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Forex News Timeline

Tuesday, September 29, 2020

Here is what you need to know on Wednesday, September 30: The greenback edged lower against most major rivals, falling alongside equities. The market’

Here is what you need to know on Wednesday, September 30:The greenback edged lower against most major rivals, falling alongside equities. The market’s mood deteriorated on the back of increasing coronavirus cases in Europe leading to new restrictive measures, combined with a cautious stance ahead of the first US presidential debate that will take place at the beginning of the Asian session. The EUR/USD pair edged higher, despite mounting concerns about the spread of COVID-19 as Autumn kicks in in the North Hemisphere. So far, the US seems to be better positioned within the pandemic, as the number of contagions has stabilized lately. In Europe, however, new restrictive measures are coming into place, and even German’s Chancellor, Angela Merkel, warned about the seriousness of the situation in Berlin. GBP/USD was unable to rally, as BOE Governor Bailey said that the central bank is not out of ammunition when it comes to additional QE. He also said that policymakers have “not ruled out using negative interest rates but are realistic about challenges from banking retail deposits.”Gold soared as the dismal mood boosted demand for the bright metal, which ended the day at $1,897 a troy ounce. Crude oil prices, however, came under pressure and followed the lead of equities, with WTI ending the day at $40.00 a barrel. Top 3 Gainers: OMG, SXP, and STORJ explode 70% and are eying up more gains

UK MPs approve Internal Market Bill by 340 to 256. The bill has cleared the last stage in the House of Commons. The Bill now moves to the House of Lor

UK MPs approve Internal Market Bill by 340 to 256. The bill has cleared the last stage in the House of Commons. The Bill now moves to the House of Lords. more to come...    

New York Federal Reserve Bank President John Williams said that the Fed will need to purposely overshoot on its 2% inflation target temporarily to mak

New York Federal Reserve Bank President John Williams said that the Fed will need to purposely overshoot on its 2% inflation target temporarily to make up for periods when inflation is lower than desired, and it will need to be flexible in its approach. "We need to make sure that we’re purposely overshooting that moderately for some time to get that balance," Williams told reporters. "To me, success is not some arithmetic or some formula but it’s really this notion of inflation expectations, how people think about what’s inflation going to be in the future." Market implications The headline is bearish for the greenback that is currently unwinding a good majority of its recent rally in what could be the 4th wave of a 5-wave uptrend:

Fox News has reported that the House Democrats have offered a $2.2T bill but the White House is floating a package worth just $1.5-1.6 trillion. The n

Fox News has reported that the House Democrats have offered a $2.2T bill but the White House is floating a package worth just $1.5-1.6 trillion. The new package, which is being referred to as the updated HEROES Act, proposes to restore popular assistance programs such as the $600 weekly federal unemployment benefits boost and another round of stimulus payments.  However, it’s uncertain whether the Senate would consider taking up the revised bill if it clears the House this week. Market implications Stocks have been on the bid at the start of the week, but are fading into the forthcoming first of three rounds in the US election debate that gets underway on Tuesday night at 9 ET. Stocks do not like uncertainty and there is plenty of it around. The S&P 500 is down some 0.22% at the time of writing in the final hour of the session on Wall Street.               

The S&P 500 Index (SPX) opened little changed on Tuesday and continues to trade in a choppy way as investors stay on the sidelines ahead of the first

S&P 500 Index struggles to build on Monday's gains.Tech stocks are among top gainers on Tuesday.Falling crude oil prices weigh on energy stocks. The S&P 500 Index (SPX) opened little changed on Tuesday and continues to trade in a choppy way as investors stay on the sidelines ahead of the first US presidential debate. As of writing, the SPX was down 0.13% on the day at 3,346. S&P 500 top movers Technology stocks are among the best performers of the day. As of writing, Paycom Software Inc (PAYC: NYSE) shares were up 4.02% at $302.48. Furthermore, DXC Technology Co (DXC: NYSE), Advanced Micro Devices Inc (AMD: NASDAQ), Arista Networks Inc (ANET: NYSE) and NVIDIA Corp (NVDA: NASDAQ) shares are up between 3.7% and 3%. On the other hand, the sharp decline witnessed in crude oil prices is weighing on energy shares. At the moment, the barrel of West Texas Intermediate is losing 3.6% on the day at $39.10. Apache Corp (APA: NASDAQ), National Oilwell Varco Inc (NOV: NYSE) and Halliburton Co (HAL: NYSE) shares are down 6.7%, 5.9% and 5%, respectively.

EUR/USD has rallied, as forecasted in this week's The Chart of the Week. The technical analysis is again detailed below in a fresh update. The US doll

EUR/USD bulls taking the reigns al the way into supply territory. Risk-on has helped the euro and weighed on the US dollar.US elections, euro strength and US NFP will now be the main focus for the week.EUR/USD has rallied, as forecasted in this week's The Chart of the Week. The technical analysis is again detailed below in a fresh update. The US dollar has fallen away and against a basket of currencies, (DXY), it is headed to a test of a critical support zone in the 93.40 area. Fundamentally, the euro has been helped by a risk rally with a number of factors playing out.  Firstly, it is month-end as well as quarter-end. US stocks have bounced back on portfolio reshuffling following a dismal month of September.  Secondly, the markets are running on fumes amidst untold levels of stimulus expectations and the European Central Bank's President, Christine Lagarde said the bank stands ready to act if needed.  The combination of European and Us stimulus is driving risk sentiment forward.  The US dollar is also susceptible to the US elections with a track record that sees weakness into election day and then a recovery following the election. this too could be playing into the strength in EUR/USD.  Meanwhile, EUR net longs strengthened in the latest CFTC data, reversing the bias of the previous week. However, this could all come undone given the fears about a second wave of COVID-19 in Europe and the political fragility of the member bloc. The markets are paying close attention to any additional comments from an ECB GC members that could well resurface is the euro continues on this trajectory for much longer. EUR strength could ultimately be the euro's worst enemy. NFP in focus Next up, we have the US Nonfarm Payrolls as a key data event at the end of the week.  Analysts at TD Securities expect that Payrolls probably rose fairly strongly by pre-COVID standards, but with the pace slowing again, and the level still down around 11mn since February. ''We are assuming a 200k decline in government payrolls, due largely to weak education hiring at the start of the school year. More positively, the initial manufacturing survey data for September point to another solid ISM reading.'' Meanwhile, as we head into the en do the month, as October unfolds and once the September US labour market data is out of the way on Friday, market focus should intensify on the next US President’s economic policy mix, their trade agenda and diplomatic style. The first round of three debates will get underway Today, Donald Trump could face the most direct challenge of his presidency to his handling of the coronavirus pandemic, the economy and his personal conduct in his first debate against Democratic nominee Joe Biden. Both will meet on Tuesday night in Cleveland for their first of three debates. Fox News host Chris Wallace is the moderator where it will be televised live. EUR/USD and DXY technical analysis Moving down to the charts, as per The Chart of the Week: EUR/USD's copy-book landing, still plenty of longs to unwind, the price is moving exactly according to the forecast: As can be seen, the price has reached the target area.  There is scope for a 61.8% Fibonacci retracement at this juncture, given that the DXY may still have some more room to go to the downside until 93.50's within the 4th wave: This is part of an ongoing analysis of the reverse head and shoulders pattern on the DXY:

The price of gold is trading on the bid at $1,897.50 and some 0.88% higher on the day as the US dollar crumbles away. The range on the day so far has

Gold is on the bid as the US dollar slides towards a critical support area. US elections could be problematic for the US dollar over the following weeks, supporting a fundamental case for gold.Technical forecasts see a higher dollar medium term, which is problematic for gold on the charts. The price of gold is trading on the bid at $1,897.50 and some 0.88% higher on the day as the US dollar crumbles away.  The range on the day so far has been between $1,875 and $1,898.52 as the bulls approach a key resistance area on the charts between 1908 and 1928.  However, while some may argue that the secular bull market in precious metals is still intact as capital will continue to seek shelter from a prolonged period of negative real rates, there is more at play here pertaining to the US dollar.  It is true, that the US dollar has been sliding, as explained in the prior article last week, Gold Price Analysis: XAU/USD bulls looking to the dollar to give back some ground. Indeed, the US dollar, potentially, has more to give back until the DXY reaches a critical support area in the 93.50s which should continue to feed the gold bulls. However, if this is just a healthy correction prior to a prolonged recovery to the upside, then the bullish narrative comes unstuck. Nevertheless, analysts at TD Securities are more optimistic for gold. ''The stage is set for a precious metals rebound'', analysts at TD Securities said, adding, ''market participants should recall that the consolidation in the complex was catalyzed by a positioning squeeze that has since morphed into election-related jitters, pummeling gold bugs in response to the months-long delay in passing a multi-trillion dollar stimulus bill.'' If history is anything to go buy, the USD's track record in the build-up to election day has been poor, although, following the election, the dollar has performed on the bid.  ''If the election is the hurdle that has kept inflation expectations from rising further, as suggested by the prevailing market narrative, then gold bugs may not need to look too far into the future to expect the multi-trillion-dollar fiscal deal,'' the analysts at TD Securities argued. Gold and DXY technical analysis Casting eyes back to last week's analysis, Gold Price Analysis: XAU/USD bulls looking to the dollar to give back some ground, the price action has played out as expected: DXY 5-wave in the making? It seems so... As can be seen, the DXY's price action has played out as expected. The 5th-wave can be expected to begin at the support structure identified in the above charts.  The 5th-wave will be problematic for the gold bulls. Especially if it is on the kind of trajectory as forecasted in the prior analysis and the chart below: The reverse head and shoulders is a bullish pattern that according to the above analysis has the DXY headed towards a 61.8% Fibo and prior structure in the higher end of the 95 handle.  Meanwhile, the price of gold is also playing out as forecast, in part due to the slide in the US dollar. As can be seen, the price is headed towards the resistance structure, as expected. There is a high probability, that if the dollar can catch a bid in the 5th-wave, that gold will struggle to extend higher, resulting in a continuation of the downtrend.

"I'm not concerned about the dollar losing it's very important status," New York Federal Reserve President John Williams said on Tuesday, as reported

"I'm not concerned about the dollar losing it's very important status," New York Federal Reserve President John Williams said on Tuesday, as reported by Reuters. Additional takeaways "Fed's emergency facilities, with exception of the Main Street, are basically operating more of a backstop role." "The banking system came into this episode with very strong capital." "The Fed has gone to extra lengths to make sure stress testing is taking into account the effects of COVID." "Health, hospitality and travel are sectors are still struggling." "Commercial real estate is an area hit hard and with greater uncertainty right now." "We should keep interest rates appropriately low to achieve maximum employment and price stability goals." "Economy has been surprising us on the upside over the last several months." "My view is the economy is going to have a sustained recovery for the next couple of years." Market reaction The US Dollar Index edged slightly lower and was last seen losing 0.42% on the day at 93.88.

The AUD/USD pair climbed to a weekly high of 0.7139 on Tuesday but lost its traction during the American session. After retreating to 0.7100 area, how

AUD/USD remains on track to close second straight day higher.US Dollar Index stays below 94.00 ahead of presidential debate.Building Permits data will be featured in the Australian economic docket on Wednesday.The AUD/USD pair climbed to a weekly high of 0.7139 on Tuesday but lost its traction during the American session. After retreating to 0.7100 area, however, the broad-based USD weakness allowed the pair to regain its traction. As of writing, AUD/USD was up 0.8% on the day at 0.7126. Focus shifts to US presidential debate Although Wall Street's main indexes are trading in the negative territory, the USD struggles to find demand as a safe-haven as investors remain reluctant to make large bets ahead of the first presidential debate. At the moment, the US Dollar Index is losing 0.38% at 93.90. Previewing this event and its potential impact on the USD, "if Trump wins the televised encounter and improves his chances of re-election, there is a greater probability that Senate Majority Leader Mitch McConnell and his colleagues would devote more time to boosting the economy and their chances of holding onto the upper chamber," said FXStreet analyst Yohay Elam. "In this case, the greenback could fall while stocks and gold would shine." On the other hand, the Australian Bureau of Statistics will release Private Sector Credit and Building Permits data on Wednesday. Market participants are likely to ignore this data and the USD's market valuation is expected to remain as the primary driver of AUD/USD's movements in the near-term. Technical levels to watch for  

New York Federal Reserve President John Williams said on Tuesday that he expects to see very low inflation and very low interest rates "for the forese

New York Federal Reserve President John Williams said on Tuesday that he expects to see very low inflation and very low interest rates "for the foreseeable futures." Additional takeaways "As we continue to increase balance sheet it helps to support the economic recovery." "Once the economy is stronger, the Fed may reach a point where it is not necessarily growing the balance sheet." "We're still in a very weak economy with high unemployment and that's what we're focused on." "A big unanswered question is how did COVID fundamentally shift how we structure our economy." "There are concerns about structural or longer-term damage to the economy which would potentially lower the neutral rate." "High levels of debt are not creating that much risk for the economy right now." Market reaction These comments don't seem to be having a significant impact on the greenback's performance against its rivals. As of writing, the US Dollar Index was down 0.37% on a daily basis at 93.92.

Analysts at CIBC, forecast the NZD/USD pair will trade around 0.64 during the fourth quarter and at 0.63 during the first one of next year. They point

Analysts at CIBC, forecast the NZD/USD pair will trade around 0.64 during the fourth quarter and at 0.63 during the first one of next year. They point that the kiwi weakened amid negative bond yields in New Zealand.  Key Quotes:  “During the last month, New Zealand 2-year bond yields have fallen from around 10bps to current -5bps, while the NZD has been amongst the weaker currencies against the USD, off by 2.7% in the period. The reversion to weakness from previous steady performance came after a period of relative strength of the NZD, which was underpinned by then USD weakness and a moderate recovery out of virus lockdowns encouraging buyers." “Like its Tasman neighbour, the New Zealand economy is facing economic headwinds from projected higher unemployment and the ending of a number of government support schemes. Our outlook for the NZD into the end of the year and introduction of negative cash rates, potentially in 1Q, is for further weakness against the USD and on major crosses, including JPY and CAD.” “That NZ yields have already fallen to reflect broad expectation the RBNZ will deliver additional monetary accommodation in the months ahead, suggests the pace of NZD weakness may moderate from present levels. Still, previous RBNZ suggestion of potentially buying foreign assets – akin to intervention, will remain a cap against gains.”

The economic recovery in the US has been more robust than many were expecting, New York Federal Reserve President John Williams said on Tuesday, as re

The economic recovery in the US has been more robust than many were expecting, New York Federal Reserve President John Williams said on Tuesday, as reported by Reuters. Additional takeaways "Optimistic we will be able to continue to see a pretty strong economic recovery rest of this year and next year." "Seeing the economy growing above trend and getting back to close employment in about three years." "COVID is the focus and depending on how the pandemic continues issues like vaccine and treatment will affect the economy." "Fed wants people to understand we want 2% inflation to be what people think about when planning for the future." "We recognize there's a lot of downward pressure on inflation and we need to offset that." "Fed is as focused on making sure inflation doesn't get too high as keeping it from getting too low." "Not worried about inflation and the Fed has proven ability to rein in high inflation." Market reaction The US Dollar Index largely ignored these comments and was last seen losing 0.34% on the day at 93.95.

Consumer confidence rose by the most in more than 17 years, as expectations of the economy improved, explained analysts at Wells Fargo. They point out

Consumer confidence rose by the most in more than 17 years, as expectations of the economy improved, explained analysts at Wells Fargo. They point out confidence remains below its pre-virus level and continued improvement may hinge on additional stimulus. Key Quotes:  “The consumer confidence index bounced an impressive 15.5 points to 101.8 in September. This marked the largest gain in 17 years. August’s print of a six-year low was also revised higher, leaving confidence in a better position than its April low.” “Rebounding confidence continues to point to increased spending.” “With confidence recently mostly driven by higher-income households, confidence may still hinge on additional household stimulus.”

The Turkish lira dropped to a new record low after Russia said to Turkey to contribute to end, and not to fuel, the current clashes over the disputed

Turkish lira remains under pressure on clashes at the disputed territory of Nagorno-Karabakh.USD/TRY heads for another record close, eyes 8.00.The Turkish lira dropped to a new record low after Russia said to Turkey to contribute to end, and not to fuel, the current clashes over the disputed territory of Nagorno-Karabakh between Armenia and Azerbaijan. The USD/TRY climbed to 7.8591, the new all-time high and as of writing, it trades at 7.8401, up 0.46% for the day and up 2.30% from the level it had a week ago. The pressure on the currency continues to grow amid geopolitical concerns. Last week, the Turkish’s central bank was forced to raise interest rates in order to support the currency. The geopolitical conflict, now with the involvement of Russia, is another negative factor for the currency. If the situation worsens the USD/TRY could climb to 8.00 and even more, triggering more concerns. Emerging market assets could be hit if the decline of the lira accelerates.      

The USD/JPY pair is forecast to trade at 103 by the end of the fourth quarter and at 101 by the first quarter at CIBC. They point out that Japanese po

The USD/JPY pair is forecast to trade at 103 by the end of the fourth quarter and at 101 by the first quarter at CIBC. They point out that Japanese politics did not alter markets.  Key Quotes:  “Although the BoJ revised up their assessment of the domestic economy, there remains little expectation any immediate policy change. For now, the central bank assumes that domestic activity will rebound, in part due to accommodative financial conditions. The BoJ also upgraded both its export assessment and industrial output outlook. However, a declining trend in capital investment suggests that any recovery will remain slow and protracted, underlining ongoing policy inertia.” “The unexpected resignation of PM Abe failed to materially destabilise asset markets.” “For now, markets are happy to assume that the policy backdrop remains broadly unchanged.” “With monetary policy on auto-pilot, we expect limited upside pressure on domestic yields. Therefore, if we are to see additional JGB-UST spread compression, key to additional USDJPY downside, it may have to come from the US side of the equation. However, the perpetuation of limited yield pick-up is likely to see Japanese domestic investor flows remain well below year-ago levels amidst potential US election related political uncertainty. Limited yield pick and risk uncertainty point towards ongoing JPY impetus. The BoJ/MoF may only start to become uncomfortable should JPY gains begin to threaten 101.19 year-to-date lows prior to year-end.”

Both Brent and WTI have fallen heavily on Tuesday as fears grow that global COVID-19 restrictions could hit demand again. This comes despite the OPEC+

WTI trades over 5% lower as fears mount over more restrictions. The triangle formation has broken to the downside.WTI 4-hour chart Both Brent and WTI have fallen heavily on Tuesday as fears grow that global COVID-19 restrictions could hit demand again. This comes despite the OPEC+ group announcing an extension to their output cuts to December. Elsewhere there was news from Kuwait as their Sheikh Sabah has died. He was responsible for much of the peace between Kuwait and Saudi Arabia and his successor will be Crown Prince Sheikh Nawaf al-Ahmad al-Sabah, his brother. Looking at the chart, the move lower is breaking levels galore. The red trendline has been taken out and the support at USD 39 per barrel has also been broken. Below the current price level, the market could find support at USD 38.20 per barrel as it had been sticky in the past but a stronger zone is down at USD 37.60 per barrel.  The indicators are looking extremely bearish as expected. The MACD histogram is in the red and the signal lines are under zero. The Relative Strength Index indicator is also very depressed in an oversold area. It seemed like the price was stabilising at USD 40 per barrel but this move lower looks strong. The main wave low is at USD 36.40 and a break beyond that zone could lead oil into the abyss.  Additional levels  

The pound is rising for the fifth consecutive day versus the Japanese yen on Tuesday, as the recovery from the lowest in almost three months continues

Pound extends recovery versus yen but found resistance at 136.00 and 136.25.GBP/JPY bullish bias still in place, momentum eases.The pound is rising for the fifth consecutive day versus the Japanese yen on Tuesday, as the recovery from the lowest in almost three months continues. The rally is showing signs of exhaustion as it failed to break Monday’s highs and also after being rejected from above 136.00 again. The GBP/JPY will likely continue to consolidate between 135.00 and 136.00. If it manages to break and hold above 136.00 more gains seem likely. The first target is seen at 136.50 (20-day simple moving average) followed by 137.50/70. If the current loss of momentum in GBP/JPY triggers a decline, the key support to watch is seen at the band 134.50/70. A break lower would increase the bearish pressure, suggesting a test of the September low at 133.00 (interim support at 133.75). GBP/JPY 4-hour chart    

Analysts at CIBC, expect the EUR/USD pair to remain steady for now. The see the pair trading around 1.17 into year-end and also during the first quart

Analysts at CIBC, expect the EUR/USD pair to remain steady for now. The see the pair trading around 1.17 into year-end and also during the first quarter of next year and then rising to 1.20.  Key Quotes:  “The combination of an earlier re-opening and a less dovish central bank compared to the Fed, led to an aggressive expansion in EUR longs over the summer. Speculative positioning reached all-time extremes into the end of August, with the position extension coinciding with the change in Fed policy to average inflation targeting.” “An unwinding of such positions, triggered by global risk aversion that favours the greenback, alongside eurozone data that added up to an easing the eurozone surprise index, has put a temporary stall into the euro’s march stronger. We expect EURUSD to remain near 1.17 into year-end.” “Looking ahead into 2021, the arrival of vaccines, and the fading of the current second wave, should encourage renewed euro momentum. The ECB has noted that it’s attentive to the impact of FX gains on inflation and inflation expectations, but we don’t expect any serious push back in term of policy levers that would stand in the way of reach 1.20 on EURUSD next year as long as a recovery is underway.”
 

