2023-09-06 03:10

EURO, EUR/USD, RSI DIVERGENCE – TECHNICAL UPDATE: Euro closed at its lowest in almost 3 months EUR/USD close to ending dominant uptrend EUR/GBP once again approaching support The Euro closed at its lowest against the US Dollar in almost 3 months, extending the downtrend since July. In fact, EUR/USD confirmed a breakout under the 200-day Moving Average. That is offering a stronger bearish technical conviction. Still, the dominant uptrend since late 2022 remains in play. Immediate support from here is 1.0635. The latter is the May low. If the single currency breaks below this price and confirms the breakout, EUR/USD will effectively end the dominant uptrend since the end of last year, ending the strings of higher highs and higher lows. That would open the door to revisiting the March low of 1.0516. Otherwise, a turn higher from here places the focus on the falling trendline from July. Chart Created in TradingView Meanwhile, the Euro is also struggling against the British Pound. After establishing new resistance at 0.861, EUR/GBP has been falling towards the key zone of support between 0.8493 and 0.8519. The latter has been holding since June, establishing a zone of consolidation with key resistance as the 0.8658 – 0.8701 range. With positive RSI divergence brewing, fading downside momentum could open the door to a bounce off support. That would place the focus on the 100-day Moving Average, which can hold as resistance maintaining the broader downside focus since February. Otherwise, clearing through support places the focus on the 61.8% Fibonacci extension level of 0.8408. Chart Created in TradingView https://www.dailyfx.com/analysis/euro-technical-forecast-eur-usd-and-eur-gbp-drop-to-key-support-levels-20230906.html

2023-09-06 03:09

AUD/USD SENTIMENT ANALYSIS Sentiment data from IG shows that 86.20% of traders are net long, with the bullish-to-bearish ratio standing at 6:25 to 1 at the time of writing. The tally of clients who are net long has increased by 15.15% since yesterday and by 8.53% over the previous week, while the number of net-short traders has decreased by 27.36% compared to the previous session and by 20.28% from the preceding week. Taking a contrarian view of crowd sentiment, the heightened bullish positions on AUD/USD indicate the potential for further declines in the pair. It's crucial to note that traders remain more net-long than they were both yesterday and in the previous week. Taking these aspects into account, the current positioning, combined with recent sentiment shifts, suggests a robust contrarian trading bias favoring a bearish outlook for AUD/USD. Source: IG Client Sentiment Data AUD/USD TECHNICAL ANALYSIS AUD/USD experienced a notable pullback on Tuesday, dragged lower by disappointing economic data from China, which had a cascading effect and put downward pressure on riskier currencies. Following this retracement, the currency pair momentarily established a new low for the year but was unable to decisively breach the critical support zone in the vicinity of 0.6360. In the days ahead, it is imperative for traders to closely monitor the 0.6360 area, as a breakdown could potentially trigger a selloff toward 0.6275. On further weakness, the possibility of a revisit of the 2022 lows near 0.6170 should not be ruled out. On the flip side, if the bulls regain control of the market and initiate a bullish reversal, the first resistance to consider appears near the psychological 0.6500 threshold. Upside clearance of this barrier could catalyze additional buying interest, paving the way for a rally toward 0.6600. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-australian-dollar-outlook-aud-usd-in-peril-as-sentiment-data-signals-weakness-20230905.html

2023-09-06 03:07

AUD/USD, AUSTRALIAN DOLLAR, RBA, GDP – TALKING POINTS: The Australian economy slowed in Q2, but less than expected. AUD/USD declined after the data release and is now testing key support. What’s next for AUD/USD? The Australian dollar fell against the US dollar after the Australian economy slowed in the second quarter of the year, reinforcing the growing view that the Reserve Bank of Australia (RBA) is done with hiking interest rates. The economy grew 2.1% on-year in the April-June quarter from 2.3% in the January-March quarter, compared with 1.8% expected, and 2.7% in the last quarter of 2022. GDP grew 0.4% on-quarter, in line with expectations, after net export volumes expanded more than twice analysts’ expectations as the government spent big on infrastructure during the quarter, offsetting the softness in household consumption. AUD/USD 5-minute Chart Chart Created Using TradingView The data trajectory is likely to further strengthen the belief that the RBA will keep interest rates on hold for the rest of the year. At its meeting on Tuesday, the RBA kept interest rates on hold, saying recent data were consistent with inflation returning to the 2-3% target range by 2025, boosting hopes that the tightening cycle was over. However, the central bank reiterated that further tightening may still be required, though it would depend on the outlook for inflation and the labour market. Australia's CPI eased more than expected in July, coinciding with the RBA’s view that the worst is probably over for inflation. Markets see a small probability of one last hike before the end of 2023. Much would depend on the outlook with regard to the Chinese economy, as the RBA noted on Tuesday while keeping the cash rate steady at 4.1%. Chinese policymakers have responded with a spate of support/stimulus measures in recent months, but those measures have yet to have a meaningful impact on sentiment. China is Australia’s largest export destination. AUD/USD Daily Chart Chart Created Using TradingView On technical charts, after a brief reprieve, AUD/USD is retesting the multi-month low of 0.6360 hit in August. Any decisive break below could initially pave the way toward the early November 2022 low of 0.6270, with major support at the October 2022 low of 0.6170. On the upside, the pair would need to rise above immediate resistance at last week’s high of 0.6525 for the imminent downward pressure to fade. https://www.dailyfx.com/news/australian-dollar-falls-after-gdp-beat-how-much-more-downside-for-aud-usd-20230906.html

