US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• Inflation expectations and CPI readings continue to
  show disinflation with the last two Core CPI M/M figures
  coming in at 0.16%.
• The US PMIs missed
  expectations across the board last week, while the US Jobless Claims remained
  solid.
• Fed Chair Powell’s speech at the Jackson Hole Symposium was
  mostly in line with what he said previously but he stressed on the need to be
  careful going forward and that continued strength in the labour market may
  require further rate hikes.
• The first half of the week saw US Job Openings and Consumer Confidence reports
  missing expectations by a big margin, followed by a miss in the US ADP data
  yesterday.
• The market doesn’t expect another hike from the Fed
  anymore, but a lot will depend on the data going forward.

EU:

• The ECB hiked by 25 bps and
  changed a line in the statement that leant more on the dovish side.
• President Lagarde didn’t hint to what we can expect
  next and, in line with the Fed, just reaffirmed their data dependency and kept
  all the options on the table.
• The Eurozone PMIs missed
  expectations across the board with the Services sector plunging in contraction.
• President Lagarde at the Jackson Hole Symposium
  didn’t signal much but she wasn’t as dovish as the market expected her to be.
• The Eurozone CPI beat
  expectations on the headline reading due to higher energy prices, but the Core
  CPI came out in line with forecasts.
• The market doesn’t expect the ECB to hike at the
  upcoming meeting.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD yesterday
broke out of the downward trendline but
found strong sellers around the red 21 moving average. The
price is now falling back below the trendline in what could end up being a
fakeout. This is generally a bearish signal so the buyers will need to break
out again to invalidate the bearish setup.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we’ve been diverging with the
MACD for a
long time and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we got a breakout of the trendline which
should point to a bigger pullback into the 1.1033 level, so what happens after
today’s fakeout will be key. Right now, the price is testing the red 21 moving
average and we should find buyers stepping in here, but if the price continues
lower, then the sellers will be in control and start targeting a break below
the major bottom trendline.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a support zone
at the last higher low level where we can also find the 50% Fibonacci
retracement level for confluence. If
the price breaks through it, it will make a new lower low and switch the market
structure from bullish to bearish. So, the buyers should step in here with a
defined risk below the level to target a new higher high, while the sellers
will want to see a break lower to pile in and extend the selloff.

Upcoming Events

This week is all about the US labour market data and the
recent releases haven’t been encouraging on a forward-looking basis. Today, the
main event will be the US Jobless Claims report accompanied by the US PCE data.
Tomorrow, we conclude the week with the US NFP and ISM Manufacturing PMI
reports.

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

Yesterday
Bitcoin jumped following the news that Greyscale won the lawsuit against
the SEC as the D.C. court ruled that the SEC improperly rejected the Bitcoin
spot ETF. This was seen as a positive news as Greyscale will have to reapply
for a spot ETF but that an ETF is actually coming. This news has lifted all the
other cryptocurrencies, including Ethereum, as there’s a tight correlation with
Bitcoin. Looking at the bigger picture though, we have some bearish news all
around as CryptoQuant reported
that Bitcoin trading volume is at its lowest in more than four years and on the
macro side we have recessionary fears caused by weakening data as yesterday’s
Job Openings and Consumer Confidence missed expectations by a big margin
possibly pointing to a deterioration in the labour market. On top of that, the
central banks are expected to keep monetary conditions tight even if we start
to see more weakness creeping in, which should ultimately make the economic
conditions and the risk sentiment worse.

Ethereum Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Ethereum after
a two-week long consolidation around the support level,
jumped following the news of Greyscale winning the lawsuit against the SEC. The
spike higher is getting rejected by the 61.8% Fibonacci retracement level
where we have also the confluence with the
red 21 moving average. This is
where the sellers are likely piling in with a defined risk above the level to
target another selloff into the lows.

Ethereum Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that the spike
higher might have opened the door for more upside and we have a good support
zone around the 1681 level where we can also find the Fibonacci retracement
levels and the red 21 moving average. This is where we can expect the buyers to
step in with a defined risk below the black trendline looking
for another extension to the upside.

