The changes among major dollar pairs are roughly 0.1% or less at the moment. And that exemplifies the more tentative mood that is gripping traders in European morning trade. USD/JPY was again the more volatile pair, dipping to a low of 143.05 before bouncing back to around 143.50 levels now. But outside of that, the moves so far today are extremely guarded as traders are eyeing key US data later on.

US futures are flat and 10-year Treasury yields are also now near unchanged at 3.768% on the day.

All together, it suggests that market players are very much waiting on US data later before committing to anything. We’ll have the ADP employment change, weekly initial jobless claims, and then the ISM services PMI all on the data docket.

Following the reaction to the Bank of Canada and JOLTS job openings yesterday, do expect markets to start moving with more vigour after the data today. And all of this will culminate with the non-farm payrolls report tomorrow of course.

For now, the wait continues. The ADP roulette will be up next first and that is in roughly two hours‘ time.

As an aside, one spot to keep an eye out for is gold as well. The precious metal is up 0.8% to $2,515 today and looks poised again to try and chase a firmer breakout.

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

This week the growth fears came
back as the we got a couple of soft US data. Most of the weakness can be
attributed to the ISM
Manufacturing PMI which disappointed as it missed expectations, and the new
orders index dropped further into contraction.

Overall, the report was much
better than the prior month, but it looks like the market wants to err on the
defensive side heading into the NFP report tomorrow. We also got the US
Job Openings data yesterday, but it was July’s data which was bad for many
other indicators as it looks like short term factors negatively affected the
data.

We are going into the NFP
report with a 50/50 chance of either a 25 bps or 50 bps cut at the upcoming
meeting, so the data tomorrow will decide by how much the Fed is going to cut.

In today’s context though,
weaker labour market data and the prospect of a 50 bps cut might not be enough
to lift the stock market and could actually lead to more downside on
recessionary fears, so that’s something to keep in mind.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 eventually couldn’t break above the 5665 level and
fell into new lows as the sellers piled in on a key breakout on the lower
timeframe and the ISM Manufacturing PMI missed expectations. There’s not much
we can glean from this chart as the market is just waiting for the NFP report.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the failure to break above the 5665 level and then the break
below the trendline which triggered more selling pressure. The price is now
consolidating between the 5506 and 5560 levels. The buyers will want to see the
price breaking higher to position for a rally into the 5665 level, while the
sellers will look for a break lower to increase the bearish bets into the 5432
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the rangebound price action as we await the NFP release. Today
we will also get other labour market data but unless we get big surprises, it’s
unlikely to see a breakout today. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US ADP, the US Jobless Claims and the US ISM Services PMI.
Tomorrow, we conclude the week with the US NFP report.

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

• A slower start for major currencies so far today
• Oil jumps amid report that OPEC+ is discussing a delay to planned output hike in October
• Reminder: There is no ADP roulette on the agenda today
• Eurozone August final services PMI 52.9 vs 53.3 prelim
• UK August final services PMI 53.7 vs 53.3 prelim
• US MBA mortgage applications w.e. 30 August +1.6% vs +0.5% prior
• German economy expected to contract this year, says Kiel Institute
• German trade lobby sounds warning as recession clouds circle

Markets:

• JPY leads, USD and CAD lag on the day
• European equities lower; S&P 500 futures down 0.4%
• US 10-year yields down 3.8 bps to 3.806%
• Gold down 0.2% to $2,489.13
• WTI crude up 1.0% to $70.86
• Bitcoin down 2.9% to $56,510

It was a bit of a draggy session for major currencies as there wasn’t too much to work with.

The dollar is marginally lower at the balance, but mostly keeping lightly changed against the rest of the major currencies bloc outside of the Japanese yen. USD/JPY is down 0.4% to just under 145.00, continuing to weave in and out around the figure level. Meanwhile, the rest of the dollar pairs are just 0.1% changed among one another thus far on the day.

