USD/JPY closes in on the highs for the year, building from the Friday rebound 0 (0)

After the US jobs report on Friday, it looked like USD/JPY was set for a break lower in a drop below the 145.00 mark. However, a major turnaround in the bond market helped to drive yields higher and was a saviour for USD/JPY buyers. The pair closed higher at the end of last week above 146.00 and is now in the hunt for a third straight day of gains.

This comes as Treasury yields are once again pushing higher, with the bond market returning to play after the long weekend. 10-year yields are up 5.1 bps to 4.224% currently and that is underpinning USD/JPY especially as the dollar itself is strongly bid across the board.

The pair is now closing in on the highs for the year with plenty of breathing room still from 145.00 to 150.00 at least from a technical perspective.

What is perhaps also helping buyers feel more confident is the lack of pushback from Japanese officials as of late. They’re not really attempting to jawbone the yen, so that does free up some room to maneuver as bond yields continue to track higher.

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

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AUDUSD Technical Analysis – Watch this key support 0 (0)

US:

  • The Fed hiked by 25 bps as
    expected and kept everything unchanged at the last meeting.
  • Fed Chair Powell reaffirmed their data dependency
    and kept all the options on the table.
  • Inflation measures
    since then showed further disinflation.
  • The labour market
    displayed signs of softening although it remains fairly tight.
  • Overall, the economic data started to surprise to
    the downside lately.
  • The Fed members are leaning more towards a pause
    rather than another rate hike.
  • The market doesn’t expect the Fed to hike anymore.

Australia:

  • The
    RBA kept its cash rate unchanged as widely expected as they are
    seeing signs that the economy is indeed slowing and that will help to return
    inflation back to target.
  • The
    data is supporting the RBA’s stance as the Australian jobs, wages and inflation data all missed expectations
    lately.
  • The
    Australian PMIs also missed expectations remaining
    in contraction.
  • The
    market expects the RBA to hold rates steady at the next meeting as well.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that today the
AUDUSD pair sold off as the Chinese Services PMI missed expectations by a big
margin. The RBA also seems to be done with their tightening cycle, so there’s
not much support for the AUD on the fundamentals side, while there’s support
for the USD as a safe haven currency. The pair is now at the previous lows, and
we might see a bounce as we await the US data next. The bearish trend
nonetheless remains intact and the target for the sellers is the 0.6168 level.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we’ve been
ranging between the 0.6370 support and the
0.6500 resistance. The last week it seemed like the pair could at least correct
into the 0.6616 level as China stepped up support for the economy and the US
data missed expectations, but fears of a bigger global slowdown are likely
prevailing. A break below the support should see more sellers piling in and
extend the drop into the 0.6168 level.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is now overextended as depicted by the distance from the blue 8 moving average. In
such instances, we can see the price pulling back into the moving average or
consolidate before the next move. The buyers are likely to step in here with a
defined risk below the support to target the 0.66 handle. The sellers, on the
other hand, will want to see the price breaking lower to pile in even more and
target new lows.

Upcoming Events

This week is a bit empty on the data front with just the
US ISM Services PMI tomorrow and the US Jobless Claims on Thursday being the
main highlights. The market pricing is unlikely to change unless the data comes
in really hot in which case, we should see the US Dollar strengthening. On the
other hand, weaker readings might just bring forward rate cuts expectations and
weigh on the greenback in the short term.

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

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GBPUSD Technical Analysis – The sellers remain in control 0 (0)

US:

  • The Fed hiked by 25 bps as
    expected and kept everything unchanged at the last meeting.
  • Fed Chair Powell reaffirmed their data dependency
    and kept all the options on the table.
  • Inflation measures
    since then showed further disinflation.
  • The labour market
    displayed signs of softening although it remains fairly tight.
  • Overall, the economic data started to surprise to
    the downside lately.
  • The Fed members are leaning more towards a pause
    rather than another rate hike.
  • The market doesn’t expect the Fed to hike anymore.