Ethereum Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see more
closely both the bearish and the bullish setups. If the price manages to break
below the black trendline, then the bullish setup would be invalidated, and we
will likely see much lower prices with the first support coming around the 1400
level. On the other hand, upside breaks should support the buyers going forward
and lead to higher highs.

Upcoming Events

This week is an important one given that we will see
many key labour market data for the US, including the NFP, before the next FOMC
meeting. Weak data is likely to cause recessionary fears across the markets and
weigh on Ethereum, while strong readings should keep the Fed on the hawkish
side and put a lid on the cryptocurrency’s upside. Today, we have the US ADP
report, and after yesterday’s big miss in the US Job Openings, a weak report is
likely to increase recessionary fears. Moving on to tomorrow, we will see the
US Jobless Claims and the US PCE data. Finally, we conclude the week with the
US NFP and the ISM Manufacturing PMI on Friday.

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

• Saxony August CPI +6.8% vs +6.7% y/y prior
• Bavaria August CPI +5.9% vs +6.1% y/y prior
• North Rhine Westphalia August CPI +5.9% vs +5.8% y/y prior
• Spain August preliminary CPI +2.6% vs +2.6% y/y expected
• ECB’s Centeno: Even if we pause, saying we are done would be the wrong message
• ECB’s Centeno: Growth indicators have been surprising to the downside recently
• BOJ’s Tamura: Timing of easy policy exit must not be too late, but not too early too
• Eurozone August final consumer confidence -16.0 vs -16.0 prelim
• Germany July import price index -0.6% vs 0.0% m/m expected
• UK July mortgage approvals 49.44k vs 51.00k expected
• Switzerland August Credit Suisse investor sentiment -38.6 vs -32.6 prior
• Switzerland August KOF leading indicator index 91.1 vs 91.5 expected
• US MBA mortgage applications w.e. 25 August +2.3% vs -4.2% prior
• Dollar bears looking for that Goldilocks scenario on the US economy

Markets:

• GBP leads, JPY lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields up 3.3 bps to 4.155%
• Gold flat at $1,937.82
• WTI crude up 0.7% to $81.21
• Bitcoin down 0.7% to $27,396

After the sharp moves yesterday, things are looking calmer for now at least in European trading.

The dollar steadied itself as bond yields also find a bit of a footing. But all of this is coming before we get to the US ADP employment roulette data later today.

Among the highlights of the session was CPI data for German states. The early one was for NRW which saw a slight rise in August inflation and that spooked ECB bettors a little. They moved to price in odds of a 25 bps rate hike to ~61% from around ~54% before that.

But after the other mixed readings, the pricing fell to ~51% and is now holding at around ~57%. As such, the euro is also holding steady across the board with EUR/USD little changed at 1.0885 currently.

The dollar is seeing gains more notable against the yen and antipodeans. USD/JPY is up 0.4% to 146.40 as slightly higher yields are helping. Meanwhile, AUD/USD is down slightly by 0.2% to 0.6470 but off its earlier lows of 0.6450 at least.

In the equities space, the mood is more tentative and tepid now as dollar and yields are holding their ground after the fall yesterday.

It’s now over to the ADP number to see if there is reason for the outsized reaction yesterday to take hold again today.

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

• Prior -4.2%
• Market index 189.0 vs 184.8 prior
• Purchase index 144.9 vs 142.0 prior
• Refinance index 407.1 vs 397.1 prior
• 30-year mortgage rate 7.31% vs 7.31% prior

It’s a minor bump in mortgage activity after five straight weeks of declines. So, that should put things into perspective as housing market conditions continue to be weighed down by higher rates for now.