There were 7,143 new confirmed coronavirus infections in the UK as of Tuesday morning, the UK government data showed, per Reuters. This reading marked

There were 7,143 new confirmed coronavirus infections in the UK as of Tuesday morning, the UK government data showed, per Reuters. This reading marked the highest daily jump in cases and followed Monday's increase of 4,044. Further details of the report revealed that there were 71 fatalities on Tuesday within 28 days of testing positive. Market reaction The GBP/USD pair edged slightly lower after this report and was last seen trading at 1.2846, where it was still up 0.15% on a daily basis.

The GBP/USD pair spiked to a daily high of 1.2903 in the early American session but reversed its direction and erased a large portion of its daily gai

GBP/USD tested 1.2900 in American session but lost its traction.BoE Governor Bailey says BoE is "not out of ammunition" on QE.US Dollar Index stays in negative territory below 94.The GBP/USD pair spiked to a daily high of 1.2903 in the early American session but reversed its direction and erased a large portion of its daily gains. As of writing, the pair was still up 0.2% on the day at 1.2853. While speaking at an online event organized by Queen's University Belfast, Bank of England (BoE) Governor Andrew Bailey said that the BoE was "not out of ammunition" with regards to additional quantitative easing. Commenting on the possible use of negative rates, "we do not rule out using negative interest rates but are realistic about challenges from banking retail deposits." Bailey said.  Although Bailey's remarks on the policy outlook were nothing new or surprising, the British pound struggled to find demand and started to weaken against its major rivals. At the moment, the EUR/GBP pair is up 0.5% on the day at 0.9130. DXY stays below 94 ahead of presidential debate On the other hand, the greenback remains on the back foot and helps GBP/USD stay in the positive territory for the time being. The US Dollar Index (DXY) is currently down 0.4% on the day at 93.90.  However, Wall Street's main indexes are staying in the red ahead of the first presidential debate, suggesting that the USD could show some resilience if the market mood remains cautious. Earlier in the day, the data from the US showed that the trade deficit in August widened to a record high of $82.94 billion but had little to no impact on the DXY's movements. Technical levels to watch for  

The EUR/USD pair is rising again on Tuesday, as it continues to recover after falling last week to 1.1611, the lowest level since late July. Recently

Euro extends gains across the board during the American session.EUR/USD up for the second day in a row, continues to rebound from monthly lows.The EUR/USD pair is rising again on Tuesday, as it continues to recover after falling last week to 1.1611, the lowest level since late July. Recently it climbed to 1.1743, the strongest level in a week. It is trading near the top, with an intraday bullish tone intact. The US dollar is showing weakness with the DXY trading at six days low under 94.00. Lower US yields appear to be weighing on the greenback. The US 10-year fell to 0.645%, the weakest since September 4. Attention in the US is on politics. The first presidential debate between Trump and Biden will take place on Wednesday at 01:00 GMT (Tuesday night in the US). Also, it was reported that US Treasury Secretary Mnuchin and House Speaker Pelosi will speak on Wednesday, on new stimulus. Economic data from the US showed a larger than expected increase in Consumer Confidence. In Germany, inflation fell more than expected in September according to preliminary data. Those economic numbers had little to no impact on markets. The euro is among the top performers among the G10 space. It is rising particularly against the pound. The EUR/GBP cross rose toward 0.9150, moving away from the weekly lows it hit on Monday. Technical levels    

"We have a lot of very practical work to do before we would be able to cut interest rates below zero," Bank of England (BoE) Governor Andrew Bailey sa

"We have a lot of very practical work to do before we would be able to cut interest rates below zero," Bank of England (BoE) Governor Andrew Bailey said on Tuesday and added that he cannot put a date on it, as reported by Reuters. Additional takeaways "Would need to see quite a strong downturn to get a negative figure for Q4 GDP growth." "If we cut rates below zero, would need to explain it very carefully to the public." "Tiered interest rates would add operational complexity." "I do not expect to see a sharp downward move in house prices when stamp duty land tax exemption expires but would not be surprised to see transactions fall a bit." Market reaction The GBP/USD pair struggles to make a decisive move in either direction after these comments and was last seen gaining 0.18% on the day at 1.2855.

"I think we will see a continuation of greater consumer caution," Bank of England (BoE) Governor Andrew Bailey said on Tuesday, as reported by Reuters

"I think we will see a continuation of greater consumer caution," Bank of England (BoE) Governor Andrew Bailey said on Tuesday, as reported by Reuters. Additional takeaways "Latest COVID restrictions are not comparable in economic effect with what we saw earlier this year." "I do not expect anything like the economic hit we saw in spring." "Critically important that the BoE's can use all its tools to support the economy." "BoE is not out of ammunition on QE, can also use forward guidance." "Negative interest rates are in the BoE's toolbox, have not reached judgement on whether or when to use them." "We do not rule out using negative interest rates but are realistic about challenges from banking retail deposits." "Evidence on negative rates is a mixed bag." "Would be a cardinal sin if the BoE had a tool but did not know how to put it into effect." Market reaction The GBP/USD pair edged lower after these comments and was last seen trading at 1.2843, where it was still up 0.12% on the day.

The AUD/USD pair built on the overnight recovery move from the 100-day SMA support, around the key 0.7000 psychological mark and gained traction for t

AUD/USD edged higher for the second consecutive session on Tuesday.The momentum pushed the pair to four-day tops, around 38.2% Fibo. level.Mixed technical indicators on hourly/daily charts warrant caution for bulls.The AUD/USD pair built on the overnight recovery move from the 100-day SMA support, around the key 0.7000 psychological mark and gained traction for the second consecutive session on Tuesday. The momentum pushed the pair to four-day tops, near a resistance marked by the 38.2% Fibonacci level of the 0.7346-0.7005 recent decline. A sustained move beyond 100-hour SMA and a subsequent strength beyond the 0.7100 round-figure mark was seen as a key trigger for intraday bullish traders. Meanwhile, technical indicators on the 4-hourly chart have recovered from the bearish territory and support prospects for additional gains. However, oscillators on the 1-hourly chart are already flashing slightly overbought conditions and maintained their bearish bias on the daily chart. The set-up warrants some caution for bullish traders ahead of the first US presidential debate. This makes it prudent to wait for some strong follow-through buying before confirming that the recent downfall is over and positioning for any further appreciating move for the AUD/USD pair. On the flip side, the 0.7100 mark now seems to protect the immediate downside and is closely followed by the 23.6% Fibo. level around the 0.7080 region. Dips towards the mentioned support might continue to attract some buying and remain limited near the 100-hour SMA, around the 0.7065 region. A convincing breakthrough will negate any near-term positive bias and turn the pair vulnerable to eventually slide below 100-day SMA support. The downward trajectory could then drag the AUD/USD pair further towards the 0.6925 intermediate support en-route the 0.6900 round-figure mark. AUD/USD 1-hourly chart Technical levels to watch  

Since May, there has been quite a sharp and fast recovery in the UK, Bank of England (BoE) Governor Andrew Bailey said on Tuesday but added that there

Since May, there has been quite a sharp and fast recovery in the UK, Bank of England (BoE) Governor Andrew Bailey said on Tuesday but added that there are signs that the recovery will not be as fast going forward, as reported by Reuters. Additional takeaways "Recovery has been uneven." "Q3 recovery is a bit ahead of where we thought it would be in August." "UK economic activity in Q3 probably 7-10% lower than it was pre-COVID." "Level of activity at end of Q3 probably higher than 7-10% below pre-COVID range." "Investment still looks very weak." "Risks include COVID, Brexit talks, US-China trade relationship." "Labour market is one of the hardest things to assess." Market reaction The GBP/USD pair edged slightly lower with the initial reaction and was last seen gaining 0.15% on the day at 1.2845.  

The Federal Reserve should be willing to be accommodative after the crisis but should also have the flexibility to raise rates, Dallas Federal Reserve

The Federal Reserve should be willing to be accommodative after the crisis but should also have the flexibility to raise rates, Dallas Federal Reserve President Robert Kaplan argued on Tuesday, as reported by Reuters. Additional takeaways "Zero rates likely appropriate until late 2022 or sometime in 2023." "Fed should keep emergency lending facilities, consider other tools until the economy is on track to meet goals." "Need to do more to help small, mid-sized businesses access capital." "Prolonged zero rates could cause financial market fragilities, excesses, imbalances." "Recovery has been faster than expected." "Expecting unemployment at 7.5% at year-end, 5.7% at end of 2021." "Lack of additional fiscal relief is key downside risk to forecasts." Market reaction The US Dollar Index largely ignored these comments and was last seen losing 0.37% on the day at 93.92.

Consumer confidence in the US improved sharply in September with the Conference Board's Consumer Confidence Index rising to 101.8, highest reading sin

Consumer confidence in the US improved sharply in September with the Conference Board's Consumer Confidence Index rising to 101.8, highest reading since March, from 86.3 in August (revised from 84.8). This Further details of the publication showed that the Consumer President Situation Index climbed to 98.5 from 85.8, the Consumer Expectations Index jumped to 104 from 86.6. Finally, the 1-year Consumer Inflation Rate Expectations edges lower to 5.7% from 5.8%. Market reaction With the initial market reaction, the greenback continued to weaken against its rivals and the US Dollar Index was last seen losing 0.4% on the day at 93.90.

Prices of the American benchmark for the sweet light crude oil broke below the $40.00 mark per barrel and slipped back to the $39.70 region on Tuesday

Prices of the WTI leave the area above the $40.00 mark.The $39.70 region offers initial support for the time being.The API will release its weekly report on US inventories later on Tuesday.Prices of the American benchmark for the sweet light crude oil broke below the $40.00 mark per barrel and slipped back to the $39.70 region on Tuesday. WTI focus on pandemic, crude supplies Prices of the barrel of the West Texas Intermediate now edge lower and trespass the $40.00 mark in response to heightened concerns over the coronavirus pandemic and the impact on the oil industry. Further out, crude oil prices are seen extending the multi-session consolidative range with gains so far limited by the $41.50 zone (September 18 peaks) while the 100-day SMA, today at $39.14, continues to hold the downside. Somewhat limiting the downside in prices, however, emerge the current offered stance in the dollar coupled with a potential strike in the Norwegian oil industry, which could involve around 900K bpd. Later on Tuesday, the API will publish its weekly report on crude oil inventories ahead of Wednesday’s EIA report and Friday’s oil rig count by driller Baker Hughes. WTI significant levels At the moment the barrel of WTI is losing 1.69% at $39.85 and a breakdown of $38.67 (weekly low Sep.21) would aim for $36.15 (monthly low Sep.8) and then $31.16 (low May 28). On the other direction, the next up barrier is located at $41.46 (weekly high Sep.18) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3).

The economic recovery in the US is expected to continue if coronavirus is kept in check, Philadelphia Fed President Patrick Harker said on Monday, as

The economic recovery in the US is expected to continue if coronavirus is kept in check, Philadelphia Fed President Patrick Harker said on Monday, as reported by Reuters. Additional takeaways "Unemployment still unlikely to reach pre-pandemic levels until 2023." "Congress should consider further economic aid soon." "Forecast is contingent on mask use or other steps to limit new outbreaks and deployment of a vaccine by late next year." "Average inflation targeting will not focus on a formula but on the rate of change in inflation." "Expecting a slow and bumpy recovery." Market reaction The US Dollar Index extended its slide and was last seen losing 0.33% on the day at 93.96.  

Following Monday's impressive rally, major equity indexes in the US opened little changed on Tuesday as investors seem to be opting out to stay on the

Wall Street's main indexes turn quiet following Monday's rally.Energy shares underperform pressured by falling crude oil prices.Focus shifts to the first presidential debate between Joe Biden and Donald Trump.Following Monday's impressive rally, major equity indexes in the US opened little changed on Tuesday as investors seem to be opting out to stay on the sidelines ahead of the first presidential debate. As of writing, the S&P 500 Index was virtually unchanged on the day at 3,351, the Dow Jones Industrial Average was down 0.15% on the day at 27,542 and the Nasdaq Composite was up 0.14% at 11,132. Reflecting the indecisive market mood, five of 11 major S&P 500 sectors trade in the negative territory while six of them register gains. The Energy Index is the worst performer of the day, losing 1.3% on the day pressured by a 1.9% decline in US crude oil prices. On the other hand, the defensive Utilities Index is up 0.4%. Among S&P 500-listed companies, Molson Coors Beverage Co (TAP: NYSE) is up 3.45% as the biggest daily percentage gainer. S&P 500 chart (daily)

The first presidential debate is set to shake up the elections campaign. Markets will move on implications for a new fiscal relief package, Yohay Elam

The first presidential debate is set to shake up the elections campaign. Markets will move on implications for a new fiscal relief package, Yohay Elam, an analyst at FXStreet, explains. More: A decisive Democratic victory to hit the USD – Nordea Views on China aligned whoever is next president – ANZ Key quotes “If Biden is perceived as the winner, Republicans could conclude that they must do everything to impact the Supreme Court as they would lose their chance after the election. That would further lower the chances of further relief. In this scenario, markets would retreat, drag gold down with them, and the only winner would be the safe-haven dollar.” “If Trump wins the televised encounter and improves his chances of re-election, there is a greater probability that Senate Majority Leader Mitch McConnell and his colleagues would devote more time to boosting the economy and their chances of holding onto the upper chamber. In this case, the greenback could fall while stocks and gold would shine.” “Apart from the next stimulus bill, markets prefer certainty. Trump's recent refusal to commit to a peaceful transition of power means that a close election could trigger a constitutional crisis and perhaps violence on the streets – an unfavorable outcome for investors. Representative Alexandra Ocasio Cortez, and Senators Bernie Sanders and Elisabeth Warren scare Wall Street. A Biden win in the debate raises the chances for a clean sweep by Democrats, allowing left-leaning lawmakers to push their agenda, a scenario markets dread. However, an inconclusive election is worse than AOC yielding more influence, even for markets.”  

Henry Hub benchmark prices now give away some ground after recording fresh 2020 highs near the key $2.80 mark per MMBtu earlier on Tuesday. Natural Ga

Prices of Natural Gas clinched yearly highs near $2.80.Higher demand is expected to underpin prices in the next months.The usual EIA’s report on gas storage comes in on Thursday.Henry Hub benchmark prices now give away some ground after recording fresh 2020 highs near the key $2.80 mark per MMBtu earlier on Tuesday. Natural Gas prices face positive prospects The upcoming winter season is expected to lift prices of the commodity to the vicinity of the $3.00 mark per MMBtu and even beyond, many analysts conclude, always on the back of the predicted increase in the demand for the commodity in the northern hemisphere. Furthermore, prices are seen attempting some consolidation in the next weeks ahead of the probable upside when colder weather kicks in in the US, Europe and the north of Asia. Supporting the view of higher prices emerges the expected lower US production coupled with higher demand from Europe and Asia amidst the ongoing economic recovery following the slump earlier in the year due to the coronavirus crisis. The rebound in prices of natural gas in European and Asian hubs also bodes well for US exports of LNG. Later in the week, the EIA will release its weekly report on Natural Gas storage (Thursday). Natural Gas levels to watch At the moment, Natural Gas prices are advancing 24.65% at $2.619 and faces the next hurdle at $2.789 (2020 high Sep.29) seconded by $2.905 (monthly high Nov.5 2019) and finally $2.908 (monthly high Feb.26 2019). On the downside, a break below $2.320 (high Sep.24) would expose $1.934 (200-day SMA) and then $1.795 (monthly low Sep.21).

Gold built on the previous day's goodish bounce from 100-day SMA and edged higher through the first half of the trading action on Tuesday. The overnig

Gold gained some positive traction for the second consecutive session on Tuesday.The uptick lacked any bullish conviction ahead of the first US presidential debate.Any further move up is more likely to fizzle out near the $1900 support breakpoint.Gold built on the previous day's goodish bounce from 100-day SMA and edged higher through the first half of the trading action on Tuesday. The overnight sustained move beyond 100-hour SMA was seen as a key trigger for bullish traders and pushed the commodity to multi-day tops. The intraday uptick was supported by the fact that technical indicators on the 1-hourly chart have been gaining positive traction. The commodity, however, lacked any follow-through ahead of a pivotal debate between Republican President Donald Trump and Democratic rival Joe Biden. Meanwhile, oscillators on the daily chart maintained their bearish bias and are yet to register any meaningful recovery. Hence, any subsequent move up seems more likely to meet with some fresh supply, instead fizzle out near the $1900 strong horizontal support breakpoint. That said, a sustained move beyond might trigger a short-covering move and lift the XAU/USD back towards the $1924-25 congestion zone. On the flip side, immediate support is pegged near the $1877-76 region, below which the commodity could accelerate the slide back to the $1862-60 area before eventually dropping towards the $1849-48 support region (100-day SMA). A convincing breakthrough the mentioned support levels will set the stage for a further near-term depreciating move towards the $1818-15 region. Gold 1-hourly chart Technical levels to watch  

The USD/CAD pair dropped to a daily low of 1.3350 on Tuesday but staged a rebound in the early American session. As of writing, the pair was up 0.12%

USD/CAD staged a rebound after dropping to 1.3350.US Dollar Index stays in the negative territory a little above 94.The trade deficit in the US widened to a record high of $82.94 billion.The USD/CAD pair dropped to a daily low of 1.3350 on Tuesday but staged a rebound in the early American session. As of writing, the pair was up 0.12% on the day at 1.3388. Falling crude oil prices hurt CAD on Tuesday Earlier in the day, the selling pressure surrounding the greenback caused USD/CAD to push lower. After closing the first day of the week in the negative territory, the US Dollar Index (DXY) continued to edge lower toward 94.00 on Tuesday. In the absence of significant macroeconomic drivers, the DXY's drop seemed to be the extension of the technical correction that started on Monday. Meanwhile, the data published jointly by the US Census Bureau and the US Bureau of Economic Analysis revealed that the trade deficit in August widened to a record high of $82.94 billion in August. Nevertheless, this data had little to no impact on the USD's performance against its rivals and the DXY was last seen 0.22% on the day at 94.06. On the other hand, falling crude oil prices weighed on the commodity-related loonie and allowed USD/CAD to reverse its direction. At the moment, the barrel of West Texas Intermediate (WTI) is down 1.45% on the day at $39.95. Later in the day, the Conference Board's Consumer Confidence data will be watched closely by the market participants. Additionally, the first US presidential debate will take place in the early Asian session on Wednesday. Technical levels to watch for  

The EUR/USD pair retook the 1.1700 during European trading hours, extending its corrective advance, as bulls are in the lead ahead of US critical even

The EUR/USD pair retook the 1.1700 during European trading hours, extending its corrective advance, as bulls are in the lead ahead of US critical events with a critical Fibonacci resistance level emerging at 1.1712, FXStreet’s Chief Analyst Valeria Bednarik reports. Key quotes “The risk-on sentiment finds support in renewed hopes of a US coronavirus aid-package, and increased chances of a Brexit trade deal. On a down note, the UK and Germany, among other  European countries, are studying more restrictions to contain coronavirus contagions.” “The EU published the September Economic Sentiment Indicator, which improved to 91.1 from 87.5 in the previous month. Germany released the preliminary estimate of September inflation, which was worse than anticipated, printing at -0.2% YoY. As for the US, the country has just published the August Goods Trade Balance, which showed that the deficit was of $-82.94B, worse than the previous $-80.11B. Later today, the focus will be on the US CB Consumer Confidence and several Fed’s speakers, ahead of the first US presidential debate.” “From a technical point of view, the risk is skewed to the upside, as, in the 4-hour chart, technical indicators advance within positive levels. Even further, the 20 SMA has lost its bearish strength below the current level, although the 100 SMA maintains its bearish slope around 1.1780.”  “An advance beyond the daily high of 1.1714 should favor an extension towards the mentioned 1.1780 price zone, mainly if the sentiment improves during US trading hours.”  

United States S&P/Case-Shiller Home Price Indices (YoY) above expectations (3.8%) in July: Actual (3.9%)

The GBP/USD pair edged higher for the second consecutive session on Tuesday, albeit lacked any strong follow-through and remained well within the prev

GBP/USD gained traction for the second consecutive session on Tuesday.The upside remains capped near a three-week-old trend-channel hurdle.Dips towards 200-hour SMA might still be seen as a buying opportunity.The GBP/USD pair edged higher for the second consecutive session on Tuesday, albeit lacked any strong follow-through and remained well within the previous day's broader trading range. Looking at the technical picture, the overnight strong positive move stalled near a resistance marked by the top end of a near three-week-old descending channel. The pullback, however, remained limited and attracted some dip-buying near 200-hour SMA, which should now act as a key pivotal point for intraday traders. Meanwhile, technical indicators on hourly charts maintained their bullish bias and have been recovering from the negative territory on the daily chart. The set-up supports prospects for an eventual breakthrough the trend-channel resistance, though bulls seemed to wait for Brexit updates before placing fresh bets. That said, some follow-through buying beyond the previous day’s swing high, around the 1.2930 region, should pave the way for a move towards conquering the key 1.3000 psychological mark. A subsequent strength beyond 50-day SMA, around the 1.3025-30 region, will be seen as a fresh trigger for bullish traders. On the flip side, the 200-hour SMA, around the 1.2820 region, might continue to protect the immediate downside. This is followed by the 1.2800 mark and support near the 1.2775 region. Failure to defend the mentioned support levels will negate prospects for any further near-term appreciating move. The pair might then accelerate the fall back towards the 1.2700 mark before eventually dropping to multi-week lows, around the 1.2675 region, en-route the trend-channel support. A convincing break below will set the stage for the resumption of the recent sharp decline and drag the pair further below the 1.2600 mark. GBP/USD 1-hourly chart Technical levels to watch  

The greenback remains well on the defensive in the first half of the week and forces the US Dollar Index (DXY) to briefly dip to the sub-94.00 level.

