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USD finds a bid as focus shifts to the trade war The greenback has recovered partially on Tuesday after a dip to a four-week low against the euro. The EURUSD pair was rejected from the 1.1733 area and retreated to 1.1660 on Wednesday amid profit-taking following an aggressive USD sell-off since the start of last week. The dollar demand seems to be reemerging, partly due to the abating risk-on sentiment as investor focus shifts from US-Mexico agreement to the US-China trade war. Now, after recent talks failed to bring a major breakthrough, the trade conflict between the two countries could escalate as September 5 is the deadline for public comment on Trump's increased tariffs on $200 billion of Chinese goods. Therefore, the risk aversion could resume in coming days as investors will likely prefer to focus on safe-havens ahead of the decision on new tariffs. As such, the greenback could win in this scenario and recoup its recent losses. EURUSD may challenge the 1.16 threshold first and target the 20-DMA at 1.1530 afterwards.
by HelenRush
Gold: “buy the dip” continues Gold prices continue to recover on Tuesday, holding steady close to nearly two-week highs around $1,214. The greenback remains on the defensive, with the selling pressure has intensified in the wake of a trade deal between the US and Mexico. Against the backdrop of a weaker dollar, which suffers a decline amid a risk-on sentiment, the bullion demand has surged over the past couple of weeks, and more signs of a reversal start to emerge. Late last week, the price has got back above the $1,200 hurdle which brought more buying interest for gold. For the current corrective rebound to continue, we need to see further decline in the USD index however. Considering Trump is a wild card and the major news-marker for the global financial markets, the risk aversion could reemerge at any point. This means that the dollar demand may return suddenly down the road. Therefore, gold bulls should be careful as the yellow metal now looks more attractive for a partial profit-taking. In the short term however, the bullion could target the $1,216 area, but a sustained break above is unlikely any time soon.
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by HelenRush
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What’s next for EURUSD? The EURUSD pair gained decently last week, with the euro received support both from dollar weakness and a broad rebound in risk appetite. The price has surged to early-August high of 1.1650 earlier on Monday, but the move higher looks to be out of steam for now. The recent bullish catalyst for the pair was the Powell’s speech at Jackson Hole on Friday, with dollar bulls were disappointed by the lack of hawkish comments as the Fed’s governor tone was rather cautious. As a result, the greenback was hit across the board, which opened the way north for the single currency. But as the euro strength is mostly derived from dollar retreat, the rally could run out of steam now if the pair doesn’t receive its own bullish catalysts any time soon. A daily close above 1.16 is needed for a confirmation of an upside breakthrough, but the longer the price trades below the 1.1650 intermediate resistance, the higher the risk of a profit-taking and a retreat back to the 20-DMA at 1.1530.
by HelenRush
Will dollar bulls regain control? The greenback is back on the defensive after yesterday’s recovery. This week, the US currency came under an intense pressure amid Trump’s criticism, and the bulls still fail to regain control as traders are nervous ahead of the key event of this week – Powell’s speech at Jackson Hole. The Fed’s chair testament will set the tone not for USD pairs only, but for the global financial markets as well. Investors hope that Powell will confirm the central bank’s commitment to further rate hikes, despite the recent Trump’s comments. And the solid US fundamentals justify this path for now. So, positive rhetoric by the Federal Reserve governor could open the way for an ascent in the buck across the board, while the potential highlight of the consequences from the US-China trade war is a risk for the greenback. As such, the EURUSD pair, which faced intraday resistance at 1.1580, could target the 1.15 level again, after a break below the 20-DMA at 1.1530.
by HelenRush
Brent set for correction Crude oil prices enjoyed an impressive rally yesterday, with Brent rose most in two month. The price has edged above the $75 figure, but struggles to stay above this level on Thursday. The corrective moves look limited so far, but the retreat could deepen in the short term. The bullish EIA report served as a catalyst for buyers as the report showed that US stockpiles declined by 5.8 million barrels last week, much more than the 1.8 drain expected. The additional buying interest came from the news that a member of International Group said the US sanctions have severely compromised its relations with Iran. Market participants took this message as another sign of the potential risks for global supply. As the dust has settled after a short-covering rally, Brent could proceed with its bearish correction, especially if the greenback continues to regain ground across the board. Traders could opt to exit longs in the oil market ahead of Powell speech due tomorrow as the Fed Governor may express a hawkish tone and fuel dollar rally.
