume. Further decline now looks unlikely in the very near-term, while last week’s multi-month tops around $43.50 per barrel keeps limiting the upside for the time being.

EUR/GBP prints a three-day losing streak while declining to 0.9022, down 0.11% on a day during the pre-European session on Monday. The pair stays depr

EUR/GBP stays mostly beyond 0.9020 despite sluggish moves.Falling trend line from July 29 adds to the upside barrier.A two-month-old support line holds the key to July month’s bottom.EUR/GBP prints a three-day losing streak while declining to 0.9022, down 0.11% on a day during the pre-European session on Monday. The pair stays depressed below 200-HMA as well as a short-term falling resistance line. As a result, sellers can keep their short positions while targeting 0.9000 psychological magnet. However, any further downside will have to offer a clear downside break below an upward sloping trend line from June 09, at 0.9000, to aim for July month’s low near 0.8940. It’s worth mentioning that the pair’s inability to bounce off the 0.9000 threshold will attack June month’s bottom surrounding 0.8865. Alternatively, 0.9030 and 0.9040, comprising 200-HMA and the aforementioned resistance line, can restrict the pair’s short-term recoveries. Also acting as upside hurdles will be 0.9060 and the late-July tops near 0.9090 ahead of 0.9100 round-figures. EUR/GBP hourly chart Trend: Bearish  

Open interest in Gold futures markets shrunk by almost 1.5K contracts according to preliminary figures from CME Group at the end of last week, reachin

Open interest in Gold futures markets shrunk by almost 1.5K contracts according to preliminary figures from CME Group at the end of last week, reaching the third consecutive session with losses. On the other hand, volume reversed the previous drop and rose by around 97.3K contracts. Gold met resistance near $2,080/oz The July-August rally in the precious metal seems to have met initial hurdle in the $2,080 area per ounce during last week. Friday’s negative price in Gold action came in line with the rebound in the greenback and shrinking open interest, leaving the scenario of a deeper correction unfavoured for the time being.

Markets in Asia seem to not miss Japanese traders as stocks in Australia and South Korea manage to keep the screens heated ahead of Monday’s European

Asian stocks trade mixed amid risk reset, off in Japan.Stimulus hopes renew while virus woes and Sino-American tussle continue.MSCI’s index of Asia-Pacific shares outside Japan seesaw near the highest in over six months.Markets in Asia seem to not miss Japanese traders as stocks in Australia and South Korea manage to keep the screens heated ahead of Monday’s European session. Additionally, shares from China and India also join the league of positive signs but those from Hong Kong mark losses as we write. While portraying the mixed mood MSCI’s index of Asia-Pacific shares ex-Japan take rounds the last week’s top, also the highest since February by the press time. Although the coronavirus (COVID-19) woes get stronger in Australia, with a record death toll of 300, upbeat China inflation data seems to have helped ASX 200 rise over 1.70% to 6,105. The same could be applied to South Korea’s KOSPI which gains 1.4% to 2,385 despite natural calamities hitting the Asian nation. Overall, the market sentiment stays mildly positive as US President Donald Trump’s recent executive orders pushed the opposition democrats back to the discussion table for phase 4 COVID-19 stimulus package. Though, Mr. Trump’s sanctioning of Hong Kong Leader Carry Liam and White House’s allegations that China is meddling into the US Presidential Election are the headlines that keep challenging the risk-tone. Talking about the data, China’s July month Consumer Price Index (CPI) and Producer Price Index (PPI) renewed hopes that the Asian major is overcoming the pandemic’s economic impacts. On the contrary, downbeat figures of New Zealand’s ANZ Business Confidence and Activity Outlook trims the gains of NZX 50. Amid all these plays, S&P 500 Futures rise 0.20% to 3,351 while the US 10-year Treasury yields fail to portray any moves in the absence of Japanese traders. It’s worth mentioning that the US dollar fails to keep Friday’s gains whereas crude oil rises over 0.50% as we write. Moving on, a light calendar keeps the market players on the lookout of risk catalysts for the fresh impetus. In doing so, virus headlines, stimulus update and the Sino-American tussle will be the key to follow.

Gold consolidates Friday’s steep drop to $2015, as the upside attempts remain capped by the US fiscal impasse and lingering US-China tensions. The ri

Gold consolidates Friday’s steep drop to $2015, as the upside attempts remain capped by the US fiscal impasse and lingering US-China tensions. The risk-averse market conditions could put a fresh bid under the US dollar, as it struggles to extend Friday’s correction. The yellow metal corrected sharply from the record highs of $2075 last Friday, courtesy of the upbeat US NFP figures and US-China tech war escalation. Let's take a look at how gold is positioned technically. XAU/USD: Key resistances and supports The tool shows that the bright metal face strong upside hurdle around $2032, which the convergence of the Fibonacci 38.2% one-week, SMA5 on four-hour and SMA100 on one-hour. Above that level, the XAU bulls will retest the daily highs of $2036. The next resistance awaits at $2039, where the Bollinger Band one-hour Middle and Fibonacci 23.6% one-day coincide. Further north, minor resistances en route the next key barrier at $2048 will be tested. The latter is the Fibonacci 23.6% one-week. The corrective bias will likely remain intact as long as the price holds below the critical resistance at $2054, the pivot point one-month R1. To the downside, powerful support is aligned at $2024, below which Friday’s low of $2015 will be put to test. Sellers will then target the $2009 demand area, which is the pivot point one-day R1. The bears need to take out the $2005 support (Fibonacci 61.8% one-week) to extend the recent downside bias. Here is how it looks on the tool   About the Confluence Detector The TCI (Technical Confluences Indicator) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.Learn more about Technical Confluence 

USD/CHF prints 0.07% gains while trading around 0.9130 during the pre-European session. Although the pair rises for the third consecutive day after it

USD/CHF seesaws around the intraday top while extending pullback from 0.9122.10-day EMA adds to the upside barrier during the three-day winning streak.Sellers will have to conquer the key supports to dominate further.USD/CHF prints 0.07% gains while trading around 0.9130 during the pre-European session. Although the pair rises for the third consecutive day after it’s U-turn from 0.9050, a falling trend line from July 17 and 10-day EMA stay tall to challenge the bulls. As a result, the pair’s latest upside momentum is likely to falter unless it successfully crosses 0.9150 level comprising the said EMA. However, the quote’s further rise to the immediate resistance line near 0.9145 can’t be ruled out. Should the buyers manage to print a daily closing beyond 0.9150, the resulted upside will eye 0.9200 and the monthly top near 0.9240. Meanwhile, 0.9100 can offer immediate support to the pair during fresh declines, a break of which could recall the multi-month low near 0.9050 to the charts. In a case where the bears dominate past-0.9050, 0.9000 psychological magnet can act like a tough nut to crack for the sellers before targeting January 20, 2015 top near 0.8840/35. USD/CHF daily chart Trend: Pullback expected 

The Nomura Research Team believes that the Reserve Bank of India (RBI) is likely to cut the key rates by 50 bps in October to December quarter amid a

The Nomura Research Team believes that the Reserve Bank of India (RBI) is likely to cut the key rates by 50 bps in October to December quarter amid a prolonged period of a growth slowdown and inflation worries. Key quotes “While stagflation risks may dominate in the short term, they are unlikely to be sustained. Recent flattening in the mobility curve suggests that sequential growth is stagnating below normal after the initial business resumption, which should have a salutary effect on underlying inflation. “The latest forward-looking surveys released by the RBI point to a troubling stagflationary outcome. Household inflation expectations (1yr ahead) inched up to an elevated 10.5% in July, levels last seen in 2015-2016. Consumer confidence, by contrast, remains weak, and while forward expectations have improved, they remain below pre-pandemic levels.”