DXY meets initial support just below the 94.00 mark.US advanced trade deficit widened to nearly $83.0 billion.Markets’ attention stays on the Trump-Biden presidential debate.The greenback remains well on the defensive in the first half of the week and forces the US Dollar Index (DXY) to briefly dip to the sub-94.00 level. US Dollar Index now looks to further data, debate The index came under further downside pressure, as the mood in the risk complex continues to improve on turnaround Tuesday. In fact, the risk appetite trends remain biased towards the riskier assets despite the mixed tone from European stock markets, whereas the dollar’s peers like the euro, the sterling and the aussie dollar all navigate well into the positive ground so far. Later in the NA session, US politics will take centre stage as President Trump and Democrat nominee Joe Biden will participate in the first presidential debate in Cleveland, where the pandemic and the US economic outlook are expected to be on top of the agenda. In the US data space, advanced Trade Balance results showed the trade deficit is expected to tick higher to almost $83.0 billion during August. Additional data will see the S&P/Case-Shiller Index and speeches by New York Fed John Williams (permanent voter, centrist) and Philadelphia Fed Patrick Harker (voter, hawkish). What to look for around USD The index started the week on a weak note, although it manages well to keep the trade above the 94.00 yardstick for the time being. It seems the dollar met an important hurdle at the 94.70 region, where coincide a 6-month resistance line. Occasional bullish attempts in DXY are (still) seen as temporary, however, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections and over further monetary/fiscal stimulus. US Dollar Index relevant levels At the moment, the index is retreating 0.25% at 94.04 and faces the next support at 93.55 (55-day SMA) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop). On the flip side, a break above 94.74 (monthly high Sep.25) would open the door to 95.42 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop).

United States Redbook Index (MoM) climbed from previous -0.9% to -0.3% in September 25

United States Redbook Index (YoY): 2.2% (September 25) vs 1.5%

The United States' international trade deficit increased by $2.8 billion to $82.94 billion in August, the data published jointly by the US Census Bure

Goods Trade Balance in the US declined to $83.94 billion in August.US Dollar Index remains depressed near 94.00 after the data.The United States' international trade deficit increased by $2.8 billion to $82.94 billion in August, the data published jointly by the US Census Bureau and the US Bureau of Economic Analysis showed on Tuesday. "Exports of goods for August were $118.3 billion, $3.2 billion more than July exports," the publication read. "Imports of goods for August were $201.3 billion, $6.0 billion more than July imports." Further details of the publication revealed that Wholesale Inventories rose by 0.5% to $637 billion. Market reaction These data don't seem to be having a significant impact on the USD's performance against its rivals. As of writing, the US Dollar Index was down 0.26% on the day at 94.02.

United States Wholesale Inventories above expectations (-0.2%) in August: Actual (0.5%)

United States Goods Trade Balance dipped from previous $-79.32B to $-82.94B in August

The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range around the 105.60 region, just below thre

USD/JPY was seen consolidating its recent gains to three-week tops, above mid-105.00s.The set-up favours bullish traders and supports prospects for further appreciating move.Only a sustained break below the 105.00 round-figure will negate the constructive outlook.The USD/JPY pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range around the 105.60 region, just below three-week tops set earlier this Tuesday. Given that the overnight dip was bought into near the 105.40-35 confluence support, the bias seems tilted firmly in favour of bullish traders and supports prospects for additional gains. The constructive outlook is further reinforced by the fact that oscillators on hourly charts have been gaining traction and have also recovered from the negative territory on the daily chart. Hence, some follow-through positive move beyond the 106.00 round-figure mark, towards testing the next major hurdle near the 106.25-30 supply zone, now looks a distinct possibility. The mentioned barrier is followed by 100-day SMA, around the 106.60-65 region, which if cleared will set the stage for an extension of the recent recovery from the 104.00 mark. On the flip side, the 105.40 area might continue to act as immediate strong support, below which the USD/JPY pair might turn vulnerable to slide back to the key 105.00 psychological mark. The latter coincides with 200-hour SMA and should act as a strong near-term base for the major. A convincing breakthrough will now be seen as a fresh trigger for bearish traders. USD/JPY 1-hourly chart Technical levels to watch  

EUR/USD remains well into the positive territory and manages to reclaim the key barrier at 1.1700 the figure and above on Tuesday. EUR/USD now looks t

EUR/USD keeps the positive note unchanged above 1.1700.German flash CPI came in at -0.2% MoM in September.Attention stays on the presidential debate, US key data.EUR/USD remains well into the positive territory and manages to reclaim the key barrier at 1.1700 the figure and above on Tuesday. EUR/USD now looks to US data, politics EUR/USD adds to the optimism seen at the beginning of the week and pushes further north of the key resistance region around the 1.1700 mark. The renewed offered tone in the buck is helping the sentiment not only around the euro but also in the rest of its riskier peers. In the meantime, investors’ focus of attention stays on the rising cases of coronavirus across the world and the potential impact on the economy, as many countries have already resumed partial lockdowns and social restrictions. In the domestic calendar, German flash inflation figures now see the CPI contracting at a monthly 0.2% in September. Year-on-year, consumer prices are also expected to drop 0.4%. Earlier in the session, the final print of the Consumer Confidence in the euro area measured by the European Commission matched the first estimate at -13.9 for the month of September, while the Spanish CPI is seen rising 0.2% inter-month and contracting 0.4% from a year earlier. Across the pond, the focus of attention will be on the presidential debate between President Donald Trump and Democrat candidate Joe Biden. In the data space, the Conference Board will publish its always-relevant Consumer Confidence measure. Further data will see the S&P/Case-Shiller Index, advanced Trade Balance results and speeches by New York Fed John Williams (permanent voter, centrist) and Philadelphia Fed Patrick Harker (voter, hawkish). What to look for around EUR EUR/USD is looking to extend the rebound from 2-month lows in the 1.1610 region so far this week. Despite the move, the pair’s outlook still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far calm US-China trade front and the steady – albeit vigilant- stance from the ECB. The solid position of the EMU’s current account coupled with the favourable positioning of the speculative community also lends support to the shared currency. EUR/USD levels to watch At the moment, the pair is advancing 0.33% at 1.1702 and a breakout of 1.1714 (weekly high Sep.29) would target 1.1760 (55-day SMA) en route to 1.1917 (high Sep.10). On the flip side, immediate contention is seen at 1.1612 (monthly low Sep.25) seconded by 1.1495 (monthly high Mar.9) and finally 1.1447 (50% Fibo of the 2017-2018 rally).

Inflation in Germany, as measured by the Consumer Price Index (CPI), was -0.2% (preliminary) in September, the data published by Destatis showed on Tu

HICP in Germany fell to -0.4% on a yearly basis in September.EUR/USD clings to daily gains above 1.1700 after the data.Inflation in Germany, as measured by the Consumer Price Index (CPI), was -0.2% (preliminary) in September, the data published by Destatis showed on Tuesday. This reading followed August's print of -0.1% and came in lower than the market expectation of -0.1%. On a yearly basis, the CPI declined to -0.2% as well. Additionally, the Harmonized Index of Consumer Prices (HICP), the European Central Bank's (ECB) preferred gauge of inflation, slumped to -0.4% in September from -0.1% on a yearly basis and missed analysts' estimate of -0.1%. Market reaction The EUR/USD pair largely ignored this data and was last seen gaining 0.35% on a daily basis at 1.1705.

Germany Harmonized Index of Consumer Prices (YoY) came in at -0.4%, below expectations (-0.1%) in September

Germany Harmonized Index of Consumer Prices (MoM) came in at -0.4%, below expectations (-0.1%) in September

Germany Consumer Price Index (YoY) came in at -0.2%, below expectations (-0.1%) in September

Germany Consumer Price Index (MoM) below forecasts (-0.1%) in September: Actual (-0.2%)

The EUR/GBP cross refreshed daily tops during the mid-European session, with bulls now looking to build on the momentum further beyond the 0.9100 mark

EUR/GBP gains some traction and recovers further from three-week lows.The GBP bulls turned cautious and wait for the final round of Brexit negotiations.A modest pickup in demand for the euro remained supportive of the uptick.The EUR/GBP cross refreshed daily tops during the mid-European session, with bulls now looking to build on the momentum further beyond the 0.9100 mark. Following an early dip to the 0.9060 region, the cross managed to attract some buying interest and built on the previous day's goodish rebound from the 0.9025 region, or three-week lows. The British pound's relative underperformance against its European counterpart could be attributed to cautiousness ahead of the ninth round of Brexit negotiations. Reports suggest that both the sides remain optimistic that some kind of a deal will be struck ahead of the upcoming EU summit in mid-October. Investors, however, preferred to wait for fresh Brexit updates, which, in turn, prompted some short-covering move around the EUR/GBP cross. Hence, Thursday could be a critical day for the GBP traders. The EU's chief Brexit negotiator Michel Barnier and his UK counterpart David Frost will update the press on the status of talks on Thursday. Given that this would be the final round of official negotiations, the outcome will be significant for the future EU-UK relationship and should play a key role in influencing the sterling. The EUR/GBP pair's intraday uptick was further supported by the emergence of some buying around the shared currency, fueled by the ongoing USD pullback from two-month tops. Market participants now look forward to the prelim German consumer inflation figures for some meaningful trading opportunities amid absent relevant macro data from the UK. Technical levels to watch  

After spending the first half of the day fluctuating in a tight range below 0.7100, the AUD/USD pair gained traction ahead of the American session and

AUD/USD gained traction after breaking above 0.7100 on Tuesday.US Dollar Index declines toward 94.00 ahead of key data, presidential debate.S&P 500 futures are posting modest daily losses.After spending the first half of the day fluctuating in a tight range below 0.7100, the AUD/USD pair gained traction ahead of the American session and rose to a fresh weekly high of 0.7128. As of writing, the pair was up 0.76% on the day at 0.7123. DXY closes in on 94.00 The US Dollar Index (DXY), which gained 1.7% last week, staged a technical correction on Monday and closed in the negative territory. Ahead of key macroeconomic data releases and the first presidential debate, the DXY pushed lower on Tuesday and helped AUD/USD preserve its bullish momentum. At the moment, the DXY is down 0.25% at 94.04. The US Census Bureau will release the Goods Trade Balance data for August at 1230 GMT. Later in the session, the Conference Board's Consumer Confidence Index data will be looked upon for fresh catalysts. Meanwhile, the S&P 500 futures are down 0.15% on the day, suggesting that Wall Street could start the day modestly lower. Investors are likely to adopt a cautious mood in the second half of the day and the USD could take advantage of the risk-averse market environment and start recovering its losses against its major rivals. On Wednesday, Building Permits and Private Sector Credit data will be featured in the Australian economic docket. Technical levels to watch for  

USD/JPY is up this Tuesday, trading near a daily high of 105.73 as the market is cautiously optimistic ahead of Fed’s speakers and the presidential de

USD/JPY is up this Tuesday, trading near a daily high of 105.73 as the market is cautiously optimistic ahead of Fed’s speakers and the presidential debate. The pair is biased higher and needs to break above 105.80 to accelerate the upmove, FXStreet’s Chief Analyst Valeria Bednarik briefs. Key quotes “The greenback remains under pressure against most major rivals, as investors maintain a cautiously optimistic stance ahead, amid hopes for a US coronavirus aid package and a Brexit trade deal. US Treasury yields ticked lower, ahead of a bunch of Fed’s speakers and the first US Presidential debate that will take place later in the day.” “From a technical point of view, the USD/JPY pair is biased higher, although without enough strength. The 4-hour chart shows that technical indicators remain within positive levels, slowly grinding higher. Also, the pair is above its 20 and 100 SMA, which converge in the 105.40 price zone, while a mildly bearish 200 SMA caps advances around 105.80.” “Beyond 105.80, the USD/JPY pair could accelerate north towards 106.25, the next relevant resistance level.”  

S&P 500 maintains the strong tone set late Friday and above 3323/29 has seen a near-term base confirmed to suggest the worst of the price fall in the

S&P 500 maintains the strong tone set late Friday and above 3323/29 has seen a near-term base confirmed to suggest the worst of the price fall in the corrective phase may be behind us, per Credit Suisse. More: S&P 500: Three critical policy disappointments behind the correction – Morgan Stanley Implementing national lockdowns to lead to a new bear market for stocks – Charles Schwab S&P 500 Index: Near-term correction, long-term recovery – Morgan Stanley Key quotes “The S&P 500 has maintained the strong tone set late Friday after holding key support and our next objective at 3204/3198 and the market has gapped higher, albeit on muted volume for a break above resistance at 3323/29 – the falling 13-day exponential average, top of the accelerated downtrend from early September and high of last week. This sees a near-term base established to suggest the worst of the corrective decline may be behind us in terms of price declines, clearing the way for the recovery to extend.” “We look for a close above the 38.2% retracement of the September fall at 3354 to clear the way for a move to gap resistance at 3375/85 next, then the mid-September highs at 3425/29 which we expect to prove a tougher initial barrier.”  “Support is seen at 3333 initially, then 3315, with gap support from yesterday at 3298/93 now ideally holding to keep the immediate risk higher. Below can raise the prospect of further sideways ranging, with support next at 3279.”  

Buyers appear to have regained the upper hand and push EUR/USD back to the 1.1700 zone on Tuesday, recording at the same time new multi-day highs. Ext

EUR/USD resumes the upside and flirts with the 1.1700 mark.The next resistance of note emerges at the 55-day SMA near 1.1760.Buyers appear to have regained the upper hand and push EUR/USD back to the 1.1700 zone on Tuesday, recording at the same time new multi-day highs. Extra gains are seen on a serious breakout of the 1.1700 area (previous key support area). Against this, the 55-day SMA at 1.1760 now emerges as the next interim barrier. Further north, there are no levels of note until 1.1917 (September 10 high). Looking at the broader scenario, the bullish view on EUR/USD is expected to remain unchanged as long as the pair trades above the critical 200-day SMA, today at 1.1240. EUR/USD daily chart  

The USD/CHF pair rose to its highest level in more than two months at 0.9299 on Monday but reversed its direction to close the day with a 40-pip loss.

USD/CHF is trading in a tight range on Tuesday.US Dollar Index is falling for the second straight day.Major European equity indexes trade in the negative territory.The USD/CHF pair rose to its highest level in more than two months at 0.9299 on Monday but reversed its direction to close the day with a 40-pip loss. During the early trading hours of the European session, the pair continued to edge lower and was last seen losing 0.28% on the day at 0.9219. Eyes on US data, presidential debate The selling pressure surrounding the greenback seems to be causing the pair to remain under bearish pressure. The US Dollar Index (DXY), which lost 0.33% on Monday, is currently down 0.25% at 94.04. In the absence of significant fundamental drivers and macroeconomic data releases, the DXY's slide on Tuesday could be seen as a technical correction of last week's impressive 1.7% gain. Later in the day, Goods Trade Balance and the Conference Board's Consumer Confidence data will be featured in the US economic docket. Moreover, NY Federal Reserve President John Willams and Randal Quarles, Vice-Chair of the Federal Reserve, will be delivering speeches. Additionally, the first presidential debate will take place at 0100 GMT on Wednesday. Although Wall Street will already be closed at the time of the debate, investors will be paying close attention to potential changes in market sentiment. A risk-off market environment in the near-term could help the DXY re-gain its traction. Meanwhile, major European equity indexes are down between 0.25% and 0.4% on Tuesday, reflecting a cautious market mood.  Technical levels to watch for  

The bearish note in the greenback picks up pace in the first half of the week and forces DXY to put the 94.00 mark to the test. A clear breakdown of t

DXY extends the decline and challenges the 94.00 mark.Next on the downside emerges 93.66 (September 9 top).The bearish note in the greenback picks up pace in the first half of the week and forces DXY to put the 94.00 mark to the test. A clear breakdown of the 94.00 neighbourhood could pave the way for a move to the September 9 peak near 93.70 ahead of the 55-day SMA, today at 93.55. While below the 200-day SMA, today at 97.07, the outlook on the dollar is forecasted to remain negative. DXY daily chart  

Brazil Inflation Index/IGP-M came in at 4.34%, below expectations (4.51%) in September

EUR/JPY posts decent gains and adds to Monday’s advance above 123.00 the figure amidst the better tone in the risk complex. The cross managed to regai

EUR/JPY gains further upside momentum beyond 123.00 on Tuesday.The 3-month resistance line emerges as the next interim hurdle.EUR/JPY posts decent gains and adds to Monday’s advance above 123.00 the figure amidst the better tone in the risk complex. The cross managed to regain attention after bottoming out in the 122.40 area on Monday, where also converges the 100-day SMA. Further upside looks likely and could initially extend to the 3-month resistance line in the 124.20 zone. Above the 200-day SMA, today at 120.89, the outlook on the cross is expected to remain constructive. EUR/JPY daily chart  

Copper (LME) formed a top at 6877.50 and is set to slide further towards the August low at 6226.00, according to the Technical Analysis Research Team

Copper (LME) formed a top at 6877.50 and is set to slide further towards the August low at 6226.00, according to the Technical Analysis Research Team at Commerzbank. Key quotes “LME Copper’s advance has recently taken it to a two and a quarter year high at 6877.50 but then suddenly dropped to the 55-day moving average at 6557.88 as expected.” “A slip below the current September low at 6449.00 would target the August low at 6226.00. En route lies the mid-July low at 6305.50. Only a failure at 6226.00 on a daily chart closing basis would confirm a significant top formation, though, with the 200-day moving average at 5876.09 then being in the frame.” “Were a rise and daily chart close above the recent high at 6877.50 to unexpectedly be seen, however, we would turn bullish again and would continue to target the psychological 7000.00 level. Further up the December 2017 and June 2018 highs remain to be seen at 7312.50/7348.00.”  

Commenting on the impact of the coronavirus on the UK, British Prime Minister Boris Johnson said that the UK economy has been shaken, as reported by R

Commenting on the impact of the coronavirus on the UK, British Prime Minister Boris Johnson said that the UK economy has been shaken, as reported by Reuters. Additional takeaways "Shortcomings of the labour market and education system made apparent by the crisis." "We have a shortage of many crucial skills. The market will pay richly for skills, the problem is with supply." "At this moment, there is a shortage of UK-trained lab technicians and other crucial skills." "The economy is underproductive." Market reaction These comments don't seem to be having a significant impact on market sentiment. As of writing, the UK's FTSE 100 Index was down 0.43% on the day at 5,902.

Italy 10-y Bond Auction declined to 0.89% from previous 1.11%

Italy 5-y Bond Auction: 0.35% vs previous 0.58%

The NZD/USD pair took advantage of the broad USD weakness on Monday and closed the day in the positive territory. With the bearish pressure on the gre

NZD/USD is rising for the second straight day on Tuesday.US Dollar Index continues to push lower toward 94.00.Focus shifts to CB Consumer Confidence data from the US.The NZD/USD pair took advantage of the broad USD weakness on Monday and closed the day in the positive territory. With the bearish pressure on the greenback staying unabated on Tuesday, the pair continued to push higher and was last seen gaining 0.5% on a daily basis at 0.6585. USD remains on the back foot ahead of key events The upbeat market mood amid renewed optimism for another coronavirus relief bill in the US weighed on the greenback at the start of the week. Although major European equity indexes are posting modest losses to reflect a relatively cautious market environment, the US Dollar Index (DXY) is down 0.15% on the day at 94.13. In the second half of the day, the Conference Board's Consumer Confidence data from the US will be looked upon for fresh impetus. Additionally, Federal Reserve's Vice Chairman Richard Clarida and NY Fed President John Williams are scheduled to speak later in the American session. At the moment, the S&P 500 futures are virtually unchanged on the day as investors seem to be opting out to stay on the sidelines ahead of the first presidential debate. If Wall Street's main indexes struggle to build on Monday's impressive gains, the USD could stay resilient against its rivals and cap NZD/USD's upside. During the Asian session on Wednesday, ANZ Business Confidence and ANZ Activity Outlook data will be released from New Zealand. Technical levels to watch for  

GBP/USD has been attempting to recover in response to reports on Brexit progress. Rising UK coronavirus cases and US political uncertainty may also we

GBP/USD has been attempting to recover in response to reports on Brexit progress. Rising UK coronavirus cases and US political uncertainty may also weigh on the pair, Yohay Elam, an analyst at FXStreet, reports. More – GBP/USD: The outperformer toward the day of true Brexit – MUFG Key quotes “‘We only go into the tunnel if there is going to be light at the end of it’ – the words of EU officials pour cold water on hopes for an imminent breakthrough in Brexit talks and may limit any pound gains. The Guardian's Jennifer Rankin's sources serve as a reality check to more hopeful talk earlier in the day. A ‘tunnel’ is EU terminology for intense talks aimed to produce a final agreement.” “There is a dearth of positive coronavirus developments of late. PM Boris Johnson is considering slapping additional restrictions to curb COVID-19, especially in northern England. The rising number of cases and economic hardship are now joined by political issues. A group of Conservative Party ‘rebels’ led by Steve Baker is trying to limit the government's powers. PM Johnson's struggles with the virus also weigh on sterling.”  “President Donald Trump and rival Joe Biden are set to clash in the first presidential debate late on Tuesday. The occupant of the White House is considered a better debater, and he would need all his skills to help him narrow the gap in the polls. Uncertainty about the elections – and Trump's hint he may not guarantee a smooth transition – are weighing on markets and supporting the safe-haven dollar.”

