<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/and-there-it-is-eurusd-falls-back-to-parity-20220822/“>And there it is.. EUR/USD falls back to parity</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/icymi-nord-stream-pipeline-to-be-halted-for-three-days-for-maintenance-20220822/“>ICYMI: Nord Stream pipeline to be halted for three days for maintenance</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-staggering-surge-in-european-energy-prices-continues-20220822/“>The staggering surge in European energy prices continues</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/risk-off-flows-starting-to-permeate-in-european-morning-trade-20220822/“>Risk-off flows starting to permeate in European morning trade</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinese-yuan-stumbles-further-to-start-the-new-week-20220822/“>Chinese yuan stumbles further to start the new week</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/rbnz-governor-orr-confirmed-to-be-in-attendance-at-jackson-hole-20220822/“>RBNZ governor Orr confirmed to be in attendance at Jackson Hole</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/opec-reportedly-miss-output-target-by-29-mil-bpd-in-july-20220822/“>OPEC+ reportedly miss output target by 2.9 mil bpd in July</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/iran-says-nothing-is-agreed-until-everything-is-agreed-on-nuclear-deal-20220822/“>Iran says „nothing is agreed until everything is agreed“ on nuclear deal</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/bundesbank-says-german-recession-is-looking-increasingly-likely-20220822/“>Bundesbank says German recession is looking increasingly likely</a></li></ul><p style=““ class=“text-align-justify“>Markets:</p><ul><li>AUD leads, EUR lags on the day</li><li>European equities lower; S&P 500 futures down 1.1%</li><li>US 10-year yields down 1.5 bps to 2.974%</li><li>Gold down 0.9% to $1,731.23</li><li>WTI crude up 0.5% to $91.22</li><li>Bitcoin flat at $21,201</li></ul><p style=““ class=“text-align-justify“>The dollar continues to keep steady in the new week while the euro stumbled to parity against the greenback again as Europe continues to deal with a host of concerns, the latest being Russia to halt natural gas supplies via the Nord Stream pipeline for three days at the end of August.</p><p style=““ class=“text-align-justify“>Energy prices in the region were sent soaring and the euro slumped with EUR/USD falling from 1.0030 to 0.9990, before hovering around parity for the time being. GBP/USD also eased lower in a fall from 1.1820 to 1.1785 before sticking around 1.1800 as sellers flirt with a steeper drop to start the new week.</p><p style=““ class=“text-align-justify“>Stocks continue to be pressured lower with European indices mostly falling by over 1% alongside US futures, which saw early declines deepen with S&P 500 futures having initially been down by 0.3% before falling now by over 1.1% on the day.</p><p style=““ class=“text-align-justify“>The sense of risk aversion kept bonds slightly more bid but the likes of the aussie and kiwi are defying the risk flows so far today. AUD/USD is seen up 0.5% to 0.6910 as buyers keep a defense of the 5 August low at 0.6869 since the end of last week.</p><p style=““ class=“text-align-justify“>Elsewhere, oil continues to see volatile trading as an initial fall to $88.90 is more than recovered as price traded back up to $91.03 before sticking just below that currently. OPEC+ continues to significantly underdeliver in terms of output target in July, but that is already rather known over the past few months.</p><p style=““ class=“text-align-justify“>Jackson Hole is the key focus in trading this week but so far, the risk mood and dollar flows are still two key factors playing their part in influencing trading sentiment to kick start proceedings.</p>

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

<p style=““ class=“text-align-justify“>It is being reported that sanctions on some members and low investment by others hindered the bloc from producing as it should. For some context, the compliance with production targets stood at 546% in July – that compares with 320% in June.</p><p style=““ class=“text-align-justify“>In other words, OPEC+ is producing nowhere near their output targets (which have been increased over the course of the year) and even with Saudi Arabia and UAE believed to be the only ones with spare capacity, they aren’t pressing the pumps either. As a reminder, the bloc <a target=“_blank“ href=“https://www.forexlive.com/news/opec-said-to-agree-on-a-100k-output-increase-for-september-20220803/“ target=“_blank“>agreed</a> to increase its output target by 100k bpd for September in what was a rather trivial gesture.</p>

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

<ul><li>A recession is increasingly likely</li><li>Inflation will continue to accelerate and could peak above 10% this autumn</li><li>Upside risk for inflation is high</li><li style=““ class=“text-align-justify“>High degree of uncertainty over gas supplies and sharp price increases likely to weigh heavily on households, companies</li></ul><p style=““ class=“text-align-justify“>That’s a fair assessment and one that isn’t quite clouded by political bias for the most part. It almost seems inevitable now especially when you look at how energy prices have gone parabolic in Europe. The set of PMI data releases tomorrow could be what it takes to tip the euro over the edge as it holds on the brink of parity at the moment.</p>

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

<p style=““ class=“text-align-justify“>Gone are the days that politicians testing positive for COVID-19 would have done something to move markets. Still, it’s best to stay abreast of the latest developments in case of anything. We do wish Kishida a speedy recovery and he says that he plans to be back in office by 31 August.</p>