UK:

  • The BoE hiked by 25 bps as expected at the last meeting.
  • The central bank seems to be leaning
    more on the less hawkish side as a key line in the statement was tweaked to
    indicate the propensity for a “higher for longer” stance rather than keeping
    with additional rate hikes.
  • Recent key economic data like the
    latest employment report showed even more wage growth
    despite the unemployment rate ticking higher again, and the UK CPI beat expectations pointing to stagflation.
  • The UK PMIs missed expectations across the board with the
    Services sector plunging into contraction.
  • The market expects the BoE to hike
    by 25 bps at the upcoming meeting.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD seems to
be bottoming out around the key support at
1.2593 level. The bias is still bearish though as the price has been printing
lower lows and lower highs and the moving averages are
crossed to the downside. Nevertheless, the buyers should be leaning on this
support with a defined risk below it to target the 1.3141 high. The sellers, on
other hand, are likely to lean again on the red 21 moving average to position
for a break below the support zone.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
recently got rejected from the downward trendline and a
previous swing level, but the buyers keep on defending the support zone. A
break above the trendline should open the door for more upside with the buyers
targeting the 1.28 resistance first and eventually a breakout.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that GBPUSD
broke below the support again and set a new low. The sellers are firmly in
control, but the price is now overextended as depicted by the distance from the
blue 8 moving average. In such instances, we can generally see a pullback into
the moving average or some consolidation before the next move. If the price
pulls back into the previous swing low around the 1.2580 level, we can expect
the sellers to pile in with a defined risk above the level to target a new
lower low. The buyers, on the other hand, will need the price to break above
the last swing high around the 1.2640 to start positioning for more upside.

Upcoming Events

This week is a bit empty on the data front with just the
US ISM Services PMI tomorrow and the US Jobless Claims on Thursday being the
main highlights. The market pricing is unlikely to change unless the data comes
in really hot in which case, we should see the US Dollar strengthening. On the
other hand, weaker readings might just bring forward rate cuts expectations and
weigh on the greenback in the short term.

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

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ForexLive European FX news wrap: Dollar slightly lower to start the new week 0 (0)

Headlines:

Markets:

  • GBP leads, JPY lags on the day
  • European equities higher; S&P 500 futures up 0.1%
  • Gold flat at $1,939.05
  • WTI crude flat at $85.58
  • Bitcoin up 0.5% to $25,875

It was a quiet one in Europe today as markets are also taking a bit of a light breather with it being a US and Canadian holiday.

The main story on Friday was a sudden rebound in Treasury yields and with the key market closed today, we’ll have to wait until tomorrow for further clues.

As such, major currencies could only rely on equities and the general risk mood for direction. A slight nudge higher in stocks in Europe is helping to see the dollar pinned a little lower but nothing too significant.

EUR/USD moved up from 1.0780 to 1.0800 while GBP/USD nudged up from 1.2610 to 1.2640 but both pairs are still holding below key technical levels that broke on Friday. The former is still below its 200-day moving average at 1.0817 while the latter is still below its 100-day moving average at 1.2650 currently.

There wasn’t much appetite elsewhere with USD/JPY keeping flattish after the turnaround on Friday, still above 146.00 today. With the Treasuries market out, there’s really not much to work with today.

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

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Nasdaq Composite Technical Analysis – Watch this key support 0 (0)