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by HelenRush
The dollar could receive a boost from FOMC minutes The dollar has stabilized after a massive sell-off fuelled by recent Trump’s attack on the Fed policy and comments by the central bank official Kaplan who hinted at a pause in tightening. The greenback demand is reemerging gradually ahead of the FOMC meeting minutes release due later today. As such, EURUSD retreats marginally from highs in the 1.16 region, with the 20-DMA at 1.1535 is back on traders’ radars. Market participants expect a hawkish tone from the Fed minutes despite the recent Trump’s criticism as the central bank itself is an independent institution, and the economic fundamentals remain solid and justify further rates hiking. So if the Fed doesn’t disappoint the dollar bulls, EURUSD could accelerate the emerging downside correction and challenge the 1.15 support. The stakes are also getting higher for a delivery from Powell at Jackson Hole due on Friday. The expectations of this event could also support the greenback in coming days
by HelenRush
Euro gets a relief from Trump The EURUSD pair is extending gains for the fourth day in a row on Tuesday, with the recent buying interest was fuelled by Trump’s verbal interventions. The US President has criticized the Fed for raising interest rates. His rhetoric sent the greenback down across the board, which helped the euro to regain the 1.15 threshold. As the pair has recovered from lows decently, and the buck remains under pressure against major rivals, the price could proceed with the ongoing rebound in the short term as the single currency still looks attractive for buyers, and the dollar will feel the effect from Trump’s intervention for some time yet. As such, EURUSD could overcome the 20-DMA at 1.1540 and target the 1.16 barrier. The risk for this scenario is if the US-China trade talks this week fail to result in a breakthrough. In this case, the dollar will regain ground due to safe haven demand. So it’s too early to claim victory for the euro as much will depend on the developments around the trade tensions.
by HelenRush
EURUSD: bearish risks persistThe dollar is trading mixed on Monday, after a retreat late last week. The risk-off sentiment has ebbed somehow amid the upcoming US-China trade talks, which eases the upside pressure on the greenback. But the bearish potential sill looks limited as investors don’t hope for a major breakthrough in the resuming negotiations. As for the EURUSD pair, the price is under a selling pressure again, following two days of recovery. The 1.15 area remains the key on the upside, and the longer the single currency stays below this level, the higher is the risk of a deeper retreat, down to the 1.13 major support. The buck could receive support this week from the FOMC meeting minutes due on Wednesday, while the upcoming Powell’s testament at Jackson Hole on Friday could help the USD to stay afloat this week amid the optimistic market expectations. Traders will also continue to follow the US-China trade developments as any signs of easing tensions will limit the dollar’s upside potential. The immediate resistance for EURUSD comes at 1.1450, while support lies at 1.14. A break below this level will open the way to 1.1370.
by HelenRush
Dollar bullish trend intact  Major currency pairs have been consolidating on Friday amid a lack of fresh catalysts and news. The risk-off tone has abated but investors refrain from more active buying and remain cautious as any negative news headline could easily derail the emerging optimism in the global markets. As such, the dollar is trading under just a mild selling pressure and signals it is not yet ready for a deeper correction. For a more aggressive decline in the USD index, a robust and sustainable risk-on sentiment is needed. There is a risk that Trump’s aggressive behavior will prevent easing of trade tensions between the US and China, even as the two countries are planning to resume the talks next week. So the greenback will likely remain within its bullish trend, at least as long as the risks stemming from a trade war persist. Besides, the dollar is supported by further Fed rates hiking and rising inflation. Against this backdrop, the EURUSD pair, which is attempting to challenge the 1.14 area, remains attractive to sell on rallies and will likely fail to stage a sustainable recovery, at least in the short term. 
