2023-09-21 04:08

AUD/USD TECHNICAL ANALYSIS AUD/USD retreated on Wednesday, dragged down by the Fed’s hawkish monetary policy outlook, but continued to carve out a double bottom, a reversal technical formation typically symptomatic of a waning selling pressure that often precedes a sustained recovery in the underlying asset. To elaborate further, a double bottom is a pattern characterized by two comparable troughs separated by a peak in the middle, normally observed within the context of a prolonged downtrend. Confirmation of this bullish configuration occurs when the price completes the "W" shape and breaches resistance at the neckline, marked by the intermediate crest. Examining the daily chart presented below, neckline resistance can be seen in the 0.6500/0.6510 range. Successfully piloting above this ceiling could reinforce buying impetus, opening the door to a move to 0.6600. Conversely, if sentiment shifts in favor of the bears and leads to a selloff, initial support is situated at 0.6360. While AUD/USD might find a foothold in this area during a pullback, a breakdown might precipitate an outsize slump, paving the way for a drop toward 0.6275, at which point the double bottom would be no longer valid. USD/JPY TECHNICAL ANALYSIS USD/JPY fell at the onset of the previous week, but promptly encountered support just above the psychological 146.00 level. This resilience paved the way for a rapid rebound in the subsequent trading sessions, with the pair steadily climbing in recent days, seemingly intent on capturing the 148.00 handle once and for all. Over the course of this month, USD/JPY has failed to clear the 148.00 threshold decisively. Every concerted effort made by the bullish camp to take out this barrier has been met with steadfast rejection, indicating the presence of a substantial number of sellers in this region. That said, a similar outcome may play out on a retest, but a rally towards 148.80 could unfold on a breakout, followed by a climb to 150.00. Taking the opposite side, if U.S. dollar sentiment takes a bearish turn and gives way to meaningful pullback, initial support appears at 145.90. On further weakness, the focus shifts to 144.55 and 143.85 thereafter. It's worth highlighting, however, that the bearish outlook could face substantial hurdles, especially in the context of the Federal Reserve's hawkish posture. UaSD/JPY TECHNICAL CHART https://www.dailyfx.com/news/forex-aud-usd-charts-bullish-technical-setup-as-usd-jpy-defies-channel-resistance-20230920.html

2023-09-21 04:07

GOLD, SILVER, TRENDLINES – TECHNICAL UPDATE: Gold and silver prices pressured by the Fed rate decision Gold turning lower toward key rising support Silver following same path, will a breakout occur? XAU/USD Analysis Gold and silver prices have turned lower in the aftermath of the Federal Reserve monetary policy announcement. There, Chair Jerome Powell basically alluded to a ‘higher for longer’ approach, causing financial markets to price in a higher terminal Federal Funds rate and pushing back expectations of rate cuts further down the time horizon. In response, Treasury yields and the US Dollar rose, working together to pressure precious metals, like gold and silver, lower. On the daily chart below, XAU/USD rejected a recently formed, near-term falling trendline from July. That has opened the door to revisiting rising support from April, which is closely aligned with the 38.2% Fibonacci retracement level of 1903.46. Clearing under the latter would open the door to a stronger bearish technical bias. Otherwise, pushing above near-term falling resistance exposes the 23.6% level of 1971.63. Chart Created in TradingView XAG/USD Analysis Meanwhile, silver faces a similar predicament in the wake of the Fed. Higher borrowing costs for longer and a stronger Greenback will likely pressure XAG/USD. On the daily chart, silver can be seen turning back lower towards the rising range of support from August. Broadly speaking, XAG/USD has been consolidating between this rising support and a range of falling resistance from May. As such, the broader technical outlook remains neutral. But, the fundamental consequences of the Fed on silver could open the door to an extended move lower. As such, keep a close eye on rising support. Breaking lower exposes the 78.6% Fibonacci retracement level of 21.24. Chart Created in TradingView https://www.dailyfx.com/analysis/gold-and-silver-after-the-fed-xau-usd-xag-usd-at-risk-to-higher-treasury-yields-20230921.html