The USD/CAD pair quickly retreated around 30-35 pips from session tops and dropped to the lower end of its daily trading range, around the 1.3355 regi

USD/CAD turns lower for the second straight session amid a softer tone surrounding the USD.Weaker oil prices might undermine the loonie and help limit deeper losses, at least for now.US Consumer Confidence eyed for some impetus ahead of the first US presidential debate.The USD/CAD pair quickly retreated around 30-35 pips from session tops and dropped to the lower end of its daily trading range, around the 1.3355 region in the last hour. The pair failed to capitalize on its early uptick, instead witnessed a modest intraday pullback from the vicinity of the 1.3400 mark and turned lower for the second consecutive session. The downtick was exclusively sponsored by the emergence of some fresh US dollar selling during the first half of the European trading session. The greenback extended the previous day's pullback from two-month tops and remained depressed on the back of a weaker tone surrounding the US Treasury bond yields. However, worries about a surge in new coronavirus infections and political uncertainty in the US might extend some support to the USD's safe-haven status. Meanwhile, concerns that the ever-increasing coronavirus cases could lead to severe lockdown measures dampened prospects for a swift recovery in the fuel demand. This, in turn, weighed on crude oil price, which might undermine demand for the commodity-linked currency – the loonie – and help limit deeper losses for the USD/CAD pair. From a technical perspective, the pair remains well within a four-day-old trading range. This further makes it prudent to wait for some strong follow-through selling before positioning for any meaningful slide as investors turn cautious ahead of the first debate between President Donald Trump and Democrat candidate Joe Biden, due later this Tuesday. In the meantime, traders are likely to take cues from Tuesday's release of the Conference Board's US Consumer Confidence Index. This, along with speeches by influential FOMC members and the broader market risk sentiment might influence the USD price dynamics and produce some meaningful trading opportunities. Technical levels to watch  

Julia Goh, Senior Economist at UOB Group, and Economist Loke Siew Ting assessed the latest export data in Malaysia. Key Quotes “Gross exports unexpect

Julia Goh, Senior Economist at UOB Group, and Economist Loke Siew Ting assessed the latest export data in Malaysia. Key Quotes “Gross exports unexpectedly reversed course and declined by 2.9% y/y in Aug (Jul: +3.1% y/y), bringing year-to-date export contraction to 5.8% in the first eight months of 2020 (Jan-Aug 2019: +0.8%). Aug’s export reading was much worse than our estimate (+4.0%) and Bloomberg consensus (+4.9%). Gross imports continued to drop for the sixth month by -6.5% y/y (Jul: -8.7% y/y). With these, trade surplus narrowed to MYR13.2bn from a record high of MYR25.3bn in Jul.” “The unexpected decline in exports last month was across the board. Both overseas shipments of manufactured and agriculture goods took a backseat after steep falls in manufactures of metal, chemicals & chemical products, machinery, equipment & parts, sawn timber & moulding, and natural rubber. Exports of mining goods still saw a sharp decline for 14 months, largely due to the persistent weakness in exports of liquefied natural gas.” “The surprise setback in Aug exports amid year-ago low base comparison reaffirms our view of a bumpy ride for Malaysia’s export outlook. A return to softer manufacturing Purchasing Manager Indices (PMIs) in most countries including Malaysia and resurgence of COVID-19 infections may further undermine the pace of recovery. We maintain our export projection of -3.5% for this year before rebounding to +4.0% growth in 2021.”

The GBP/USD pair traded with a positive bias through the early European session and was last seen hovering near the top end of its daily range, around

The GBP/USD pair traded with a positive bias through the early European session and was last seen hovering near the top end of its daily range, around the 1.2875-80 region. Economists at Credit Suisse look for an attempt to establish a more important base with key resistance seen at 1.2967/1.3007, above which is needed to confirm to open the door back to 1.3125/35 initially and eventually a retest of medium-term resistance at 1.3482/1.3514. More – GBP/USD attempts to recover towards 1.3070 – Commerzbank Key quotes “GBP/USD extends its defence of our target of a cluster of supports at 1.2720/1.2655 – the 200-day average, the 38.2% retracement of the entire March/September rally, 23.6% retracement of the entire rally from the March low and ‘measured top objective’ – and we look for an attempt to establish a floor here.” “Above 1.2805 has already seen a minor base complete and we look for this to clear the way for a challenge on what we see as more important resistance, starting at 1.2967 and stretching up to 1.3007 – the mid-September highs and 55-day average. A close above here remains needed to confirm a more important base and turn higher with resistance then seen next at 1.3035 initially, then the ‘neckline’ to the August/September top at 1.3125/35. Beyond this latter area can clear the way for a retest of medium-term resistance at 1.3482/1.3514.”  “Near-term support moves to 1.2833, then 1.2805, with 1.2752 now ideally holding to keep the immediate risk higher.”  

Once again, the Turkish lira fell to all-time lows vs. the greenback, this time lifting USD/TRY to the area above 7.8500 during early trade. USD/TRY f

USD/TRY once again clinches fresh all-time highs around 7.85.Fresh geopolitics jitters continue to weigh on the Turkish currency.The Turkish central bank will publish its minutes on Thursday.Once again, the Turkish lira fell to all-time lows vs. the greenback, this time lifting USD/TRY to the area above 7.8500 during early trade. USD/TRY focused on geopolitics and CBRT The Turkish currency continues to debilitate on Tuesday. Now, with the centre of attention in the Caucasus, the ongoing conflict between Armenia and Azerbaijan carries the potential to see Russia and Turkey face each other, as these countries support the opposing parties. In the meantime, the pair regained upside traction and quickly left behind the knee-jerk following the decision by the Turkish central bank (CBRT) to hike interest rates by 200 bps last Thursday. It is worth noting that the lira shed nearly 25% vs. the greenback so far this year. The next key event for TRY will be the publication of the CBRT Minutes on Thursday. USD/TRY key levels At the moment the pair is gaining 0.53 at 7.8376 and faces the next hurdle at 7.8525 (all-time high Sep.29). On the downside, a drop below 7.5082 (low Sep.25) would expose 7.4124 (low Sep.10) and finally 7.2019 (low Aug.21).

According to the latest quarterly survey conducted by the People’s Bank of China (PBOC) on Tuesday, the sentiment amongst the Chinese firms and househ

According to the latest quarterly survey conducted by the People’s Bank of China (PBOC) on Tuesday, the sentiment amongst the Chinese firms and households appeared quite upbeat for the third quarter of this year, as the economy regains its recovery momentum from the coronavirus pandemic. Key findings “Q3 business climate index rises 6.6ppts to 49.4%.“ “Income sentiment index rises 3.2ppts to 49.3%.” “25.1% of households believe housing prices will rise in Q4.” “35% of bankers in China said monetary policy for the July-September quarter was loose.”

In the view of the analysts at Bank of America (BofA), the S&P 500 index could jump 30% from current levels to 3,700-4,300 target range, as the long-t

In the view of the analysts at Bank of America (BofA), the S&P 500 index could jump 30% from current levels to 3,700-4,300 target range, as the long-term technical set up remains constructive despite this month’s correction, per Business Insider. Key quotes “Investors should continue to hold on for upside in the S&P 500 heading into the November election.” “A completed "cup and handle" pattern suggests the S&P 500 could rise to 3,700, representing potential upside of 12% from Friday's close. A longer-term target of 4,300 from the technical-analysis pattern, representing 30% upside.” "SPX 4300 is an aspirational upside count, but one that is achievable based on the bullish breakout, positive backdrop signals and our secular bull market roadmap.”

Belgium Consumer Price Index (YoY) rose from previous 0.82% to 0.9% in September

Belgium Consumer Price Index (MoM): -0.37% (September) vs previous 0.06%

The GBP/JPY cross regained positive traction for the fifth consecutive session on Tuesday and moved back closer to two-week tops touched in the previo

A combination of factors assisted GBP/JPY to gain traction for the fifth consecutive session.The technical set-up favours bullish traders and supports prospects for additional gains.Dip-buying should help limit any meaningful slide near the key 135.00 psychological mark.The GBP/JPY cross regained positive traction for the fifth consecutive session on Tuesday and moved back closer to two-week tops touched in the previous session. Bulls were now seen making a fresh attempt to build on the momentum beyond the 136.00 mark. The cross on Monday broke through the 200-hour SMA for the first time in three-week. A subsequent move beyond the 23.6% Fibonacci level of the 142.72-133.05 recent pullback, along with the emergence of some dip-buying on Tuesday, favours bullish traders. The bullish set-up is reinforced by the fact that oscillators on hourly charts have been gaining traction in the positive territory. Some follow-through buying beyond the overnight swing high, around the 136.20-25 area, will add credence to the constructive outlook. The GBP/JPY cross might then aim to test the 38.2% Fibo. level resistance near the 136.80 region. The latter coincides with the very important 200-day SMA, which if cleared decisively should pave the way for an extension of the recent bounce from the 133.00 mark. On the flip side, the 135.35-30 region (23.6% Fibo. level) now seems to have emerged as immediate strong support. Any further slide will now be seen as a buying opportunity and remain limited near the key 135.00 psychological mark amid the latest Brexit optimism. That said, failure to defend the mentioned support levels might turn the GBP/JPY cross vulnerable to slide back to the 134.60-50 horizontal support. The downward trajectory could then drag the cross back towards multi-month lows touched on September 22nd. GBP/JPY 1-hourly chart Technical levels to watch  

South Africa Unemployment Total dipped from previous 7.1M to 4.295M in 2Q

South Africa Unemployment Rate (%) came in at 23.3%, below expectations (30.3%) in 2Q

The buying interest in Silver (XAG/USD) remains unabated this Tuesday, courtesy of the resumption of the US dollar decline across the board and a bull

Silver is set to test the 200-HMA at $24.42 in the near-term. Bull flag breakout spotted on the hourly chart.Hourly RSI edges higher towards the overbought territory.The buying interest in Silver (XAG/USD) remains unabated this Tuesday, courtesy of the resumption of the US dollar decline across the board and a bullish technical set up on the hourly chart. From the near-term technical perspective, the white metal is on track to confront the bearish 200-hourly Simple Moving Average (HMA) at $24.42, in light of a bull flag breakout in the last hour. The next in sight for the bulls remain the pattern target at $24.55. The hourly Relative Strength Index (RSI) looks north while trending still below the overbought territory, suggesting that there is still room for more upside. To the downside, the immediate cushion is seen at $23.60, the confluence of the pattern resistance now support and the upward-sloping 21-HMA. A break below the latter could trigger a fresh drop towards the falling trendline support at $23.28. All in all, the path of least resistance looks to the upside. XAG/USD: Hourly chart XAG/USD: Additional levels  

GBP/USD keeps bounces off 1.2836 to print a two-day winning streak whereas Tuesday's 4-hour chart is painting a mixed technical picture. Resistance is

GBP/USD keeps bounces off 1.2836 to print a two-day winning streak whereas Tuesday's 4-hour chart is painting a mixed technical picture. Resistance is seen at 1.2930, on the flip side, the 1.2835 daily low marks the initial support, FXStreet’s Yohay Elam briefs. More – GBP/USD attempts to recover towards 1.3070 – Commerzbank Key quotes “Momentum on the 4-hour chart is positive and sterling trades above the 50 Simple Moving Average. However, it has failed to recapture the 100 SMA and is well below the 200 SMA. All in all, the picture is mixed.”  “Support awaits at the daily low of 1.2835, followed by 1.2760 and 1.2680.”  “Resistance is at 1.2930, a level recorded on Monday, followed by 1.30 – a psychologically significant level, which also held cable down in mid-September. The next levels to watch are 1.3040 and 1.3145.”  

EUR/USD has been struggling to recover from last week's substantial falls. Coronavirus concerns, inflation figures and tensions ahead of the president

EUR/USD has been struggling to recover from last week's substantial falls. Coronavirus concerns, inflation figures and tensions ahead of the presidential debate could keep the pair down, FXStreet’s analyst Yohay Elam reports. Key quotes “One million coronavirus deaths – the world has reached that grim milestone and the focus on Europe is weighing on sentiment. That is only one of the reasons preventing EUR/USD from recovering and may bring it down to new lows.” “Christine Lagarde, President of the European Central Bank, expressed concern about the virus and the impact on the economy. Will the Frankfurt-based institution provide more stimulus? Reportedly, that is fiercely debated and the ECB remains split between hawks and doves. The bank also has to deal with weak inflation, and new statistics published on Tuesday are adding to the case for more accommodation that may weigh on the euro.” “COVID-19 infections remain elevated in the US as well, but the dollar's safe-haven status means it gains from such concerns.”  “The Federal Reserve seems reluctant to provide more stimulus. Most officials, including Chairman Jerome Powell, urged the government to provide more stimulus. Vice-Chair Richard Clarida and several other officials will speak on Tuesday and are likely to continue signaling that the ball lies in elected officials' court.”  “Some hope for a deal between Republicans and Democrats pushed stocks higher and the dollar lower – but that is beginning to fade. Lawmakers are gearing up for a battle around the nomination of a new Supreme Court Justice as the clock ticks down toward the elections – and the first presidential debate. The former Vice President is leading in the polls but is considered an underdog when it comes to debating. Will Trump close the gap with Biden? That would add uncertainty and potentially boost the safe-haven greenback as investors continue dreading the nightmare scenario of an inconclusive election and a constitutional crisis.”   

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recent decision by the FTSE. Key Quotes “FTSE Russell (FTSE) retained

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recent decision by the FTSE. Key Quotes “FTSE Russell (FTSE) retained Malaysia on the Watch List (as of Sep 2020 review) for possible exclusion from its World Government Bond Index (WGBI). Malaysia currently has a 0.43% weight in the index. The next review is in Mar 2021.” “FTSE acknowledges the additional initiatives by Bank Negara Malaysia (BNM), over the last twelve months to improve the accessibility of the Malaysian government bond market for foreign investors. However, FTSE is still evaluating the practical improvements from the initiatives alongside feedback from investors and stakeholders.” “Malaysia was first placed on FTSE’s Watch List back in March 2019 for a potential exclusion. There is no mention of a definite time frame to be in the Watch List though we presume no longer than two years. We reiterate our view that a complete exclusion of Malaysia from the WGBI is low albeit Malaysia’s weight may be lowered marginally to pave for China’s inclusion from Oct 2021. We estimate the impact of a 0.1% weight reduction at ~MYR 10.4bn or 2.4% of MGS outstanding and 5.5% of foreign holdings of Malaysia’s government bonds.”

A fair deal on Brexit is still possible, said Germany's Europe Minister Michael Roth, in a letter to the UK government, as seen by Der Spiegel. more t

A fair deal on Brexit is still possible, said Germany's Europe Minister Michael Roth, in a letter to the UK government, as seen by Der Spiegel. Roth added: “The European Union (EU) cannot and will not accept Britain questioning Brexit agreement signed nine months ago.” more to come ..

The GBP/USD pair traded with a positive bias through the early European session and was last seen hovering near the top end of its daily range, around

GBP/USD regained positive traction for the second consecutive session on Tuesday.The overnight comments by BoE’s Ramsden, Brexit optimism underpinned the pound.A mildly softer tone around the USD remained supportive of the intraday positive move.The GBP/USD pair traded with a positive bias through the early European session and was last seen hovering near the top end of its daily range, around the 1.2875-80 region. Following the previous day's pullback of around 100 pips from the 1.2930 region, or one-week tops, the pair managed to regain traction and was being supported by a combination of factors. The British pound was underpinned by the overnight comments by the Bank of England (BoE) policymaker, Dave Ramsden, who downplayed the possibility of negative interest rates in the short-term. This comes amid the optimism over a breakthrough in the upcoming Brexit trade negotiations, starting this Tuesday, which extended some additional support to the sterling. This, coupled with a softer tone surrounding the US dollar remained supportive of the uptick for the second consecutive session on Tuesday, though the positive move lacked any strong bullish conviction. However, worries about the second wave of COVID-19 infections, along with the political uncertainty in the US helped limit the USD pullback and capped the upside gains for the GBP/USD pair. Investors also seemed reluctant to place any aggressive bets, rather preferred to wait for fresh Brexit updates and the first US presidential debate before positioning for any firm direction. In the meantime, traders are likely to take cues from the broader market risk sentiment. Apart from this, the release of the Conference Board's US Consumer Confidence Index will influence the USD price dynamics and produce some short-term trading opportunities later during the early North American session. Technical levels to watch  

EUR/JPY weakness has been abruptly arrested just ahead of 122.27/23 and above 123.33/43 can see a near-term base established with resistance then at 1

EUR/JPY weakness has been abruptly arrested just ahead of 122.27/23 and above 123.33/43 can see a near-term base established with resistance then at 123.67. On the flip side, support is seen at 122.96/89, the Credit Suisse analyst team informs. Key quotes “EUR/JPY weakness has been abruptly reversed just ahead of our 122.27/23 objective and although a bullish ‘reversal day’ has just been avoided, the bearish continuation pattern has been negated and a near-term base looks likely.”  “Above 123.33/43 is needed to see this confirmed to provide the platform for a deeper recovery with resistance then seen next at the 13-day average at 123.67, then the ‘measured base objective’ at 124.02. An overshoot to 124.18/31 should be allowed for – the 38.2% retracement of the September fall and price resistance – but with a fresh cap expected here.” “Below 122.96/89 is needed to ease the basing risk with support then seen back at 122.38, then our flagged objective at 122.27/23 – the 38.2% retracement of the May/September rally and 61.8% retracement of the rise from late June.”  

The single currency keeps the buying bias unchanged in the first half of the week and now pushes EUR/USD to daily highs in the 1.1680/85 band. EUR/USD

EUR/USD adds to Monday’s gains in the 1.1680 region.EMU’s final Consumer Confidence came in at -13.9 in September.US Consumer Confidence, Trade Balance, Fedspeak next of relevanceThe single currency keeps the buying bias unchanged in the first half of the week and now pushes EUR/USD to daily highs in the 1.1680/85 band. EUR/USD focused on data, USD EUR/USD advances for the second consecutive session so far on turnaround Tuesday, looking to put further distance from last week’s 2-month lows near 1.1610. In fact, the selling pressure appears to have returned to the buck so far this week, lending the risk-associated galaxy some respite in light of last week’s strong bounce in the risk aversion. The rebound in the pair comes despite the dovish tone from ECB President Christine Lagarde on Monday before the European Parliament. Lagarde left the door open to further stimulus in light of what she considers the recovery in the region to be “incomplete, uncertain and uneven”. Furthermore, Lagarde reiterated that the ongoing pandemic poses downside risks to the growth outlook and put extra downside pressure on consumer prices. Data wise in Euroland, the final Consumer Confidence gauge tracked by the European Commission (EC) came in at -13.9 for the month of September while the Economic Sentiment bettered to 91.1 for the same period. Later in the session, German preliminary inflation figures for the current month are also due. Lagarde is due to speak again on Wednesday, this time at the ECB and its Watchers XXI Conference in Frankfurt. Across the pond, the focus of attention will be on the presidential debate between President Donald Trump and Democrat candidate Joe Biden. In the data space, the Conference Board will publish its always-relevant Consumer Confidence measure. Further data will see the S&P/Case-Shiller Index, advanced Trade Balance results and speeches by New York Fed John Williams (permanent voter, centrist) and Philadelphia Fed Patrick Harker (voter, hawkish). What to look for around EUR EUR/USD is looking to extend the rebound from 2-month lows in the 1.1610 region so far this week. Despite the move, the pair’s outlook still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far calm US-China trade front and the steady – albeit vigilant- stance from the ECB. The solid position of the EMU’s current account coupled with the favourable positioning of the speculative community also lends support to the shared currency. EUR/USD levels to watch At the moment, the pair is advancing 0.13% at 1.1678 and a breakout of 1.1709 (38.2% Fibo retracement of the 2017-2018 rally) would target 1.1759 (55-day SMA) en route to 1.1917 (high Sep.10). On the flip side, immediate contention is seen at 1.1612 (monthly low Sep.25) seconded by 1.1495 (monthly high Mar.9) and finally 1.1447 (50% Fibo of the 2017-2018 rally).

