Daily Market Analysis

Market Focus

U.S. equities gained to record highs as investors took assurance from comments by Jerome Powell that the withdrawal of stimulus would be gradual.

The S&P 500 and Nasdaq 100 rose during the Federal Reserve chairman’s much-anticipated address from Jackson Hole, where he reinforced the message that it would be appropriate to begin tapering bond purchases by the end of the year. Treasury yields and the dollar fell. Gold gained.

Powell said the economy has now met the test of “substantial further progress” toward the Fed’s inflation objective while the labor market has also made “clear progress.” The remarks come as the latest reading of a closely watched measure of inflation remained elevated, highlighting the case for starting policy normalization despite the threat of the delta virus variant on the economic recovery.

During the speech, Powell also drew a line between asset purchases and interest rates, saying the Fed wouldn’t be in a hurry to begin increasing rates after it begins tapering its $120-billion-a-month bond-buying program.

The Stoxx Europe 600 index gained on track for the seventh straight month of gains, the longest streak in eight years. Stocks climbed in China, where the central bank signaled targeted steps to cushion the economy. West Texas Intermediate crude headed toward its best week since June 2020. Bitcoin rose to $48,000.

Main Pairs Movement:

The US dollar tumbled on Friday, as bear took over after Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium. The DXY index is at 92.652 as of writing, losing 0.42% on a daily basis. Powell mentioned that employment in US has been improving since July, but he also worried about the spread of the Delta variant which might influence labor conditions. Furthermore, he said that current inflation is a concern but likely to be temporary. More significantly, timing and pace of taper should not be taken as a direct signal regarding the timing of interest rate liftoff. Conclusively, the Fed could start bond tapering later this year, offering no specific timeline.

GBP/USD and EUR/USD both advanced on Friday amid weaker US dollar across the board, trading at 1.3766 and 1.1792, respectively. GBP/USD recorded a weekly high after Powell’s speech, climbing above the 1.3780 level for a time. But then retreated modestly back, posting a 0.48% gain on the day. EUR/USD also reached the highest level since August 16 with a 0.37% gain on a daily basis.

USD/JPY slipped on Friday amid US dollar’s weakness, dropping to a two-day low during American session. The pair is losing 0.22% on the day as of writing. AUD/USD rebounded strongly, surging 1.02% on a daily basis.

Gold prices rose more than $20 from the daily low, as the precious metal find demand after Powell’s dovish tone in his speech. Gold is trading at 1817.65 with a 1.40% gain on the day at the time of writing. WTI Crude Oil, in a similar way, climbed more than 1.43% on Friday.

Technical Analysis:

EURUSD (4-hour Chart)

The EUR/USD pair slipped under 1.1740 level at first, then took a strong rebound during American session. The pair is now trading at 1.1791 at the time of writing and posted a 0.34% gain on a daily basis. The bullish momentum witnessed in EUR/USD is result from US dollar’s weakness across the board, as the greenback dived right after Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium. For technical aspect, RSI indicator 64 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a golden cross indicates that the trend is reversing and market will be bullish.

In conclusion, we think market will be bullish as the pair is now testing the 1.1805 resistance line. A break above that level will open the door for additional near-term profits. And the next resistance is at 1.1857. On top of that, the Bollinger Bands shows that the price moves out of the upper band, which means a strong upward trend continuation can be expected.

Resistance: 1.1805, 1.1857

Support: 1.1726, 1.1692, 1.1664

USDCAD (4- Hour Chart)

The USD/CAD pair plunged on US dollar’s weakness after Powell’s speech, although the pair was trading higher in early trade on Friday. The pair is losing 0.59% on the day, trading around 1.2614 at the time of writing. The Canadian dollar is supported by the outstanding performance of Crude oil, plus the heavy selling pressure on the US dollar. For technical aspect, RSI indicator 42 figures as of writing, suggesting tepid bear-movement ahead. For Bollinger Bands, the price is falling from the upper band and crossing below the moving average, which also indicates a selling signal and the lower band becomes the loss target.

In conclusion, we think market will be bearish as the pair failed to break the 1.2708 resistance, now heading to test the 1.2579 support. Further losses can be expected if price dig under that level. In addition to that, WTI crude oil perserves its bullish momentum that started from August 23, as the approval of a Covid-19 vaccine in the US and a production outage in Mexico both taken as positive for oil prices. Therefore, the forecast of the commodity-linked loonie is possibly bullish.

