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USD, DXY Support Structure Ahead of CPI While the US Dollar has technically set a fresh yearly low, sellers were unable to get much run below the Dec 2023 swing low of 100.62. That price has since stalled the sell-off with support holding the line for the past few weeks. Given the upcoming CPI report and the FOMC rate decision next week, this could change, of course, but at this stage there's also an opening door for bulls given technical structure combined with those drivers on the horizon. For reference points, resistance levels exist at 102, 102.16 and 102.35. If bulls can drive through that, there will be a greater show of control and this is something that can further open the door for topside swing continuation. - js
TVC:DXY
by FOREXcom
Daily Technical Analysis of Gold,Currencies,and Indices10/9/2024Daily Technical Analysis for Gold, Currencies, and Indices - September 10, 2024 Introduction: Greetings, this is Mohammed Qais Abdulghani, financial markets expert, with the daily technical analysis for the most important currency pairs, commodities, and indices for Tuesday, September 10, 2024. Key Economic Data: Before starting the technical analysis, let’s highlight the key economic data scheduled for today that may impact price movements: • 9:00 AM Mecca Time: The German Consumer Price Index (CPI) will be released, a key inflation indicator for the Eurozone’s largest economy. • 3:25 PM Mecca Time: A speech from Mr. Macklem, Governor of the Bank of Canada, which could provide insights into Canada’s monetary policy and market movements. Technical Analysis: US Dollar Index (DXY): • The US Dollar Index continues its upward corrective wave, but trading below the 102 level keeps the index under pressure. • A break above 102 could extend the correction toward 103.200. • Trading below 102 suggests potential further downside toward the 100.300 support level. EUR/USD: • The pair is in a downward corrective move, approaching significant support at 1.1000. • As long as it trades above 1.1000, the scenario remains positive with targets at 1.1200 on the short-term. • A break below 1.1000 would lead to a deeper correction. GBP/USD: • The pair is approaching key support at 1.3100. A break below this level could trigger a strong bearish wave toward 1.2900 and 1.2850. • Staying above 1.3100 would keep the bullish outlook intact. USD/JPY: • The pair remains under pressure as long as it trades below 145 yen, favoring a bearish outlook toward 140 yen and 134 yen. USD/CHF: • The pair continues to trade under pressure, with prices below 0.5810 indicating further downside toward 0.5700 and 0.5630. AUD/USD: • A break below 0.6670 could initiate a bearish wave toward 0.6500 and 0.6250 on the medium term. NZD/USD: • The pair remains in a downtrend, and continued trading below 0.6225 may target 0.6100 or lower levels. USD/CAD: • The pair is facing bearish pressure. Trading below 1.3600 could lead to further declines toward 1.3500 and 1.3300. GBP/JPY: • Trading below 196 yen supports the bearish outlook toward 184 yen and potentially 170 yen in the medium term. EUR/JPY: • A break below 157.900 could trigger a significant drop toward 153 yen and 148 yen. EUR/GBP: • Trading below 0.8400 reinforces the bearish trend with targets at 0.8375 and 0.8300. USD/TRY: • The pair is attempting to end its correction. A break above 34 lira could lead to a rise toward 34.50 lira and 35 lira. BTC/USD: • Bitcoin is attempting to recover previous losses, but a decisive break above the psychological barrier at 60,000 USD is necessary for further gains. • Without this, the price remains under threat of declining toward 52,000 USD and 44,000 USD. ETH/USD: • A break below 2200 USD could trigger a strong bearish wave, targeting 1600 USD. XRP/USD: • Trading below 55 cents suggests further declines toward 48 cents and 40 cents. Gold (XAU/USD): • Gold remains in a corrective downward wave, but as long as it trades above 2460 USD per ounce, the overall bullish trend remains intact. • A break above 2520 USD is needed to target 2600 USD and 2700 USD. • Inflation data expected on Wednesday could bring high volatility to gold prices. Crude Oil (WTI): • Trading below 70 USD per barrel keeps the bearish scenario intact, with targets at 66 USD and 62 USD. Silver (XAG/USD): • Remaining below 29 USD strengthens the bearish trend, with downside targets at 27.50 USD and 26 USD. Natural Gas (NG): • A break below 2.20 USD could lead to a sharp decline toward 1.80 USD. Dow Jones Industrial Average (DJIA): • The Dow Jones is attempting to end its correction. A break above 41,000 points could trigger a rise toward 42,500 points. • The 41,000-point level represents a strong resistance, and a break above this level could signal strong movements in the market. Nasdaq (NASDAQ): • Trading below 19,250 points reinforces the bearish scenario toward 18,250 and 17,200 points. FTSE (FTSE): • Staying above 8200 points could support a recovery toward 8400 points. DAX (DAX): • A break below 18,200 points could negate the positive outlook and lead to significant declines. CAC (CAC): • Trading below 7600 points strengthens the bearish outlook toward 7200 points. Nikkei (Nikkei): • Trading below 37,000 points suggests further declines toward 35,000 and 33,000 points. Conclusion: This concludes the daily technical analysis. Thank you for following along. Best regards, and see you soon. This analysis was prepared by Mohammed Qais Abdulghani, financial market expert, based on current data and market trends. Please note that all strategies and analyses are subject to market changes, and it is advisable to follow the latest economic developments for well-informed decisions.