EUR/USD trades flat around 1.1795 after Friday's 0.78% decline. The oversold dollar may draw haven bids due to fiscal impasse in Washington. Friday's

EUR/USD trades flat around 1.1795 after Friday's 0.78% decline. The oversold dollar may draw haven bids due to fiscal impasse in Washington.Friday's slide confirmed a bearish reversal on the daily chart. EUR/USD is lacking a clear directional bias on Monday, having declined by 0.78% on Friday to register its biggest single-day decline in over four months.  Dollar oversold The American dollar is at its most oversold level in over 40 years, according to Morgan Stanley, The investment bank said on Friday that it has ditched its dollar-bearish stance and turned tactically neutral on the greenback, according to Reuters.  The dollar index, which tracks the value of the greenback against majors, fell to a 26-month low of 92.52 last week. At press time, the index is seen at 93.34 – down over 9% from the high of 102.99 seen in March.  Technical indicators like the 14-day relative strength index and slow stochastic are reporting oversold conditions. As such, a notable bounce could be seen in the short-term – more so, as global equities are looking overvalued and due for a pullback. Potential losses in stock markets will likely bode well for the safe-haven US dollar.  EUR/USD Price Analysis: Interim top in place? Focus on US stimulus Frustrated by the deadlock in Washington over an additional coronavirus support package, President Trump on Saturday signed executive orders partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the pandemic. The orders would provide an extra $400 per week in unemployment benefits – $200 less than the $600 per week paid earlier in the crisis, as noted by Reuters report.  The US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said on Sunday that they were willing to resume stimulus negotiations.  The risk sentiment may take a hit if the deadlock persists, putting a haven bid under the greenback. According to analysts at JP Morgan, the market will have to face a wave of GDP downgrades, a rise in unemployment and lower consumer spending if the White House postpones negotiations until after Presidential Elections.  Technical levels  

GBP/USD picks up the bids near 1.3070, up 0.16% on a day, while heading into the London open on Monday. The Cable registered the biggest losses since

GBP/USD prints mild gains while extending recovery moves from 1.3041.Fresh US dollar selling ignores fears of further hardships for the UK’s labor market.British PM Johnson determined to open schools in September, suspension over daily death data likely.Brexit optimism, UK-Japan trade talks and hopes of further stimulus favor the bulls.GBP/USD picks up the bids near 1.3070, up 0.16% on a day, while heading into the London open on Monday. The Cable registered the biggest losses since June 24 on Friday. However, the US dollar’s failure to keep the latest gains recalled the bulls despite not so upbeat headlines from the UK. Looking forward, a lack of major data/events will keep the pair traders directed towards the key risk catalysts like Brexit, coronavirus (COVID-19) and the US traders’ reaction to President Donald Trump’s latest executive orders. Following his notifications to stop doing business with TikTok and WeChat, not to forget sanctioning Hong Kong Leader Carry Liam, on Friday, American President Trump signed a few more executive orders during the weekend to unlock the stimulus. In doing so, the Republican leader not only allowed $400 unemployment benefits but also offered helps to people living in the rented house and also on student loans. While the move helped the US dollar to extend Friday’s gains during the early-Asia, the recent news increasing odds of a stimulus deal among the US policymakers seems to have dragged the greenback off-late. As a result, the US dollar index (DXY) drops 0.09% to 93.32 by the press time. On the other hand, British diplomats like Michael Gove and Rishi Sunak highlighted the odds of a Brexit deal by September without citing any strong shreds of evidence whereas fears of a larger job loss wave triggered following the study by a British institute. “The study by the Chartered Institute of Personnel and Development found the number of employers expecting to make redundancies had jumped from 22 percent earlier this year to 33 percent for the three months to the end of September,” per Financial Times. Further, Japan is still talking trade with the UK even if denied on the push to recall auto tariffs before 2026. Elsewhere, British Prime Minister Johnson suggests reopening the schools in September while the UK Telegraph came out with the headline saying, “UK daily COVID-19 death count could be scrapped.” Against this backdrop, the market’s risk-tone stays mildly positive with S&P 500 Futures gain 0.15% to 3,350 while stocks in Australia and New Zealand print welcome numbers. It’s worth mentioning that Japanese markets are off today. Technical analysis 10-day EMA near 1.3030 precedes the 1.3000 threshold to restrict the quote’s near-term declines. However, bulls are less likely to find an easy roan unless crossing 1.3200 on a daily closing basis.  

In an interview with the People's Daily published on Monday, People's Bank of China (PBOC) Governor Yi Gang said that China is committed to promote th

In an interview with the People's Daily published on Monday, People's Bank of China (PBOC) Governor Yi Gang said that China is committed to promote the Yuan internalization and deepen the opening up of the financial sector, per MNI. Key quotes “China's macro leverage may rise this year given the increase in loans and debt and slower GDP. “ “The currency shows "good momentum" with surging cross-border yuan transactions and gains in its acceptance as a reserve currency.” “China will further direct flexible monetary policy to support targeted areas, including SMEs, to stabilize businesses and protect employment.” “China plans to open up, with measures such as lifting foreign share ownership limits in areas such as securities as it pushes for international cooperation amid the pandemic “Institutions such as American Express, MasterCard and Fitch Group had been allowed into the Chinese market.” Related content Chinese CPI higher than expected, 2.7% vs 2.6% USD/CNH Price Analysis: Bears aren’t impressed by upbeat China CPI/PPI

EUR/CHF's daily chart shows a golden cross, a bullish but lagging indicator. A move above 1.0838 is needed to confirm a bullish breakout. EUR/CHF is

EUR/CHF's daily chart shows a golden cross, a bullish but lagging indicator. A move above 1.0838 is needed to confirm a bullish breakout.EUR/CHF is trading in the green on Monday with the daily chart flashing a golden crossover, a long-term bull market indicator.  The golden cross is the bullish crossover of the 50- and 200-day simple moving averages (SMAs). The indicator, however, is based on backward-looking moving averages and has limited predictive powers at best. The indicator often traps buyers on the wrong side of the market.  In other words, the bull cross confirmed on Friday does not necessarily imply a stronger rally.  Moreover, a sustained move above 1.0838 is needed to signal a continuation of the rally from July lows near 1.06. That’s because the pair faced rejection at 1.0838 multiple times in the past two weeks.  While 1.0838 is the level to beat for the bulls, a move below 1.0712 (July 24 low) is needed to strengthen the bear grip around the currency pair. At press time, the pair is trading at 1.0770, representing a 0.16% gain on the day.  Daily chartTrend: Neutral Technical levels

USD/JPY rises to 105.79 during the early trading hours of Monday. Even so, the pair loses 0.12% on a day while defying Friday’s halt to a three-day lo