2023-09-21 04:03

The Federal Reserve (Fed) kept rates on hold (5.25%-5.5%) at its latest meeting, but delivered a hawkish hold as what markets were anticipating – or rather, more hawkish. The Fed’s dot plot left the door open for one more rate hike by the end of this year as before, but were only looking for two rate cuts in 2024, down from the previous four rate cuts forecasted in June. Similarly, Fed funds rate in 2025 was forecasted to end at 3.9%, higher than the previous 3.4% forecast. That leaves a high-for-longer rate outlook as the clear takeaway, which called for a hawkish recalibration in rate expectations overnight. While the higher gross domestic product (GDP) and lower unemployment forecasts for 2023 and 2024 do provide more conviction for soft landing hopes, that economic resilience also seems to provide the confidence for Fed Chair Jerome Powell to display a stricter tone in his press conference, which saw some downplaying of inflation progress and that “stronger activity means we (the Fed) have to do more with rates”. Overnight, US Treasury yields found the validation to push on further with their 16-year highs, allowing the US dollar to reverse earlier losses. With that, the US dollar is heading to reclaim the 105.00 level of resistance with the formation of a bullish pin bar on the daily chart. Further positive follow-through may leave the 106.84 level as the next resistance to overcome. Thus far, its weekly moving average convergence/divergence (MACD) is eyeing for a cross back into positive territory, while its weekly Relative Strength Index (RSI) continues to trade above the key 50 level as a reflection of buyers in broad control. Source: IG charts Asia Open Asian stocks look set for a downbeat open, with Nikkei -0.61%, ASX -0.46% and KOSPI -1.06% at the time of writing, as de-risking tracks the overnight losses in Wall Street, higher bond yields and a firming in the US dollar. US-listed Chinese stocks were lower overnight as well, with the Nasdaq Golden Dragon China Index down 0.9%, following a downbeat session in the earlier Asian session. The economic calendar this morning saw a significantly higher-than-expected 2Q GDP in New Zealand (0.9% QoQ vs 0.5% forecast), which brought some resilience for the NZX compared to the rest of the region, but failed to provide much of a boost for the risk-sensitive NZD/USD. Broader risk sentiments will continue to take its cue from the hawkish takeaway in the recent Fed meeting, as we continue to tread in the seasonally weaker period of the year (mid-September to early-October). The risk-sensitive AUD/USD has come under pressure as well, with the formation of a bearish engulfing on the daily chart seeking to unwind all of its past week’s gains. A double-bottom formation seems to be in place, with the 0.649 level serving as the key neckline to overcome. Further downside may leave its year-to-date bottom on watch for a retest at the 0.636 level. Source: IG charts On the watchlist: Gold prices finding resistance from its Ichimoku cloud on the daily chart Gold prices failed to hold onto initial gains overnight, with the yellow metal finding resistance from its Ichimoku cloud on the daily chart at the US$1,940 level, as Treasury yields headed higher and US dollar firmed in the aftermath of the Fed meeting. This US$1,940 level also marks a confluence with its 100-day moving average (MA), reinforcing the level as a key resistance to overcome for buyers. Thus far, prices have failed to trade above the cloud since its breakdown in June this year, with any further downside likely to leave the US$1,900 level on watch as immediate support to hold. Source: IG charts https://www.dailyfx.com/news/asia-week-ahead-fed-s-hawkish-takeaway-firms-us-dollar-while-aud-usd-gold-weigh-20230921.html