European Monetary Union Business Climate registered at -1.19 above expectations (-1.38) in September

European Monetary Union Consumer Confidence meets forecasts (-13.9) in September

European Monetary Union Industrial Confidence below forecasts (-9.5) in September: Actual (-11.1)

European Monetary Union Economic Sentiment Indicator above forecasts (89) in September: Actual (91.1)

European Monetary Union Services Sentiment above expectations (-15.3) in September: Actual (-11.1)

Turkish economy is likely to expand 0.3% in 2020, said the Finance Minister Berat Albayrak said on Tuesday. In the worst-case scenario, Turkey's econo

Turkish economy is likely to expand 0.3% in 2020, said the Finance Minister Berat Albayrak said on Tuesday. In the worst-case scenario, Turkey's economy could contract 1.5% in 2020, he said.            Additional quotes Turkish GDP growth seen at 5.8% in 2021, 5% in 2023. “Turkish unemployment rate seen at 13.8% in 2020, 12.9% in 2021.” “Turkish inflation rate seen at 10.5% in 2020.” “Turkish inflation rate seen at 8% in 2021, 4.9% in 2023.” “Turkish current account deficit-to-GDP seen at -3.5% in 2020.”   developing story ...

WTI (futures on Nymex) turns negative for the first time in five trading sessions on Tuesday, having reversed half the Monday’s 1% rally to five-week

WTI downed amid risk-aversion, stall in the USD decline.Coronavirus concerns weigh on the market sentiment. Focus shifts to the API crude stocks data and US election debate. WTI (futures on Nymex) turns negative for the first time in five trading sessions on Tuesday, having reversed half the Monday’s 1% rally to five-week highs of $40.80. The US oil sheds 0.91% to trade around $40.23, as we write, awaiting the American Petroleum Institute’s (API) weekly crude inventories data for fresh trading impetus. The renewed weakness in the black gold can be mainly attributed to a major turnaround in the risk sentiment in Europe, which has re-fuelled the haven demand for the US dollar across the board. Reports that Germany is considering imposing fresh restrictions limiting social gatherings underscore rising fears of the coronavirus resurgence in the Old Continent, weighing negatively on the market mood. Further, markets turn cautious ahead of the first US Presidential election debate between the incumbent Donald Trump and Democratic candidate Joe Biden scheduled this Wednesday. On Monday, the WTI barrel rallied in tandem with the global stocks on hopes of an additional US fiscal stimulus, as the House Speaker Pelosi and Treasury Secretary Steven Mnuchin push a new $2.2 trillion plan pre-Election. More so, escalating geopolitical tensions between Armenia and Azerbaijan over the weekend, raising concerns over the South Caucasus, a corridor for pipelines carrying oil and gas to world markets, and collaborated with the rally above the $40 mark. WTI technical levels to watch “Not only the immediate resistance line, currently around $40.85, 200-bar SMA and 61.8% Fibonacci retracement level of WTI’s August-September downside, around $41.00, also acts as the key upside barrier for the black gold. As a result, odds of the commodity’s pullback to the $40.00 threshold, also comprising an upward sloping trend line from September 14, are brighter,” FXStreet’s Analyst Anil Panchal explained. WTI additional levels  

EUR/USD is consolidating the recent corrective advance towards 1.1700. At the time of writing, the pair adds 0.14% to trade at 1.1680, having hit a da

EUR/USD is consolidating the recent corrective advance towards 1.1700. At the time of writing, the pair adds 0.14% to trade at 1.1680, having hit a daily high of 1.1684. Nonetheless, Tuesday's 4-hour chart is showing bears are in the lead, FXStreet’s analyst Yohay Elam briefs.  Key quotes “While momentum on the 4-hour chart has flipped to positive, it remains weak. Moreover, EUR/USD is trading below the 50, 100, and 200 Simple Moving Averages, adding to the bearish case.”  “The daily low of 1.1660 is only weak support. It is followed by 1.1625, a swing low from last week, followed by September's trough of 1.1615. Next, 1.1550 and 1.1480 date back to August.” “Some resistance awaits at 1.1685, the daily high. It is followed by 1.1730, which provided support last week, and then by 1.1755, a cushion from mid-September. Next up, 1.1785 and 1.1830 are the next lines to watch.”  

United Kingdom M4 Money Supply (YoY) fell from previous 13.5% to 12.1% in August

United Kingdom Net Lending to Individuals (MoM) down to £3.4B in August from previous £3.9B

Portugal Consumer Confidence fell from previous -26 to -26.3 in September

United Kingdom M4 Money Supply (MoM) below expectations (1.3%) in August: Actual (-0.4%)

United Kingdom Consumer Credit came in at £0.3B, below expectations (£1.45B) in August

Portugal Business Confidence increased to -0.5 in September from previous -1.3

The surge of the pound on Monday was a reflection of the more positive mood-music as the Brexit talks kicked off. Economists at MUFG Bank forecast the

The surge of the pound on Monday was a reflection of the more positive mood-music as the Brexit talks kicked off. Economists at MUFG Bank forecast the GBP/USD pair sckyrocketing to 1.35 in the last quarter if a deal is reached.  Key quotes “We have always assumed that a deal would be finally done but that it would probably extend beyond the mid-October deadline. PM Johnson’s spokesman, James Slack stated yesterday that he expected talks to extend beyond this week and there is a chance now that talks could continue through to the EU summit. If that’s what happens there is every chance that expectations could rise further of a deal being reached at the final hours of the EU summit as we have come to expect of EU summits. But comments like being in the ‘final stages of negotiations’ certainly paints a brighter picture of a deal being done and that hope could well extend GBP gains further this week.” “Something on fishing rights for something on state-aid independence seems the logical course of direction in negotiations and given the political capital that PM Johnson is losing in the fight against COVID we see the balance as having shifted more in favour of a deal. However, how extensive that deal is and how it alters economic ties will only be known once we get greater detail.” “Our current forecasts see GBP advance up to around the 1.3500 level on a deal being reached in Q4 only for GBP weakness to return in H1 2021 as the details of the deal and the fallout in the UK jobs market from COVID-19 prompts a reversal and with it the BoE cutting rates to zero percent.”  

United Kingdom Mortgage Approvals above forecasts (71K) in August: Actual (84.7K)

Italy Producer Price Index (MoM) registered at 0.1% above expectations (-0.4%) in August

Italy Producer Price Index (YoY) in line with forecasts (-3%) in August

The AUD/USD pair traded near four-day tops during the early European session, with bulls now looking to extend the momentum further beyond the 0.7100

AUD/USD edged higher for the second consecutive session on Tuesday.A softer tone around the USD was seen as a key factor lending support.The uptick lacks bullish conviction ahead of the US presidential debate.The AUD/USD pair traded near four-day tops during the early European session, with bulls now looking to extend the momentum further beyond the 0.7100 round-figure mark. The pair gained positive traction for the second consecutive session on Tuesday and recovered further from two-month tops, around the key 0.7000 psychological mark, coinciding with 100-day SMA support. The overnight strong rally in the equity markets prompted some US dollar profit-taking, which, in turn, prompted a short-covering move around the perceived riskier Australian dollar. The global risk sentiment remained well supported by upbeat Chinese data released over the weekend, which offered signs of economic recovery in the world's second-largest economy. Adding to this, the latest optimism over additional US fiscal stimulus measures further boosted investors' confidence and dented the greenback's relative safe-haven status. The USD pullback, however, remained limited amid worries that the second wave of coronavirus infections could lead to severe lockdown restrictions and halt the current economic recovery. Adding to this, the US political uncertainty might further hold investors from placing any aggressive bets and cap any strong gains for the AUD/USD pair. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the recent corrective fall is over and positioning for any further positive move. Market participants now look forward to the release of the Conference Board's US Consumer Confidence Index for some trading impetus later during the early North American session. The key focus, however, will be on the first US presidential debate between President Donald Trump and Democrat candidate Joe Biden, scheduled later this Thursday. This, along with important US macro data, including the closely watched US monthly jobs report, will influence the near-term USD price dynamics and help investors to determine the next leg of a directional move for the AUD/USD pair. Technical levels to watch  

According to reports by Deutsche Presse-Agentur and other media,” Chancellor Angela Merkel will recommend restricting private meetings to 25 people an

According to reports by Deutsche Presse-Agentur and other media,” Chancellor Angela Merkel will recommend restricting private meetings to 25 people and public gatherings to 50 people when she holds talks with regional premiers via video conference on Tuesday,” Bloomberg reported on Tuesday.     developing storiy ...

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session, just below multi-day tops set

Gold was seen oscillating in a range through the early European session on Tuesday.A softer USD was seen extending some support to the dollar-denominated commodity.The upside seems limited ahead of the first US presidential debate later this Tuesday.Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session, just below multi-day tops set earlier this Tuesday. The precious metal built on the previous day's goodish rebound from 100-day SMA support, around the $1849 region, and gained some traction during the early part of the trading action on Tuesday. A mildly softer US dollar was seen as one of the key factors lending some support to the dollar-denominated commodity. Adding to this, a modest pullback in the US equity futures further underpinned the precious metal's safe-haven status. The prevalent cautious mood was further reinforced by a fresh leg down in the US Treasury bond yields, which further collaborated towards limiting any meaningful slide for the non-yielding yellow metal. Meanwhile, the latest optimism over additional US fiscal stimulus measures and upbeat Chinese data released over the weekend capped the upside for the commodity. Investors also seemed reluctant to place any aggressive bets ahead of the first US presidential debate on Tuesday, leading to a subdued/range-bound price action. In the meantime, the broader market risk sentiment will continue to play a key role in influencing the XAU/USD. Apart from this, Tuesday release of the Conference Board's US Consumer Confidence Index will also be looked upon for some short-term trading opportunities later during the early North American session. Meanwhile, the overnight bounce might still be categorized as a short-covering bounce from a technically significant moving average (100-day SMA). Hence, any subsequent move up might still be seen as a selling opportunity and run out of the steam ahead of the $1900 strong horizontal support breakpoint. Technical levels to watch  

Last week, the S&P 500 officially entered correction territory, down 10% from its September 2nd peak, while the Nasdaq has fallen even further, down n

Last week, the S&P 500 officially entered correction territory, down 10% from its September 2nd peak, while the Nasdaq has fallen even further, down nearly 12%. Lisa Shalett from Morgan Stanley lays out three key catalysts behind the latest swoon in US stocks. More: S&P 500 Index: Near-term correction, long-term recovery – Morgan Stanley Implementing national lockdowns to lead to a new bear market for stocks – Charles Schwab Key quotes “A new stimulus bill has stalled. Surprisingly, Senate Republicans have apparently walked away from the possibility of further fiscal stimulus this calendar year. Almost every Wall Street analyst, myself included, had expected another round of spending that would help state and local governments, support key industries and provide aid to small businesses and the unemployed.” “The Fed has yet to provide further details on how its new plan for ‘average inflation targeting’ would work, or how it will eventually roll back or taper the massive quantitative-easing stimulus programs put in place during the crisis. Instead, the Fed has only confirmed that it will keep the key federal funds rate near zero for at least the next three years. That signaling has contributed to an all-time low in interest-rate volatility and moderately higher long-term yields. One side effect of those higher Treasury yields: Tech stocks, often viewed as higher-risk growth investments that tend to trade at a given premium above the benchmark 10-year Treasury yield, now look even more expensive. That’s likely one reason tech stocks have been hit particularly hard lately.” “Uncertainty is rising around when the US presidential election will be finalized. Normally, we would advise investors to ignore election-related volatility. However, circumstances surrounding the general election add a layer of uncertainty that we have never encountered before. It is unclear whether finalized results will be known within days, weeks or, through court battles, months.”  

Before a vaccine against COVID-19 is available, it is still the health situation that drives the economy and financial markets. Once a vaccine becomes

Before a vaccine against COVID-19 is available, it is still the health situation that drives the economy and financial markets. Once a vaccine becomes available, the analysis to be made is about irreversibilities, about what remains different despite the health situation returning to normal: changes in behaviour, acceleration of the energy transition and deterioration in the structure of corporate balance sheets, per Natixis. More – Implementing national lockdowns to lead to a new bear market for stocks – Charles Schwab Key quotes “As long as there is neither a vaccine nor an effective treatment against COVID-19, the health situation will continue to play a leading role for the economy and financial markets. Given that the health situation is worsening again in the Americas, India and Europe, there is a risk of a further decline in activity at the end of 2020 and the beginning of 2021due to restrictive measures taken by governments, disruption in companies if there are many cases and a decline in household confidence. This decline in activity is already giving rise to a downturn in share prices.” “Once a vaccine and an effective treatment against COVID-19 become available, is it possible to return to the same economic situation as before the crisis? The answer is no, since some aspects of the economy will be permanently different, since there will be irreversibilities.” “We see three irreversibilities about what remains different despite the health situation returning to normal. Permanent changes in behaviour, for example, remote working, online consumption, a drop in business travel, leading to permanent weakness for office real estate, traditional retail and air transport. The COVID-19 crisis has triggered, without many scientific reasons, the desire to speed up the energy transition, and therefore an accelerated shift to electric cars, faster development of renewable energies and new technologies (hydrogen, carbon capture, etc.), and an effort to insulate buildings and housing. Corporate balance sheets are deteriorating in 2020, due to falling earnings and therefore a loss of equity and rising debt. Even a company that will return to normal revenues once a vaccine becomes available will suffer from the deterioration in its balance sheet structure, leading to a weakening of investment and employment.”  

The USD/JPY pair climbed to two-week week tops during the early European session, with bulls now looking to extend the momentum further beyond the 105

USD/JPY caught some fresh bids on Tuesday and climbed to fresh two-week tops.The upbeat market mood undermined the safe-haven JPY and remained supportive.A mildly softer USD did little to influence the pair ahead of US presidential debate.The USD/JPY pair climbed to two-week week tops during the early European session, with bulls now looking to extend the momentum further beyond the 105.70 supply zone. Following the previous day's good two-way price moves, the pair managed to regain positive traction on Tuesday and seemed rather unaffected by a softer tone surrounding the US dollar. The upbeat market mood – as depicted by a positive trading sentiment around the equity markets – undermined the safe-haven Japanese yen and was seen as a key factor driving the USD/JPY pair higher. The global risk sentiment remained well supported by upbeat Chinese data released over the weekend, which offered signs of economic recovery in the world's second-largest economy. Adding to this, the latest optimism over additional US fiscal stimulus measures further boosted investors' appetite for perceived riskier assets and drove flows away from traditional safe-haven currencies. Meanwhile, worries about the ever-increasing coronavirus pandemic and the US political uncertainty continued lending some support to the greenback's status as the global reserve currency. Hence, the key focus will remain on the first US presidential debate between President Donald Trump and Democrat candidate Joe Biden, due later this Tuesday at 01:00 GMT. In the meantime, the broader market risk sentiment will continue to play a key role in influencing the USD/JPY pair. Later during the early North American session, the release of the Conference Board's US Consumer Confidence Index will also be looked upon for some short-term trading opportunities. From a technical perspective, a sustained move beyond the 105.70-80 region has the potential to push the USD/JPY pair beyond the 106.00 mark. The pair might aim back to test the 106.25-30 supply zone before eventually climbing to 100-day SMA hurdle near the 106.60-65 region. Technical levels to watch  

The prospects for a return to lockdowns appear to be on the rise, pressuring stock prices in September. Nonetheless, strategists at Charles Schwab bel

The prospects for a return to lockdowns appear to be on the rise, pressuring stock prices in September. Nonetheless, strategists at Charles Schwab believe a return to widespread national lockdowns is highly unlikely for three reasons: healthcare systems are not overwhelmed, precision pays off when it comes to the effectiveness of restrictions and national lockdowns are known to have a huge cost. More – S&P 500 Index: Near-term correction, long-term recovery – Morgan Stanley Key quotes “A return to widespread national lockdowns is highly unlikely for three reasons: healthcare systems are not overwhelmed, mid-summer second waves of virus cases in the US and China faded when narrow, localized restrictions were put in place, achieving success while limiting overall economic impact and the huge cost of the economic and human toll of national lockdowns is now known to be severe. Examining each of these leads us to believe a return to widespread national lockdowns and a related return to global recession and a bear market is highly unlikely.” “Avoiding a boom and bust economic environment generated from the rapid removal of economic restrictions followed by a renewed national lockdown should be a priority for politicians. With broad-based vaccinations unlikely this year, measured restrictions may be needed to effectively contain the virus while being efficient in their economic cost. While stocks have been wary of measures taken in September to contain the outbreaks, investors may soon get comfortable with these effective alternatives to widespread shutdowns.” “The biggest political risk facing investors is the potential for a more dramatic reaction to COVID-19 outbreaks by politicians in the form of national lockdowns that could lead to a new bear market for stocks. In addition, such severe measures could prompt a rotation back into the COVID-winner US tech stocks and away from cyclically-oriented international stocks that have outperformed recently.”  

USD/CNH could extend the rebound to the 6.8600 level in the next weeks, in opinion of FX Strategists at UOB Group. Key Quotes 24-hour view: “We highli

USD/CNH could extend the rebound to the 6.8600 level in the next weeks, in opinion of FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted yesterday that ‘momentum indicators are mostly neutral and further sideway-trading would not be surprising, likely between 6.8100 and 6.8400’. Our view was not wrong even though USD traded within a narrower range than expected (6.8101/6.8349). While the underlying tone has weakened somewhat, USD is unlikely to weaken much. Overall, USD could drift lower but any weakness is viewed as part of 6.8050/6.8350 range.” Next 1-3 weeks: “There is not much to add to our latest narrative from last Thursday (24 Sep, spot at 6.8220). As highlighted, the ‘rebound in USD could extend to 6.8600’. While momentum has not improved by much, there is still chance for USD to move to 6.8600. At this stage, the prospect for a sustained advance above this level is not high. Support is at 6.8000 but only a break of 6.7800 (no change in ‘strong support’ level) would indicate the current upward pressure has eased.”

Over the past month, the S&P 500 dropped over 10% from its recent highs, led by a 14% decline in the tech-heavy Nasdaq 100. The recent correction may

Over the past month, the S&P 500 dropped over 10% from its recent highs, led by a 14% decline in the tech-heavy Nasdaq 100. The recent correction may have been inevitable given rising risks for fiscal stimulus, a potential COVID-19 second wave and the upcoming election. But a resolution to these hurdles may also be possible longer-term, Mike Wilson, Chief Investment Officer and Chief US Equity Strategist for Morgan Stanley reports. Key quotes “The correction this month is happening for the same reasons I suspected back in August. First, with Congress embroiled in election-year politics and a disagreement over when to fill the Supreme Court vacancy, the odds of the CARES2 legislation getting passed before November 3rd have dropped considerably. Morgan Stanley public policy strategist Michael Zezas thinks it's just a 33% chance at this point. Second is COVID-19 and the looming arrival of a second wave. Until we know exactly what it looks like, further lockdowns remain a real possibility. Third, real long-term interest rates appear to have bottomed as the Fed formally tells us asset purchases won't increase from here. And finally, we have the election itself.” “The good news is that investors have started to discount these very visible concerns via lower prices and higher financial market volatility. Options markets are pricing in higher risks than normal around the U.S. election, but nothing like we actually experienced in 2016. That doesn't seem right, given the uncertainty around the election outcome and the process itself. As a result, I expect volatility to remain high for the next 4-6 weeks, creating what is likely to be a difficult trading environment with a wide band for the major averages.” “Looking beyond the near-term, I think three of the aforementioned risks are likely to be resolved positively by the end of the year, or shortly thereafter. More specifically, additional fiscal stimulus is likely as both parties want to spend more but may not be able to come to terms before the election process is completed. Meanwhile, progress on a vaccine should become clear, and we will eventually have a conclusion to the election. The one risk I think will remain with us is that long-term interest rates are likely to rise further from here, particularly if those other risks fade and the recovery continues.”  

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, alternates gains with losses ahead of the opening bell in

DXY gyrates around the 94.20 region on turnaround Tuesday.Investors’ attention stays on data and Trump-Biden first debate.Advanced Trade Balance, S&P/Case-Shiller, Fedspeak next on tap.The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, alternates gains with losses ahead of the opening bell in Europe on Tuesday. US Dollar Index focused on data, politics The index trades without a clear direction in the low-94.00s on Tuesday following the negative price action and the rejection from the 94.70 region seen at the beginning of the week. It is worth noting that in this area is located the 6-month resistance line, which keeps capping the upside for the time being. In the meantime, market chatter keeps gyrating around another probable stimulus package amidst the unabated advance of the coronavirus pandemic, while the pace of the economic recovery appears to have lost some traction in past weeks. Later in the session, the US political scenario will take centre stage as President Trump and Democrat nominee Joe Biden will participate in the first presidential debate in Cleveland, where the pandemic and the economic outlook are expected to be on top of the agenda. In the US data space, advanced Trade Balance results are due seconded by the S&P/Case-Shiller Index and speeches by New York Fed John Williams (permanent voter, centrist) and Philadelphia Fed Patrick Harker (voter, hawkish). What to look for around USD The index started the week on a weak note, although it manages well to keep the trade above the 94.00 yardstick for the time being. It seems the dollar met an important hurdle at the 94.70 region, where coincide a 6-month resistance line. Occasional bullish attempts in DXY are (still) seen as temporary, however, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections and over further monetary/fiscal stimulus. US Dollar Index relevant levels At the moment, the index is retreating 0.06% at 94.22 and faces the next support at 93.55 (55-day SMA) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop). On the flip side, a break above 94.74 (monthly high Sep.25) would open the door to 95.42 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop).