USD/JPY trims early-day losses with a bounce off 105.72.12-day-old resistance line defends bears, monthly falling trend line and 200-bar SMA add to the upside barriers.Short-term horizontal support can offer immediate rest.USD/JPY rises to 105.79 during the early trading hours of Monday. Even so, the pair loses 0.12% on a day while defying Friday’s halt to a three-day losing streak. Although MACD flashes bullish signals, the pair’s immediate upside is challenged by a falling trend line from July 23, at 106.00 now, a break of which could escalate the recovery moves to another resistance line, from July 01, currently around 106.60, followed by 200-bar SMA level of 106.67. In a case where the bulls manage to dominate past-106.70, the late-July top near 107.55 will flash on their radars. Alternatively, two-week-old horizontal support near 105.30 can entertain the short-term sellers ahead of driving them towards the July month low near 104.20. However, 104.80 and 105.00 are some extra buffers that the pair could avail during the further downside. USD/JPY four-hour chart Trend: Bearish  

Global stock markets are now worth more than 100% of the world's gross domestic product (GDP) for the first time since 2018, a sign of overstretched v

Global stock markets are now worth more than 100% of the world's gross domestic product (GDP) for the first time since 2018, a sign of overstretched valuations, according to the Buffet indicator.  Stock markets are considered to be overvalued when the Buffet indicator – the ratio of stock market capitalization to GDP – rises above 100%.  With the stock market rally looking overdone, the dollar bears need to observe caution. The greenback will likely pick up a haven bid if the equity markets suffer a pullback.   

WTI oil tick higher in Asia as Saudi's Aramco sees recovery in demand. Iraq plans to cut output in August and September. Oil giant Saudi Aramco’s upb

WTI oil tick higher in Asia as Saudi's Aramco sees recovery in demand. Iraq plans to cut output in August and September. Oil giant Saudi Aramco’s upbeat comments on potential demand conditions look to be powering gains in the black gold on Monday.  At press time, West Texas Intermediate (WTI), the North American oil benchmark, is trading at $41.67 per barrel, having defended the 10-day simple moving average (SMA) support of $41.27 a couple of hours ago.  Saudi Aramco’s Chief Executive Amin Nasser said on Sunday that oil demand is likely to rebound in Asia with the gradual easing of coronavirus lockdown restrictions. “Look at China, their gasoline and diesel demand is almost at pre-coronavirus levels. We are seeing Asia is picking up and other markets (too),” Nasser said, according to Reuters.  Additional optimism may be stemming from Iraq’s plans to cut its oil production by 400,000 barrels per day in August and September to compensate for the oversupply of the past three months. Iraq’s oil minister Ihsan Abdul Jabbar said on Friday that his country is committed to cut supply in August and September under an OPEC+ supply pact.  Looking forward, the black gold remains vulnerable to potential risk aversion in the global equities due to lingering coronavirus concerns and political deadlock in Washington over an additional coronavirus support package.  Technical levels

State oil giant Saudi Aramco’s Chief Executive Officer (CEO) Amin Nasser said on Sunday, oil demand recovery is picking up pace in Asia as economies g

State oil giant Saudi Aramco’s Chief Executive Officer (CEO) Amin Nasser said on Sunday, oil demand recovery is picking up pace in Asia as economies gradually open up after the easing of coronavirus lockdowns. Key quotes “Look at China, their gasoline and diesel demand is almost at pre-COVID 19 levels. We are seeing that Asia is picking up and other markets (too).” “As countries ease the lockdown, we expect the demand to increase.” His comments come after the company reported a 73.4% fall in second-quarter net profit.

Ahead of this week's Reserve Bank of New Zealand (RBNZ) monetary policy meeting this Wednesday, the New Zealand Institute of Economic Research (NZIER)

Ahead of this week's Reserve Bank of New Zealand (RBNZ) monetary policy meeting this Wednesday, the New Zealand Institute of Economic Research (NZIER) Monetary Policy Shadow Board offer their expectations on future monetary policy path. Key quotes “Fewer Board members this quarter consider further monetary policy stimulus is appropriate, particularly when it comes to introducing a negative OCR.  While there was support for an expansion of the Reserve Bank's Large-Scale Asset Purchases (LSAP) programme over the coming year, this stimulus was considered more appropriate beyond the upcoming meeting. Some members considered introducing a negative OCR an ineffective way to stimulate demand, and all members felt expanding QE was more appropriate.”

Gold's daily chart shows early signs of bearish reversal. A move below Friday's low of $2,015 would confirm the trend change. Gold is trading near $2

Gold's daily chart shows early signs of bearish reversal. A move below Friday's low of $2,015 would confirm the trend change.Gold is trading near $2,031 per ounce at press time, having put in a session low of $2,019 early Monday.  The yellow metal created a bearish outside day candle on Friday, as prices clocked a high and low of $2,075 and $2,015, respectively, and ended the day with a 1.39% drop, engulfing Thursday’s price gain.  The bearish outside day is widely taken to represent a bullish-to-bearish trend change when it appears after a notable rally. In this case, the candlestick has appeared at record highs and after a stellar 35% year-to-date gain.  The trend change would be confirmed if the bulls fail to defend Friday’s low of $2,015. As such, Friday’s low is a key support to watch out for this week.  Acceptance under $2,015 would imply an interim top has been made and open the doors for a stronger pullback to $,1981 (resistance-turned-support as per 4-hour chart).  Friday’s bearish candle would be invalidated if prices rise above $2,075. However, with the 14-day relative strength index and slow stochastic reporting overbought conditions, a move below $2,015 looks more likely.  Daily chartTrend: Bearish Technical levels

USD/CNH takes rounds to 6.9725 amid Monday’s initial trading. In doing so, the pair struggles to justify upbeat inflation data from China.

USD/CNH ignores better than forecast inflation data from China.10-day SMA, six-week-old resistance line questions immediate upside.Sellers may remain cautious unless witnessing a break of 6.9300.USD/CNH takes rounds to 6.9725 amid Monday’s initial trading. In doing so, the pair struggles to justify upbeat inflation data from China. The reason could be traced from the fresh Sino-American tension after Trump administration levied fresh sanctions on Chinese apps and Hong Kong Leader. Read: Chinese CPI higher than expected, 2.7% vs 2.6% Technically, the pair aims for a 10-day SMA level of 6.9780 as nearby resistance before targeting a falling trend line from June 29, currently around 6.9968. Although weak RSI conditions defy calls of any further moves past-6.9968, bulls’ attempt will have an additional hurdle in the form of the 7.000 threshold to justify their strength. On the contrary, 6.9530 and the monthly bottom around 6.9320 may entertain short-term traders during the pair’s fresh downside. If bears manage to firm the grip below 6.9320, March month’s low near 6.9050 could well return to the charts. USD/CNH daily chart Trend: Pullback expected  

In an interview with CBS News on Sunday, Chicago Federal Reserve Bank (Fed) President Charles Evans said that there is a need for more economic aid to

In an interview with CBS News on Sunday, Chicago Federal Reserve Bank (Fed) President Charles Evans said that there is a need for more economic aid to protect small businesses, vulnerable communities. Key quotes "I think that public confidence is really important and another support package is really incredibly important."  “The most pessimistic economic projections involved not supporting state and local governments.”