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

Yesterday
Bitcoin jumped following the news that Greyscale won the lawsuit against
the SEC as the D.C. court ruled that the SEC improperly rejected the Bitcoin
spot ETF. This was seen as a positive news as Greyscale will have to reapply
for a spot ETF but that an ETF is actually coming. Looking at the bigger
picture though, we have some bearish news all around as CryptoQuant reported
that Bitcoin trading volume is at its lowest in more than four years and on the
macro side we have recessionary fears caused by weakening data as yesterday’s
Job Openings and Consumer Confidence missed expectations by a big margin
possibly pointing to a deterioration in the labour market. On top of that, the
central banks are expected to keep monetary conditions tight even if we start
to see more weakness creeping in, which should ultimately make the economic
conditions and the risk sentiment worse.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Bitcoin bottomed
out on the key 25231 support and
after almost two weeks of consolidation it spiked up yesterday following the
news of Greyscale winning the lawsuit again the SEC. The price found resistance
near the previous support now turned resistance where we
have also the confluence with the
61.8% Fibonacci retracement level.
This is where the sellers should step back in with a defined risk above the
level and target another fall into the support and eventually a break lower.

Bitcoin Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that now the buyers
will have a strong support zone around the previous swing high at 26800 where
we can also find the 61.8% Fibonacci retracement level of the entire leg higher
and the red 21 moving average. This is
where we can expect the buyers to pile in with a defined risk below the zone
and target another extension to the upside.

Bitcoin Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that the
price is currently pulling back and from a risk management perspective, both
buyers and sellers should refrain from entering the market here as it’s
basically a no man’s land. The key levels to watch, in fact, are the resistance
at 28300 and the support at 26800.

Upcoming Events

This week is an important one given that we will see
many key labour market data for the US, including the NFP, before the next FOMC
meeting. Weak data is likely to cause recessionary fears across the markets and
weigh on Bitcoin, while strong readings should keep the Fed on the hawkish side
and put a lid on the cryptocurrency’s upside. Today, we have the US ADP report,
and after yesterday’s big miss in the US Job Openings, a weak report is likely
to increase recessionary fears. Moving on to tomorrow, we will see the US
Jobless Claims and the US PCE data. Finally, we conclude the week with the US
NFP and the ISM Manufacturing PMI on Friday.

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

• Need to be very cautious about policy decisions
• A lot has already been done

He’s not giving much away but the ECB will have a tough time trying to manage market expectations at this point. Inflation is still keeping rather stubborn and the „safe bet“ would be to raise rates one more time. But if they do skip, expect markets to take that as a sign of pausing especially since the economy is starting to run into the ground now in Q3.

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

• Treasury yields pare declines, all to play for in US trading later
• RBA’s Bullock: Inflation is still too high, that will be my first priority as governor
• RBA’s Bullock: Climate change likely to lead to more volatile inflation outcomes
• Germany September GfK consumer sentiment -25.5 vs -24.3 expected
• France August consumer confidence 85 vs 85 expected
• China reportedly to cut borrowing costs on mortgages as soon as today
• Japan reportedly considers to extend fuel subsidies until year-end

Markets:

• USD leads, JPY lags on the day
• European equities slightly higher; S&P 500 futures down 0.1%
• US 10-year yields flat at 4.211%
• Gold down 0.1% to $1,917.10
• WTI crude up 0.6% to $80.61
• Bitcoin down 0.1% to $25,962

It was a quiet session for the most part but things are starting to pick up now in the handover to North America trading.

Major currencies saw little appetite despite London coming back today while equities also looked more tentative after a bit of an optimistic start. US futures were up around 0.2% earlier on but are now down slightly as we see Treasury yields turn around as well on the day.

10-year yields were down to around 4.175% earlier on but are now flat at 4.211% and that is helping to underpin the dollar as well.

USD/JPY in particular is jumping up to around 147.00 from around 146.50-60 levels earlier in the day, while GBP/USD is retreating back to 1.2590 from a high of 1.2635 earlier in the session.

Outside of the two pairs, the dollar is little changed and stuck in narrower ranges against the rest of the major currencies. Even AUD/USD which was up to around 0.6455 earlier is now down 0.6420 but that represents a measly 35 pips range on the day.