Spain Retail Sales (YoY) above expectations (-14.6%) in August: Actual (-2.4%)

Sweden Consumer Confidence (MoM) below forecasts (91.8) in September: Actual (88.3)

Spain Consumer Price Index (MoM) above expectations (0%) in September: Actual (0.2%)

Spain HICP (MoM) registered at 0%, below expectations (0.5%) in September

Spain Consumer Price Index (YoY) registered at -0.4% above expectations (-0.5%) in September

Spain HICP (YoY) registered at -0.6%, below expectations (-0.5%) in September

Turkey Economic Confidence Index up to 88.5 in September from previous 85.9

The SEK responded to the Riksbank’s dovish commentary by dropping lower vs the EUR. However, with Sweden’s 2020 GDP growth outlook looking better than

The SEK responded to the Riksbank’s dovish commentary by dropping lower vs the EUR. However, with Sweden’s 2020 GDP growth outlook looking better than most of its peers, economists at Rabobank question whether this weaker tone can be sustained vs. the EUR. They forecast the EUR/SEK pair trading back to the 10.40-10.50 in the coming months. Key quotes “At last week’s policy meeting, the Riksbank forecast 2020 CPI inflation at just 0.6% y/y and the unemployment rate at a hefty 8.6%. In both cases the forecasts were a little better than the projections contained in the Riksbank’s July Monetary Policy Report. That said, they clearly paint a weak economic outlook. Faced with this backdrop, the forward guidance offered by policy-makers was very dovish in tone.” “The Riksbank revised its 2020 GDP projections last week. For the year as a whole GDP is expected to contract by -3.6%. This compares with a forecast of -4.5% made in July. Next year’s growth forecast has been revised higher to 3.7% from a previous forecast of 3.6%.” “Insofar as domestic CPI inflation is well below the 2.0% y/y inflation target and with unemployment high particularly among the young high, there would appear little chance that the Riksbank will back away from its QE and liquidity programmes any time soon. That said, given the Riksbank’s previous concerns about negative rates, we don’t see a decision in that direction for the time being.” “We expect a move back towards the EUR/SEK 10.40/10.50 range in the coming months.”  

USD/INR is looking to accelerate its upbeat momentum in Europe this Tuesday, despite the broad US dollar retreat, helped by a bullish technical breako

USD/INR’s path of least resistance is to the upside. The spot has confirmed a falling wedge breakout on the hourly chart. Bulls head towards the pattern target above 74.00. USD/INR is looking to accelerate its upbeat momentum in Europe this Tuesday, despite the broad US dollar retreat, helped by a bullish technical breakout on the hourly chart. The recent consolidation at the higher levels has carved out a falling wedge formation, with the breakout confirmed on an hourly closing above the falling trendline resistance at 73.81. The bulls now remain poised to test the pattern target at 74.29. However, the 74 level will likely challenge their commitment on the way northwards. The hourly Relative Strength Index (RSI) points south but holds above the midline, suggesting a brief pullback before the uptrend resumes. Therefore, a break below the pattern resistance now support at 73.80 could trigger fresh declines toward the upward-pointing 21-hourly Simple Moving Average (HMA) at 73.76. Acceptance below the latter could prompt a drop towards the critical 200-HMA support at 73.62. USD/INR: Hourly chart USD/INR: Additional levels  

France Consumer Confidence registered at 95 above expectations (93) in September

GBP/USD is bouncing from the 200-day ma at 1.2717 and was last seen trading at 1.2847, up 0.1% on the day. Karen Jones, Team Head FICC Technical Analy

GBP/USD is bouncing from the 200-day ma at 1.2717 and was last seen trading at 1.2847, up 0.1% on the day. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, notes that the cable has room to rise to 1.3070, but a failure here would allow for further losses to the 1.2250 area. Key quotes “GBP/USD saw a decent recovery yesterday from the 200-day ma at 1.2717, but the rally has yet to overcome any resistance of note.” “Caution is warranted as intraday Elliott wave counts are positive and we have opted to cover our short positions for now.” “Initial resistance lies at 1.3008 the mid-September high and we would allow for 1.3070. Ahead of here lies the 20-day ma at 1.2936. Should the market fail 1.3000/70, we would allow for further losses to 1.2445 and then 1.2250/00.” “The 1.3070 level guards the 1.3201 March high and the recent high at 1.3483 and the 1.3522 downtrend.”  

The AUD/NZD downward correction since August has stalled and the pair could rise to 1.08 on Tuesday but analysts at Westpac expect a slump to the 1.06

The AUD/NZD downward correction since August has stalled and the pair could rise to 1.08 on Tuesday but analysts at Westpac expect a slump to the 1.06 neighborhood in the next weeks. By end-2020, they forecast the AUD/NZD pair pushing towards the 1.12 level. Key quotes “Over the next few weeks, the cross could slip further to the 1.06 area. Westpac recently changed its RBA forecast to a 15bp cut at the November meeting and markets are gravitating to that view. In addition, iron ore is under downward pressure as inventories need rebalancing.”  “Further ahead, attention will shift to the RBNZ’s next dovish shift, which Westpac expects to be a cheap bank funding scheme (FLP) announced at the November meeting.”  “Yields spreads should again favour the AUD, pushing the cross to 1.12 by year-end.”  

Further gains in USD/JPY are likely if the 106.00 level is cleared, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “In line with our expe

Further gains in USD/JPY are likely if the 106.00 level is cleared, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “In line with our expectation, USD traded sideways yesterday, between 105.25 and 105.68, narrower than our expected range of 105.25/105.75. The price actions offer no fresh clues and USD could continue to trade in a quiet manner for now, albeit at a slightly lower range of 105.20/105.70.” Next 1-3 weeks: “There is not much to add to our update from Wednesday (23 Sep, spot at 105.05). As highlighted, the recent negative phase has run its course and USD is in the early stages of a correction phase. There is room for USD to edge higher but any advance is viewed as part of 104.75/105.75 range (narrowed from 104.25/105.75 previously). While a move above 105.75 would not be surprising, USD has to break 106.00 before a sustained advance can be expected.”  

Open interest in Natural Gas futures markets went up by nearly 6K contracts on Monday, reversing three consecutive daily pullbacks according to prelim

Open interest in Natural Gas futures markets went up by nearly 6K contracts on Monday, reversing three consecutive daily pullbacks according to preliminary prints from CME Group. On the other hand, volume shrunk for the third straight session, this time by around 108.6K contracts. Natural Gas: Further decline is not ruled out Prices of Natural Gas charted an inconclusive session at the beginning of the week amidst rising open interest. That said, a deeper pullback remains on the cards with the initial target at the 200-day SMA, today at $1.935 per MMBtu.

NZD/USD is holding steady despite the risk rally as currency markets in general disconnect a little from equity markets. The kiwi will not see a deepe

NZD/USD is holding steady despite the risk rally as currency markets in general disconnect a little from equity markets. The kiwi will not see a deeper run lower while above the 0.6510 mark, per ANZ Bank. Key quotes “The Kiwi has been remarkably stable overnight despite the risk rally and moderately weaker USD. It’s less a case of correlations breaking down; more fatigue perhaps. But we also think local specifics – the RBNZ’s very dovish policy bias, the low and flat yield curve and expectations for negative rates – are weighing too, as are longer-term risks on the horizon like US elections.”  “It’s a quieter week on the local data front, and that perhaps speaks of relative calm too”  “Technically, NZD just needs to hold 0.6510 to avoid a significant foray lower.”  

NZD/USD could see the continuation of the consolidative range ahead of further losses, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “NZ

NZD/USD could see the continuation of the consolidative range ahead of further losses, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “NZD traded between 0.6540 and 0.6567 yesterday, narrower than our expected consolidation range of 0.6525/0.6575. Momentum indicators are still mostly neutral and NZD could continue to trade sideways for today, albeit likely within a higher range of 0.6540/0.6595.” Next 1-3 weeks: “We have held a negative view in NZD since early last week. In our latest narrative from last Thursday, we highlighted that the outlook for NZD remains weak and ‘the next level to focus on is at 0.6490’. There is no change to our view even though shorter-term momentum has slowed somewhat and 0.6490 may not come into the picture so soon. From here, NZD could consolidate for a couple of days first before pushing lower towards 0.6490. Only a break of 0.6610 (no change in ‘strong resistance’ level) would indicate that the current downward pressure has eased.”

CME Group’s advanced readings noted traders added around 7.1K contracts to their open interest positions in crude oil futures markets on Monday, clinc

CME Group’s advanced readings noted traders added around 7.1K contracts to their open interest positions in crude oil futures markets on Monday, clinching the fifth consecutive build. Volume, instead, shrunk for the third session in a row, this time by around 79.5K contracts. WTI still looks to $41.50 Crude oil prices started the week on a positive footing and looks to consolidate business above the key $40.00 mark per barrel. Monday’s optimistic session was in tandem with rising open interest, opening the door to the continuation of the move up in WTI with initial target at recent peaks near $41.50 (September 18).

USD/CAD drops to 1.3375 while heading into Tuesday’s European session. The loonie pair recently took a U-turn from the intraday high as the US dollar

USD/CAD slips from intraday high of 1.3384 following the previous day’s downbeat performance.Queback City and Montreal will have fresh lockdown restrictions from October 01.WTI drops amid cautious optimism, fears of demand depletion.US Presidential Election debate, Fedspeak and coronavirus headlines can provide fresh impetus.USD/CAD drops to 1.3375 while heading into Tuesday’s European session. The loonie pair recently took a U-turn from the intraday high as the US dollar started trimming the early-Asian recovery. Even so, weakness in oil prices, Canada’s biggest export-item, joins the coronavirus (COVID-19) resurgence in Quebec to keep the pair bulls hopeful. Monday’s sharp increase in the daily virus numbers, with the addition of 750+ new cases, pushed Authorities in Quebec to announce strict activity limits for Quebec City and Montreal. The restrictions will shut down the Bars, casinos, restaurants, Museums and Libraries while also barring the guests at home. On the other hand, WTI prints a 0.55% intraday loss, currently around $40.45, as China’s inability to meet the Sino-American trade deal targets joins the World Bank’s downbeat economic forecasts, which in turn can lead to a reduction in the global demand. It should, additionally, be noted that the US dollar index (DXY) refrains from the previous day’s downbeat performance as global markets cheer hopes of further stimulus from American and the European Central Bank (ECB). Amid all these catalysts, stock futures in the US and Asia-Pacific shares are flashing mild gains while the US 10-year Treasury yields remain lackluster around 0.66% by the time of the press. Although there are no Canadian details up for publishing today, a slew of Fed speakers and comments from the much-awaited debate in the US will be the key to watch for near-term trade direction. Technical analysis FXStreet’s Ross J Burland highlights weekly resistance and daily support while signaling a day trading opportunity. The analyst further says, This leaves little to no prospect of a high probability and protected set-up in either direction from a swing trading perspective. at least not one that will offer a favorable risk to reward from a 4-hour time frame. Read: USD/CAD Price Analysis: Day traders are waiting for bearish price action signals  

Denmark Industrial Outlook: -11 (September) vs previous -10

Cable is now forecasted to navigate within the 1.2750-1.3000 range in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view:

Cable is now forecasted to navigate within the 1.2750-1.3000 range in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “GBP soared to a high of 1.2930 yesterday before easing off to close on a strong note at 1.2833. While the rally appears to be overdone, GBP could retest the 1.2930 level before a more sustained pull-back can be expected. For today, the next resistance at 1.2970 is unlikely to come into the picture. Support is at 1.2835 followed by 1.2800.” Next 1-3 weeks: “Last Friday (25 Sep, spot at 1.2755), we indicated that ‘shorter-term momentum is beginning to ease and this could lead to a couple of days of consolidation first’. We added, ‘as long the ‘key resistance’ at 1.2830 is not taken out, another down-leg towards 1.2650 is still a distinct possibility’. However, GBP blew past 1.2830 as it soared to an overnight high of 1.2930. The break of the ‘strong resistance’ indicated that the negative phase in GBP that started last Tuesday (22 Sep, spot at1.2820) ended sooner than expected (we were expecting another leg lower to 1.2650). The current movement is viewed as the early stages of a consolidation phase and GBP could trade between 1.2750 and 1.3000 for now.”

EUR/CHF remains on the back foot on Tuesday, extending its bearish streak into a third straight day. The bulls are likely to see no reprieve, as the t

EUR/CHF remains on the offers for the third straight day. Risks further falls amid likely bull pennant on the hourly chart. Hourly RSI points south while within the bearish region. EUR/CHF remains on the back foot on Tuesday, extending its bearish streak into a third straight day. The bulls are likely to see no reprieve, as the technical set up remains in favor of the bears in the near-term. The spot has charted a potential bull pennant on the hourly sticks, which is a bearish continuation pattern. Therefore, a break below the rising trendline support at 1.0785 will validate the pattern, opening floors for a test of 1.0775, the confluence of Monday’s low and the critical 200-hourly Simple Moving Average (HMA). The next downside target is aligned at 1.0750, the psychological level to beat for the bears. The hourly Relative Strength Index (RSI) points south while trending below the midline, pointing to more losses ahead. On the flip side, buyers need to seek a sustained break above 1.0792, where the 21-HMA coincides with the rising trendline resistance. Further north, the bearish 50-HMA at 1.0797 could challenge the bulls’ commitment. EUR/CHF: Hourly chart EUR/CHF: Additional levels  

Open interest in Gold futures markets increased by around 3.3K contracts on Monday, reversing two consecutive pullbacks in light of flash data from CM

Open interest in Gold futures markets increased by around 3.3K contracts on Monday, reversing two consecutive pullbacks in light of flash data from CME Group. Volume, in the same line, rose by almost 8K contracts, also following two drops in a row. Gold faces the next hurdle at $1,920 area Prices of the yellow metal posted decent gains at the beginning of the week. The price action was on the back of increasing open interest and volume, leaving the door open for extra gains in the very near-term. That said, the Fibo level (of the June-August rally) around $1,920 per ounce of gold emerges as the next up barrier.

FX Strategists at UOB Group believe EUR/USD still risks a move below the 1.1600 mark. Key Quotes 24-hour view: “Yesterday, we held view that EUR could

FX Strategists at UOB Group believe EUR/USD still risks a move below the 1.1600 mark. Key Quotes 24-hour view: “Yesterday, we held view that EUR could ‘probe the 1.1600 support but a sustained decline below this level is unlikely’. However, EUR rebounded strongly from a low of 1.1613. The rebound has room to extend higher but any advance is expected to face stiff resistance at 1.1720 (minor resistance is at 1.1700). Support is at 1.1645 but only a break of 1.1620 would indicate the current mild upward pressure has eased.” Next 1-3 weeks: “The negative phase in EUR that started more than a week ago is still intact. In our latest update from last Friday (25 Sep, spot at 1.1675), we held the view that the ‘outlook for EUR remains weak but the next support at 1.1600 may not come into the picture so soon’. While EUR subsequently dropped to a low of 1.1611, the decline appears to be running ahead of itself. From here, EUR could dip below 1.1600 but 1.1565 is expected to offer formidable support. All in, only a break of 1.1720 (‘strong resistance’ level previously at 1.1760) would indicate that the negative phase has run its course.”

EUR/GBP trims early-Asian losses while picking up the bids near 0.9080/85 during the pre-European trading on Tuesday. The cross took a U-turn from 61.

EUR/GBP keeps late-Monday pullback from a three-week low.A confluence of 100-bar EMA, falling trend line from Wednesday question recovery moves.Sellers eye August-end tops below the key Fibonacci retracement level.EUR/GBP trims early-Asian losses while picking up the bids near 0.9080/85 during the pre-European trading on Tuesday. The cross took a U-turn from 61.8% Fibonacci retracement of the September 03-11 upside the previous day. Though, bearish MACD and nearness to the key 0.9120 resistance joint, including a falling trend line from September 23 and 100-bar EMA, can continue challenging the bulls. In a case where the buyers manage to cross the 0.9120 upside barrier, another downward sloping trend line, from September 11, at 0.9180 now, will be in the spotlight. Alternatively, EUR/GBP bears are less likely to take entries unless witnessing a clear downside break of the 61.8% Fibonacci retracement level, around 0.9030. In doing so, the 0.9000 psychological magnet may offer an intermediate halt during the fall to the August 31 high of 0.8966 and then to the monthly bottom surrounding 0.8865. EUR/GBP four-hour chart Trend: Bearish  

Here is what you need to know on Tuesday, September 29: Stock markets remain cautiously optimistic and the dollar is on the back foot, extending the r

Here is what you need to know on Tuesday, September 29: Stock markets remain cautiously optimistic and the dollar is on the back foot, extending the reversal from last week's moves. Investors are eyeing a slew of Federal Reserve speeches, fresh hopes related to Brexit, and the first presidential debate.The dollar is edging lower in a risk-on mood. Talks between Republicans and Democrats continue in Washington, with House Speaker Nancy Pelosi offering a new deal worth $2.2 trillion. The fresh hopes replace the narrative that the focus on nominating a new Supreme Court Justice would divert energy from further relief.Gold has been consolidating around $1,880, looking for a new direction.  Investors – especially pound bulls – are also content with reports of some progress in Brexit trade talks. The EU is reportedly ready to work on a legal agreement.  Reported coronavirus deaths have hit the grim milestone of one million, with cases increasing quickly in Europe and resuming their rises in the US. Christine Lagarde, President of the European Central Bank, expressed concerns about the impact of the virus on the economy. Preliminary German and Spanish inflation figures for September are due out on Tuesday.  The economic calendar features a long list of Federal Reserve speakers, with Vice-Chair Richard Clarida standing out. The Fed encouraged the government to provide more fiscal relief and does not plan to increase QE at this point.  The Conference Board's Confidence Confidence gauge for September is set to extend its recovery. See US Conference Board Consumer Confidence September Preview:  Neither happy nor sad President Donald Trump and Democrat rival Joe Biden are scheduled to clash in the first presidential debate late in the day. The incumbent is the underdog in the polls but the challenger is considered a worse debater. The narrative emerging from the event may move markets. Investors are concerned about the specter of an inconclusive election. See 2020 Elections: How stocks, gold, dollar could move in four scenarios, nightmare one includedOil prices have been stable with WTI trading around the $40 mark. Cryptocurrencies are edging lower in well-known ranges. Bitcoin is changing hands at around $10,700.

Asian equities fizzle upside momentum as Beijing’s failures to comply with the trade deal probe the early-day risk-on mood before the European traders

Asian shares refrain from tracking Wall Street gains as mixed headlines from China probe the bulls.China bought only one-third of promised US goods through August, cites Yuan's strength as export negative.US House Democrats unveil plans to break the stimulus deadlock, EU also eased Brexit stance ahead of today’s key talks.First round of American Presidential Election debate, negotiations in Brussels will be crucial.Asian equities fizzle upside momentum as Beijing’s failures to comply with the trade deal probe the early-day risk-on mood before the European traders kick-start Tuesday’s work. While portraying the same, the MSCI index of Asia-Pacific shares outside Japan marks 0.30% intraday gains whereas Japan’s Nikkei 225 also adds around 0.35% to 23,595 by the time of the press. Not only the dragon nation’s failures to comply with the trade deal but comments in the China Daily, criticizing the Trump administration’s “Sinophobic policies”, also flash the risk of a trade war between the US and China. Additionally, downbeat statements from Chinese Cabinet adviser Kevin Yao also weigh on the Asia-Pacific shares. As a result, stocks in Hong Kong and New Zealand are mildly offered whereas Chinese equities seesaw with small gains/losses. Further to note is the World Bank's forecast of Asian GDP for 2020 that highlights the coronavirus (COVID-19) pandemic as a reason for the weakest prediction in five years. South Korea’s KOSPI cheers recovery in Industrial Output numbers with near 1.0% rise while India’s BSE Sensex and Indonesia’s IDX Composite are up 0.40% as we write. Although downbeat comments from China weigh on the risk-tone sentiment, hopes of further stimulus from the European Central Bank (ECB) and the US government joins Brexit-positive headlines to please the market bulls. As a result, American stock futures are near 0.50% up whereas the US 10-year Treasury yields seesaw around 0.66%. It’s worth mentioning that Wall Street benefited from a run-up in the bank shares during the previous day. Looking forward, market players will be keen on listening to the first round US Presidential Election debate. Also up in the traders’ radar are Brexit headlines from Brussels and any comments from a slew of Fed speakers up for comments during today’s North American session. While the early signals are positive to the risks, Brexit and the coronavirus (COVID-19) news may probe the optimists.

FX option expiries for Sept 29 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1600 512m - USD/JPY: USD amounts 1

FX option expiries for Sept 29 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1600 512m  - USD/JPY: USD amounts          104.75 376m 105.00 2.6bn 105.10 375m 105.30 685m 105.32 444m 105.35 404m - NZD/USD: NZD amounts  0.6580 343m - EUR/GBP: EUR amounts 0.9155 571m

Advisers to China’s Cabinet expressed their view on the exchange rate value and the measures to effectively combat the coronavirus pandemic induced im

Advisers to China’s Cabinet expressed their view on the exchange rate value and the measures to effectively combat the coronavirus pandemic induced impact on the economy. Cabinet adviser Kevin Yao said that “yuan appreciation could weaken China's export competitiveness,” adding that the foreign exchange reserves will not rise as fast as before and that the foreign trade will be more balanced.   more to come ...