AUD/JPY isn’t finding any takers even though the data released soon before press time showed China’s factory deflation eased for the second straight m

AUD/JPY remains in the red near 75.80 after upbeat China data. China's factory deflation eased for the second month in July. The CPI rebounded by 0.6%, beating forecasts for a 0.4% rise. AUD/JPY isn’t finding any takers even though the data released soon before press time showed China’s factory deflation eased for the second straight month in July.  China’s Producer Price Index (PPI) or the gauge of factory-gate prices ticked higher to -2.4% year-on-year in July from June’s -3% reading, beating the forecasted decline of 2.5% by a narrow margin.  Meanwhile, Consumer Price Index (CPI) came in at 0.6% month-on-month versus expectations for 0.4% and up from June’s -0.1% print. In annualized terms, the CPI rose to 2.7% from 2.5%.  The PPI figure improved for the second straight month, signaling a continued recovery in the world’s second-largest economy and the largest importer of commodities. Even so, the AUD is struggling to pick up a bid.  The AUD/JPY pair continues to trade near 75.80, representing marginal losses on the day. Coronavirus concerns may be keeping the AUD bulls at the bay. As per Reuters, Australia’s second-most populous state, Victoria, reported its deadliest day of the coronavirus outbreak on Sunday, with 17 people dying and 394 new cases.  The dour economic forecasts published by the Reserve Bank of Australia (RBA) on Friday could also be the reason for the AUD’s lackluster response to the upbeat China data. The pair may suffer a deeper decline during the day ahead if the global equities drop on political deadlock in Washington and US-China tensions, strengthening the demand for the anti-risk Japanese yen.  Technical levels  

AUD/USD attacks intraday high of 0.7170, up 0.12% on a day, during the early Monday. The Aussie pair dropped on Friday amid the broad US dollar streng

AUD/USD stays mildly positive following China’s CPI, PPI for July.Market sentiment struggles for a clear direction as stimulus hopes confront Sino-American tussle, virus woes.A light calendar keeps risk catalysts on the driver’s seat.AUD/USD attacks intraday high of 0.7170, up 0.12% on a day, during the early Monday. The Aussie pair dropped on Friday amid the broad US dollar strength. However, the recent shift in the market’s mood joins upbeat inflation numbers from China to challenge the bears. Read: Chinese CPI higher than expected, 2.7% vs 2.6% Earlier during the day, market sentiment recovered as US President Donald Trump said, “Democrats have called and want to get together.” The statement rekindled hopes of further stimulus that dies after policymakers called an off to any negotiations during the last week. Also likely to have pushed the Democrats for a talk and favored market sentiment could be President Trump’s signing of four executive orders to release unemployment claim benefits, help with student loans and aid for those living in a rented house. On the contrary, downbeat updates concerning the US-China tension and the coronavirus (COVID-19) keeps challenging the risk-tone sentiment. Having turned off the business tap for China’s TikTok and WeChat, as well as sanctioning the Hong Kong Leader Carry Liam, the American policymakers are alleging Beijing for its suspected meddling in the US Presidential elections. Reuters came out with the news, quoting White House National Security Adviser Robert O’Brien, “Chinese government-linked hackers have been targeting US election infrastructure ahead of the 2020 presidential election.” Talking about the virus, Australia’s second-most populous state, also the epicenter of the pandemic, Victoria, marks the biggest single-day jump in deaths due to the COVID-19. As per the ABC News published before a few minutes, “Australia's coronavirus death toll hits 314 as Victoria announces a daily record of 19 deaths and 322 new cases in the past 24 hours.” Against this backdrop, S&P 500 Futures fails to mark any clear direction while stocks in Australia and New Zealand stay mildly positive. Further, the US 10-year Treasury yields refrain from moving as Japanese traders are off due to Mountain Day. Having witnessed the initial reaction to the key Chinese data, markets may jump back to macros for fresh impulse. The reason is the lack of major data/events on the calendar as well as the present dominance of qualitative factors. Technical analysis While 0.7200 and 0.7240 restrict the pair’s immediate upside, an ascending trend line from May 22, at 0.7115 now, followed by 0.7105-7100 area comprising 21-day EMA and 0.7100 round-figures, limit the quote’s short-term declines.  

China: PPI and CPI data for July has arrived as follows CHINA JULY CPI +2.7% Y/Y (REUTERS POLL +2.6% ) 09-Aug-2020 19:30:57 - CHINA JULY PPI -2.4% Y/Y

China: PPI and CPI data for July has arrived as follows CHINA JULY CPI +2.7% Y/Y (REUTERS POLL +2.6% ) 09-Aug-2020 19:30:57 - CHINA JULY PPI -2.4% Y/Y (REUTERS POLL -2.5%) The Consumer Price Index The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchasing power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.

China Consumer Price Index (MoM) came in at 0.6%, above forecasts (0.4%) in July

China Consumer Price Index (YoY) registered at 2.7% above expectations (2.6%) in July

China Producer Price Index (YoY) came in at -2.4%, above expectations (-2.5%) in July

The price of CAD/JPY is at a crossroads on the daily chart, sandwiched between weekly upside and monthly downside set-ups. The monthly outlook as the

The price of CAD/JPY is at a crossroads on the daily chart, sandwiched between weekly upside and monthly downside set-ups. The monthly outlook as the price testing a resistance structure as follows: Monthly chart However, from a weekly perspective, the price has completed a return back to high volume support which leaves the upside open for a restest from liquidity.  Weekly chart Daily chart The daily chart opens risk to the support level for which if it holds will likely see bull emerge for a re-run of the upside.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.9649 versus Friday's fix at 6.9408

The People's Bank of China (PBOC) has set the yuan reference rate at 6.9649 versus Friday's fix at 6.9408

NZD/USD remains sidelined near 0.66 fter New Zealand Business Confidence data. Business Confidence dipped to -42.4% in August and Activity Outlook De

NZD/USD remains sidelined near 0.66 fter New Zealand Business Confidence data. Business Confidence dipped to -42.4% in August and Activity Outlook Deteriorated to -17%. Charts favor a pullback in Kiwi, while the US dollar looks oversold. NZD/USD continues to trade in a sideways manner following the release of the dismal New Zealand business confidence data for August released by the Australia New Zealand (ANZ) bank  Business Confidence has deteriorated 10 points to -42.4% in August from July’s -31.8. Meanwhile, Activity Outlook for August slipped by 8 points to -17%. The data suggests that the post-lockdown rebound has run its course and validates the Reserve Bank of New Zealand’s dovish stance. The central bank is expected to keep rates unchanged at 0.25% until March. However, it may boost or extend asset purchases to push down borrowing costs.  That, alongside bearish divergence of the daily chart relative strength index, indicates scope for a notable pullback in the Kiwi dollar.  Also, the US dollar’s sell-off looks to have run its course for now. The American currency is most oversold in 40 years, according to analysts at Morgan Stanley. The investment bank has ditched its short position in the US dollar and has turned tactically neutral.  The greenback may find bids if the deadlock in Washington over an additional coronavirus support package and flaring Sino-US tensions weigh over the global equity markets. At press time, the futures tied to the S&P 500 are trading flat.  Technical levels

Silver prices drop to $28.26, down 0.15% on a day, during Monday’s Asian session. Although the bears are cheering the white metal’s pullback from Febr