With month-end and the US jobs report still the bigger focus points this week, there’s still plenty to play for in the meantime.

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

US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• The US economic data keeps on surprising to the
  upside, but inflation expectations and CPI readings continue to show
  disinflation with the last two Core CPI M/M figures
  coming in at 0.16%.
• The US PMIs missed
  expectations across the board last week, while the US Jobless Claims remained
  solid.
• Fed Chair Powell’s speech at the Jackson Hole Symposium was
  mostly in line with what he said previously but he stressed on the need to be
  careful going forward and that continued strength in the labour market may
  require further rate hikes.
• At the moment, the market doesn’t expect another
  hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
  change this view.

Japan:

• The BoJ kept everything unchanged as expected at the last meeting but
  implicitly tweaked the YCC policy keeping the target band unchanged but giving
  more flexibility with a hard cap at 1.00%.
• This has created lots of volatility
  in the JPY, but eventually led to a fast depreciation.
• The Japanese CPI data surprised to the upside recently
  with the core-core reading reaching again the previous high.
• The Tokyo CPI, which is seen as a leading
  indicator for national cpi, missed expectations, but the core-core reading
  matched the prior figure remaining well above the BoJ’s inflation target.
• The Unemployment Rate surprisingly jumped to 2.7%
  although it remains near the lows.
• BoJ’s Governor Ueda at the Jackson Hole Symposium
  reaffirmed that inflation is still below target and that’s why they’re sticking
  with their monetary easing.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY continues to rise to new highs after breaking out of the 145.00
handle. The natural target for the buyers should be the 150.00 handle but the
momentum seems to be slowing as the market awaits key economic data. The
sellers will need the price to fall below the 145.00 level to switch the bias
from bullish to bearish and start targeting lower lows.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair has
been diverging with the
MACD for a
long time which is generally a sign of weakening momentum often followed by
pullbacks or reversals. In fact, recently the pair pulled back to the 145.00 resistance turned support and
bounced strongly from the 38.2% Fibonacci retracement level.
The price is now struggling to break above the recent high at 146.56 as the
market awaits the data to gather more momentum.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price action around the 145.00 handle created a possible bullish flag pattern. The
price broke out last Friday following Fed Chair Powell’s comments and given the
BoJ’s stance, it looks like we might see higher highs coming soon. We can also
notice that we have another divergence with the MACD right at the previous high
which might be a sign that a pullback may be due. In that case, we should see
the buyers coming into the market around the 38.2% Fibonacci retracement level.

Upcoming Events

This week is an important one given that we will see
many key labour market data for the US, including the NFP, before the next FOMC
meeting. Today, we have the US Consumer Confidence and the US Job Openings
reports. Tomorrow, we have the US ADP report. Moving on to Thursday, we will
see the US Jobless Claims and the US PCE data. Finally, we conclude the week
with the US NFP and the ISM Manufacturing PMI on Friday. Although the Fed keeps
all the options on the table, it’s also leaning more towards a pause in September,
so we will need strong data to make the market to expect a hike at the upcoming
meeting.

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

Capital
markets come alive in late August and early September, and volatility returns.
New trends often emerge, and opportunities to capitalise on them open up.
Amidst the constantly changing financial landscape, investors must watch
popular instruments like BTC and gold. OctaFX analysts explore the reasons
behind the end of the crypto winter and the increase in demand for gold.

Bitcoin is dominating the crypto market while recovering its
value

From
November 2021 to December 2022, the price of Bitcoin fell more than four times.
This period was called crypto winter. However, since the beginning of 2023,
Bitcoin price has almost doubled—from $16,500 to $29,200, suggesting that the
deep correction phase is over. The difference is also apparent if we compare
the dynamics of Bitcoin and other cryptocurrencies. According to CoinGecko
Crypto Industry Report, Bitcoin added 6.9% in the second quarter of 2023, while
the entire crypto market grew by only 0.14%. Interest in NFT projects and
stablecoins decreased, suggesting that Bitcoin’s crypto winter is likely over.