TVC:DXY
by MohammedQais
Market News Report - 08 September 2024Our fundamental outlooks for the major currencies remain the same from the past week. However, those that we considered bearish, like the British pound and the US dollar have shown strength recently. Nonetheless, let's see what to expect from all the major forex markets performance-wise in our latest news report. Market Overview Below is a brief technical and fundamental analysis breakdown for all major currencies. US dollar (USD) Short-term outlook: bearish. STIR (short-term interest rate) markets expect at least four full rate cuts before the end of this year. They also suggest a 36% chance of a 50 bps (basis points) cut at the meeting next week on the 18th. Another bearish focus for the US is the slowing labour market, according to the latest jobs revisions data from the Bureau of Labor Statistics. Diarise the upcoming inflation rate and initial jobless claims for the dollar this week. The DXY chart aligns perfectly with the fundamentals. It recently reached a major support area (100.617) on the daily chart and is still near this level. Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time. Long-term outlook: bearish. Markets anticipate several full rate cuts before the year ends. Also, data on weakened jobs is another bearish driver for the dollar. Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment. Euro (EUR) Short-term outlook: weak bearish. The primary bearish driver is the interest rate, with STIR markets anticipating a very high chance of a 25 bps rate cut at the meeting this Thursday. Furthermore, the Governing Council affirmed that rates need to remain "sufficiently restrictive for as long as necessary." However, the European Central Bank (ECB) has also stressed that it is data-dependent. This means that certain economic data, like employment data, may boost the euro. Meanwhile, the chart tells a slightly different story. After breaking the last major resistance (although dropping slightly now), the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774. Long-term outlook: weak bearish. The ECB hasn't committed to a specific future path with the interest rate. They are data-dependent, meaning data around inflation, growth, and wage improvement can lift the euro. However, their meeting in July was slightly more dovish than hawkish. British pound (GBP) Short-term outlook: bearish. The Bank of England (BoE) cut the interest rate by 25 basis points at the beginning of last month. However, the BoE remains data-dependent and has no set future path. STIR markets are currently pricing two additional cuts for the remainder of 2024. The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP. Watch out for the new unemployment and inflation rates on Tuesday and Wednesday, respectively. As with the euro, the British pound has been saved by dollar weakness on the charts. It has just broken the major resistance at 1.31424. So, the next area of interest is near by at 1.32666. On the other hand, the nearest key support is far below at 1.26156. Long-term outlook: weak bearish. While the interest rate is the chief bearish driver for the pound, the BoE has yet to signal a future path in this regard. STIR markets predict a rate hold next month (74% chance vs. 62% chance last week). Furthermore, two-way risks remain based on upcoming economic data, particularly with inflation. Also, GBP/USD has been pushing higher of late due to USD weakness on Fed easing hopes. Japanese yen (JPY) Short-term outlook: bullish. The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision in July to hike the interest rate (15 bps hike vs the 10 bps expected). STIR markets expect a hold (99% probability, up from 95% last week) at the next meeting but a hike at the start of next year. So, the bullish bias is intact, more so with the rate-cutting mood of other major centrals like the Fed, ECB, and BoE. The USD/JPY market perfectly reflects the fundamental outlook of the dollar and yen. This pair looks to now target the major support area at 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about. Long-term outlook: weak bullish. In addition to the recent rate hike, other bullish catalysts for the yen include lower US Treasury yields. Also, the Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside. Australian dollar (AUD) Short-term outlook: weak bullish. The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation. Moreover, Governor Bullock expressed last week that the central bank must see 'results' on the latter before lowering rates. Like many currencies, the Aussie remains data-sensitive, whether we look at economic growth, labour, or inflation going forward. The recent rise in China's share prices, which correlates with the Aussie, has been positive for the currency. Still, there is doubt over the longevity of this run. The Aussie market has risen noticeably of late, having reached a recent resistance level (0.67986). While dipping last week, the next target at 0.68711 isn't so far away. Meanwhile, the major support level is down at 0.63484. Long-term outlook: weak bullish. The RBA remains hawkish as per the recent meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive. However, the Australian dollar is pro-cyclical. So, it is exposed to slow economic growth in other countries. New Zealand dollar (NZD) Short-term outlook: weak bearish. New Zealand's central bank recently dropped the Kiwi's interest rate from 5.50% to 5.25%. Lower-revised