Silver struggles to defy Friday’s pullback from $29.85.Bullish MACD, key support lines favor the buyers.Overbought RSI conditions suggest price consolidation.Silver prices drop to $28.26, down 0.15% on a day, during Monday’s Asian session. Although the bears are cheering the white metal’s pullback from February 2013 top, bullish MACD and the key trend lines keep challenging the further downside. However, the quote’s latest declines gains support from overbought RSI conditions, which in turn highlights an ascending support line from February 2020, at $26.80, as nearby rest-point. During the metal’s further weakness past-$26.80, an upward sloping trend line from July 17, currently around $26.00, becomes the key as it holds the gate for the additional south-run targeting July 28 low near $22.30. On the contrary, an upside clearance of $29.20 can renew the bullion’s run-up towards the $30.00 threshold. In a case where the bulls manage to stay positive above $30.00, $30.30 and November 2012 bottom surrounding $30.65/70 could return to the charts. Silver daily chart Trend: Bullish  

New Zealand ANZ Activity Outlook fell from previous -8.9% to -17% in August

New Zealand ANZ Business Confidence declined to -42.4 in August from previous -31.8

S&P 500 Futures extend the latest bounce from 3,335 to 3,342 amid Monday’s Asian session. Even so, the risk barometer prints 0.06% losses on a day as

S&P 500 Futures stay positive despite the initial pullback from 3,347.Fears of escalating Sino-American tension, coronavirus woes confront stimulus hopes.China inflation data decorates calendar, risk catalysts to remain as the key drivers.S&P 500 Futures extend the latest bounce from 3,335 to 3,342 amid Monday’s Asian session. Even so, the risk barometer prints 0.06% losses on a day as traders struggle for firm guidance. Although heating tension between the US and China joins the coronavirus (COVID-19) woes to challenge the market sentiment, recent measures from the US keep hopes of further stimulus alive and challenge the risk-off mood. Following Friday’s banning of WeChat and TikTok, not to forget sanctions on the Hong Kong Leader Carry Liam, Trump administration alleges China to meddle the US Presidential election. As per Reuters, White House National Security Adviser Robert O’Brien said that Chinese government-linked hackers have been targeting US election infrastructure ahead of the 2020 presidential election. On the other hand, US President Donald Trump recently said, “Democrats have called and want to get together.” This means the two main political parties of America will restart the stimulus talks that died during the last week. This even could be traced from President Trump’s signing of four executive orders to release unemployment claim benefits, help with student loans and those living in a rented house. Elsewhere, Australia’s Victoria marks the biggest single-day jump in deaths due to the COVID-19. As per the ABC News published before a few minutes, “Australia's coronavirus death toll hits 314 as Victoria announces a daily record of 19 deaths and 322 new cases in the past 24 hours.” It’s should be noted that the market lacks momentum as Japanese traders are off due to Mountain Day. Even so, stocks in Australia and New Zealand are mildly positive by press time. Moving on, China’s headlines inflation data for July will be the immediate catalyst to watch. However, major attention will be given to the US traders’ reaction to the latest change in the US-China tussle and American stimulus news.

Analysts at Goldman Sachs see more pain for Turkish lira, which fell to a record low of 7.3558 per US dollar on Friday and has depreciated by nearly

Analysts at Goldman Sachs see more pain for Turkish lira, which fell to a record low of 7.3558 per US dollar on Friday and has depreciated by nearly 23% this year.  “Over the short run, risks to USD/TRY are skewed to the upside, given rising foreign currency deposits locally and a backdrop that features a deteriorating inflation outlook, limited reserves, an external financing gap and an unconventional policy mix that is running up against binding constraints,” Goldman’s Zach Pandl noted in a report, according to Bloomberg.  The investment bank has raised USD/TRY forecasts to 7.75, 8, and 8.25 in three, six, and 12 months, respectively, from the previous projection of 7, 7.50, and 8. Key quote “Amid August illiquidity, a discontinuous move in the lira would still reverberate across EM HY markets as investors would likely worry about ‘the next domino to fall’ as a result of the COVID crisis”

EUR/USD’s rally may have run out of steam and a multi-month high of 1.1916 reached on Thursday may turn out to be an interim top, technical studies in

EUR/USD's daily chart shows a bearish divergence of key indicators. The candlestick arrangement on the daily chart is biased bearish. The pair may have carved out of an interim top above 1.19.EUR/USD’s rally may have run out of steam and a multi-month high of 1.1916 reached on Thursday may turn out to be an interim top, technical studies indicate.  The daily chart shows a bearish divergence of the relative strength index and slow stochastic. A bearish divergence occurs when an indicator charts lower highs as opposed to higher lows, higher highs on price and is taken to be the sign of ebbing of bullish momentum.  In addition, Friday’s 0.78% decline validated the uptrend exhaustion signaled by Thursday’s spinning top candle and confirmed a short-term bullish-to-bearish trend change.  As such, a stronger pullback may be seen this week. Immediate support is located at 1.1696 (Aug. 3 low), which, if breached, would confirm a double top breakdown on the daily chart and open the doors for 1.1482 (target as per the measured move method). On the higher side, 1.1916 is the level to beat for the bulls. At press time, the pair is sidelined near 1.1791. Daily chartTrend: Bearish Technical levels

USD/CAD trades near 1.3385 amid the initial Asian session on Monday. In doing so, the loonie pair stays beyond a downward sloping trend line from July

USD/CAD stays near the upper end of the 1.3370/3400 trading range.A clear break of short-term resistance line, now support, joins bullish MACD to lure the buyers.Sellers may wait for fresh monthly low before entering any traders.USD/CAD trades near 1.3385 amid the initial Asian session on Monday. In doing so, the loonie pair stays beyond a downward sloping trend line from July 14 amid bullish MACD. The same indicates the pair’s further upside towards the monthly top near 1.3450. Though, a 200-day SMA level of 1.3531 could challenge the bulls afterward. In a case where the pair manages to cross 1.3530, the mid-July top near 1.3650 will lure the buyers. Alternatively, the pair’s failure to keep the present breakout can recall the intraday sellers should the quote slips below 1.3370. However, a major downside is likely should the bears dominate below the current month’s low of 1.3230. USD/CAD daily chart Trend: Further upside expected  

The Finacial Times has stated that one in three British businesses are planning job cuts in the third quarter of this year as the government’s coronav

The Finacial Times has stated that one in three British businesses are planning job cuts in the third quarter of this year as the government’s coronavirus furlough scheme winds down, a survey of 2,000 companies has found. Lead paragraphs The study by the Chartered Institute of Personnel and Development found the number of employers expecting to make redundancies had jumped from 22 per cent earlier this year to 33 per cent for the three months to the end of September. The latest quarterly Labour Market Outlook said that although hiring intentions had also risen — with almost half of employers expecting to take on new recruits in the next three months, compared with 40 per cent last quarter — confidence is at its lowest since the survey in its current form started in 2013.  The net employment balance, which measures the difference between the proportion of employers who expect to increase staff levels and those who expect to decrease staff levels, has fallen from minus 4 to minus 8 over the past three months. Sectors, such as hospitality, transport and retail, that were struggling to operate in a time of social distancing, registered the steepest falls in confidence. Market implications With Brexit and what is likely to be very dismal data for the week ahead, the pound could come under immense pressure while the greenback seeks to stage a recovery.  UK poised to suffer the biggest Covid blow of any major economy - Telegraph    

President Trump has said that the Democrats might be more inclined to make a deal now. Key comments Payroll tax cut may be permanent. If it’s not a wa

President Trump has said that the Democrats might be more inclined to make a deal now. Key comments Payroll tax cut may be permanent.
If it’s not a waste of time, the White House would talk again with democrats about stimulus