A constant tailwind for Bitcoin

For
Bitcoin, being an alternative to fiat money fueled its growth in the early days
of the crypto industry. But it wasn’t the only way to contribute to Bitcoin’s
rise—investors also started using it as a store of value. For the past few
years, those looking for safe-haven assets have put Bitcoin on par with gold
and, at the same time, as a counterweight to the US dollar and US treasuries.

OctaFX
analyst Kar Yong Ang says that Bitcoin growth is possible if the US Fed starts
giving dovish signals: in case of a key rate cut, BTC is likely to grow quite
strongly and could reach the $45,000 range by the end of 2023 and up to $30,000
if the rate stays unchanged. His inclination is more towards the second option,
as according to the CME Fed watch tool, the rate hike probability at the FOMC
meetings in September 2023 is only 16%.

The Turkish crisis forced gold prices down in the second quarter

Since
reaching an all-time high of $2075 in August 2020, gold tried to break this
level twice: on 8 March 2022 and 4 May 2023. But each time, the price stopped
and started to decline. The latest decline in gold prices from May 2023 to the
current moment has a fundamental reason. According to the published report of
the World Gold Council, net purchases by central banks fell by 64% in the
second quarter to 103 tons. This slowdown is mainly due to gold sales by the
Central Bank of the Republic of Turkey (CBRT), whose net sales totalled 132
tons in the second quarter of 2023.

According
to Kar Yong Ang from OctaFX, the CBTR’s actions have made gold prices decline
since May 2023. The sales of the Turkish Central Bank were aimed at supporting
the economy in an emergency and were more tactical than strategic. Therefore,
the upward trend in gold demand in 2023 remains in place.

An
additional factor is the anticipated peak of the Fed rate hike cycle and the
falling value of the U.S. dollar. Lower rates increase the attractiveness of
gold amid falling bond yields. The falling dollar rate makes gold cheaper for
holders of other currencies.

Following
the comments of Kar Yong Ang, in 2023, gold may rise to a record $2,500 due to
falling interest rates amid a non-growing global economy and a weak dollar.
Thus, the estimated increase in gold prices can be more than 30%.

Investors
should monitor Fed decisions to understand how much gold and Bitcoin will rise.
The Fed raises the rate in a pessimistic scenario, making the dollar strong and
Bitcoin and gold investments unattractive. In the positive case, the Fed starts
to lower the key rate, encouraging investment interest in Bitcoin and gold as
the best store of value. In such a case, gold will rise to $2,500 and Bitcoin
to $45,000 by the end of 2023. The most likely scenario is neutral—in which the
Fed pauses key interest rate changes until the end of 2023, increasing the
likelihood of gold’s rise above $2,000 and Bitcoin above $30,000. The starting
point of the uptrend will be the FOMC decision of the U.S. Fed, which will be
announced on 20 September 2023.

About OctaFX

OctaFX is an international broker that has been providing online
trading services worldwide since 2011. It offers commission-free access to
financial markets and various services already utilised by clients from 180
countries with more than 42 million trading accounts. Free educational
webinars, articles, and analytical tools they provide help clients reach their
investment goals.

The
company is involved in a comprehensive network of charitable and humanitarian
initiatives, including the improvement of educational infrastructure and
short-notice relief projects supporting local communities.

OctaFX
has also won more than 60 awards since its foundation, including the ‘Best
Online Broker Global 2022’ award from World Business Outlook and the ‘Best
Global Broker Asia 2022’ award from International Business Magazine.

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

More stimulus is coming for China as Beijing is reportedly poised to cut interest rates on some of the ¥38.6 trillion of existing mortgages. And that move could come as soon as today, with the reductions set to only affect loans on first homes. Once officially announced, it will be the first time that China has reduced the rates on outstanding home mortgages for the first time since the global financial crisis.

Considering the pressure that the economy is under, these added stimulus measures will help somewhat but again, where is the fiscal help? That for me, is the key to really try and dig China out of its current plight.

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