This is a similar view shared by Citi and Barclays as well quite a number of other analysts. Beijing already lacked in response to cutting the lending policy rates today but with mounting pressure on the economy and especially the property sector, further liquidity injections via RRR cuts would be much needed.

This article was written by Justin Low at www.forexlive.com.

The
Nasdaq Composite selloff has been remarkable with key levels being breached
with no hesitation as the sentiment turned negative. The reason for the selloff
is unclear as the US data has been supporting the soft-landing narrative but
the sharp slowdown in the Chinese economy is expected to infect the other
advanced economies and drag the global economy down. Moreover, the quick rise
in long term Treasury yields is also tightening financial conditions with real
yields approaching the levels last seen during the Global Financial Crisis of
2008. It’s a tough environment for sure, so the technicals will be very helpful
in managing the risk.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite broke below the trendline and
extended the selloff into the key 13174 support. This is
where we can expect the buyers stepping in more strongly with a defined risk
below the level to target another rally to the high. The sellers, on the other
hand, will want to see the price breaking below the support to extend the
selloff into the 12274 level.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price is
indeed bouncing from the support at the moment and if see a bigger pullback,
the sellers are likely to step in near the broken trendline now turned
resistance, the 38.2% Fibonacci retracement level
and the red 21 moving average.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a strong minor trendline where the sellers have been leaning on to
position for more downside. We can expect them to do so again and we can see
that we have also the confluence with
the Fibonacci retracement levels and the previously mentioned moving average.
The buyers will need the price to break above the trendline to turn the bias
more bullish and get the conviction to target the high again.

Upcoming
Events

This week is
pretty empty on the data front with just the US PMIs scheduled for Wednesday
and the US Jobless Claims for Thursday. We seem to be at a point where good
news is bad news because of the Fed’s stance and bad news is bad news because
the slowdown in global growth will lead to a recession in many countries
included the US. Remember also that it’s the Jackson Hole Symposium week, so we
will get comments from Fed officials again and especially Fed Chair Powell who
is scheduled to speak on Friday.

This article was written by FL Contributors at www.forexlive.com.

There’s not much in terms of headlines driving the move but higher bond yields are certainly playing a part I would say. 10-year Treasury yields are still up 5 bps to 4.301% and that is underpinning yen pairs so far on the session. The near-term chart for USD/JPY is also seeing buyers seize back control now:

The pair bounced around its key hourly moving averages at the end of last week, with buyers holding a defense at the 145.00 mark as well. They are now regaining some momentum on a push back above the 100-hour moving average (red line), switching the near-term bias to being more bullish again.

But as is the case on Friday, any further break higher in the pair would also need approval from the bond market. For now, yields are threatening a break but we’re not there yet.

This article was written by Justin Low at www.forexlive.com.

The rise
in US real yields coupled with a strong US Dollar is weighing a lot on Gold.
The precious metal can’t even find support from the economic data as we keep
getting strong releases that raise the risk of more rate hikes from the Fed.
All else being equal, Gold is likely to remain in a downtrend and new lows
should be expected.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Gold broke
below the June low at 1893 and this has opened the door for a fall into the
1805 swing level. The trend remains bearish as the price keeps printing lower
lows and lower highs and the moving averages are
crossed to the downside. We can expect the sellers to pile in at every
pullback.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that we keep diverging with the
MACD which is
a sign of weakening momentum often followed by pullbacks or reversals. In this
case, we keep getting pullbacks that are almost perfectly rejected by the red
21 moving average as the sellers keep piling in. The buyers will need the price
to break above the trendline to have
more conviction for a bigger pullback.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see more
closely the current price action and how Gold trades perfectly within a falling
channel. A break below the recent low at 1885 should see the price falling
quickly into the lower bound of the channel where we might see another bounce
into the upper bound of the channel. As long as we stay within this channel the
sellers will remain in control.

Upcoming Events

This week is
pretty bare on the data front as we only have the US PMIs on Wednesday and the
US Jobless Claims on Thursday. The rise in Treasury yields and the US Dollar is
weighing a lot on Gold, so we will likely need to get bad data to see a bigger
pullback as good data should keep the precious metal on the backfoot. This is
also the Jackson Hole Symposium week so we will hear again from many Fed
officials with the Fed Chair Powell set to speak on Friday.

This article was written by FL Contributors at www.forexlive.com.

This continues from last week’s developments here:

• China reportedly told state banks to escalate yuan intervention this week

As concerns surrounding China’s economic prospects grow deeper, so is the pressure on the yuan currency. That continued today as well after the PBOC delivered a less-than-convincing rate cut. And as mentioned at the time last week, these stop-gap measures won’t really do. Where is the fiscal help, more importantly? Beijing has to dig deeper and fast.

This article was written by Justin Low at www.forexlive.com.