Early Monday around 01:30 GMT, the market sees July month headline inflation numbers from China, namely the Consumer Price Index (CPI) and the Produce

China CPI/PPI overview Early Monday around 01:30 GMT, the market sees July month headline inflation numbers from China, namely the Consumer Price Index (CPI) and the Producer Price Index (PPI). China’s annualized CPI reading is expected to rise from 2.5% to 2.6% with PPI YoY likely bouncing off -3.0% to -2.5%. On the MoM basis, CPI bears the forecast to reverse the previous -0.1% fall with a 0.4% reading. With the recent US dollar recovery and downbeat prints of China’s Caixin Manufacturing PMI probing the AUD/USD buyers, inflation numbers from Australia’s largest customer become the key to watch. The headline inflation figures from the dragon nation are anticipated to end their deflationary pattern, which in turn becomes the cause of concern for the Aussie bulls. Westpac conveys optimism from the day while saying, “PPI and CPI data for July (11:30 am Syd/9:30 am local) will show a continued absence of inflation risks, with consensus +2.6%yr on consumer prices, -2.5%yr on producer prices.” How could they affect the AUD/USD? AUD/USD extends Friday’s losses while taking rounds to 0.7155 during the pre-event Asian session on Monday. The Aussie pair’s latest weakness took clues from the US dollar surge and the coronavirus (COVID-19) woes that marked the biggest single-day death toll. While data from China have been good so far, wave 2.0 is feared to have larger negative repercussions and is left to portray its marks. As a result, any weakening in the key statistics could be important for sellers to firm-up the grip. On the contrary, upbeat figures are less likely to convince buyers for fresh entries unless being drastically positive. Technically, the pair’s three failed attempts to stay past-0.7240 joins sluggish MACD on the daily chart to keep the bulls cautious unless it crosses the immediate upside hurdle. On the contrary, an ascending trend line from May 22, at 0.7115 now, followed by 0.7105-7100 area comprising 21-day EMA and 0.7100 round-figures, could keep the restricts the AUD/USD prices for a short-term. Key Notes AUD/USD: Kick-starts the week with little action under 0.7200, eyes China CPI AUD/USD Forecast: Corrective decline could continue at the beginning of the week About China CPI The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY. About China PPI The Producer Price Index released by the National Bureau of Statistics of China is a measurement of the rate of inflation experienced by producers. It captures the average changes in prices received by Chinese domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods). Changes in the PPI are widely considered as an indicator of commodity inflation. If the Producer Price Index increase is excessive, it would indicate that inflation has become a destabilizing factor in the economy, The People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, whereas a low reading is seen as negative (or bearish) for the CNY.

Australia's second-most populous state has recorded 322 new coronavirus cases in the last 24 hours, the state's health department said on Monday as Re

Australia's second-most populous state has recorded 322 new coronavirus cases in the last 24 hours, the state's health department said on Monday as Reuters reports.  Victoria state said there were 19 fatalities from the virus in the last day. more to come...

USD/JPY is trading at 105.88 and between a range of 105.82 and 105.9 in a quiet start to the week despite political developments from over the weekend

Negotiations between the White House and Democrats and tensions between the US and China take centre stage.US  unemployment rate dropped to 10.2% from 11.1% in June, edging lower from the record high of 14.7% in April.USD/JPY is trading at 105.88 and between a range of 105.82 and 105.9 in a quiet start to the week despite political developments from over the weekend.  Firstly, the US President Donald Trump signed executive orders prohibiting US residents from doing any business with TikTok, WeChat or the applications’ Chinese owners, citing the national security risk of leaving Americans’ personal data exposed. This move is seen as part of a wider strategy to distance the US from China. Relations between the two countries are at their lowest point in decades and the fall out could be supportive or the US dollar following disagreements on a number of issues like trade and human rights.

Another development over the weekend came with Trump's signing of an executive order providing temporary fiscal assistance. Negotiations between the White House and Democrats have been at a deadlock for may days but these orders, which include enhanced unemployment benefits over the remainder of 2020, deferred payroll taxes, a moratorium on evictions, and postponed student loan payments and interest. could be the beginnings of a deal. US jobs market beats expectations This could be a positive scenario for risk appetite at the start of this week, accompanied by the positive outcome from the US nonfarm payrolls on Friday. The NFPs rose by 1.763 million in July vs 1.480mn expected and +4.79mn in June. The unemployment rate dropped to 10.2% from 11.1% in June, now some way below the record high of 14.7% in April. The week ahead For the week ahead, inflation data and Retail Sales will also be important in the week ahead. The Consumer Price Index likely rose strongly while Retail sales likely slowed after huge gains in May and June. For CPI, analysts at TD Securities explained that they expect unwinding of some of the March-May plunge in travel-related prices to outweigh slowing in rents. That said, we think the slowing in rents is more indicative of the trend in the year ahead. The YoY pace in core prices likely remained low at 1.2% in July. For Retail Sales, the analysts said that a sizable gain in autos has been signalled by the units data, while gasoline spending was probably boosted by higher volumes as well as prices. We expect more slowing in the data for bars and restaurants and the control series. USD/JPY levels  

GBP/USD seesaws around 1.3050 during the early Monday’s Asian session. In doing so, the Cable trims gains following a U-turn from a seven-day-old supp

GBP/USD pair’s pullback from 1.3009 reverses from 1.3065.Sustained trading below 200-HMA keeps sellers hopeful.Bulls will retake controls beyond the monthly resistance line.GBP/USD seesaws around 1.3050 during the early Monday’s Asian session. In doing so, the Cable trims gains following a U-turn from a seven-day-old support line. The reason could be traced from the pair’s inability to cross 200-HMA. Other than the 200-HMA and immediate support line, weak RSI conditions and lingering MACD also raise questions for the pair traders. As a result, they look for a clear break of any of these key technical levels for fresh directions. While an upside break of 200-HMA, at 1.3067 now, can aim for 1.3100, the pair’s further upside will be challenged by an ascending trend line from July 31, currently around 1.3190. On the contrary, a downside break below the mentioned support line, near 1.3020, can attack the 1.3000 threshold to revisit July 28 top near 1.2950. It should also be noted that the pair’s rise past-1.3190 will need validation from 1.3200 before recalling the bulls. Meanwhile, the bears’ dominance past-1.2950 can highlight 1.2840/35 support-zone. GBP/USD hourly chart Trend: Sideways  

Amid allegations that the officials are exaggerating the number of deaths from the coronavirus (COVID-19), The Telegraph came out with the news highli

Amid allegations that the officials are exaggerating the number of deaths from the coronavirus (COVID-19), The Telegraph came out with the news highlighting possibilities of scrapping the daily update conveying the death count. Key quotes The official Covid-19 daily death toll may never be brought back following an investigation into Public Health England's method of counting it. The conclusions of the review, which was ordered by Matt Hancock after it emerged officials were " exaggerating” deaths from the virus, are expected this week. One expected recommendation would be to stop daily reporting altogether and move to a weekly official death toll instead, a government source said on Sunday night. On July 17, the Health Secretary asked PHE to urgently investigate the way daily death statistics had been reported, leading PHE to say it was “pausing” the daily release. It came after Oxford University experts revealed a significant proportion of the daily out-of-hospital death toll relates to patients who recovered from the virus weeks or months earlier. Fx implications Although the early-Asian session restricts GBP/USD moves, the Cable remains pressured around 1.3045 following the news.