2023-09-13 03:07

JAPANESE YEN PRICE, CHARTS AND ANALYSIS: Yen Selloff Resumes Following Yesterday's Gains on Governor Ueda Comments. BoJ Policy Pivot Unlikely to Occur Anytime Soon as Wage Growth Remains Key for the BoJ. USD/JPY Eyes 150.00 with EUR/JPY Printing a Head and Shoulders Pattern. Chance of Break Lower for EUR/JPY? YEN FUNDAMENTAL BACKDROP The Japanese Yen has resumed its selloff in the European session today following yesterday's gains. Comments by Bank of Japan Governor Ueda helped the Yen start the week on the front foot, but it was unlikely to last. It would appear at this stage that Governor Ueda is using his comments as a softer approach to FX intervention. I do believe the Governor is serious about ending the negative rate environment (the reason he was chosen), but this will not only depend on inflation but whether or not wage growth remains consistent and above inflation. We heard comments in the Asian session today as well from Finance Minister Shunichi Suzuki who left the ball firmly in the Bank of Japan’s (BoJ) court. The Finance Minister stated that it is up to the Bank of Japan to decide what policy steps it takes while refusing to be drawn into a debate following Governor Ueda’s comments. Finance Minister Suzuki went further and clarified that he expects the BoJ to co-ordinate closely with Government and guide policy appropriately based on economic, price and financial conditions so (the bank's) inflation target can be achieved in a sustainable and stable manner. There is optimism that the BoJ will reach its inflation target soon, will that be enough? Will wage growth be more important to BoJ officials. EXTERNAL FACTORS CONTINUE TO DRIVE YEN PAIRS As I had discussed yesterday Yen pairs and USDJPY in particular did come under selling pressure before bouncing today as the Dollar Index (has started the day on the front foot. Japanese Yen pairs continue to be driven by external factors with a lot in terms of high impact data releases ahead from both the US and Japan. The US side brings US CPI data which could really create volatility. There is also PPI data from Japan as well as the Reuters Tankan Index which could show some signs of where the Japanese Economy currently rets. PRICE ACTION AND POTENTIAL SETUPS EURJPY EURJPY has kept up with the trend in Yen pairs of late, with selling pressure proving to be short-lived thus far. Yesterday saw the Yen start the week positively but EURJPY failed to close below the key confluence area around the 157.00 handle. There does appear to be a head and shoulder pattern in play as well with the neckline also resting around the 157.00 handle. A daily candle close below 157.00 may open up the possibility of further downside but should we see a rate hike from the ECB this week it could throw the technical into a short-term frenzy. An ECB rate hike could scupper the idea of further downside at least in the short-term while market participants gauge the ECB outlook moving forward. I do however believe that any break to the downside may come under buying pressure even if we get a pause, purely from a fundamental standpoint. EURJPY Daily Chart Source: TradingView, prepared by Zain Vawda Key Levels to Keep an Eye On: Support levels: 157.00 (50-day MA) 155.50 154.21 (100-day MA) Resistance levels: 158.30 159.00 160.00 USDJPY USD/JPY Daily Chart Source: TradingView, prepared by Zain Vawda From a technical perspective, USD/JPY pushed lower in a similar vain to EURJPY but failed to close below 146.50 support level. An aggressive bounce today as the Dollar Index (DXY) recovers has seen USDJPY put in gains of around 70 pips at the time of writing. Today’s daily candle is on course for a bullish engulfing close which could lead to further upside tomorrow. The only factor that could scupper a fresh high could be a soft US CPI print tomorrow. Should CPI come in higher than forecast there is every chance that we make a run for that key 150.00 psychological level which could be the straw that breaks the camel's back and lead to FX intervention by the BoJ. This week could turn into a really interesting one for Yen pairs as a whole. Key Levels to Keep an Eye On: Support levels: 146.50 145.00 143.60 (50-Day MA) Resistance levels: 147.80 150.00 (Psychological level) Taking a quick look at the IG Client Sentiment Data which shows retail traders are 74% net-short on USDJPY. https://www.dailyfx.com/news/japanese-yen-selloff-resumes-usd-jpy-eur-jpy-eye-further-upside-20230912.html