It’s
increasingly evident that the market is taking the weaker labour market data as
good news for inflation and the soft-landing scenario. In fact, last week we
got many big misses heading into the NFP report, but the US Jobless Claims
showed that the labour market is still fine and the NFP beat
expectations. We have also got a jump in the unemployment rate, but it was
accompanied by a rise in the participation rate and the average hourly earnings
surprised to the downside, which is another good news for inflation. The market
doesn’t expect the Fed to hike anymore, so the next stop might be the rate
cuts. Historically though, the market falls when the Fed starts to cut rates
because those generally come in response to a recession.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite bounced strongly on the key 13174 support and
rallied all the way back to test the broken trendline. The
price is now struggling a bit around the trendline, but the trend has turned
more bullish as the price has been printing higher highs and higher lows and
the moving averages have
crossed to the upside.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had a
strong resistance around the trendline where we had the confluence of the
previous support turned resistance and the
61.8% Fibonacci retracement level.
The breakout opened the door for higher prices and the buyers are likely to
pile in here with a defined risk below the support to target the 14659 high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
recently got a pullback into the resistance turned support where we can expect
the buyers to step in. If the price fails to bounce on the support zone and
continues lower, then we can expect the sellers to pile in to extend the fall
into the minor trendline around the 13800 level. If the price then breaks
through that trendline as well, it will open the door for a selloff into the
13174 support.

Upcoming
Events

Today is the US Labor Day
so the markets will be closed. This week is pretty empty on the data front with just
the US ISM Services PMI scheduled for Wednesday and the US Jobless Claims on
Thursday. The market has shown strong resilience to weaker data in the past
weeks and it’s hard to tell how much bad the data needs to be to bring it down.
One thing that held pretty well is the US Jobless Claims, so much worse than
expected readings might trigger a selloff.

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

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Central bank policy decisions in focus this week 0 (0)

The two big ones to watch this week are the RBA (tomorrow) and the BOC (Wednesday). Both major central banks are expected to keep their respective policy rates unchanged at 4.10% and 5.00% respectively.

For the RBA, this will be Philip Lowe’s last policy meeting as governor before handing over the post to Michele Bullock from September onwards. The latest developments and language guidance have steered markets accordingly to not expect a rate hike for tomorrow. The odds priced in are ~99% for no change.

Meanwhile, the BOC is facing a tough challenge as economic conditions are starting to take a noticeable hit recently. That is enough to convince traders not to expect any more rate hikes by the central bank, with odds of a no change decision this week at ~98% currently. According to the OIS market, we are at peak interest rates in Canada but traders have not gotten too aggressive to price in any rate cuts just yet with the earliest hint only coming in October next year.

There will be bigger fish to try later this month in relation to the central bank bonanza. So, the two this week aren’t really expected to be too impactful for markets and broader sentiment in general.

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

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VEXT is Live On ByBit Now 0 (0)

Veloce, the world’s
largest digital racing media network, has just launched (10am UTC) its
governance and utility token, VEXT, exclusively on ByBit, one of the global top
leading centralized exchanges.

Users
can head over to ByBit now so they don’t miss out on the exclusive rewards and
bonuses up for grabs! Users who don’t have a ByBit account can sign up now!

This is
a defining moment where users have the opportunity to be part of shaping the
VEXT future. Veloce appreciates the support of all its users; more exciting
news coming soon!

About
Veloce Media Group

Founded
in 2018, Veloce (www.velocemediagroup.com) is a multi-pillared gaming and
sports media group operating across some of the most innovative, fast-growing,
and future-focused sectors in the UK.

Headquartered
in London, the Veloce brand comprises the industry-leading gaming and racing
platform, Veloce Esports, and race-winning outfit, Veloce Racing, currently
competing in the renowned Extreme E championship.

As the world’s
largest digital racing media network, Veloce has so far attracted over 35
million subscribers and nearly one billion monthly views with a focus on
esports, gaming, purpose-driven motorsport, and Web3.

Veloce
is partnered with a number of high-profile teams from across the globe, running
multiple gaming and esports team operations, including Mercedes AMG, Ferrari,
McLaren, and Yas Heat. Well-established JV sub-brands, including Lando Norris’
gaming and lifestyle brand Quadrant, make up another key aspect of Veloce’s
vast global network.

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

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Hedge funds have ditched short bets against US regional banks – Goldman 0 (0)

The firm says that hedge funds have dropped short trades on US regional banks as of the end of August and instead have now turned bullish on the broader US financial sector in general. The note is from Goldman’s prime brokerage desk, which serves hedge funds, and says that US financial services companies – including banks – were among the most sought-after stocks last week.