That despite equities staying pressured after the selloff yesterday. S&P 500 futures remain pinned down since Asia but the losses aren’t getting much worse as we look towards US trading at least. Bond yields are continuing to look heavy and that is perhaps weighing on USD/JPY as well. 10-year Treasury yields are down nearly 4 bps to around 3.80% currently.

Among the headlines, we did see one involving the oil market. A Reuters report noted that OPEC+ is considering delaying their planned output hike in October. And that saw oil prices bounce back a little with WTI crude moving up by 1% away from the $70 mark before that.

In other markets, gold was under some light pressure earlier in falling to $2,472 but is now climbing back up to $2,489 on the day. The push and pull continues as price action continues to consolidate in and around $2,500, awaiting the next big move.

Coming up later, we will have the Bank of Canada policy decision and US JOLTS job openings as key risk events for markets.

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

• Prior +0.5%
• Market index 230.5 vs 226.9 prior
• Purchase index 136.1 vs 131.8 prior
• Refinance index 751.4 vs 753.8 prior
• 30-year mortgage rate 6.43% vs 6.44% prior

Mortgage applications rose in the past week but the breakdown was a bit more mixed. Purchases jumped but was partially offset by a decline in refinancing activity. That as the average rate of the most popular US home loan remained relatively stable after the recent drop.

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

Reuters is out with the headline, citing three OPEC+ sources in saying that the bloc is discussing a delay to its planned output hike in October. It looks like they are finally not being stubborn about it but it took oil prices falling to its lowest levels this year for them to start rethinking about this. Pfft.

Anyway, the jump here still sees $70 as the key threshold on the daily and weekly charts. And I wouldn’t be too confident about the bounce here lasting unless risk trades also turn around and markets grow less concerned about global growth in the near-term. The US data this week, especially the jobs report on Friday, will be key in determining that sentiment.

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

That opposed to a Trump victory of course, according to Goldman Sachs. The firm argues that economic output will take a hit next year under the Trump banner. And that is mostly from increased tariffs on imports and tighter immigration policies. Adding that jobs growth will also be stronger under a Democrat government as opposed to a Republican one.

„We estimate that if Trump wins in a sweep or with divided government, the hit go growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse, resulting in a peak hit to GDP growth of -0.5% in 2H 2025 that abates in 2026. If Democrats sweep, new spending and expanded middle-income tax credits would slightly more than offset lower investment due to higher corporate tax rates, resulting in a very slight boost to GDP investment due to higher corporate tax rates, resulting in a very slight boost to GDP growth on average over 2025-26.“

On the inflation front, Goldman Sachs says that a Trump win will likely lead to a rise in core inflation amid increased tariffs on auto imports from China and the EU.

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

Yesterday, we got the US
ISM Manufacturing PMI and even though the headline number missed
expectations, under the hood the report was better than the prior month.

The bad news was new orders
falling further into contraction, which is a proxy for demand, and it’s
generally considered as a leading indicator.

Tight monetary policy of
course has been weighing a lot on the manufacturing sector and if the Fed
manages to avoid a hard landing as it cuts rates in the next months, we could
see a rebound in Q4.

From a monetary policy
perspective, the data didn’t change much for the Fed expectations although the
probabilities for a 50 bps cut edged a bit higher. For the RBNZ, the market
sees a 40% probability of a 50 bps cut in October and a total of 75 bps of
easing by year-end.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD is testing a key support
zone around the 0.6175 level where we can find the confluence
of the trendline
and the 38.2% Fibonacci
retracement level. We can expect the buyers to step in with a defined risk
below the trendline to position for a rally into a new high. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 0.6050 support.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the setup around the 0.6175 level. There’s also a counter-trendline
defining the bearish momentum of the pullback. The buyers will want to see the
price breaking higher to increase the bullish bets into new highs, while the
sellers will likely lean on it to position for a break below the major upward
trendline.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price consolidated near the trendline with no major reaction from
the ISM Manufacturing PMI. There’s not much else we can glean from this
timeframe as the buyers will just look for a bounce, while the sellers will
look for a break. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Job Openings. Tomorrow, we get the US Jobless Claims
figures and the 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.