WTI seesaws around $41.75 during the initial Asian session on Monday. The energy benchmark rose from $41.42 to $41.87 at the day’s start. However, the

WTI struggles to extend pullback from 200-HMA, a seven-day-old support line.Descending trend line from Wednesday restricts immediate upside.Bulls are getting tensed and may warrant a clear break of $44.00 for a stronger comeback.WTI seesaws around $41.75 during the initial Asian session on Monday. The energy benchmark rose from $41.42 to $41.87 at the day’s start. However, the follow-on trading moves failed to keep the upside momentum and portray the black gold’s weakness below a three-day-old resistance line. Even so, sellers await a clear downside break of 200-HMA and an ascending trend line from July 30 for fresh entries. Hence, the bears are waiting for the break of $41.30 support to aim for Tuesday’s low near $40.30 ahead of targeting the $40.00 threshold. In a case where the quote remains weak past-$40.00, July 30 bottom surrounding $39.10 will be the key. Meanwhile, an upside clearance of $42.00 will trigger fresh pullback towards $42.80 and August 05 top near $43.60. However, February month low near $44.00 becomes the tough nut to crack for the bulls before eyeing any further upside past-$43.60. WTI hourly chart Trend: Further weakness expected  

Early Monday morning in Asia, Reuters came out with the news while taking excerpts from the CBS’ “Face the Nation” interview of White House National S

Early Monday morning in Asia, Reuters came out with the news while taking excerpts from the CBS’ “Face the Nation” interview of White House National Security Adviser Robert O’Brien. The Trump administration member alleges Beijing for meddling into the Presidential election. Key quotes Chinese government-linked hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election. They’d like to see the President lose. China - like Russia, like Iran - they’ve engaged in cyberattacks and phishing and that sort of thing with respect to our election infrastructure, with respect to websites and that sort of thing. O’Brien said the United States had seen hackers try to infiltrate websites belonging to Secretary of State offices around the country, which are responsible for administering elections at the local level, and collecting data on Americans. It is a real concern and it’s not just Russia. There will be severe consequences for any country that attempts to interfere in our free and fair elections. FX implications The news adds to the already tense relations between the US and China. The same increases the market’s rush to risk-safety and weighs on S&P 500 Futures. The risk barometer drops 0.27% to 3,338 by the press time.

Gold drops to $2,027 amid the initial Asian trading session on Monday. The yellow metal’s latest declines can be considered as an extension to Friday’

Gold prices fail to extend late-Friday pullback from $2,015.US Dollar attempts recovery as upbeat employment data, fresh risk-off moves gain support from President Trump’s executive orders.Market reaction to the American actions, virus headlines will be the key to follow.Gold drops to $2,027 amid the initial Asian trading session on Monday. The yellow metal’s latest declines can be considered as an extension to Friday’s losses that were the biggest in two months. Although coronavirus (COVID-19) concerns to keep the bullion’s safe-haven demand intact, the recent strength in the US dollar could be cited as the reason behind the fresh fall. Is it the much-needed move? Having surged more than 11% in July, gold buyers are likely getting tensed during early August. The reason could be traced from the US dollar’s latest U-turn from the lowest in two years. The greenback initially gained momentum as the executive orders sanctioning Hong Kong leader Carry Liam and banning business with TikTok and WeChat triggered the rush to risk-safety. The moves gained additional strength after July month employment data from the US managed to defy further pessimism, even not marking much optimism. US NFP for grew 1.763 million while the Unemployment Rate stood at 10.2% during Friday’s reading. The moves gained an extra boost as US President Donald Trump signed four other executive orders during the weekend. These four orders attack the stimulus deadlock by allowing $400 unemployment benefits, stopping house evictions for those living in rented houses with federal financial support and ease recovery of student loans. Against this backdrop, Wall Street struggled to keep the bulls happy as Nasdaq dropped after declines in tech shares. Though, the US 10-year Treasury yields managed to stay positive near 0.56%. Currently, S&P 500 Futures drops 0.07% to 3,344 by the press time. Looking forward, China’s July month inflation data may decorate the economic calendar but the absence of Japanese traders could curb the market volatility. Though, risk catalysts are less likely to be ignored. Among them, the Sino-American tension and virus news will gain major attention. While the present weakness in the yellow metal keeps sellers hopeful, bulls are still in the driver's seat as neither the pandemic is over nor the bullion trades below $2,000. Technical analysis An ascending trend line from July 21, at $2,030 offers immediate support to the bullion ahead of $2,000 psychological magnet. On the upside, 61.8% Fibonacci Expansion (FE) of 2001-2011, near $2,077 becomes the key resistance holding the gate for further north-run towards the $2,100 threshold.  

NZD/USD is starting out the week below structure although in a correction of` Friday's New York sell-off to the 0.6580 lows. The greenback's recovery

NZDS/USD holding by the skin of its teeth as the greenback start to recover.The week ahead could provide some headwinds for the bird with the RBNZ slated. NZD/USD is starting out the week below structure although in a correction of` Friday's New York sell-off to the 0.6580 lows. The greenback's recovery extended on Friday's Nonfarm Payrolls jobs data which beat expectations.  The key takeaways in Nonfarm Payrolls that another 1.8 million in July came with the Unemployment Rate falling to 10.2% while the hours worked were still down 9% vs. pre-pandemic; with concerns linger over the long-run outlook. This came US/China tensions flared up, lending further support to the US dollar. As analysts at ANZ Bank note, the US President Donald Trump announced on Friday that US residents would be banned from doing business with ByteDance’s TikTok and Tencent’s WeChat in 45 days’ time, hitting tech stocks. The move would affect Apple’s phone sales in China as it would not be able to distribute the ubiquitous, even essential, WeChat app on its phones. To be fair, 45 days is a long time, and the market will hope the ruling is softened. But with an election looming, talking tough on China appears to be the strategy, and markets should probably expect more volatility from this source. The week ahead It could be a week of obstacles for the kiwi as investors get set for the Reserve Bank of New Zealand as it delivers a lift in the size of the LSAP QE programme on Wednesday. There is some uncertainty about where the RBNZ will land on QE, but the greatest room for surprise is likely to be what the RBNZ says on other unconventional monetary policy tools, analysts at ANZ bank explained. We expect that the RBNZ will keep its options open, with a negative OCR and foreign asset purchases on the table, reaffirming market expectations that a negative OCR next year is a non-trivial possibility (with 25bps priced in by mid-2021), and keeping a lid on the elevated exchange rate. Most local data has beat expectations of late; while welcome, the longer-term outlook remains highly uncertain and we expect all options – including negative rates and foreign asset purchases to remain on the table. This all speaks to headwinds for the NZD.  First up, we have data today in the preliminary read of the ANZ Business Outlook survey for August and China’s PPI and CPI data for July.  