2023-09-13 03:04

RAND TALKING POINTS & ANALYSIS Chinese optimism unable to deter USD upside. US & Chinese economic data the focus for the week. USD/ZAR trendline resistance remains in tact for now. USD/ZAR FUNDAMENTAL BACKDROP The rand has given up some of its recent gains against the USD this Tuesday as key US economic data looms. Tomorrow’s US CPI (see economic calendar below) is expect to tick higher on the headline figure while many analysts anticipate a beat on the core print that could weigh negatively on the rand – contributing to today’s dollar strength. There has been some positivity around China and its stimulus measures but the US trading session swept some of these early Asian/European advances away. With no high impact South African specific data scheduled throughout the week, US and Chinese influences will play a major role. Chinese industrial production, retail sales, unemployment and 1-year MLF rate announcement will provide some short-term volatility early on Friday morning. From a US perspective, PPI, retail sales and Michigan consumer sentiment will keep interest alive across USD crosses following on from CPI. ZAR ECONOMIC CALENDAR (GMT +02:00) Source: DailyFX Economic Calendar TECHNICAL ANALYSIS USD/ZAR WEEKLY CHART Chart prepared by Warren Venketas, IG Weekly USD/ZAR price action above shows last week’s close tentatively above trendline resistance (black). The lack of conviction could point to additional rand strength to come traders remain cautious ahead of tomorrow’s US CPI which should provide short-term directional bias for the EM pair. USD/ZAR DAILY CHART Chart prepared by Warren Venketas, IG Looking closer at the daily chart above, USD/ZAR now sits below the 19.0000 psychological handle and should today’s candle close with another long upper wick, market inclination could skew towards the downside. It is important to remember that the two respective central banks in question (SARB and Federal Reserve) are beginning to diverge with South African inflation beginning to soften at a quicker pace than the resilient US economy who may still opt for additional monetary policy tightening dependent on incoming data. Resistance levels: 19.5000 19.1522 19.0000 Support levels: 18.7759 50-day MA (yellow) 18.5000 https://www.dailyfx.com/news/forex-usd-zar-price-forecast-rand-stumbles-ahead-of-us-cpi-wv-20230912.html

2023-09-13 03:02

EUR/USD ANALYSIS EUR/USD gains proved short-lived ahead of US CPI US CPI poses a threat to the euro, a hotter print opens up further EUR/USD selling Major risk events ahead: US CPI, ECB rate decision EUR/USD GAINS PROVED SHORT-LIVED AHEAD OF US CPI On Monday, the BoJ and China posed a challenge to USD dominance, allowing momentary respite for currencies against the greenback. The moment proved to be a very short one seeing that EUR/USD has been unable to pull back to the 200 simple moving average (SMA) around the 1.0831 level. On Wednesday, US CPI is anticipated to reveal a rise in the headline version of the data set reflecting the recent rise in commodity prices, mainly oil. July’s CPI print rose from 3% the month before to 3.2% and we are potentially going to see a move to 3.6% meaning inflation risks have regained momentum. The US economy is powering ahead as PMI data showed an improvement in business activity and new orders and the Atlanta Fed anticipates Q3 GDP growth could reach 5.6%. The real-time estimate has been known to overinflate actual GDP but nevertheless remains a positive for the dollar and may lead to rate cuts being shifted further along into next year as the ‘higher for longer’ narrative gains traction. Source: Atlanta Fed, prepared by Richard Snow Speaking of traction, EUR/USD appears to have lost its footing as the pair continues its slide. EUR/USD bears may have been licking their lips as the pair edged higher, possibly providing a better entry point for trend continuation plays. That proved not to be the case and EUR/USD appears vulnerable to the downside ahead of US CPI tomorrow. The psychological 1.0700 level could come under pressure tomorrow, with the potential to move towards the 38.3% Fibonacci retracement of the major 2021 – 2022 move at 1.0610. Resistance remains at 1.0831. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow The weekly chart reinforces the current bearish posture of the pair after breaking beneath the ascending channel. There is yet to be a concerted move back towards prior channel support and in the absence of such a move, the pair remains exposed to further selling – particularly as fundamental data worsens in Europe while the US surges on. EUR/USD Weekly Chart Source: TradingView, prepared by Richard Snow MAJOR RISK EVENTS STACK UP US inflation data shifts the week into gear tomorrow with the ECB rate decision on Thursday. Odds are edging closer to a 50/50 split between a 25-bps hike or a pause from the ECB’s governing council. Delaying a hike for one of the remaining meetings this year could prove tricky if inflation fails to continue moving lower. Worsening fundamental data would make a decision to hike a lot harder to get over the line. This week appears like a better option. https://www.dailyfx.com/news/euro-outlook-eur-usd-struggles-for-traction-ahead-of-major-event-risk-20230912.html