• Just a week to go until the next US presidential debate
• US futures dribble lower on the session
• Gold stays poised for a firmer breakout in big week for the dollar
• European equities open a little higher to start the day
• SNB has just about the right excuse to do a little bit more later this month
• Switzerland Q2 GDP +0.7% vs +0.5% q/q expected
• What are the main events for today?
• Switzerland August CPI +1.1% vs +1.2% y/y expected
• Eurostoxx futures -0.1% in early European trading
• FX option expiries for 3 September 10am New York cut
• Swiss data in focus in the session ahead
• China to launch anti-dumping investigation into Canadian chemical products

Markets:

• USD leads, AUD lags on the day
• European equities lower;
  S&P 500 futures down 0.50%
• US 10-year yields flat at
  3.91%
• Gold flat at $2,500
• WTI
  crude down 1.88% to $72.17
• Bitcoin
  down 0.17% to $50,041

The
European session has been dominated by defensive positioning into the US ISM
Manufacturing PMI release. As a reminder, the last month the ISM Manufacturing
PMI triggered a selloff in risk assets as we got the growth scare.

The main
culprit might have been the employment sub-index dropping to a 4 year low, so
that will be something to keep an eye on today ahead of the NFP report on Friday.

Early in
the morning, we got the Swiss CPI report which came out a touch softer,
although the Core measure remained unchanged, and diminished the probabilities
for a 50 bps cut at the upcoming SNB meeting.

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

Last week, crude oil has
been on a seesaw due to supply side factors as we got the news that Libya was going to close down all
oil fields and halt
production and exports, and then that Iraq was going to cut production.

On Friday, oil weakened
again on the news
that OPEC+ was going to proceed with the planned production hike in October. In
the bigger picture, the market has been mostly rangebound for two years as
central banks tightening weighed on growth.

Right now, it seems like
the Fed is going to cut rates into a resilient economy which could spur
economic activity. If they really manage to pull out a soft landing, it should
support the crude oil market. On the other hand, if the data increases the
expectations for a hard landing, we should see new lows ahead.

Watch out for the US ISM
Manufacturing PMI release today as that will likely set the trend into NFP across
all markets.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil is now near the key 72.50 support.
This is where we can expect the buyers to step back in with a defined risk
below the support to position for a rally into the 80 handle. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 67.50 level next.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong trendline defining the bearish bias. If we
bounce around these levels and get there, we can expect the sellers to lean on
it with a defined risk above it to position for a break below the 72.50
support. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into the 80 handle.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a nice resistance zone around the 74 handle. If we get a
bounce around the support, the buyers will want to see the price breaking above
the resistance to increase the bullish bets into the trendline. The sellers, on
the other hand, will likely lean on it to position for a break below the
support. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US ISM Manufacturing PMI. Tomorrow, we have the US Job
Openings. On Thursday, we get the US Jobless Claims figures and the 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.

The event will take place at the National Constitution Center in Philadelphia at 9pm EDT (or 0100 GMT the next day). The question is, if there is a clear winner, who will be better or worse for the dollar?

The short answer is that it isn’t going to be so straightforward.

On the one hand, Trump is more pro-business and could also clamp down hard on trade policy. Tariffs, anyone? And the latter could still benefit the dollar somewhat amid protectionism and safety flows into markets. But too much of that is also a bad thing and could harm the dollar.

And on the other hand, there’s also Trump having recently come out to want a weaker dollar and warning to the Fed not to cut rates before the election. For some context: Trump wants a weaker dollar but will he get his wish?

As for Harris, there’s the argument that her winning will be a continuation of stability amid ongoing policy arrangements. For me, that’s not really an argument on its own but let’s just try to be open a little about it, eh?

But on the flip side, there are concerns over increased spending especially. That raises more questions surrounding the fiscal status of the US and what not. So, again there are arguments on both sides.

Anyway, whatever the case is, markets will eventually find a narrative to land on. And that will be made more clear once there is a favourite going into November. That makes the debate next week a key litmus test in trying to figure out who that will be.

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