Resistance: 1.2708, 1.2834

Support: 1.2579, 1.2528, 1.2453

XAUUSD (4- Hour Chart)

The XAU/USD pair was trading higher in early trade on Friday and reinforced its bullish momentum to gain further profits during American session. The pair is now trading at 1815.55 as of writing with a remarkable 1.30% gain on the day. Gold was lifted up by the fact that the greenback tumbled for 0.40% after Powell’s dovish speech. For technical aspect, RSI indicator 70 figures as of writing, suggesting that the market is in overbought zone now, and the buying pressure is relatively high. Investors should pay attention to selling signals.

In conclusion, we think market will be moderately bearish as long as the 1819.56 resistance line holds. Meanwhile, the Bollinger Bands shows that the price moves out of the bands first, and now seems to move back inside the band, which is considered as a selling signal. Gold prices reached a fresh three-week high, so a short-term correction could be possible in next trading week..

Resistance: 1819.56, 1831.78

Support: 1780.09, 1744.03, 1717.81, 1690.61

Economic Data

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Daily Market Analysis

Market Focus

U.S. equities fell Thursday as markets turned cautious after explosions in Afghanistan and ahead of a Federal Reserve gathering that may provide more clues about its approach to paring stimulus. The S&P 500 and Nasdaq slid as U.S. and civilian casualties were reported from blasts outside the Kabul airport, escalating tensions as the U.S. evacuates the area. Energy shares led the decline as crude oil fell. Dow Jones closed red as well, down 0.54%.

Escalating concerns about the crisis in Afghanistan added to the risk-off mood. The Pentagon confirmed on Thursday that an explosion took place at the Kabul airport, leaving an unconfirmed number injured or dead as the U.S. evacuation of the region continued.

Investors have also been awaiting the start of the Federal Reserve’s Jackson Hole symposium, which is being held as a virtual event due to the virus. Fed Chair Jerome Powell is set to give a closely watched speech on the economic outlook on Friday, which will divulge more of his and the central bank’s thinking about the timing and scope of tapering the Fed’s pandemic-era asset purchase program.

Some Fed officials have struck a more hawkish tone in recent remarks, however, adding to jitters that a shift away from accommodative monetary policy may come in the near-term. Esther George, the president of the Federal Reserve Bank of Kansas City, told Yahoo Finance in a recent interview that she was in favor of beginning the tapering process “sooner rather than later.”

Main Pairs Movement:

The US dollar bounced back on Thursday, ending its four-day losing streak. The DXY index is at 93.072 as of writing, posting a 0.27% gain on the day. The bullish momentum witnessed on US dollar might result from the fact that worries about Delta variant of the coronavirus has been dissipated. As the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech Covid-19 vaccine, which convinced investors that the Fed might still start bond tapering later this year. The focus now shifts to Powell’s speech at the Jackson Hole Symposium this Friday, as the Fed Chairman will talk about the recovery status of US economic.

GBP/USD and EUR/USD both declined on Thursday amid stronger US dollar across the board, trading at 1.3698 and 1.1750, respectively. EUR/USD reached a fresh weekly high then pulled back towards 1.1750 level during American session, losing 0.17% on a daily basis. The ECB Publishes Account of Monetary Policy Meeting was released earlier in the day, which showed that the ECB will continue the bond purchases and review its monetary policy at the September meeting. Hence, we may see further decline on EUR/USD.

USD/JPY consolidated on Thursday, hovering around 110.02. The pair is rising 0.01% on the day as of writing. AUD/USD was surrounded by selling pressure, losing 0.50% on a daily basis.

Gold edged higher on Thursday as the precious metal took a lift during American session, trading at 1792.24 with a 0.12% gain on the day at the time of writing. WTI Crude Oil, on the contrary, failed to continue its rally from Monday while posted a 0.21% loss on the day.

Technical Analysis:

AUDUSD (4-hour Chart)

The AUD/USD pair was trading lower on Thursday, touching a fresh daily low during American session. The pair is now trading at 0.7248 at the time of writing, losing 0.37% on a daily basis. The selling pressure witnessed in AUD/USD is attributable to US dollar’s strength across the board, as the greenback is now posting a 0.19% gain on the day. For technical aspect, if we take a look at MACD indicator, a near-zero MACD histogram suggests bear-movement ahead. For Bollinger Bands, the price is falling from the upper band and crossing below the moving average, which also indicates a selling signal and the lower band becomes the loss target.

In conclusion, we think market will be bearish as the pair is now testing the 0.7237 support line. If the price breaks below that level, it will open the door for additional near-term losses. And the next resistance is at 0.7201. On top of that, Covid-19 cases in Australia hit a new daily high on Wednesday as New South Wales reported 919 new infections, which can be negative for the Australian dollar.