USD/CHF seesaws around intraday low, currently down 0.05% on a day near 0.9240, while heading into Tuesday’s European session. The pair took a U-turn

USD/CHF extends Monday’s downbeat performance to probe the three-day lows.Bearish MACD favors sellers targeting seven-week-old horizontal support.Ascending trend line from September 08 can question the bulls beyond the monthly top.USD/CHF seesaws around intraday low, currently down 0.05% on a day near 0.9240, while heading into Tuesday’s European session. The pair took a U-turn from over two months’ high on Friday and fell since then. With the recent declines taking clues from the MACD histogram, the quote is likely to weaken further towards an area comprising highs marked since August 12, close to 0.9200. If at all the bears refrain from stepping back from 0.9200, August 20 top near 0.9160 and September 17 peak close to 0.9140 may get the market attention. Meanwhile, 0.9250 and 0.9280 can offer immediate resistance to the pair ahead of fueling it to the monthly peak of 0.9296. Though, a three-week-old rising trend line, at 0.9310 now, can question the USD/CHF bulls beyond the 0.9300 mark. USD/CHF four-hour chart Trend: Further weakness expected  

EUR/USD is consolidating the recent corrective advance towards 1.1700, as the US dollar attempts a comeback across the board, despite the risk-on mark

EUR/USD consolidates the corrective bounce below 1.1700President Lagarde indicated the ECB will deploy further stimulus if needed.Eurozone/ US Consumer Confidence data, Fedspeak in focus. EUR/USD is consolidating the recent corrective advance towards 1.1700, as the US dollar attempts a comeback across the board, despite the risk-on market mood. At the time of writing, the main currency pair adds 0.10% to trade at 1.1675, having hit a daily high of 1.1684. The spot hit a two-month low of 1.1625 last Friday. EUR/USD’s correction from two-month lows gained traction on Monday after the upbeat risk tone on the global equities curbed the US dollar’s recent ascent. The haven demand for the greenback weakened after the weekend’s solid Chinese Industrial Profits data suggested a robust economic recovery in the world’s second-biggest economy and lifted the overall market mood. The optimism extended into the US equities alongside the hopes of a US fiscal stimulus deal. On the EUR-side of the story, the shared currency received a boost from the European Central Bank (ECB) President Christine Lagarde’s comments, as she indicated that the central bank stands ready to deploy additional stimulus, if necessary, to support the post-coronavirus pandemic economic turnaround. Looking ahead, the upside potential in the spot appears limited, as the bearish bets in the dollar remain at almost a decade high and a likely short-squeeze could revive the bullish momentum in the greenback. In the meantime, markets look forward to the Confidence numbers from both continents, Fedspeak and the first US Presidential debate for fresh trading impulse in the pair.

GBP/USD keeps buyers hopeful, despite the US dollar’s recent recoveries, while taking rounds to 1.2860 during the pre-London open trading on Tuesday.

GBP/USD keeps bounces off 1.2836 to print a two-day winning streak.EU steps back from threats to drop trade and security talks, shows readiness to prepare a joint legal agreement.UK’s Gove refrains from entertaining the bloc’s demand over IMB, BOE’s Ramsden rules out negative rates.Brexit talks in Brussels will be up till Friday, BOE’s Carney, US Presidential Election and Fedspeak also becomes important.GBP/USD keeps buyers hopeful, despite the US dollar’s recent recoveries, while taking rounds to 1.2860 during the pre-London open trading on Tuesday. In doing so, the Cable extends the previous day’s gains, mainly due to the Brexit-positive headlines, but stays challenged ahead of the crucial departure talks in Brussels. With headlines from The Times suggesting the European Union’s (EU) softer stand on Brexit, Pound bulls could ignore The Financial Times (FT) news suggesting hardships for UK Chancellor Rishi Sunak. The bloc not only shows readiness to alter the legal statement, while taking clues from Britain, but also drops the previous tone of warnings. The news also ignores the UK Cabinet Minister Michel Gove’s rejection to remove the clauses in the Internal Market Bill (IMB) that confront the Brexit Withdrawal Agreement (WAB). On the other hand, the FT piece relies on the comments from the Institute for Fiscal Studies (IFS) that highlight the risk of failing on the Tory manifesto promises without raising taxes or huge borrowing. It should be noted that the BOE’s Deputy Governor Sir Dave Ramsden mentioned, as per Reuters, “At present, negative policy rates would be less effective as a tool to stimulate the economy." Should the BOE Governor, Andrew Bailey, drop his recently bearish bias at the Chief Executives’ Club at Queen’s, GBP/USD bulls will have an additional reason to cheer. Positives aren’t only confined to the UK as the US Democrats’ readiness to alter the demands over the coronavirus (COVID-19) aid package also favor the market’s risk-tone sentiment and helps the US dollar index (USDX) to recover Monday’s losses. Looking forward, the Brexit teams of the UK and the EU, led by David Frost and Michael Barmier respectively, will meet in Brussels today. The departure negotiations were last stuck over the IMB and hence the same will become an important issue. However, talks concerning fisheries, level playing field also can trigger the British anger the call back the guys, which in turn will harm the GBP/USD prices. It’s worth mentioning that the first round of US President Election debate is likely to use American President Donald Trump’s tax payments as a fresh issue and may challenge the US dollar run-up. Additionally, a slew of the second-tier Fed policymakers are also up for speaking and may entertain the momentum traders. Technical analysis The pair’s ability to cross the 100-day EMA, currently near 1.2830, directs the bulls towards 1.2910/20 resistance confluence comprising 21-day and 50-day EMA.  

Gold (XAU/USD) started out the US Non-Farm Payrolls (NFP) week on a solid footing, rallying nearly $20 on Monday. The metal bounced-off the SMA100 one

Gold (XAU/USD) started out the US Non-Farm Payrolls (NFP) week on a solid footing, rallying nearly $20 on Monday. The metal bounced-off the SMA100 one-day support for the third straight day, courtesy of the broad retreat in the US dollar from two-month peaks. The risk-on mood returned amid upbeat Chinese Industrial Profits data, lifting the sentiment on the global markets at the expense of the safe-haven greenback. Further, hopes of the US Congress reaching a fiscal stimulus deal also added to the broader market optimism.     Attention now turns towards a slew of speeches by the Fed policymakers, US Consumer Confidence data and the first US Presidential election debate for fresh cues on the prices. Meanwhile, let’s see how gold is positioned technically. Gold: Key resistances and supports Following the corrective move higher, the Technical Confluences Indicator suggests that Gold faces immediate fierce resistance at $1889, which is the convergence of the Fibonacci 38.2% one-week and Bollinger Band 15-minutes Upper. Buyers will then look to takeout the next hurdle at $1894, the intersection of the pivot point one-day R1 and Bollinger Band one-hour Upper. A sharp rally towards the $1905 barrier will get fuelled, which is the pivot point one-day R2. To the downside, significant support at $1875 could likely limit the pullbacks. At that level, the SMA5 one-day coincides with the Fibonacci 23.6% one-day. Further down, a bunch of minor support levels will slow the declines before the bullion reaches the critical cushion at $1863, which is the convergence of the previous month low, Fibonacci 61.8% one-day and pivot point one-month S1. Here is how it looks on the tool About 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
 

EUR/JPY registers a little movement while taking rounds to the intraday high of 123.17 during early Tuesday. In doing so, the pair confronts 50-bar SM

EUR/JPY buyers attack 50-bar SMA after bouncing off the lowest since July 20.Short-term horizontal resistance, a falling trend line from September 10 adds to the upside barriers.Normal RSI conditions favor further recovery but bulls are probed by the key upside barriers.Sellers may look for entries below the monthly low.EUR/JPY registers a little movement while taking rounds to the intraday high of 123.17 during early Tuesday. In doing so, the pair confronts 50-bar SMA amid normal RSI conditions. Considering Monday’s U-turn from the multi-day low, EUR/JPY buyers are likely to cross the immediate SMA resistance around 123.15/20. Though, a horizontal area since September 17, near 123.25/35, followed by a 13-day-old descending trend line, currently around 123.50, will probe the bulls afterward. In a case where EUR/JPY manages to cross 123.50, it’s the run-up to September 18 high close to 124.30 can’t be ruled out. Alternatively, the 123.0 threshold and 122.60 may offer nearby supports to the pair during its fresh downside. It should, however, be noted that the sellers will remain cautious unless witnessing a fresh monthly low under 122.37. In doing so, the early July high near 122.00 could be on their radars. EUR/JPY four-hour chart Trend: Bearish  

Ahead of the Reserve Bank of Australia’s (RBA) October 6 monetary policy meeting, analysts at Citigroup believe that the Australian central bank will

Ahead of the Reserve Bank of Australia’s (RBA) October 6 monetary policy meeting, analysts at Citigroup believe that the Australian central bank will likely keep the policy steady while dismissing the negative interest rates talks. Key quotes “RBA is in wait and see mode.” “RBA is comfortable for now with the current level of monetary stimulus.” “Negative rates pretty much ruled out.” “We don't see a negative for the currency from a central bank perspective for now.”  “Risks to AUD are fat tailed: Second wave risks,  Health disappointment,  US election, Particular worry placed on the evolution of US/China relations and its relation to the presidential election.”

G20 Energy Ministers reaffirmed their commitment to "ensure that the energy sector continues to make a full, effective contribution to overcoming COVI

G20 Energy Ministers reaffirmed their commitment to "ensure that the energy sector continues to make a full, effective contribution to overcoming COVID-19" pandemic, the statement highlighted, which was released following the conclusion of their two-day virtual meeting, Additional highlights “Recognize actions by both producers and consumers to stabilize energy markets.”  Emphasize the importance of stimulus packages to stimulate inclusive economic activities.” “Will continue to work together to create the conditions for sustained capital investments, including bolstering investments in innovation and a skilled work force.”Market reaction Despite the upbeat statement from the G20 meeting, oil bulls failed to take advantage, as both crude benchmarks return to the red in Asia this Monday. WTI trades at $40.33, down 0.67% on the day. WTI slips below $40.50 amid US dollar recovery, API data eyed

“East Asia and Pacific region seen at 0.9% in 2020, its lowest rate since 1967, due to impact from the COVID-19 pandemic.” “China is expected to grow

“East Asia and Pacific region seen at 0.9% in 2020, its lowest rate since 1967, due to impact from the COVID-19 pandemic.” “China is expected to grow by 2.0% in 2020, while rest of East Asia and Pacific region is projected to contract by 3.5%.“ 'Triple shock' in developing East Asia and Pacific region from the pandemic, as well as the economic impact of containment measures and global recession.” “It sees an increase of as many as 38 million people in poverty in the region in 2020.”   developing story ...

AUD/USD stalls its corrective bounce just shy of the 0.71 barrier, as the bulls take a breather before the next push higher. The spot is now consolida

AUD/USD faces rejection just shy of the 0.7100 level. Hourly RSI remains in bullish territory. Bulls to retain control while above critical support at 0.7065.AUD/USD stalls its corrective bounce just shy of the 0.71 barrier, as the bulls take a breather before the next push higher. The spot is now consolidating the gains, holding above the critical support at 0.7065, as observed in the hourly chart. That level is the confluence of the rising trendline support, 21 and 100-hourly Simple Moving Averages (HMA). A breach of the last could call for a test of the horizontal 50-HMA at 0.7053. A daily closing below the 100-day Simple Moving Average (DMA) at 0.7018 is needed to revive the downside momentum. Alternatively, acceptance above 0.7100 could trigger a fresh rally towards the downward-sloping 200-HMA at 0.7166. The hourly Relative Strength Index (RSI) has turned flat (at 59.26) but holds well above the midline, allowing for an additional bounce. AUD/USD: Hourly chart AUD/USD: Additional levels  

WTI bounces off the day’s low of $40.31 to $40.422, down 0.60% intraday, during early Tuesday. The black gold recently dropped after the US dollar (US

WTI refreshed the intraday low after reversing from $40.79.US dollar regains upside momentum amid hopes of further stimulus.Challenges to the US-China trade deal add downside pressure on oil prices.API data, USD moves become the key amid a light calendar.WTI bounces off the day’s low of $40.31 to $40.422, down 0.60% intraday, during early Tuesday. The black gold recently dropped after the US dollar (USD) started recovering the previous day’s losses. Also on the negative side could be downbeat news from China and USD positive updates from American. Having marked the biggest losses in one month, the US dollar index (DXY) bounces off September 23 low to 94.22 by the time of the press. Given the inverse correlation between commodities and the greenback, the latest moves by the US currency weigh on the WTI crude oil. The US dollar gains could be attributed to the news suggesting House Democrats’ readiness to alter the coronavirus (COVID-19) aid package demands. Further, the South China Morning Post (SCMP) came out with the news that points towards further hardships for the Sino-American trade deal. The reason is Beijing’s ability to purchase not even one-third of the agreed US goods through August. Also, challenging the US-China relations, which weigh on the energy demand, are comments from China Daily that said, “The Sinophobic policies of the United States are causing losses to China in the near term, but in the long run, China could benefit from them.  Against this backdrop, S&P 500 Futures gain 0.30% whereas stocks in Asia-Pacific are also mildly positive. Moving on, oil traders will keep eyes on the greenback moves ahead of the weekly inventory data from a private provider, the American Petroleum Institute (API). Technical analysis Unless breaking $41.00 resistance, comprising 200-bar SMA and 61.8% Fibonacci retracement level of WTI’s August-September downside, oil buyers are less likely to be convinced.  

A headline from the South China Morning Post (SCMP), published Tuesday’s early Asian session, suggests challenges to the global risk-on sentiment. The

A headline from the South China Morning Post (SCMP), published Tuesday’s early Asian session, suggests challenges to the global risk-on sentiment. The news relies on China’s imports of the US goods under the trade agreement between Washington and the dragon land to suggest further hardships for the market’s mood. Only one-third purchase? The news mentions that China has so far, through August, purchased nearly 33% of the previously agreed US goods. The latest customs data, as per the update, suggests a 25% hike in imports from America. “The agreement dictates that China’s purchases should be US$200 billion higher than 2017’s levels, and on those terms, China is still miles away,” mentions the SCMP piece. Reasons cited include the Trump administration’s anti-China moves, comprising sanctions on the cotton imports from Xinjiang. Other than the risk to the US-China trade deal, the piece also portrays the risks to US President Donald Trump ahead of the American elections while citing failures to keep promises of Chinese demand. Market sentiment stays positive… As the news can be considered as a continuous noise, S&P 500 Futures paid a little heed to the risk-challenging update. While doing so, the risk gauge prints 0.25% gains to 3,353 by the time of the press.

The following is a top-down analysis starting with the daily chart, moving in on the 4-hour and the 1-hour to identify where the opportunity might com

GBP/CAD has come up for air during the Asian session, with a move sparked by additional Brexit headlines. The price of oil is also coming off which adds fuel to the fire for CAD bears.The following is a top-down analysis starting with the daily chart, moving in on the 4-hour and the 1-hour to identify where the opportunity might come about.  “It is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared,” – Whitney M. Young Jr. Daily bias to the downside The overall trajectory is to the downside while below the marked resistance structure.  However, there could be some gas left in the bulls yet and the wick on the daily chart is significant, as explained on the 4-hour time frame just below. 4-hour prospects The daily wick is essentially a 4-hour correction to support.  This gives rise to an opportunity to fill-in the wick and would give the resistance a more meaningful test. 1-hour outlook The 1-hour chart offers the possibility of a break of the near term structure. On a retest of the structure, bulls can look to buy into what could be the next impulse to the 1.73 area. The set-up would be best suited on a 15-min time-frame with a buy limit at support accompanied by a stop loss below the 15-min support structure to protect against a failed trade setup. The setup will likely offer something in the region for 1 to 2 risk to reward ratio.  Breakeven would be the first course of action as soon as the price makes new support structure above the entry point where the stop loss will be moved to, factoring in the spread and or commissions.  Correlations reinforcing the bullish outlook Backing the bullish prospects are the following Brexit news and offers in oil, now down -67% on the day so far in WTI:WTI Price Analysis: Bears lining-up for the 'Kill Zone'

Silver trades near $23.70, up 0.20% intraday during the early Tuesday. In doing so, the white metal trades near a four-day high while probing the resi

Silver prices stay mildly positive above $23.50 after refreshing the highest level since last Wednesday.MACD seems to lose the bullish momentum, 200-HMA adds to the upside barriers.100-HMA can offer intermediate support before confirming the bearish chart pattern.Silver trades near $23.70, up 0.20% intraday during the early Tuesday. In doing so, the white metal trades near a four-day high while probing the resistance line of a bearish chart play, namely rising wedge. Although the commodity’s sustained trading beyond 100-HMA enables it to stay firm, receding strength of the MACD histogram may pullback the quote back towards the key moving average near $23.00. It should, however, be noted that the sellers will remain cautious unless silver prices slip beneath $22.85, comprising the support line of the stated wedge. Following that, the metal’s drop to the monthly low of $21.85 can’t be ruled out. Alternatively, an upside clearance of $23.85 resistance will aim for a 200-HMA level of $24.56. Though, the $24.00 threshold may offer an intermediate halt during the rise. During the quotes’ further upside past-$24.56, the $25.00 round-figures and September 22 peak surrounding $25.20/25 will gain silver bulls’ attention. Silver hourly chart Trend: Pullback expected  

In its latest analysis, conveyed by Bloomberg, JPMorgan Chase & Co. highlight risks to the traditional safe-havens, like gold and Japanese Yen, due to

In its latest analysis, conveyed by Bloomberg, JPMorgan Chase & Co. highlight risks to the traditional safe-havens, like gold and Japanese Yen, due to the easy-money policies of most central banks. John Normand from the bank said, “Defensive assets are delivering their weakest performance and therefore worst hedge protection of any equity sell-off in at least a decade,” he said. “The wall of cash some hypothesize will inevitably flow into equity, credit and EM may remain very high indefinitely.” The bank also mentioned, “a portfolio of hedges like the yen versus all currencies, the dollar against emerging-market currencies and gold versus the greenback is still worth holding as these have delivered gains in 60% to 80% of major stock-market downturns.” Read: Gold Price Analysis: XAU/USD bulls catch a breather below $1,900

EUR/USD eases to 1.1675, up 0.10% on a day, during Tuesday’s Asian session. In doing so, the major currency pair steps back from the neckline of a sho

EUR/USD stays mildly positive above 200-bar SMA.Sustained trading beyond the key SMA favor buyers to confirm the bullish chart pattern.Fresh selling may wait for a clear downside break below 1.1600.EUR/USD eases to 1.1675, up 0.10% on a day, during Tuesday’s Asian session. In doing so, the major currency pair steps back from the neckline of a short-term head-and-shoulders bullish chart pattern. However, successful trading beyond 200-bar SMA, amid an absence of overbought RSI, keeps the buyers hopeful. Hence, fresh buying will take place on a clear break above 1.1680, which in turn will target 1.1750 theoretical aim with the September 23 top, near 1.1720, likely acting as an intermediate halt. In a case where EUR/USD prices remain strong past-1.1750, the 1.1800 threshold and September 21 top surrounding 1.1870/75 will be in the spotlight. Alternatively, the pair’s downside below the 200-bar SMA level of 1.1660 may recall 1.1640 and 1.1610 immediate supports on the chart. Though, EUR/USD bears’ dominance past-1.1610 will need validation from 1.1600 to attack March 2020 top close to 1.1500. EUR/USD 30-minute chart Trend: Bullish  

PBOC Fixes Yuan Mid-Point Against The Dollar At 6.8171 (est 6.8133). More to come...

PBOC fixes Yuan Mid-Point against the US dollar At 6.8171 (est 6.8133). More to come...

One million people have died from Covid-19, official data from Johns Hopkins reports. Estimates suggest the virus may be among the world's top five ca

One million people have died from Covid-19, official data from Johns Hopkins reports.  Estimates suggest the virus may be among the world's top five causes of death as global cases are now at 33, 273, 720.  Global deaths are at 1,000,555 with both developed and emerging economies strive to contain the spread while the struggle to keep the global economic recovery on track plays on risk appetite in financial markets.  It has been almost 10 months after the virus first emerged and while there is still no vaccine, the only defence is still down to rapid testing and social distancing.     

