Forexlive European FX news wrap: The US Dollar adds to yesterday’s gains 0 (0)

Markets:

  • USD leads, NZD lags on the day
  • European equities higher;
    S&P 500 futures down 0.07%
  • US 10-year yields down 4 bps to
    3.741%
  • Gold
    up 0.52% to $2,647
  • WTI
    crude down 0.70% to $67.71
  • Bitcoin
    up 0.69% to $63,747

We had a
relatively quiet session in terms of fresh data releases. The main highlight was the
Eurozone Flash CPI report, and the data came out in line with estimates. The
market has already fully priced in a back-to-back 25 bps cut in October and that’s
also something ECB members recently have been touting to.

In the
markets, the US Dollar added to the gains following Fed Chair Powell’s comments
yesterday with EUR/USD being the most notable mover. Another
notable mover this morning has been crude oil as it sold off to a new weekly
low before erasing almost the entire drop. There was no catalyst for the
move though.

The focus
will now switch to the US data in the American session with the US ISM Manufacturing
PMI being the main highlight. We will also get the Canadian PMI and the US Job
Openings data.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

USDCHF Technical Analysis – Can’t get out of the range 0 (0)

Fundamental
Overview

The USD got a bit of a
boost yesterday as Fed Chair Powell reiterated that 50 bps of easing by year end
remains the base case. The market’s probability for the Fed to cut by 50 bps in
November fell from 51% to 40%.

The focus remains on the
economic data. If we start to see an improvement, then Treasury yields will likely
rise and drive USDCHF higher. Conversely, if the data weakens significantly,
the market will start to worry about a recession and take USDCHF lower.

For the CHF, the SNB last week cut rates by 25 bps bringing the policy rate
to 1.00%. The central bank mentioned that it’s prepared to intervene in
currency markets as necessary and the new inflation forecasts were revised
significantly lower signalling more rate cuts to follow.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF remains stuck in the range between the 0.8555 resistance and the 0.8400 support. The market
participants will likely keep on playing the range by buying at support and
selling at resistance until we get a breakout.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action. There’s not much to add here as
we will need to wait for a major catalyst or a breakout to see a more sustained
trend. The US ISM Manufacturing PMI and the US NFP this week will likely be
key.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish
momentum on this timeframe. The buyers will likely keep on leaning on the trendline
to position for further upside, while the sellers will want to see the price
breaking lower to pile in for a drop back into the support. The red lines
define the average daily range for today.

Upcoming
Catalysts

Today we get the US ISM Manufacturing PMI and the US Job Openings data.
Tomorrow, we have the US ADP report. On Thursday, we get the Swiss CPI, the US
Jobless Claims and the US ISM Services PMI. Finally, on Friday, we conclude the
week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

Euro falls to fresh lows on the day 0 (0)

The pressure is back on the euro now as traders are rebuffing expectations for a rate cut by the ECB in October. That comes after Rehn was out saying that the scale is tipping towards that now, at least in his view. It’s the first sign of any ECB policymaker confirming the recent shift in market pricing.

EUR/USD is down and while that also is in part due to the dollar keeping steadier, the euro is not finding much cheer elsewhere. EUR/JPY is down 0.3% to 159.40 levels and EUR/CHF down 0.2% to 0.9393. Both are also trading to fresh session lows currently.

In the case of EUR/USD, there are large option expiries at 1.1100 that could anchor price action a little.

But from a technical perspective, the downside momentum is starting to build. The minor support around 1.1121-25 has given way and now the key 4-hourly moving averages are starting to crack as well as seen above.

For now, the euro side of the equation has cast its vote. It’s now down to the dollar side of the equation to follow that up later.

When Wall Street enters, we’ll have the US ISM manufacturing PMI and JOLTS job openings to work through.

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

Go to Forexlive