Resistance: 0.7280, 0.7341

Support: 0.7237, 0.7201, 0.7107

GBPUSD (4- Hour Chart)

The GBP/USD pair declined on Thursday as it failed to persist a six-day rally, in spite of attempting to rebound during American session. The pair is now trading at a daily low of 1.3695 as of writing, losing 0.50% on a daily basis. Increase in the demand of US dollar and rising US Treasury bond yields put selling pressure around the cable. For technical aspect, the MACD indicator shows a death cross, which is considered as a selling signal. For Bollinger Bands, the price is now trading below the 20 SMA line and touching the lower band, suggesting that the market is bearish.

In conclusion, we think market will be bearish as the pair heads to test the 1.3691 support, further losses can be expected if price dig under that level. The next support sits at 1.3602. In addition to that, the epidemic situation in UK seems like not improving at all, despite the government’s successful vaccination program. New cases is over 35k a day now in UK.

Resistance: 1.3768, 1.3888, 1.3958

Support: 1.3691, 1.3602

USDCAD (4- Hour Chart)

The USD/CAD pair was trading higher in early trade on Thursday and preserved its bullish traction to gain further profits during American session. The pair is now trading at 1.2684 at the time of writing with an outstanding 0.75% gain on the day. USD/CAD surged on oil’s weakness, as the WTI crude oil is losing 0.77% on Thursday. For technical aspect, RSI indicator 55 figures as of writing, suggesting tepid bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish.

In conclusion, we think market will be bullish as the Bollinger Bands shows that the price moves out of the upper band, which means a strong upward trend continuation can be expected. Moreover, the Canada Raw Materials Price Index (RMPI) will be released on Friday. It is a leading indicator of consumer inflation, and a higher-than-expected reading is positive for the Canadian dollar.

Resistance: 1.2731, 1.2834, 1.2949

Support: 1.2587, 1.2502

Economic Data

Daily Market Analysis

Market Focus

U.S. equities were higher on a quiet day of trading ahead of the Federal Reserve’s Jackson Hole symposium later this week. The S&P 500 and Nasdaq gained on Wednesday, with both indexes topping record highs. The financial and energy sectors led the gains as Treasury yields and crude oil advanced. Dow Jones gained as shares of American Express, JPMorgan Chase and Goldman Sachs outperformed.

A bout of frenzied buying from dip-hunting retail traders over the last couple of days has helped spur a rally in Chinese stocks listed in the U.S. after a prolonged selloff. Net purchases of Chinese technology shares in New York by retail investors in the past five trading sessions topped the $400 million mark, according to Vanda Research.

The bargain-hunting helped push the Nasdaq Golden Dragon China Index up more than 13% in the past four days, for its best run since late June when Beijing’s increased regulations on technology and education companies added pressure on the shares.

“Since the regulatory crackdown started, retail investors increased their buying on dips, providing liquidity to institutional investors who were exiting long positions,” Ben Onatibia, senior strategist at Vanda said in a note.

While retail traders have chased momentum in more speculative names, demand has generally faded for Chinese ADRs as soon as their prices begin rising, according to Vanda, which tracks retail flows in the U.S.

“Retail attitudes towards stocks or ETFs can change over time, but we think demand is more likely to dry up in the coming days,” Onatibia said.

Main Pairs Movement:

The US dollar was trading higher in early trade on Wednesday and reached a two-day high in the beginning of American session, given the fact that the US Durable Goods Orders delivered a better-than-expected reading. However, the greenback then lost its bullish momentum and dropped to its fresh daily low, losing 0.03% on the day as of writing. The dollar has fallen for the fourth consecutive day, including last Friday. As markets are now doubting that whether Fed Chairman Jerome Powell will mention about taper plan during his speech at the upcoming Jackson Hole Symposium.

GBP/USD and EUR/USD both posted a gain on Wednesday, trading at 1.3759 and 1.1768, respectively. GBP/USD recorded a fresh weekly high then retreated modestly back towards 1.3760 level during American session. EUR/USD rebounded back after dropping to a two-day low, rising 0.14% on a daily basis. In addition, the European Central Bank (ECB) will release the Monetary Policy Meeting Accounts on Thursday.

USD/JPY touched a two-day high in the middle of the American session, then pulled back to 110.00 at the time of writing. The pair is rising 0.35% on the day. AUD/USD also advanced on Wednesday, posting a 0.26% gain.