S&P 500 Futures rises to 3,357.40, up 0.33% intraday, amid the initial hour of Tokyo open on Tuesday. In doing so, the risk barometer stays positive a

S&P 500 Futures print four-day winning streak, surge the most in three weeks the previous day.Brexit hopes, expectations of US stimulus keep trading sentiment positive.Light calendar restricts major moves ahead of EU-UK talks in Brussels, US Presidential Election debate also be the key.S&P 500 Futures rises to 3,357.40, up 0.33% intraday, amid the initial hour of Tokyo open on Tuesday. In doing so, the risk barometer stays positive after Monday’s upbeat performance amid risk-positive headlines from America and the European Union (EU). Also favoring the market sentiment could be hopes of the coronavirus (COVID-19) vaccine. With the US Democrats’ readiness to alter previous proposals, the deadlock over the much-awaited stimulus talks seems to break anytime. US House Speaker Nancy Pelosi recently said, "We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now." On the other hand, US Treasury Secretary Steve Mnuchin is also pushing harder to not fall for any longer brakes on the aid package. In addition to the American Congress, the European Central Bank (ECB) is also signaling further stimulus. In her latest speech, the ECB President Christine Lagarde showed preparedness “ready to adjust all of its instruments, as appropriate” to combat the COVID-19 resurgence that threatens an economic recovery from lockdowns. On the other hand, The Times came out with the news suggesting that the EU policymakers are ready to put their guns down and rewrite the legal agreement ahead of today’s ninth round of Brexit talks in Brussels. It should also be noted that stocks in Australia remain firm whereas Japan’s Nikkei bears the burden of downbeat inflation data. Elsewhere, the US 10-year Treasury yields also remain mostly sideways around 0.65%. Moving on, market players will keep eyes on a slew of Fed policymakers’ speeches up for crossing wires during the North American Session. Though, the first round of debate for the Presidential Election 2020 gains all the market attention.

USD/JPY is under pressure in the Tokyo open as the USD slides in what is a potential making of a significant correction to the downside in the DXY, as

USD/JPY is under pressure as the US dollar is broadly sold off across the board. DXY has been telegraphing a downside correction for a number of days. USD/JPY is under pressure in the Tokyo open as the USD slides in what is a potential making of a significant correction to the downside in the DXY, as forecasted in the prior analysis, here: USD/JPY Price Analysis: This could be the bull's last dance in the 105, eyes on 103.50sUSD/JPY bulls testing critical resistance to no availUSD/JPY bulls not convincing enough in test of resistanceDXY's 5-wave forecast playing out Fundamental updates Meanwhile, there has been a couple of domestic releases for the yen with the Bank of Japan Summary of Opinions.''It is appropriate for the bank to maintain the current monetary policy for the time being and, as before, take additional measures if necessary while closely monitoring the impact of COVID-19,'' the opinions stated. We also had the Consumer Price Index for Tokyo in September arrive at 0.2% year on year vs the 0.1% expected, far behind the Bank of Japans stubborn 2% national target. We will get the national data next month.  As for news from the European and US sessions,  there were some encouraging reports across both sessions relating to Brexit signs of progress and European stimulus from the European Central Bank's president, Lagarde who said the bank stands ready to act if needed.  US data was a touch encouraging with the Dallas Fed manufacturing activity survey rising to 13.6 in Sep (vs 9.5 estimate, 8.0 prior). ''The index has recovered after spending March-July in contraction mode when the region was affected by the pandemic and low oil prices,'' analysts at Westpac explained.  However, the heavy lifting was done on Wall Street's trading floors with US stocks jumping out of bed on the bid. Portfolio reshuffling and bargain buying were potentially in play due to quarter-end flow following a dismal month. The dollar has been negatively correlated to US stocks which could be partly to blame for today's extension in the correction.  USD/JPY technical analysis While below 106, a U-turn is expected towards 103.30/50.  

GBP/USD remains positive while rising to 1.2875, up 0.31% on a day, during Tuesday’s Asian session. The Cable recently benefited from news shared by T

GBPUSD stays firm after breaking 100-day EMA the previous day.EU policymakers show preparedness to work on legal agreement.A joint of 21-day and 50-day EMAs lures the pair buyers.61.8% Fibonacci retracement adds to the downside support.GBP/USD remains positive while rising to 1.2875, up 0.31% on a day, during Tuesday’s Asian session. The Cable recently benefited from news shared by The Times that suggests the European Union (EU) is softening the stand over Brexit talks. Read: GBP crosses catching a bid in Asia on Brexit hopes Other than the fundamentals, the pair’s ability to cross the 100-day EMA also directs the bulls towards 1.2910/20 resistance confluence comprising 21-day and 50-day EMA. Should GBP/USD buyers remain firm beyond 1.2920, the 1.3000 psychological magnet and the mid-month high around 1.3010 will be on their radars. On the contrary, a downside break of 100-day EMA, currently near 1.2830 may rest on 61.8% Fibonacci retracement of June-September upside by the Pound major, at 1.2721 now. In a case where the quote provides a daily closing below 1.2721, the early July tops near 1.2670 will be in the spotlight. GBP/USD daily chart Trend: Further upside expected  

There have been a series of news relating to Brexit and monetary policy to start the week which has been underpinning the pound. The latest news, repo

There have been a series of news relating to Brexit and monetary policy to start the week which has been underpinning the pound. The latest news, reported by the Times, states that the ''European negotiators have indicated for the first time that they are prepared to start writing a joint legal text of a trade agreement with the UK, before fresh talks begin today.'' In a potentially significant move Brussels is understood to have dropped its demand for the two sides to reach a broad agreement on all the outstanding areas of dispute before drafting a final agreement. In the European session, there was an article written in the Financial Times that had reported on tentative signs of progress in trade talks as well. In other reports, the Bank of England and the EU's securities regulator have agreed on information-sharing arrangements necessary for EU banks to continue using clearing houses in London from January. Staying with the BoE's Deputy Governor Ramsden said the central bank is not about to use negative rates "imminently". Ramsden also explained that it is going to take time to do preparatory work and engage with banks and others on the issue. GBP/USD is higher by 0.33% in the session. More to come...

NZD/USD seesaws around 0.6560, up 0.08% intraday, during the early Asian session on Tuesday. The kiwi pair benefited from the broad US dollar weakness

NZD/USD directs the previous two days’ upward trajectory towards 0.6600.S&P 500 Futures prints a four-day winning streak after Monday’s biggest surge in three weeks.Hopes of breaking the US stimulus deadlock, virus vaccine gain momentum, a light calendar probes the bulls.The first debate of the American Presidential Election becomes important, comments from Fed speakers will also be followed closely.NZD/USD seesaws around 0.6560, up 0.08% intraday, during the early Asian session on Tuesday. The kiwi pair benefited from the broad US dollar weakness and risk recovery the previous day. Though, a lack of major data/events keeps the bulls chained ahead of crucial catalysts. US Congress progresses towards COVID-19 aid package talks… With the House Democrats’ readiness to compromise on the earlier demands concerning the coronavirus (COVID-19) stimulus package, the halt to the American policymakers’ talks for the much-awaited aid is likely to be broken soon. The same joins the line of the European Central Bank (ECB) and British diplomats to keep the market’s risk-tone sentiment positive. Also favoring the NZD/USD bulls are expectations that the COVID-19 cure will soon be rolled out. Additionally, the Fed policymakers’ dovish tone, a contrast to the RBNZ counterparts’ absence, offer extra reasons to propel the quote. Even so, nearness to the US Presidential Election debate and a plethora of Fed speakers scheduled for crossing wires during the North American session question the risk-takers. Hence, the S&P 500 Futures register 0.30 intraday gains to 3,356 while the US 10-year Treasury yields and New Zealand’s NZX 50 are both mildly positive by the time of the press. Moving on, the Asian calendar doesn’t carry any major factors worth watching than the risk catalysts. As a result, the continuation of the latest pullback can be expected ahead of the US session. Though, any major positives for the greenback won’t be taken lightly. Technical analysis FXStreet’s Ross J Burland suggests the “wait and watch” approach for the bulls while saying, At this stage, the conditions are still not ideal for entry as bulls would be prudent to wait until the momentum indicators are more bullish and price pulls away from the 21-moving average. The price will indeed need to move higher towards the Fibo targets, but bulls would be on the lookout for structure lower down below price from where a buy-in at a discount might be achieved on pullbacks.  Read: NZD/USD Price Analysis: Bulls set on at least a 38.2% Fibonacci retracement  

USD/CAD has not been very forthcoming with its intentions during phases of consolidation and here we are again, with the weekly resistance and daily s

USD/CAD stalls at a well-telegraped resistance area.There are few, if any, prospects of a high probability setup from a swing-trading point of view.Day-traders will take note of the potential for sideways channel trading opportunities between resistance and support. USD/CAD has not been very forthcoming with its intentions during phases of consolidation and here we are again, with the weekly resistance and daily support sandwiching the outlook. Unfortunately, this makes for treacherous swing-trading opportunities.  However, there could be potential on the day-trading side. The following illustrates the price action and developments to date in a continuation of the following analysis that had predicted the upside breakout to where the market is now resisted:USD/CAD Price Analysis: Bulls finally catching a break?Monthly chart There is more to go to the upside until a 38.2% Fibonacci retracement and resistance structure.  However, there will be shorter-term opportunities on the downside at this juncture first.  Weekly chart The price has reached a 61.8% Fibonacci that meets structure.  This makes for a compelling case for a pullback to at least a 38.2% Fibonacci retracement level. Barroom brawl However, the price is now trapped between weekly resistance and daily support. This leaves little to no prospect of a high probability and protected setup in either direction from a swing trading perspective. at least not one that will offer a favourable risk to reward from a 4-hour time frame. Day-trading opportunities On the other hand, on the hourly time frame, bears can watch for an impulse to the downside to clear the support. Such an outcome will potentially offer a discount with a fade on rallies towards the 38.2% Fibo target.

Japan Tokyo CPI ex Fresh Food (YoY) above forecasts (-0.3%) in September: Actual (-0.2%)

Japan Tokyo CPI ex Food, Energy (YoY) came in at 0%, below expectations (0.2%) in September

Japan Tokyo Consumer Price Index (YoY) came in at 0.2%, below expectations (0.4%) in September

WTI fades Monday’s upside momentum while easing to $40.68 during the pre-Tokyo open trading on Tuesday. The energy benchmark earlier rose to the highe

WTI buyers struggle to keep the previous day’s upside momentum near one-week high.One-month-old falling trend line restricts WTI crude oil’s immediate upside.200-bar SMA, 61.8% Fibonacci retracement offers the key resistance.Multiple ascending trend line stands tall to question the bears’ entries.WTI fades Monday’s upside momentum while easing to $40.68 during the pre-Tokyo open trading on Tuesday. The energy benchmark earlier rose to the highest in one week before taking a U-turn from a descending trend line from August 31. Not only the immediate resistance line, currently around $40.85, 200-bar SMA and 61.8% Fibonacci retracement level of WTI’s August-September downside, around $41.00, also acts as the key upside barrier for the black gold. As a result, odds of the commodity’s pullback to the $40.00 threshold, also comprising an upward sloping trend line from September 14, are brighter. Though, any further weakness below the psychological benchmark will be probed by a short-term rising support line from September 21 that presently stays around $39.50. It’s worth mentioning that the RSI strength may help WTI to attack the monthly top of $41.75 on the successful clearance above $41.00. WTI four-hour chart Trend: Sideways  

South Korea Industrial Output Growth above forecasts (-1.5%) in August: Actual (-0.7%)

South Korea Service Sector Output came in at -1%, below expectations (0.6%) in August

South Korea Industrial Output (YoY) below expectations (-2.8%) in August: Actual (-3%)

Japan’s Statistics Bureau will release the September month inflation data on early Tuesday morning in Asia, 23:30 GMT globally. While Tokyo Consumer P

Tokyo Core CPI overview Japan’s Statistics Bureau will release the September month inflation data on early Tuesday morning in Asia, 23:30 GMT globally. While Tokyo Consumer Price Index (CPI) is considered to be the benchmark of price pressure in the Japanese economy, Tokyo CPI ex-Fresh Food, popularly known as Tokyo Core CPI, gains much love among Japanese Yen (JPY) traders as one of the favorite price measures for the Bank of Japan (BOJ). The Japanese inflation data, otherwise mostly ignored, is likely to gain attention as the Asian economic calendar is mostly silent while the BOJ is yet to give any strong signals to join the lines of the US Federal Reserve and the European Central Bank. Forecasts suggest no change in the Tokyo CPI ex-Fresh Food (YoY) figure of -0.3% while signaling an upbeat Tokyo CPI data of 0.4% (YoY) versus 0.3% prior. It should be noted that the Tokyo CPI ex-Food and Energy figures may also recovery to 0.2% from -0.1% on an annualized basis. How could Tokyo Core CPI affect USD/JPY? With the recent correction in the US dollar, global traders are searching for extra clues ahead of the key event scheduled during the week. As a result, USD/JPY fails to extend the previous day’s halt to a five-day winning streak while taking rounds to 105.50/55. Given the recent risk-on sentiment, any further upside in the Japanese inflation data can help build the market sentiment and propel the USD/JPY further towards refreshing the monthly top. On the contrary, disappointment from the scheduled data will have a mixed response amid expectations of further easing from the BOJ and the coronavirus (COVID-19) resurgence, not to forget the market’s cautious sentiment. Technically, a clear break of the one-month-old falling trend line, at 105.45 now, can continue to challenge the monthly peak surrounding 105.70. Also acting as an immediate upside barrier is the 21-day SMA level of 105.60. Meanwhile, odds of the pair’s drop to August month’s low near 105.10 have comparatively fewer obstacles. Key Notes USD/JPY Forecast: Consolidating gains, bulls hesitateAbout the Tokyo CPI ex Fresh FoodThe Tokyo Consumer Price Index released by the Statistics Bureau is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services, excluding fresh food. The index captures inflation in Tokyo. The purchase power of JPY is dragged down by inflation. Generally, a high reading is seen as positive for the JPY.

Gold traders are waiting for extra directions to extend the biggest recovery move in a month. In doing so, the yellow metal fades the previous day’s u

Gold eases from a four-day high of $1,883.08 flashed the previous day.Markets await fresh clues to extend the latest risk-on sentiment.Vaccine hopes, expectations of further stimulus keep the buyers positive but COVID-19 resurgence probes the bulls.Cautious sentiment ahead of the first US Presidential Election debate, Brexit talks also challenge the bullion optimists.Gold traders are waiting for extra directions to extend the biggest recovery move in a month. In doing so, the yellow metal fades the previous day’s upside momentum near $1,880 amid the pre-Tokyo open Asian trading on Tuesday. Are bears sneaking in? Given the commodity buyers’ pause, coupled with a lack of major data/event ahead of the key US Presidential Election debate, concerns over the short-term strength of the safe-haven metal can’t be ruled out. Also adding questions to gold’s latest pullback could be the recent announcements by US House Speaker Nancy Pelosi who said, "We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now." The news inflates the hope of the American stimulus and can reduce the rush to risk-safety for now. Additionally, the European Central Bank (ECB) President Christine Lagarde also showed readiness to announce further measures to keep the bloc on the recovery mode amid recent challenges. Meanwhile, UK PM Johnson is up for announcing further helps to combat the fears of economic slowdown as the coronavirus (COVID-19) resurgence and Brexit uncertainty attack the previous optimism. It’s worth mentioning that the rising numbers of the pandemic are pushing the UK and Europe towards strict activity restrictions while two cities of Canada, namely the Quebec City and Montreal, will be under red alert from October 01. Amid all these plays, S&P 500 Futures gain 0.20% to 3,353 after Wall Street marked a notable bounce. Looking forward, a light calendar in Asia may keep gold traders directed towards risk catalysts for fresh impetus. In doing so, news concerning the US aid package, virus and vaccine will join the Brexit and American Presidential Election could entertain the momentum traders. Technical analysis A clear break of the September 21 low of $1,882.30 becomes necessary for the bulls to attack the $1900 threshold. Though, August month’s low near $1,903 will precede 50-day EMA figures surrounding $1,908/09 to probe the gold buyers afterward. Meanwhile, sellers are less likely to enter unless the bullion prices drop below $1,848.  

Emily Cochrane, who is a reporter in the Washington bureau of The New York Times has been tweeting the updates with respect to Pelosi and Mnuchin who

Emily Cochrane, who is a reporter in the Washington bureau of The New York Times has been tweeting the updates with respect to Pelosi and Mnuchin who are are scheduled to speak at 6:30 tonight as the window closes for a covid relief deal. Five minutes before the call, House Democrats unveil their coronavirus relief bill, which comes in at about $2.2 trillion and 2,152 pages. 

AUD/JPY picks up bids near 74.60 during the early Tuesday morning in Asia. The aussie cross broke a descending trend line from September 19 the previo

AUD/JPY keeps upside break of a seven-day-old falling trend line.Bullish MACD favors extra run-up but 200-hour EMA, a fortnight old resistance line will question the buyers.Sellers can retake entries below the previous resistance line but 74.00 will be the tough nut to crack.AUD/JPY picks up bids near 74.60 during the early Tuesday morning in Asia. The aussie cross broke a descending trend line from September 19 the previous day and is currently combating 100-hour EMA. Considering the pair’s ability to stay past the short-term resistance line, now support, coupled with the bullish MACD, AUD/JPY buyers are likely to stay happy for a bit more beyond the 74.65 immediate upside barrier. While the anticipated strength can direct the bulls towards the 75.00 threshold, a confluence of 200-hour EMA and a downward sloping trend line from September 15, near 75.20 will be the crucial resistance to watch as a break of which will push AUD/JPY further north towards 76.00. Alternatively, 74.40 can act as the nearby support for the pair during its pullback, a break of which will highlight the previous resistance line, at 74.25 now. It should, however, be noted that the bears will remain cautious unless breaking the monthly low of 74.00 that holds the gate to further declines targeting the late-June lows near 73.30. AUD/JPY hourly chart Trend: Further recovery expected  

UK Prime Minister (PM) Boris Johnson is will put forward another measure combat the economic fears of coronavirus (COVID-19) resurgence and no-deal Br

UK Prime Minister (PM) Boris Johnson is will put forward another measure combat the economic fears of coronavirus (COVID-19) resurgence and no-deal Brexit. In doing so, the Tory leader will push for adult education by retraining the unemployed for jobs in growth sectors, per the Financial Times (FT). Key quotes The PM is to promise a ‘lifetime skills guarantee’ open to adults in England who do not have an A-level or equivalent qualification, offering them a free college place on an approved list of vocational courses. Details also suggest that higher education loans would also be made more flexible to allow adults to space out the study across their lifetimes, allowing them to retrain for new careers as the economy changed. Furthermore, the new offer of free college places will be paid for from the £2.5bn National Skills Fund, which was announced in the Budget in March before the onset of the coronavirus pandemic. An additional £1.5bn of capital investment was allocated to upgrade further-education colleges. FX implications Although GBP/USD trimmed some of the Monday’s strong gains by the Asian session on Tuesday, the news can add reasons for the Pound buyers. However, a lack of British traders during this time of the day restricted the quote’s moves around 1.2840 by the time of the press.

AUD/USD keeps Monday’s recovery moves while taking rounds to 0.7070 at the start of Tuesday’s Asian session. In doing so, the aussie pair respects Fri

AUD/USD seesaws near the high of Monday’s corrective recovery.Hopes of further money supply from the US and Europe join expectations of virus vaccine to boost market sentiment.Equities, commodities benefited the most whereas the US dollar is still not on the bears’ radars.US Presidential Election debate is the key event while Fedspeak may offer intermediate clues.AUD/USD keeps Monday’s recovery moves while taking rounds to 0.7070 at the start of Tuesday’s Asian session. In doing so, the aussie pair respects Friday’s U-turn from the lowest in 10 weeks as the market environment benefits from the hints of further stimulus, be it monetary or fiscal, by the US and European policymakers. Also favoring the mood is Brexit-positive sentiment and hopes that the coronavirus (COVID-19) vaccine will be out soon. Not a trend change… Despite the AUD/USD traders’ relief from the heaviest drop in many weeks, the quote is not eligible to stand on the bull’s radars. The reason could be many starting from the broad market favor for the US dollar to the on-going COVID-19 resurgence that dampens the hope of economic recovery from the virus-led lockdowns. Also challenging the run-up could be the Reserve Bank of Australia’s (RBA) bearish bias and cause of concerns for China, Australia’s largest customer. Even so, global markets cheered the hints of further money flow from the US and Europe. Following US House Speaker Nancy Pelosi’s optimism towards the COVID-19 aid package discussion, European Central Bank (ECB) President Christine Lagarde reiterated that the Governing Council, “continues to stand ready to adjust all of its instruments, as appropriate”. It should also be noted that expectations of China’s local press concerning no change in monetary policy and signals of manufacturing recovery also helped build the previous day’s consolidation. Against this backdrop, Wall Street managed to keep Friday’s gains whereas the US 10-year Treasury yields also stood positive by the end of Monday. Further, Gold regained $1,880 whereas the WTI crossed $40.00. Looking forward, the economic calendar remains mostly silent during the Asian session and hence risk catalysts are mostly in demand. It should, however, be noted that the market’s cautious sentiment ahead of the first US Presidential Election debate between the current leader Donald Trump and the challenger Joe Biden may probe the bulls going forward. Also, the Federal Reserve policymakers’ likely optimism, observed from the latest comments, can renew the US dollar buying, which in turn will question AUD/USD buyers. Technical analysis Successful bounce off 100-day SMA, currently around 0.7010, needs not only the break of the 0.7100 threshold but clearance of the August 12 low surrounding 0.7110 to probe 50-day SMA level close to 0.7205. Alternatively, a downside break of 0.7010 will require validation from the 0.7000 psychological magnet before recalling the bears.  

South Korea BOK Manufacturing BSI came in at 70 below forecasts (71) in October

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