by HelenRush
Dollar retreats ahead of US-China trade talks Risk-off sentiment has ebbed on Thursday as global investors received a hope for de-escalation in the trade war between the US and China as the two countries will hold trade talks in late August. Against this backdrop, the dollar safe-haven demand has abated, which opened the way to a recovery in major currencies. However, markets remain rather cautious and refrain from euphoria as they remember the previous talks in May – after the discussions, Trump has escalated the trade conflict in June. So traders beware of the same scenario, though a chance for easing of the tensions somehow improves market sentiment. As such, the greenback could get under more pressure in coming days should investors continue to switch to a risk-on mode. Further recovery in the Turkish lira adds to the amore positive sentiment in the global financial markets. On the other hand, euro and pound upside potential will remain limited as there are still concerns over the Turkish risks and Brexit developments, respectively. In the short-term, EURUSD needs to regain the 1.14 threshold in order to set the scene for further recovery.
by HelenRush
Brent: downside risks prevail Crude oil prices are making shallow recovery attempts on Wednesday, after yesterday’s decline to lows marginally above the $72 figure. The bulls refrain from more aggressive actions as market concerns over geopolitics keep increasing, fuelling fears of a decline in global oil demand. The Trump’s trade wars threaten to derail global growth and shatter global oil consumption as a result, which is the main source of concern in the market for now. And any sign of weakening economic data in China hurts crude oil prices. Against this backdrop, signals of increasing output add to the bearish pressure. As such, the recent news of a recovery in Libyan oil production recovery above 1 million bpd served as a catalyst for sellers. Earlier this week, Brent dropped to mid-April lows just above the $71 figure. And this level remains the immediate bearish target that could be reached in the short term as recovery attempts continue to attract sellers. The EIA will release inventory and production data later today, and another increase in crude oil stockpiles will further derail Brent’s positions.
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EURUSD: bearish risks persist The EURUSD pair has been trading close to one-year lows, though made some recovery attempts yester-day. The price is clinging to the 1.14 figure and lacks the impetus to stage a more sustainable and pro-nounced recovery. Chances for a steady rise above the 1.15 barrier are low as this level served as a firm support for a long time. In the short-term, weaker-than-expected German Q2 GDP data has limited the euro’s local bullish poten-tial, while a better risk sentiment has weakened the upside pressure on the greenback. So the current dy-namics in the pair looks neutral and the risk of a retreat below 1.14 persists. In a wider picture, much will depend on the developments around lira’s woes. A base-case scenario on this front could send the single currency even lower on the back of exposure of some of the largest euro zone creditors to Turkish crisis. Therefore, as long as the risks from this side persist, the single currency will remain vulnerable and unattractive for the bulls.
by HelenRush
Gold enters a new bearish phase Spot gold keeps losing ground on Monday, with the price extending loses to the critical $1,200 support. The yellow metal hit $1,210, the lowest level since March 2017, which is the last line of defense ahead of the key $1,200 support. A break below this level will open the way to fresh long-term lows and will mark a new bearish phase for the market. As the US-China trade jitters showed, gold has really lost its appeal as a safe-haven asset as the risk-off sentiment fuels USD demand instead. The same is in the case with the Turkish crisis that came into focus amid a dramatic decline in the Lira. Considering the changing status of the precious metal, there is a risk of further drop, despite the record net short positioning points to a risk for an upside reversal. As such, a challenge of the mentioned psychological support will open the bearish road to $1,997. This is the intermediate support on the way to $1,190. On the other hand, should the $1,200 figure remains intact, the metal could try to regain the $1,215 area.
TVC:GOLD
by HelenRush
Gold still threatens the $1,200 figure Spot gold remains under pressure after several recovery attempts earlier this week. The yellow metal thus finishes the eighth from the last nine weeks with declines, confirming a steady bearish trend established this year. A strong dollar remains the key reason behind gold’s weakness. The greenback continues to rise across the board, refreshing one-year highs. The increasing trade tensions between the US and China and the Fed tightening path give a strong support to the buck, which prevents the precious metal from a more sustainable recovery. From the technical point of view, gold needs to get back above the $1,220 level to form conditions for another leg higher. Otherwise, the price could accelerate the downtrend and challenge the key $1,200 support. So it’s still too early to call a bottom, though a weekly close above the $1,210 region will reduce the immediate bearish risks.