Gold declined on Wednesday, keeping its bearish momentum that started from yesterday. Gold prices dipped lower during American session, trading at 1790.25 with a total 0.66% losses on a daily basis. WTI Crude Oil, on the contrary, continued its rally from Monday and posted a 3.32% gain on the day.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair dropped to daily low at the beginning of American session, for a time trading under 1.3700 level. The pair then rebounded back strongly towards 1.3750, now trading at 1.3759 at the time of writing with a total 0.22% gain on the day. The cable looks for extending its bullish momentum as US dollar starting to slip in the second half of the day. For technical aspect, RSI indicator 62 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish. For Bollinger Bands, the price is now trading near the upper band, which also indicates a bull market.

In conclusion, we think market will be bullish as the pair heading to test the 1.3769 resistance line. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.3867. With no important UK economic data scheduled to be released this week, investors now wait for Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium.

Resistance: 1.3769, 1.3867

Support: 1.3681, 1.3604

USDJPY (4- Hour Chart)

The USD/JPY pair surged on Wednesday, climbing to fresh daily high during American session and aiming to break above the 110.12 level. The pair is now trading at 110.10 as of writing, rising 0.44% on a daily basis at the time of writing. USD/JPY seems to be benefited greatly from the rising US Treasury bond yields as the pair continues to edge higher. For technical aspect, RSI indicator 61 figures as of writing, which means the market is near the overbought zone, and the buying pressure is relatively stronger. If we take a look at MACD indicator, a positive MACD histogram indicates that the market is bullish.

In conclusion, we think market will be bullish as the Bollinger Bands shows that the price moves out of the upper band, which means a strong upward trend continuation can be expected. The next resistance is at 110.23. In addition to that, the US Initial Jobless Claims will be released on Thursday, a lower-than-expected reading should be taken as positive for the US dollar.

Resistance: 110.23, 110.55

Support: 109.51, 109.09, 108.72

XAUUSD (4- Hour Chart)

The XAU/USD pair was trading lower in early trade on Wednesday, then continued its downward traction during American session. The pair is now trading at 1792.48 at the time of writing, losing 0.59% on the day. Rising US Treasury bond yields are putting downward pressure on gold price. For technical aspect, RSI indicator 50 figures as of writing, suggesting that there is no obvious trend in the market now. If we take a look at MACD indicator, a negative MACD histogram shows that the market is bearish. For Bollinger Bands, the price is now trading below the 20 SMA line, which also indicates a bear market.

In conclusion, we think market will be bearish as the pair failed to break above the 1797.79 level. It’s heading down to test the 1776.55 support line. The metal is likely to maintain its downward correction.

Resistance: 1797.79, 1809.63, 1832.71

Support: 1776.55, 1741.68, 1725.21

Economic Data

Daily Market Analysis

Market Focus

U.S. equities rose to record highs as strong corporate earnings and a rally in commodity prices outweighed lingering concerns about the threat of Covid-19 to the global economy.

The S&P 500 and Nasdaq 100 gained as Best Buy Co. became the latest U.S. retailer to report robust consumer demand while the price of oil and iron ore similarly gained on improving sentiment.

Energy, consumer discretionary and materials stocks were among the best performers as investors also awaited insights from Federal Reserve Chairman Jerome Powell’s address from Jackson Hole this week.

While markets started the week with a strong global rally, equities in the U.S. and Europe remain volatile on concern over the spread of the delta variant and tighter monetary policy. Economic data so far this week have painted a mixed picture, with manufacturing purchasing managers’ indexes in Europe and the U.S. showing continued growth, though slowing from last month’s levels.

Earlier in the session, a rebound in Chinese tech stocks drove gains in global equities after solid results at JD.com Inc. drew in investors including Cathie Wood. Iron ore climbed on expectations additional support from the Chinese government will boost demand. WTI crude rallied to above $67 a barrel. Treasuries fell and the dollar was weaker.

Main Pairs Movement:

The US dollar edged lower on Tuesday, reaching the lowest level since August 17. At the time of writing, the greenback is losing 0.08% on the day at 92.897. Markets now await the Jackson Hole Symposium that begins this Thursday, a hawkish tone from the Fed chairman Jerome Powell could support the US dollar. The Fed is expected to start bond tapering later this year after July’s FOMC meeting minutes released.

GBP/USD and EUR/USD both posted a gain on Tuesday, trading at 1.3727 and 1.1754, respectively. GBP/USD recorded a daily high at 1.3747 but pulled back toward 1.3700 during American session. EUR/USD continues to climb higher amid US dollar’s weakness, rising 0.10% on a daily basis.

USD/JPY touched a fresh weekly low at the beginning of the American session, but then rebounded and recovered some of its losses. The pair is now trading at 109.65, losing 0.03% for the day.

Gold lost its positive traction after reaching its highest level since August 5 during American session, pulling back to 1803.68 at the time of writing. Gold is now losing 0.09% on a daily basis. WTI continues its rally from Monday, surged 3.32% for the day.