cash rate projections also hint at the potential for further cuts in the near future. The Kiwi has recently breached a major resistance at 0.62220 - the next target is 0.63696. Conversely, the major support is at 0.58498, an area that it is unlikely to test soon. Long-term outlook: weak bearish. The central bank's dovish stance in its latest meeting (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.' However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for the NZD. As with its counterpart, traders should be data-dependent. Canadian dollar (CAD) Short-term outlook: bearish. The Canadian dollar is fresh off an interest rate cut (from 4.50% to 4.25%), confirming the overwhelming probability suggested by STIR markets. Furthermore, the latter indicates a 91% chance of another cut next month and two full rate cuts before the end of 2024. Among other factors, Canada's ongoing mortgage stress has forced its central bank to be dovish. Despite the above, the CAD continues to strengthen mildly due to USD weakness (although the dollar gained the upper hand this past week). It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468. Long-term outlook: weak bearish. Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. In last week's meeting, they also wished for economic growth. The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it. However, expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes. Swiss franc (CHF) Short-term outlook: bearish. STIR markets forecast a rate cut later this month and December this year. Also, despite the positive trend of falling inflation, the Swiss National Bank is pressured to weaken the Swiss franc to make exports easier. However, the CHF can strengthen during geopolitical tensions like the Middle East crisis. USD/CHF has trended down nicely for several weeks, now looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244. Long-term outlook: weak bearish. The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way. Conclusion The fundamental outlooks of each currency have remained mostly unchanged from the previous report. Thursday will arguably be the most anticipated day due to the ECB's interest rate decision. However, keep an eye on the high-impact news events for the dollar and the British pound. As always, hope for the best and prepare for the worst, but this report should help you determine your bias toward each currency in the short and long term.
TVC:DXY
by CityTradersImperium_CTI
DXY Will Go Lower! Short! Here is our detailed technical review for DXY. Time Frame: 9h Current Trend: Bearish Sentiment: Overbought (based on 7-period RSI) Forecast: Bearish The price is testing a key resistance 101.521. Taking into consideration the current market trend & overbought RSI, chances will be high to see a bearish movement to the downside at least to 100.405 level. P.S Overbought describes a period of time where there has been a significant and consistent upward move in price over a period of time without much pullback. Like and subscribe and comment my ideas if you enjoy them!
TVC:DXYShort
by SignalProvider
6
Weekly Analysis: Key Economic Factors to Watch September 9 - 13 Welcome to a new week. This week, aside from the United States, which remains a key focus for global investors, we should also watch other major economies—namely Germany, China, the United Kingdom, and the broader Eurozone region. These economies are interconnected, and shifts in their performance can have far-reaching implications for global markets. In this article, we will outline the crucial economic factors to watch this week and explain why they matter for your investment strategy. Key Points - Shift from Labor Market to US Inflation Concerns: Rising wage pressures and inflation risks are now at the forefront. - China's Economic Impact on the Eurozone: Trade imbalances and liquidity in China could dampen European growth. - European Central Bank (ECB) Interest Rate Decision: Possible rate cuts to support the struggling Eurozone economy, particularly in manufacturing. - The UK Economy: Persistent challenges due to political and economic uncertainty. Economic Data to Watch 1. US CPI/PPI: Inflation data to gauge future Federal Reserve policy. 2. Prelim UoM Inflation Expectations: Market expectations for inflation. 3. Prelim UoM Consumer Sentiment: Consumer confidence, which drives spending. 4. US 30-year Bond Auction: An indicator of market sentiment on long-term US economic stability. 5. China Trade Balance: Indicator of China’s international trade and demand for European goods. 6. China M2 Money Supply y/y: Measurement of cash flow and liquidity within China. 7. German Final CPI m/m: Inflation data to assess price stability. 8. German WPI m/m: Wholesale price index, relevant for manufacturing. 9. French Final CPI m/m: Inflation in France, impacting the Eurozone outlook. 10. ECB Main Refinancing Rate: Key interest rate decision by the ECB. 11. UK Claimant Count Change: A look at the UK labor market. 