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by HelenRush
Pound bears unstoppable GBPUSD keeps bleeding on Thursday, with the pair dropped to fresh one-year lows in the 1.2840 area, threatening the 1.28 threshold. The dollar is back on the offensive amid the escalation of a US-China trade war as the two world’s largest economies threaten each other with additional tariffs, fueling risk-off sentiment. Another source of a bearish pressure on the sterling is the lingering threat of a no-deal Brexit. The risk of a worst-case scenario is rising and makes traders nervous ahead of a new round of talks headed by the PM May in coming weeks. Against this backdrop, the pound will likely remain vulnerable in the medium term. Meanwhile, investors turn more cautious ahead of the UK Q2 GDP report due on Friday. Should the numbers come in lower than expected, the downside pressure in the pound will intensify, especially in the context of recent BoE’s Carney “dovish’ comments on the prospects of further tightening. As such, the pair could challenge the 1.28 barrier, should the greenback remain elevated, and the UK data disappoint.
by HelenRush
Brent: bullish potential limited Crude oil prices have been rising over the past few sessions with Brent has settled above the $74.50 area. However, the market lacks further upside momentum and the risks of resuming the decline remain. The key immediate obstacle for bulls now comes at $75, with the next upside barrier lies around $75.20, where the 50-DMA lies. The prices were recently supported as US sanctions on Iranian goods come into effect and now traders get more concerned over the upcoming sanctions on Iranian oil due in November. In another sign of bullishness, the API data overnight showed that crude oil stockpiles declined by more than six million barrels last week. Now, investors are eager to see a confirmation of bullish figures from the official report by EIA due later today. Despite the ongoing recovery, the potential for further rise in Brent crude looks limited, and the price shows signs of momentum exhaustion already. The longer the asset remains below the $75 handle, the greater becomes the risk of a downside correction in the short term as the market needs additional catalyst to proceed with the corrective rebound.
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by HelenRush
Pound in the crosshairs GBPUSD is licking its wounds after a drop to 11-month low of 1.2920 on Monday, having recovered above the 1.2960 area. Despite the immediate downside pressure has eased somehow, bearish risks for the pair remain, and the general picture in the weekly charts is still ominous. The British pound came under an intense pressure from two different fronts. First, the USD index remains firmly within a bullish trend and staged a widespread rally yesterday as the buying interest around the dollar increased amid another escalation of US-China trade tensions. The upside pressure has eased since, but the greenback keeps solid positions, so sterling remains on the defensive. Second, the threat of a no-deal Brexit is rising, especially after the UK officials mentioned the increasing probability of a so-called ‘hard” Brexit. As such a divorce scenario has not been fully priced in, there is still a downside risk for the pound from this factor. Against this background, GBBPUSD still looks attractive for selling on rallies. Only above the 20-DMA at 1.31, the downside pressure will ease more substantially.
by HelenRush
Brent needs a catalyst Crude oil prices are trading with a modest bullish bias on Monday, with Brent has settled above the $73 handle, unable to attract a more sustainable buying interest to challenge the 20-DMA marginally below the $74 barrier. The downside pressure on Brent has eased somehow recently. According to POEC sources, Saudi Arabia has cut its crude oil output in July by 200,000 bpd to around 10.29 million bpd. The news came as a surprise as in June, Saudis and Russia pledged to increase output. Meanwhile, according to Baker Hughes, the number of oil rigs in the US declined by two last week to 859. This is the second week of decline in the past three weeks. On the other hand, Saudi Arabia has resumed oil shipments through the Red Sea shipping lane of Bab al-Mandeb, which deprived the market of an important positive driver. At this stage, the overall sentiment in the crude oil markets looks uncertain, and it is still exposed to downside risks, especially on the back of rising dollar. As such, Brent will need an additional catalyst to stage a more sustainable recovery from recent losses and to get back above $74 in the short term.
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by HelenRush
GBPUSD has another test The pound has suffered a lot from the ‘dovish hike’ by the Bank of England on Thursday. The GBPUSD pair slipped from the 1.3130 area, down to the 1.30 level which has been eroded today. The price continues to retreat and could challenge this year lows before the end of the week. The BoE expressed concerns over Brexit process and made it clear that the monetary authorities are not going to hurry with further tightening in the years ahead. The central bank’s cautious tone coupled with the remaining bullish tone around the greenback across the board, prompted a fairly aggressive sell-off in the pound. Despite the fact that sterling looks oversold already in the short-term charts, further decline may yet come in the nearest future. The upcoming US labor market data could serve as another bearish driver for the pair as the buck will get a widespread support should the employment and wages come in better than expected as strong figures will cement market expectations on further Fed rate hike. As such, the key goal for GBPUSD bears now comes at this year low of 1.2957. Should this level withstand the potential pressure, the price could get back above 1.30 before the daily and weekly close.