Technical Analysis:

EURUSD (4-hour Chart)

The EUR/USD pair advanced on Tuesday, reaching a one-week high during American session. The pair is now trading at 1.1747 at the time of writing with a total 0.03% gain for the day. EUR/USD continues to benefit from a weaker US dollar across the board. For technical aspect, RSI indicator 59 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish. For Bollinger Bands, the price is now trading above the 20 SMA line, which also indicates a bull market.

In conclusion, we think market will be bullish as long as the 1.1784 resistance line holds. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.1805. On top of that, the German Ifo Business Climate Index, a data that rates the current German business climate, is scheduled to be released on Wednesday. A higher-than-expected reading should be taken as bullish for the Euro.

Resistance: 1.1784, 1.1805

Support: 1.1724, 1.1694, 1.1664

AUDUSD (4- Hour Chart)

The AUD/USD pair climbed to fresh weekly high during American session on Tuesday, but then retreated modestly back from that, now trading at 0.7253. The pair is rising 0.68% on a daily basis. For technical aspect, RSI indicator 63 figures as of writing, which means the market is near the overbought zone, and the buying pressure is relatively stronger. If we take a look at MACD indicator, a positive MACD histogram indicates that the market is bullish.

In conclusion, we think market will be bearish, as the pair is now testing the 0.7270 resistance line. Meanwhile, the Bollinger Bands shows that the price moves out of the bands first, and then move immediately back inside the band, which is considered as a selling signal. In addition to that, the assist governor of Reserve Bank of Australia Luci Ellis will speaks on Wednesday, investors can try to find some clues about Australia’s future monetary policy.

Resistance: 0.7270, 0.7319, 0.7389

Support: 0.7218, 0.7106

USDCAD (4- Hour Chart)

The USD/CAD pair declined on Tuesday, reaching its lowest level since August 17 during American session. USD/CAD continues to fell as crude oil prices rise more than 3%. The pair is now trading at 1.2595 and losing 0.4% for the day. For technical aspect, RSI indicator 32 figures as of writing, suggesting that the selling pressure is relatively higher, traders should pay attention to buying signals. If we take a look at MACD indicator, a negative MACD histogram shows that the market is bearish. For Bollinger Bands, the price is now trading below the 20 SMA line, which also indicates a bear market.

In conclusion, we think market will be bearish as it heads to test the 1.2584 support line. A break below that level could leads the pair to edge lower, and the next support is 1.2490. The forecast of the USD/CAD pair remains negative with the oil’s strength. Moreover, US Crude Oil Inventories, which influences the price of petroleum product, will be released on Wednesday. This data is likely to impact the demand of crude oil, as well as the commodity-linked loonie.

Resistance: 1.2664, 1.2834

Support: 1.2584, 1.2490, 1.2422

Economic Data

Daily Market Analysis

Market Focus

U.S. equities rose Monday as the Covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.

The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home salescoming in higher than expected while growth at U.S. services and factories slowed to an eight-month low. 

The Covid-19 vaccine made by Pfizer Inc. and BioNTech SE was granted a full approval by U.S. regulators, a milestone expected to help bolster the immunization drive amid a renewed surge in infections.

The Food and Drug Administration said in a statement on Monday that it had cleared the shot for the prevention of the disease caused by the novel coronavirus in people 16 and older. It will be marketed under the name Comirnaty. 

The approval is the first for a Covid vaccine in the U.S., and it arrives at a crucial time, as the country is ensnared in a wave of illness sparked by the highly transmissible delta variant. The Biden administration has made increasing vaccinations a priority in its efforts to tamp down the latest outbreak, and hopes the approval will increase confidence in the shot among people who say they are wary of its rapid-fire development.

Main Pairs Movement:

The US dollar declined sharply on the first day of a new trading week, surrounding by strong selling pressure. At the time of writing, the greenback is losing 0.52% on the day at 92.971. The depreciation of the greenback is likely due to the negative market mood, as the world is now facing the threat of the Delta variant. Investor worries about that the increasing cases of the Covid-19 could hinder the global economic recovery and impacts the plans of the Federal Reserve to start bond tapering. In addition, the US Manufacturing PMI and Services PMI released on Monday are both lower than expected, which is bearish for the US dollar.

GBP/USD and EUR/USD both advanced on Monday, trading at 1.3731 and 1.1747, respectively. GBP/USD picked up today after reaching a monthly low at 1.360 last week, despite a lower UK PMI data in August compared to July. EUR/USD continues to climb higher during American session, rising 0.39% on a daily basis.