12. UK GDP m/m: A measure of monthly GDP growth in the UK. --- Shifting Focus from Labor Market Conditions to U.S. Inflation Concerns Last week, the US labor market took center stage with the non-farm payrolls report, which showed a modest increase of 142,000 jobs, below analysts' expectations but a significant rise from the previous month’s 89,000. The unemployment rate dropped by 0.1% to 4.2%, aligning with market expectations. However, the most concerning data point was the jump in average hourly earnings, which rose by 0.4% from 0.2% in the previous month. According to wage-push inflation theory, increases in wages can lead to higher inflation as businesses pass these costs on to consumers (Fisher, 1930). This has dampened expectations of a Federal Reserve interest rate cut, as inflation risks have become more prominent. The link between wage growth and inflation is critical here because persistent inflation could force the Fed to maintain a more hawkish stance at its upcoming FOMC meeting (September 17-18, 2024). Hypothesis: Stronger-than-expected wage growth will push inflationary pressures higher, leading the Federal Reserve to delay any potential rate cuts. Based on the Phillips Curve, which explains the inverse relationship between unemployment and inflation (Blanchard & Johnson, 2017), the Fed may be more concerned about keeping inflation under control rather than stimulating the labor market further. As a result, last week saw a sell-off in risk assets such as the NASDAQ and S&P 500, as inflation fears led to concerns about tighter monetary policy. Investors should watch the US CPI data set to be released on September 11 for further insights into inflationary pressures. In addition to the CPI data, we recommend monitoring the Prelim UoM Inflation Expectations and Consumer Sentiment data on September 13. These indicators provide forward-looking views of inflation and consumer financial security, which are critical to assessing potential shifts in economic growth and inflation dynamics. Moreover, the US 30-year bond auction will give us a sense of investor sentiment regarding long-term inflation risks and the broader US economic outlook. --- China’s Economic Impact on the Eurozone China, as a major trading partner for Europe, plays a pivotal role in shaping the Eurozone’s economic health. A slowdown in China’s trade activity could hurt European exports, particularly in sectors like automobiles and industrial machinery, which rely heavily on Chinese demand (Krugman & Obstfeld, 2009). For instance, Germany, Europe’s largest economy, is highly dependent on exports to China, and any disruption here could spell trouble for the Eurozone. Hypothesis: A declining trade balance in China will reduce European export demand, particularly in the automotive and industrial sectors. Weakening Chinese trade figures could lead to a slowdown in German manufacturing, further exacerbating the already fragile Eurozone economy. This week, the China Trade Balance data and M2 Money Supply y/y will be crucial. The trade balance will give us insight into China’s external demand, while M2 will indicate liquidity conditions within China. If liquidity is tightening, this could also signal weaker consumer demand within China, compounding the global trade slowdown. --- European Central Bank (ECB) Interest Rate Decisions On September 12, the European Central Bank (ECB) is expected to announce its policy interest rate. With inflation remaining below target and key sectors like manufacturing still struggling, a rate cut is on the table. Germany’s industrial sector, in particular, has been grappling with energy cost shocks, exacerbated by the loss of cheap energy from the Nord Stream pipeline bombing. Hypothesis: The ECB may cut rates to support economic growth in the Eurozone, especially in countries like Germany where manufacturing has been hit hard by energy shortages. This is consistent with monetary policy theory, where central banks cut rates to stimulate investment and spending when growth is weak (Friedman & Schwartz, 1963). However, investors should be mindful that a rate cut could weaken the euro in the short term, though it could stimulate economic activity over the long term. Watch German Final CPI m/m and German WPI m/m data this week for further insights into the health of Germany’s manufacturing sector and how inflation is evolving. These indicators will help assess whether the ECB’s rate cut could provide the necessary stimulus. --- The British Economy Despite the UK’s political and economic challenges, the pound sterling remains one of the world’s major currencies. Changes in the UK economy can still influence global currency markets and trade. This week, labor market data (UK Claimant Count Change) and GDP growth will be key indicators to watch. Labor market weakness could signal broader economic stagnation, which, combined with political instability, could put downward pressure on the pound. Hypothesis: A weaker-than-expected labor market report could push the UK closer to stagflation, pressuring the Bank of England to keep rates lower for longer. This would weaken the pound as investors seek higher yields elsewhere (Campbell & Shiller, 1998). Additionally, UK GDP m/m will offer insights into whether the economy is growing despite these challenges. If growth is stagnant, it will reinforce the view that the UK’s economic recovery is faltering, further complicating policy decisions. --- Conclusion This week, inflation concerns dominate the global economic outlook. The US is grappling with rising wages, China’s trade balance is critical for Europe’s prospects, and the ECB’s decision could set the tone for the Eurozone’s economic recovery. In the UK, weak labor market data and sluggish growth could spell trouble for the pound. As always, investors should remain cautious and stay updated on economic data releases to adjust their portfolios accordingly.
TVC:DXY
by ThaiAnalyst