by HelenRush
BoE’s “dovish hike” will sink the pound The greenback remains on the offensive after the Fed meeting. The US central bank hasn’t said anything new and confirmed its commitment to further tightening. This, coupled with the reemerged trade-war concerns, was enough to support USD demand against major rivals. The GBPUSD is changing hands below the 1.31 figure ahead of BoE’s Super Thursday. Investors are pricing more than a 90% chance of a rate hike today, so the action itself won’t matter much for the pound and the markets in general. Traders will be interested in Carney’s tone as investors want to know about the prospects of further tightening. In this context, there could be bearish surprises for sterling as the central bank will hardly give a hawkish statement, considering the lingering Brexit risks, global trade-war fears and other factors, including fundamental ones as consumer confidence in the UK continues to decline. Therefore, we see some downside risks for GBPUSD in the short term, while a generally strong dollar makes things even worse. As such, should the BoE deliver a so-called “dovish hike”, the pound will further lose ground and could challenge the 1.30 level, where the key 1.2950 area should serve as support.
by HelenRush
Brent may derail the $73 threshold Crude oil prices continue to lose ground on Wednesday following yesterday’s aggressive correction. Brent crude slipped from highs in the $75.60 area, down to nearly two-week lows just above the $73 handle, which so far constrains the selling pressure. After a seven-day rally, the retreat looked inevitable as investors rushed to take profit amid signs of a slowing bullish momentum. The downside pressure intensified after the API report showed that the US crude oil inventories increased dramatically, by 5.6 million barrels last week. Now traders nervously expect the EIA data. Should the official release confirm a substantial rise in stockpiles and point to an increase in production, the bearish move could accelerate in the short term. The additional bearish factor for the market is the escalation of US-China trade tensions as Trump threatens to impose 25% on $200 billion in Chinese goods instead of 10%. On the other hand, Brent will likely refrain from a much deeper correction due to the lingering Iran supply concerns. As such, the price could derail the $73 threshold, but will likely attract demand on further bearish attempts.
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by HelenRush
Dollar focused on Fed The greenback shows mixed dynamics against major rivals this week, being cautious ahead of the Fed two-day meeting starting today. The dollar gained some support in the USDJPY pair as the yen was unfazed by the Bank of Japan meeting as the central bank left its policy unchanged and showed it still lacks flexibility. The pair is holding above the 111.000 threshold which could serve as a base for a move higher, probably, even past the 20- and 14-DMAs. The US currency shifts focus on the upcoming Fed meeting. Despite the central bank is not expected to hike rates this time, market participants will be eagerly waiting for the meeting results as Powell’s rhetoric will set the tone for dollar pairs. The regulator will likely confirm its commitment with further policy tightening, citing solid fundamentals. In this scenario, the USDJPY pair could jump past the 111.75 area, where the 14-DMA lies, with the next target at 112.00. Today’s PCE report, which is Fed’s favored price growth gauge, will hardly significantly affect the sentiment around the buck as trader will likely look past the release ahead of the key events of the week – Fed decision and NFP employment report.
by HelenRush
GBPUSD on the defensive ahead of BoE The British pound finished a third week of decline in a row. On Monday, the GBPUSD pair is attempting to regain ground and clings to the 1.31 handle. However there are still signs that the currency remains vulnerable to further losses, while the recovery potential is limited. The key event for the sterling this week is the BoE meeting due on Thursday. The so-called “Super Thursday” will set further tone to the pair and could bring another sell-off should the regulator refrain from hiking rates citing lower inflation. The odds of a hike exceed 85%, according to market expectations. Another concern for the pound is the rising threat of a “no-deal” Brexit as the key issues remain unresolved while the March 2019 deadline is steadily approaches. Besides, GBPUSD has been trading below the three key moving averages in the daily charts, which points to a bearish technical picture. As such, the short- and medium-term outlook for the pound remains negative, especially against the backdrop of a strong dollar. The immediate support comes at 1.3080. A break below will open the way to 1.2960.
by HelenRush