Meanwhile, they find that the ratio of long trades compared with short positions on US regional banks has risen by 26% since the low of the year at around mid-July.

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

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Weekly Market Outlook (04-08 September) 0 (0)

UPCOMING EVENTS:

  • Monday: US
    and Canada Holiday.
  • Tuesday: China
    Caixin Services PMI, RBA Policy Decision.
  • Wednesday:
    Eurozone Retail Sales, US ISM Services PMI, BoC Policy Decision.
  • Thursday: China
    Imports/Exports data, Switzerland Unemployment Rate, US Jobless Claims.
  • Friday: Japan
    Wage data, Canada Jobs Report.

Tuesday

The RBA is expected to keep the cash rate
unchanged at 4.10% as the economic data heading into the meeting surprised
to the downside. In fact, the jobs
report
showed a jump in the unemployment rate (although still within the
1-year range), the wages
and the inflation
data missed expectations, and the PMIs
remain in contraction.

Wednesday

The US ISM Services PMI is expected to
tick lower to 52.5 vs. 52.7 prior. The S&P
Global US Services PMI
released two weeks ago missed expectations by a big
margin and the comments from the Chief Business Economist do not look rosy on
the outlook as he stated that: “A near-stalling of business activity in
August raises doubts over the strength of US economic growth in the third
quarter. The survey shows that the service sector-led acceleration of growth
in the second quarter has faded”.

The BoC is expected to keep rates unchanged
at 5.00%, although there’s a good chance that they decide to raise rates by 25
bps. In fact, the Canadian underlying inflation measures, which is what the
central bank is currently focusing on, beat expectations in the latest inflation
report
, while the labour
market report
showed a big jump in average hourly earnings, although it was
accompanied by another increase in the unemployment rate. The BoC might even want
to skip this meeting and see more data before deciding whether another rate hike is needed.

Thursday

The US Jobless Claims remains a key labour
market report as the Fed and the Market are particularly focused on the jobs
data. Last week, we saw a beat in Initial Claims but a miss in Continuing Claims,
which lag Initial Claims by a week and show how fast people are able to secure
jobs after getting unemployed. The consensus this week sees Initial Claims at
235K vs. 228K prior and Continuing Claims at 1715K vs. 1725K prior.

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

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Newsquawk week ahead: Highlights include RBA, BoC, US ISM services PMI and China trade 0 (0)

Week Ahead 4th-8th September

  • Mon: US & Canadian Labour Day; German Trade (Jul), Swiss GDP (Q2), EZ Sentix (Sep)
  • Tue: RBA Policy Announcement; Final Composite & Services PMIs (Aug), EZ Producer Prices (Jul), US Factory Orders (Jul)
  • Wed: BoC Policy Announcement; German Industrial Orders (Jul), EZ & UK Construction PMIs (Aug), US ISM Services PMI (Aug), Canadian Trade Balance (Jul
  • Thu: Chinese Trade Balance (Aug), Swiss Unemployment (Aug), German Industrial Output (Jul), EZ Final Employment & Revised GDP (Q2), US IJC (w/e 28th Aug)
  • Fri: Japanese Revised GDP (Q2), German Final CPI (Aug), Canadian Labour Market Report (Aug)

NOTE: Previews are listed in day order

RBA Announcement (Tue): The RBA is expected to maintain its Cash Rate Target at 4.10% at its September meeting, a view reinforced by 24 out of 29 respondents polled via Reuters. The consensus is also backed by market pricing (ASX 30-Day Interbank Cash Rate Futures) showing an 86% chance of a hold and only 14% probability of a 25bps rate hike. Data conforms with a hold as well, with Aussie July CPI printing sub-5% at 4.9% vs. Exp. 5.2% (Prev. 5.4%), and in turn tilting pricing a touch more dovish. Labour market metrics were also cooler than expected – Unemployment Rate printed at 3.7% vs. Exp. 3.6% (Prev. 3.5%) and Employment at -14.6k vs. Exp. 15.0k (Prev. 32.6k). Whilst a rate hold is widely expected, the RBA is unlikely to declare victory on inflation, but with a marked cooling in the monthly figures, it will be interesting to see whether the Governor will reiterate that “some further tightening of monetary policy may be required”. Analysts at ING “expect the RBA to hold rates while looking for more signs that inflation is under control.”