USD/JPY was trading higher during Asia session, but then lost its momentum and pulled back from daily high. The pair is now trading at 109.67, losing 0.09% for the day.

Gold price surged 1.32% on Monday owing to the US dollar’s weakness, now trading at 1804.22 at the time of writing. WTI jumped for 5.63% on a daily basis, following last week’s steep decline. The crude oil is rising on Monday as a result of improved market sentiment. Also, China’s covid outbreak is under control, reporting zero local cases in the day.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair took a recovery from last week’s one-month lows on the first day of a new trading week, rising 0.7% for the day. The cable surged on US dollar’s weakness, which is now trading around 1.3729 at the time of writing. For technical aspect, RSI indicator 58 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish.

In conclusion, we think market will be bullish as long as the 1.3786 resistance line holds. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.388. On top of that, The UK Purchasing Managers Index (PMI) released on Monday had a lower reading compared to July’s data, as the Manufacturing PMI fell to a five-month low level of 60.1 in August. Nevertheless, the UK PMI prints for August seems to have only slight influence on the GBP/USD pair.

Resistance: 1.3786, 1.3888, 1.4001

Support: 1.3602, 1.3572

USDCAD (4- Hour Chart)

The USD/CAD pair slumped on Monday, retreating back from a yearly high recorded last week, as it dipped 1.21% for the day. The pair is now trading at 1.2648 at the time of writing while surrounding by strengthened bearish market mood. For technical aspect, RSI indicator 37 figures as of writing, suggesting bear-movement ahead, and the selling pressure is relatively stronger. If we take a look at MACD indicator, a negative MACD histogram indicates that the market is bearish.

In conclusion, we think market will be bearish, as the pair failed to break above the 1.2957 resistance line. The USD/CAD pair is continually heading down and trying to test the 1.2588 support. The depreciation of US dollar and upsurge in crude oil prices made the pair fall deeper during the American session. In addition to that, Canada will release its Wholesale Sales on Wednesday, which is a leading indicator of consumer spending. Investors can take note of what kind of effect it will bring to the Canadian dollar.

Resistance: 1.2807, 1.2957

Support: 1.2588, 1.2422, 1.2013

XAUUSD (4- Hour Chart)

The XAU/USD pair surged on Monday, breaking above the 1800 level. The pair is now trading at 1805.03 and rising 1.33% on a daily basis. For technical aspect, RSI indicator 68 figures as of writing, suggesting that the market is near the overbought zone, traders should pay attention to selling signals. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish.

In conclusion, we think market will be bullish as it heads to test the 1814.92 resistance line. A break above that level could leads the pair to advance higher, and the next resistance line sits at 1831.78. With the US dollar coming under strong selling pressure, gold is gathering bullish momentum at the start of the week. On top of that, US New Home Sales is scheduled to released on Tuesday, a lower-than-expected reading could help XAU/USD to edge higher.

Resistance: 1814.92, 1831.78

Support: 1776.55, 1741.68, 1717.81, 1690.61

Economic Data

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Following comments from the Swiss National Bank on their commitment to using foreign exchange interventions to stem the franc’s rise, VT Markets has conducted a review of our risk management policies with the intention of providing a more secure trading environment for our clients.

From 30th August, 00:00 (GMT+3 Server time) we will be applying margin changes as below. Your margin on CHF positions will increase by five times.

Please consider this notification carefully and be sure to maintain sufficient capital in your account.

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Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ” .

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Daily Market Analysis

Market Focus

Stocks climbed as dip buyers resurfaced at the end of a week marked by a surge in global volatility.

All major groups in the S&P 500 advanced, while the NYSE FANG+ Index of giants such as Apple Inc. and Facebook Inc. halted a five-day slide. Chinese shares listed in the U.S. rallied Friday, but were still on pace for their longest streak of weekly losses in a decade. The dollar rose for a fifth consecutive session. Treasuries fell.

Equities trimmed their decline for the week after being rattled by speculation the recovery could lose momentum just as central banks get ready to reduce support measures. Dallas Federal Reserve President Robert Kaplan said he’s open to adjusting his view that the Fed should start tapering its asset-purchase program sooner rather than later if the delta variant persists and hurts economic progress.

While risks to the global economy are mounting, money managers in search of returns are sticking to equities. U.S. stock-fund data collected before the Fed signaled it could potentially start tapering this year showed investors have confidence in policy support to buy the dip, according to Bank of America Corp. strategists.

Main Pairs Movement:

The US dollar failed to climb higher, starting to decline during American session on Friday. At the time of writing, the greenback is losing 0.07% on the day at 93.49. The fall is likely due to the downward correction in US dollar, this along with the market mood improved heading to the weekend, caused the dollar losing its strength. Investors now focus on next week’s Jackson Hole Symposium as more details about the timeline of US bond tapering expected to be released. A hawkish speech from Fed Chairman Jerome Powell can drive the US dollar up.