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

<p style=““ class=“text-align-justify“>It is just beyond petrifying to look at the charts and to see how historical prices over the past decade compare to the latest surge in European energy prices. Dutch TTF futures have jumped up by over 12% to €288/MWh today after Russia has said that they will close the Nord Stream pipeline for maintenance for three days at the end of August. Here’s a look at the chart:</p><p style=““ class=“text-align-justify“>And when you look over to French and German year-ahead baseload power prices, it is even more daunting as prices hit €775/MWh and €624/MWh (a new record) respectively to start the week (h/t @ YanQinyq):</p><p style=““ class=“text-align-justify“>This is Europe heading towards devastation and I can’t imagine how this is going to translate to consumers as we look towards the winter months.</p>

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

<p>Over 1,900 workers at Britain’s biggest container port are due to begin eight days of strikes today, Sunday, 21 August 2022. </p><ul><li>This will seriously disrupt trade and supply chains. </li><li>“The port regrets the impact this action will have on UK supply chains,“ a Hutchison Ports spokesperson said.The port said it would have a contingency plan in place</li></ul><p>Infio via Reuters. </p><p>-</p><p>This is not a surprise strike action, so while there will likely be GBP impact (its not a positive) it will be contained. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<p>In this weekend video, I review and preview the fundamental influences in the market and then look at the technicals in the market that are defining the bias, and risk with the focus on the major currencies vs the USD.</p><p>If you like this video, please give a thumbs up on YouTube. If you don’t like it give a thumbs down.</p><p>Your comments are also appreciated</p><p>Have a good weekend and new trading week. </p>

This article was written by Greg Michalowski at www.forexlive.com.

<p>The week is ending on a soft note. All 3 major indices are closing lower on the day with the NASDAQ down over 2%. The Russell 2000 index of small cap stocks fell by -2.17%.</p><p>The declines in the Dow industrial average today tipped its fortunes for the week into negative territory but only barely. </p><p>For the week, the Dow, S&P and NASDAQ close lower for the 1st time in 5 trading weeks. The declines for the week showed:</p><ul><li>Dow -0.1%</li><li>S&P -1.2%</li><li>NASDAQ -2.62%</li></ul><p>For the trading day:</p><ul><li>Dow industrial average fell -292.3 points or -0.86% at 33706.73</li><li>S&P index fell -55.24 points or -1.29% at 4228.49</li><li>NASDAQ index fell -260.12 points or -2.01% at 12705.23</li><li>Russell 2000 fell 43.38 points or -2.17% at 1957.34.</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.

<ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/all-3-major-indices-close-lower-for-the-week-1st-declines-in-5-trading-weeks-20220819/“>All 3 major indices close lower for the week. 1st declines in 5 trading weeks</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/key-events-and-releases-for-the-week-starting-august-22-20220819/“>Key events and releases for the week starting August 22</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/crude-oil-settles-at-9044-033-higher-on-the-day-20220819/“>Crude oil settles at $90.44. $0.33 higher on the day</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-oil-rigs-unchanged-at-601-20220819/“>Baker Hughes oil rigs unchanged at 601</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/us-10-year-yields-off-highs-but-technical-bias-shifted-to-the-upside-20220819/“>US 10 year yields off highs but technical bias shifts to the upside</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/lower-close-for-europes-major-indices-with-the-exception-of-the-uk-ftse-100-20220819/“>Lower close for Europe’s major indices with the exception of the UK FTSE 100</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/frances-macron-there-is-risk-of-russia-decoupling-zaporizhzhia-nuclear-plant-20220819/“>France’s Macron: There is risk of Russia decoupling Zaporizhzhia nuclear plant</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/more-barkin-still-a-lot-of-time-until-decision-needs-to-be-made-on-size-of-september-hike-20220819/“>More Barkin: Still a lot of time until decision needs to be made on size of September hike</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/more-from-barkin-reduction-of-balance-sheet-should-add-to-tighter-financial-conditions-20220819/“>More from Barkin:Reduction of balance sheet should add to tighter financial conditions</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/august-19-2022-the-morning-technical-report-looks-at-the-eurusd-usdjpy-and-gbpusd-20220819/“>August 19, 2022: The morning technical report looks at the EURUSD, USDJPY and GBPUSD</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-barkin-fed-will-do-what-it-takes-to-return-inflation-to-target-20220819/“>Fed’s Barkin: Fed will do what it takes to return inflation to target</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-retail-sales-for-june-11-vs-03-expected-20220819/“>Canada retail sales for June 1.1% vs. 0.3 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/the-chf-is-the-strongest-and-the-nzd-is-the-weakest-as-the-na-session-begins-20220819/“>The CHF is the strongest and the NZD is the weakest as the NA session begins</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/Education/bitcoin-failed-to-hold-testing-key-levels-again-20220819/“>Bitcoin failed to hold, testing key levels again</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/forexlive-european-fx-news-wrap-dollar-runs-hot-into-the-final-stretch-of-the-week-20220819/“>ForexLive European FX news wrap: Dollar runs hot into the final stretch of the week</a></li></ul><p>The US dollar was the strongest currency this week and the strongest currency today. The NZD was the weakest of the majors today. </p><p> The greenback this week, rose against all the major currencies helped by more hawkish Federal Reserve comments, and global concerns about growth in China, the euro zone, and UK due to higher inflation, Covid headwinds, higher US yields and the Ukraine war.</p><p>EURUSD fell -217 pips -2.12% on the week (USD higher by 2.12%). The high price was reached on Monday, the low price was today. Yesterday, the pair fell below the lower extreme that confined the pair in July and into early August down to 1.0096. The move tilted the bias even more to the downside and the selling continued into the New York afternoon session where the low price reached 1.0031, just 31 pips from the parity level. Recall in July the low reached 0.9951 before starting the run to the August high at 1.03678.</p><p>The GBPUSD also traded at it’s week’s high on Monday (at 1.2147). For the week, the USD rose by 2.56% vs the GBP. After a rebound higher on Tuesday and into Wednesday felll just short of the Monday high (the high reached 1.2142), the buyers turned to sellers and the pair is ending with a 3 day down streak. The low price today reached 1.1791. The low price for the year and going back to March 2020 reached 1.17594. Key support level going into next week’s trading.</p><p>The USDJPY after waffling up and down on Monday and ending marginally lower on the day (the low reached 132.54), the pair moved up on each of the subsequent 4 trading days. For the week, the greenback rose 2.52% vs the JPY. The high price today extended to 137.22 which took the pair just above a swing area between 137.00 and 137.152. The price backed off into the close, and is closing just below that area at 136.86. Next week, that area will be a key barometer for trading to start the week. </p><p>The USDCHF closed higher on each of its 5 trading days this week (higher dollar). The dollar rose 1.85% vs the CHF. </p><p>The AUDUSD (dollar higher by 3.45%) and NZDUSD closed lower each day (higher USD – by 4.33%). The RBNZ rate hike of 50 basis points did little to support the NZD against the greenback.. </p><p>A snapshot of other markets as the week comes to a close shows:</p><ul><li>Spot gold is down $12 or -0.69% at $1746.89.</li><li>Spot silver is down $-0.46 or -2.39% at $19.04.</li><li>Crude oil is trading near unchanged at $90.02 after an up and down session</li><li>Bitcoin is trading at sharply lower on the day at $21,320. Last Friday, the price closed at $24,407. So for the week the price is down $3087</li></ul><p>In the US stock market this week, the major indices close lower for the 1st time in 5 trading weeks:</p><ul><li>Dow industrial average fell -0.1%</li><li>S&P index fell -1.2%</li><li>NASDAQ index fell -2.62%</li><li>Russell 2000 fell -2.92%</li></ul><p>In the US debt market:</p><ul><li>2 year yield is trading at 3.24%. Last Friday it settled at 3.253%</li><li>5 year is at 3.098% after closing last week at 2.960%</li><li>10 year is at 2.972% after closing last week at 2.837%</li><li>30 year is at 3.213% after closing last week at 3.115%</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.

<p>What key events and releases will be driving the markets next week?</p><p>Tuesday , August 23</p><ul><li>various flash PMI estimates for Europe and UK</li><li>US/services and manufacturing PMI indices, 9:45 AM ET. Manufacturing PMI 52.0 vs. 52.2 last month. Services PMI 50.0 vs. 47.3 last month</li><li>US new home sales, 10 AM ET. Estimate 574K vs. 590K last</li><li>Richmond Fed manufacturing index for August. 10 AM ET. Estimate -6 vs. 0 last month</li></ul><p>Wednesday, August 24</p><ul><li>US durable goods orders. 8:30 AM ET. Estimate 0.9% vs. 2.0% last month</li><li>US pending home sales. 10 AM ET. Estimate -2.1% vs. -8.6% last month</li></ul><p>Thursday, August 25</p><ul><li>New Zealand retail sales Q/Q. 6:45 PM ET (Wednesday). Estimate 1.7% vs. -0.8% last quarter</li><li>German Ifo business climate. 4 AM ET. Estimate 86.7 vs. 88.6 last month</li><li>US preliminary GDP for 2Q. 8:30 AM ET. -0.8% vs. -0.9%.</li><li>US unemployment claims. 8:30 AM ET. Estimate 250K unchanged from last week</li><li>Jackson Hole symposium. All day</li></ul><p>Friday, August 26</p><ul><li>US core PCE price index. 8:30 AM ET. Estimate 0.3% vs. 0.6% last month.</li><li>US personal income/consumption. 8:30 AM ET. Personal income estimate 0.6% vs. 0.6% last. Personal consumption 0.5% vs. 1.1% last</li><li>US University of Michigan consumer sentiment. 10 AM ET. Estimate 55.3 vs. 55.1 preliminary</li><li>Fed Chair Powell speaks at the Jackson Hole symposium. 10 AM ET. </li></ul>

This article was written by Greg Michalowski at www.forexlive.com.