BoC Announcement (Wed): The consensus view is for the BoC to hold rates at 5.00%, according to a Reuters poll, and ahead, economists generally expect the Bank to keep rates at current levels up to the end of March 2024. Some still see risks that rates could be lifted, given that inflation rose by more than expected in July, while the housing market has recently shown some signs of a revival; a minority of those polled look for a 25bps rate hike. However, analysts note that the Canadian economy is expected to slow as the impact of previous rate rises continue to filter through, and the rise in joblessness also gives the BoC scope to stand pat on policy. Furthermore, it might be more prudent for the central bank to wait until October to make any tweaks to policy since it will have two further sets of jobs and inflation data to consider before that meeting.

US ISM Services PMI (Wed): Analysts expect the Services ISM will be little changed in August, with the consensus expecting 52.6 from 52.7, according to Refinitiv. As a comparison, S&P Global’s flash PMI noted that US Services Business Activity eased to a six-month low of 51.0 in August (vs 52.3 July), as high interest rates and inflationary pressures were seen to have weighed on customer spending. „A near-stalling of business activity in August raises doubts over the strength of US economic growth in Q3,“ S&P Global wrote, „the survey shows that the service sector-led acceleration of growth in Q2 has faded.“ S&P also said that companies were warning that demand was looking increasingly lethargic in the face of high prices and rising interest rates, adding that a resultant fall in new orders received by firms in August could tip output into contraction in September as firms adjust operating capacity in line with the deteriorating demand environment.“ On inflation, S&P said that „rising wage pressures as well as increased energy prices have meanwhile pushed input cost inflation higher, which will raise concerns over the stickiness of consumer price inflation in the months ahead,“ but said that one upside was that „weak demand is starting to limit pricing power, which should help keep a lid on inflation around the 3% mark.“

Chinese Trade Balance (Thu): The Chinese trade figures will be closely watched for a diagnosis of foreign and domestic demand. Last month’s release painted a grim picture of the health of the Chinese economy, with imports and exports falling faster than expected, and the latter seeing the steepest fall since the onset of COVID-19 in February 2020. There are currently no expectations for next week’s release. In terms of the July data, Exports printed at -14.5% vs. Exp. -12.5% (Prev. -12.4%), while Imports came in at -12.4% vs. Exp. -5.0% (Prev. -6.8%). Since then, China has unleashed a slew of stimulus measures to help bolster domestic demand, alongside the unveiling of property and stock market support. The desk at ING suggests “For the export side, weakness in global demand is likely to continue to weigh heavily. For imports, domestic demand has not shown any meaningful signs of improvement, so they are also likely to remain weak.”

OPEC+ (Tbc): Russia announced that OPEC+ will unveil the “new main parameters” of the supply deal next week. The next official JMMC meeting is slated for 4th October and the 36th Ministerial meeting is due on 26th November 2023, according to the OPEC+ statements. Russian Deputy PM Novak, the de-facto oil head of the nation, said Russia may extend its September export reduction (300k BPD) into October. Desks also expect Saudi to further extend its voluntary 1mln BPD support curb into October, with the Bloomberg poll suggesting 20 out of 25 traders expect an extension of at least one month. Bloomberg also suggests several OPEC delegates have privately predicted an extension by Saudi. Earlier this month, Saudi warned it could extend and deepen the cuts. That being said, it is not clear which parameters could be revealed, whilst the timing of the announcement is also not known at this point.

This article originally appeared on Newsquawk.

This article was written by Newsquawk Analysis at www.forexlive.com.

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