GBP/USD and AUD/USD both dropped on Friday, trading at 1.3621 and 0.7139, respectively. GBP/USD recorded a monthly low at 1.360 at the beginning of the American trading hours. As the UK Retail Sale released today disappointed, with a drop of 2.5% in the last month, against the market’s expected 0.4% growth. EUR/USD advanced today, now trading at 1.1698, a 0.2% gain for the day.

USD/JPY declined during Asia session, but then rebounded and recovered its losses from the day, now hovering around 109.81 at the time of writing.

Gold priced edged up on Friday, now trading at 1782.47 at the time of writing. WTI keep falling for seven consecutive days, reaching a three-month low at 61.95. The crude oil slide is owing to the fears of slower demand due to increasing cases of Delta variant around the world.

Technical Analysis:

AUDUSD (4-hour Chart)

The AUD/USD pair dropped to the lowest level since November 2020 on Friday, then slightly picked up the losses during the North American session. The pair is trading around 0.7135 at the time of writing. For technical aspect, RSI indicator 27 figures as of writing, suggesting the market is oversold now and selling pressure is too high, traders should pay attention to whether the downward trend may reverse in the near future. If we take a look at Stochastic Oscillator, the fast line lied under 20 level which shows that the market is in a weak position.

In conclusion, we think market will be bearish as the pair failed to break the 0.7181 resistance line. If the price drops below the 0.7106 mark, it will open the door for additional near-term losses. The market focus now will be the Jackson Hole symposium next week as traders look for more clues about bond tapering.

Resistance: 0.7181, 0.7270, 0.7389

Support: 0.7106, 0.6991

USDCAD (4- Hour Chart)

The USD/CAD pair was trading higher on Friday, but then pulled back during North American session. The pair is now trading at 1.2846 at the time of writing. For technical aspect, RSI indicator 70 figures as of writing, suggesting that the market is overbought now, and chances are high that the upward trend may reverse in the near future. If we take a look at Stochastic Oscillator, a fast line lied above 70 level, which shows that the market is in a strong position.

In conclusion, we think market will be tepid bearish, as the pair failed to break above the 1.2949 resistance line. The previous resistance now becomes support line at 1.2807. On Friday, Canada released its June Retail Sales, which rose by 4.2% on a monthly basis, less than what the market had expected of 4.4%. But the weaker-than-expected reading did not pushed the USD/CAD pair to a higher level.

Resistance: 1.2949, 1.3173

Support: 1.2807, 1.2649, 1.2475, 1.2422

EURUSD (4- Hour Chart)

The EUR/USD pair took a surge in the middle of the American trading hours on Friday, then retreated modestly as the pair now trading at 1.1695. For technical aspect, RSI indicator 45 figures as of writing, suggesting there is no obvious trend for the pair now, the selling power is slightly stronger than the buying power. If we take a look at Stochastic Oscillator, a fast line lied under 30 level shows that the market is in a weak position.

In conclusion, we think market will be bullish as long as the 1.166 support line holds, as the pair is trying to test the 1.1753 resistance line. A break above that level could leads the pair to advance higher, and the next resistance line sits at 1.1805. For EUR/USD traders, the focus now shifts to the German Purchasing Managers Index releasing next Monday, as it will provide an update on Euro-zone macro conditions.

Resistance: 1.1753, 1.1805

Support: 1.1666, 1.1603

Economic Data

Daily Market Analysis

Market Focus

Stock trading was volatile ahead of Friday’s options expiration. The S&P 500 closed higher after swinging between gains and losses throughout most of the session, while the Cboe Volatility Index (VIX) was on track for its biggest weekly surge since January. Dow Jones slid 0.19% to 34894.12, and Nasdaq rallied 0.11% to 14541.79. An earlier equity slide was driven by anxiety over the withdrawal of Federal Reserve stimulus, the coronavirus and global supply chains.

The Swiss National Bank appears to have intervened in the currency market to weaken the franc, with the amount of cash commercial lenders hold at the institution increasing by more than a billion francs for a second week running.

Sight deposits, as the holdings are known, increased by 1.04 billion francs ($1.14 billion) to 714.6 billion francs in the week ending Aug. 13, data on Monday showed.

“Such a rise does look like interventions,” said Credit Suisse Group AG economist Maxime Botteron.

A spokeswoman for the SNB declined to comment on the data.