AUD/JPY stays depressed around 75.80 amid the early Monday morning in Asia. The cross marked two failed attempts to cross 75.50 during the last week w

AUD/JPY struggles to extend the latest pullback from 76.43.One-week-old support line, 200-hour EMA restricts immediate downside ahead of the immediate horizontal area.Bearish MACD indicates further declines, bulls will have to cross 76.50 to regain traction.AUD/JPY stays depressed around 75.80 amid the early Monday morning in Asia. The cross marked two failed attempts to cross 75.50 during the last week while forming a bearish chart pattern on the hourly chart that need confirmation. Although 200-hour EMA and an ascending support line from July 30 restrict the quote’s immediate downside, bearish MACD keeps the sellers hopeful. As a result, a downside break of 75.65 will be a green signal for the bears targeting July 30 lows near 74.80. However, 75.50 and 75.00 round-figures may offer intermediate supports to the quote. In a case where the AUD/JPY prices remain sluggish past-74.80, the previous month’s bottom under 74.00 will be in the spotlight. On the upside, 76.00 and 76.30 may offer nearby resistance to the pair ahead of the “double top” area surrounding 76.40/45. Other than the bearish formation’s upper limit, July month’s top of 76.87 and 77.00 could also challenge the bulls during the pair’s advances. AUD/JPY hourly chart Trend: Pullback expected  

AUD/USD rises to 0.7160 at the start of the week’s Australian trading on Monday. In doing so, the aussie pair struggles to overcome four-day lows afte

AUD/USD attempts consolidation of Friday’s losses from 0.7143.US President Trump signed four executive orders, including unemployment benefits of $400.American actions of sanctioning Hong Kong Leader and banning Chinese Tech giants TikTok and WeChat add to the US-China tussle.A lack of major data at home precedes the key inflation numbers from China to direct immediate moves.AUD/USD rises to 0.7160 at the start of the week’s Australian trading on Monday. In doing so, the aussie pair struggles to overcome four-day lows after Friday’s heavy losses, the biggest in two months. While the American President Donald Trump’s use of executive orders triggered the latest push for the US dollar, US employment data added weakness to the pair during late last week. Moving on, traders will keep eyes on the risk catalysts and China’s July month Consumer Price Index (CPI) and Producer Price Index (PPI) for fresh impetus. Only Mr. Trump can do it… It all started on early Friday when US President Trump signed executive orders to sanction Hong Kong Leader Carry Liam and a few others from the so-called “Chinese city”. The move gained strength from the Republican leaders’ restriction to do business with TikTok and WeChat after the next 45 days. The moves increased safe-haven demand of the US dollar and helped the greenback inch a bit farther, not so far, from the two year low. As if it was needed, the US Nonfarm Payrolls (NFP) and Unemployment Rate also offered the strength to the pullback moves in the American currency. US NFP for grew 1.763 million while the Unemployment Rate stood at 10.2% during Friday’s reading. While Trump’s crackdown on tech giants deterred Nasdaq and cut the recent equity market gains, US 10-year Treasury yields managed to extend recoveries beyond 0.56% by the end of the week. During the weekend, the American national leader again used his Presidential powers to sign four more executive orders. This time, the Republican attacked the stimulus deadlock with unemployment claims and a temporary payroll tax deferral. Also, joining the line were orders to stop evictions from rental housing that has federal financial backing and helps in student loan. Although the recent news suggests further hardships for the AUD/USD prices, traders will keep eyes on China’s inflation data for immediate direction. China’s July month CPI is expected to rise from 2.5% to 2.6% whereas PPI may overcome -3.0% prior to -2.5%. Although the upbeat forecast suggests the pair’s further recovery, any disappointment could be hard to digest. It’s worth mentioning that headlines concerning the coronavirus (COVID-19) and the US-China tension shouldn’t also be missed while trading the pair. Technical analysis Three failed attempts to stay past-0.7240 joins sluggish MACD on the daily chart to keep the bulls cautious unless the pair crosses the immediate upside hurdle. On the contrary, an ascending trend line from May 22, at 0.7115 now, followed by 0.7105-7100 area comprising 21-day EMA and 0.7100 round-figures, could keep the restricts the AUD/USD prices for a short-term.  

The UK will suffer the heaviest Covid-19 impact of any major country this week as signs of faltering spending raise fears that the recovery is already

The UK will suffer the heaviest Covid-19 impact of any major country this week as signs of faltering spending raise fears that the recovery is already running out of steam... Economy shrinks by 23pc over the first half of 2020 due to drop in consumer spending during lockdown.  - The Telegraph reported.  Market implications The week ahead holds two critical data points. We will have the Labour market data as well as Gross Domestic Product. As for GDP, the services sector (80% of the UK economy) remains the big unknown through June (we forecast 7% m/m for IoS), but after May's disappointment, some catch-up is inevitable, with IP and Construction helping support growth too (both at 10% m/m), analysts at TD Securities explained.  We still look for a dire 20Q2 growth number, however, roughly in line with the BoE's recent -21% QoQ estimate. For the time being, the dollar is on the back foot, but that could all come undone vs the pound as the UK 's economic issues move back to the fore as prospects of negative rates swell.

CNBC reports that the United States has the worst Covid-19 outbreak in the world with more than 5 million cases, according to Johns Hopkins University

CNBC reports that the United States has the worst Covid-19 outbreak in the world with more than 5 million cases, according to Johns Hopkins University data. Lead paragraphs The latest grim record comes as growth in new cases in the U.S. appears to be leveling off at an average of 54,235 new infections a day over the last week, according to a CNBC analysis of Hopkins’ data. New cases peaked at 67,902 new cases on July 19, based on a seven-day average, after a resurgence of coronavirus cases ripped through the Sun Belt states in June and July.  California and Florida have both reported more than 500,000 total cases since the outbreak hit the U.S. in late January and Texas is closely approaching that number. Total cases for each state now exceed New York, which was once considered the epicenter of the nation’s outbreak earlier this year.  However, those states have reported far fewer deaths than the Empire State, which has lost more than 32,000 people to the coronavirus so far, according to Hopkins. Market implications Meanwhile, President Donald Trump has continued to press states to reopen. “Lockdowns do not prevent infection in the future. They just don’t. It comes back many times, it comes back,” Trump said at a press briefing Monday.  Investors are banking on a continuation of the economic recovery and such sentiment is keeping the bull recovery trend intact.

On the weekend, Australia had its deadliest day in the coronavirus pandemic, with 17 fatalities in the state of Victoria, according to Bloomberg. Lead

On the weekend, Australia had its deadliest day in the coronavirus pandemic, with 17 fatalities in the state of Victoria, according to Bloomberg.  Lead paragraphs The number of new cases climbed by 394, taking the state’s total to 14,659, Victoria’s Premier Daniel Andrews said in a media briefing in Melbourne on Sunday. Ten of the 17 deaths were related to elderly care centres, he said. While Australia enjoyed early success in flattening the curve of infections, Victoria is at the center of a renewed outbreak. The state is experiencing some of the strictest social-distancing measures in the western world, crippling economic activity there and shaking confidence across the nation. “Victorians are entitled to know more and to get the answers,” Frydenberg said on Saturday. Ten new cases were reported for New South Wales, according to the state’s heath ministry. One is a returned international traveler, seven were locally transmitted and close contacts of known cases, while two are under investigation with no known links, it said.   AUD/USD implications AUD/USD could start the week on the front foot ina risk on environment pertaining to higher equity closes last week. However, the spread of the virus will make for compelling action from the central bank and possibly dent the prospects of a higher currency down the line.  At their stage, however, the Reserve Bank of Australia sound comfortable with the currency at these levels and has not indicated any immediate action to follow. 
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