2023-09-06 03:06

US Dollar, USD/JPY, Japanese Yen, Treasury Yields, JGB, BoJ, YCC, Kanda - Talking Points The US Dollar scaled to new heights overnight with Treasury yields jumping The Japanese Yen lost ground, but official chatter might start running interference If USD/JPY continues to climb, will we see action from the Bank of Japan? The US Dollar roared across the board overnight with Treasury yields taking flight along the curve. USD/JPY ran to its highest level since November last year in the New York session, topping out at 148.80. It recoiled lower in early Wednesday trade after comments from Masato Kanda, Japan’s Vice Minister of Finance for International Affairs, the title is colloquially known as Japan’s chief of currency. On speculative moves in foreign exchange, he said, “if these moves continue, the government will deal with them appropriately.” The framing of the language has been viewed by the market as softer than that used when the Bank of Japan (BoJ) intervened in USD/JPY late last year. Most apparent is that the jawboning has begun and may seem likely to get stronger should USD/JPY approach last year’s peak of 151.95. In the meantime, the spread between Treasuries and Japanese Government Bonds (JGB) has been widening but not to the same extent that occurred when USD/JPY hit its peak. While the 10-year Treasury note is close to where it was in November last year, the JGB yield has been allowed to creep higher. It is currently near 0.65%, above the 0.50% yield it had previously been anchored to by the BoJ’s yield curve control (YCC) program. The change in YCC policy was not a directive to adjust the +/- 50 basis points band around zero percent for JGBs out to 10 years, but rather to allow flexibility in the implementation. Today’s comments from Kanda san might be reflective of an overall tilt in the way Japanese officials are seeking to avoid sudden and excessive volatility toward Yen depreciation. BoJ board member Hajime Takata also spoke on Wednesday but did little to move the dial in regards to monetary policy. To learn more about trading USD/JPY, click on the banner above. Elsewhere currencies exposed to global growth and risk sentiment saw the largest losses overnight with the Australian Dollar leading the way lower in the aftermath of the RBA leaving rates on hold yesterday at 4.10%. Compounding the outlook for such currencies, the outlook for China continues to be mired in uncertainty around the prospects of the property sector there being able to make a recovery. The Caixin services PMI missed forecasts yesterday, coming in at 51.8 for August, rather than the 53.5 anticipated and 54.1 previously. The composite PMI was 51.7 against 51.9 prior. USD/JPY AND YIELD SPREAD BETWEEN 10-YEAR TREASURIES AND JGBS Chart created in TradingView https://www.dailyfx.com/news/us-dollar-soars-as-yen-sinks-on-burgeoning-yield-differential-higher-usd-jpy-20230906.html

2023-09-05 09:50

NZD/USD: Retail trader data shows 80.80% of traders are net-long with the ratio of traders long to short at 4.21 to 1. Our data shows traders are now at their most net-long NZD/USD since Aug 13 when NZD/USD traded near 0.60. The number of traders net-long is 4.00% higher than yesterday and 2.86% lower from last week, while the number of traders net-short is 9.48% lower than yesterday and 28.08% lower from last week. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger NZD/USD-bearish contrarian trading bias. https://www.dailyfx.com/analysis/NZDUSD-IG-Client-Sentiment-202309050823.html

2023-09-05 09:49

Australian Dollar, AUD/USD, ASX S&P 200, RBA, Lowe, Bullock, CPI, China – Talking Points The Australian Dollar bumper around after the RBA left rates unchanged at 4.10% The last move by Philip Lowe was in line with market pricing and economist forecasts The new RBA governor has hurdles ahead. If inflation reignites, will the RBA tighten again? The Australian Dollar struggled to gain traction on Tuesday after the RBA left its cash rate at 4.10% as widely anticipated by the interest rate market and economists. The Aussie had been battling going into the decision on slight risk aversion sentiment with equity markets seeing a soft day. The ASX S&P 200 slid slightly lower from the open but steadied in the afternoon session and was little changed after the RBAs announcement. The accompanying statement on the monetary policy decision by Governor Philip Lowe cited notable risks around services inflation, the uncertainty around the laggard effects of tighter policy, household consumption and the economic outlook for China given the problems in its property sector. The statement noted, “Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks.” This was Mr Lowe’s last decision as Governor, and he will hand over the reins in a fortnight to Michele Bullock. Ms Bullock has been the Deputy Governor of the bank since April 2022 and has been with the institution since 1985. She has a reputation as a leading economist in her own right. The appointment is mostly viewed as a steady transfer of leadership at a critical time for monetary policy at the RBA and her recent remarks point toward a similar approach to that of her predecessors. Going into today’s monetary policy decision, AUD/USD had been slipping lower as the US Dollar strengthened across the board, despite a holiday there overnight. Perhaps undermining the Aussie, headline current account figures missed estimates earlier today. However, on closer inspection, the statistics could be seen as neutral, given the upward revisions to the prior reading. In addition, net exports as a percentage of GDP were robust through the second quarter. This points towards another stellar trade surplus that will be released on Thursday. Elsewhere in Asia today, China’s attempts to reignite its economy continue to struggle to get off the ground with the Caixin services PMI missing estimates today, further highlighting the RBA’s concerns. It came in at 51.8 for August, rather than the 53.5 anticipated and 54.1 previously. The composite PMI was 51.7 against 51.9 prior. On Wednesday, 2Q Australian quarter-on-quarter GDP is forecast to be 0.3% against 0.2% previously. Annual GDP to the end of July is anticipated to be 1.8% against the prior read of 2.3% as the base effect kicks in. The full economic calendar can be viewed here. AUD/USD 1 MINUTE CHART PRICE REACTION TO RBA HIKE Chart created in TradingView https://www.dailyfx.com/news/australian-dollar-languished-near-lows-after-rba-pauses-again-lower-aud-usd-20230905.html