Along with negative interest rates, interventions are one of the SNB’s tools to limit an undue appreciation of the “highly valued” franc. After a particularly heavy engagement in foreign-exchange markets during the initial phase of the pandemic, the SNB got labeled a currency manipulator by the U.S. Treasury last year. The designation has since been removed.

Main Pairs Movement:

The US Dollar advanced on Thursday, trading at 93.570 at the time of writing, the highest level since November 2020. The bull-movement was a continuation of July’s FOMC meeting minutes released on Wednesday, as the market expects that the Fed will start asset tapering later this year. On top of that, better than expected US employment-related figures also added to the dollar’s strength. Therefore, the US dollar was pushed higher against most major rivals.

EUR/USD and AUD/USD both touched its lowest level since November 2020 on Thursday, trading at 1.1675 and 0.7146, respectively. GBP/USD also dropped to a monthly low at 1.3637. A scarce UK economic calendar and Federal Reserve taper talks news are weighing on the cable.

USD/JPY opened higher during Asia session, but then pulled back from its weekly high, now hovering around 109.79 at the time of writing.

Gold price declined during North American session, mainly due to the dollar’s strength with Feds’ talks about bond tapering. WTI dropped to a monthly low at $62.61, later bounced back towards $63.87. The crude oil slide is owing to US dollar strength and fears of slower demand due to Covid-19 cases rising.

Technical Analysis:

GBPUSD (4-hour Chart)

At the time of writing, GBP/USD extended the decline and fell to monthly low at 1.3661. US dollar is still benefiting from the spread of the Delta variant of Covid-19, China’s corporate crackdown and the turmoil in Afghanistan. In addition, expectations that the Fed will begin tapering its asset purchases later this year pushed the US dollar to a nine-month high on Thursday. This was seen as a key factor that continued exerting downward pressure on the GBP/USD pair.

For technical aspect, RSI indicator 24 figures as of writing, suggesting the market is oversold now and selling pressure is too high, traders should pay attention to whether the downward trend may reverse in the near future. If we take a look at Stochastic Oscillator, the fast line lied under 20 level which shows that the market is in a weak position.

In conclusion, we think market will be bearish, the downward trend may persist and test the 1.3571 support. For GBP/USD traders, the next data to look out for is the UK Retail Sales released on Friday, a higher than expected reading should be taken as positive for the British Pound. Also, more information is expected at the Jackson Hole symposium in August 26-28.

Resistance: 1.3910, 1.4001

Support: 1.3572, 1.3430

USDJPY (4- Hour Chart)

The USD/JPY pair rose to its weekly high at 110.22 on Thursday but then failed to preserve its bullish momentum. At the time of writing, the pair was trading at 109.80. The sharp decline witnessed in major European equity indexes allowed the demand of Japanese Yen to increase on Thursday. On the other hand, after the release of the FOMC’s July meeting minutes, the US Dollar continues to push higher as the market still assume that the Fed will start asset tapering before the end of the year. Currently, the dollar is trading at 93.461, its strongest level since November 2020.

For technical aspect, RSI indicator 51 figures as of writing, suggesting that the buying power and selling power are almost equal. If we take a look at Stochastic Oscillator, a fast line lied above 70 level, which shows that the market is overbought now and chances are high that the price will continue to go up.

In conclusion, we think market will be tepid bullish, as the US dollar strength is likely to hold. On Friday, Japan’s National Core Consumer Price Index is scheduled to be released, traders can follow the data closely to see what kind of effect it will bring to the Japanese Yen.

Resistance: 110.80, 111.66

Support: 109.07, 108.72

XAUUSD (4- Hour Chart)

Gold prices started to decline lower in Thursday’s North American session with pressure from a stronger US Dollar. The DXY index, which tracks the greenback versus a basket of currencies, is now at a yearly high of 93.558. The XAU/USD pair is now trading at 1778.14. The FOMC meeting minutes released on Wednesday revealed that the central bank is on track to start asset tapering later this year, meanwhile, pushing the US dollar to the highest level since November 2020. This was seen as a factor that put pressure on dollar-denominated commodities, including gold.

For technical aspect, RSI indicator 48 figures as of writing, suggesting there is no obvious trend for the pair now. If we take a look at Stochastic Oscillator, a fast line lied around 55 level shows that the market is in a relatively neutral position.

In conclusion, we think market will be bearish as long as the 1795.58 resistance line holds. For XAU/USD traders, the focus now shifts to next week’s Jackson Hole Symposium when Fed Chairman Jerome Powell will speak. Hawkish tones will likely continue to underpin the US dollar and putting pressure against gold prices.

Resistance: 1795.58, 1834.12

Support: 1741.68, 1717.81, 1690.61

Economic Data