2023-08-30 01:10

USD/JPY ANALYSIS USD/JPY rose to multi-month highs during Tuesday's European session, but erased gains and reversed course sharply following weak and lackluster U.S. economic data. By late afternoon, the pair was losing 0.35% to trade at 146.00, after reaching a peak of 147.37 in the morning. Earlier in the day, the latest consumer confidence survey showed that sentiment had fallen sharply and more than expected in August, dropping to 106.01 from 114.00 previously and erasing consecutive gains in June and July. Another report revealed that job openings fell to 8.8 million in July, reaching their lowest level since March 2021, a clear indication that the labor market is weakening, buckling under the weight of restrictive monetary policy aimed at curbing inflation. US ECONOMIC DATA Source: DailyFX Economic Calendar Unfavorable macro results have reduced the likelihood of additional Fed tightening, though they have not eliminated the possibility of further policy firming entirely. In this context, yields have begun to head downwards, creating a somewhat bearish backdrop for the U.S. dollar in the session. For a sustained retreat in USD/JPY, there needs to be consistent evidence of a slowdown in the U.S. economy. Otherwise, the pair might maintain its long-term uptrend once the dust settles, supported in part by the Bank of Japan's ultra-loose monetary stance. USD/JPY TECHNICAL ANALYSIS From a technical analysis standpoint, USD/JPY jumped and charged at channel resistance at 147.40 on Tuesday, but the rally couldn’t maintain its momentum and faced a swift rejection, signaling an aggressive concentration of sellers just a tough below 147.50. Even with the retracement, the overall outlook for the pair remains bullish, evident from the consistent pattern of higher highs and higher lows. Nevertheless, given the substantial upward movement seen this year, the possibility of a consolidation phase should be taken into consideration. Focusing on major price levels, support rests at 144.60, followed by 143.85. Further down the line, attention shifts to the 50-day simple moving average. On the resistance side, the first ceiling to consider emerges at 147.40, and 149.00 thereafter. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 soared on Tuesday, marking its third consecutive trading session of gains. This ascent not only counteracted a portion of the losses incurred over the previous four weeks but also picked up momentum from the anticipation that worsening U.S. economic data will prompt the Federal Reserve to cease rate hikes before transitioning to a more dovish stance in early 2024. Turning to technical analysis, the tech index has managed to overtake its 50-day simple moving average following the latest upswing. If this move is sustained, the bulls could become emboldened to launch an attack on 15,500, the next resistance to keep an eye on. Successful clearance of this barrier could open the door for a retest of the 2023 peak. In the event of a bearish reversal, initial support comes into view near 14,850. This floor aligns with the lows seen on June 26-27 and coincides with a medium-term rising trendline. While the Nasdaq 100 might find stability around these levels during a pullback, a breakdown has the potential to intensify selling pressure and establish conditions conducive to a decline toward 14,600. NASDAQ 100 TECHNICAL CHART https://www.dailyfx.com/news/forex-usd-jpy-rejected-at-channel-resistance-nasdaq-100-comes-alive-as-us-yields-tank-20230829.html

2023-08-29 01:21

RAND TALKING POINTS & ANALYSIS Falling SA inflation hinders ZAR upside. SA stock and bond outflows a concern. USD/ZAR exhibiting hesitancy ahead of key economic data. USD/ZAR FUNDAMENTAL BACKDROP The rand is steadily consolidating after last week’s Jackson Hole Economic Symposium where markets are mulling over the ‘higher for longer’ viewpoint from the Federal Reserve. Today’s price movements on USD/ZAR has the greenback slightly firmer against the ZAR despite the fact that the Dollar Index (DXY) is marginally lower on the day. Last weeks local inflation miss has also contributed to a more accommodative expectation from the SARB, leaving the rand exposed to more downside. Looking at the JP Morgan Emerging Market (EM) Currency Index below, EM’s are generally tracking lower today largely due to concerns around China where the government decreased stamp duty on local shares. Economic growth has been a key theme of recent for China and recent economic data has supported a bleak outlook. Generally, this does not translate well for the rand and further concern and/or deterioration could weigh negatively on the currency. JP MORGAN EMERGING MARKETS CURRENCY INDEX Source: Refinitiv Another interesting fact released this morning shows that South African stocks last week saw an outflow of R2.87 billion ($153.2 million) by foreign investors with a similar pattern being seen through local bond sales. The BRICS summit may have been a potential catalyst as many western nations are not in favor of many of the undertakings by the BRICS bloc, resulting in investor resistance against these nations. The rest of the week (see economic calendar below) holds several South African data releases but the focal point for USD/ZAR will be solely focused on US Core PCE and Non-Farm Payroll (NFP) and Chinese manufacturing PMI prints respectively. Rand bulls will be looking for softer inflation, weaker labor data and firmer China manufacturing numbers. SOUTH AFRICA ECONOMIC CALENDAR (GMT +02:00) TECHNICAL ANALYSIS USD/ZAR DAILY CHART Chart prepared by Warren Venketas, IG Daily USD/ZAR price action trades without any real direction bias at this point confirmed by the Relative Strength Index (RSI) lingering around the midpoint region. Upcoming fundamental news will likely provide traders with more clarity in the short-term. Resistance levels: 19.0000 18.7759 Support levels: 18.5000/50-day MA (yellow) 18.2500 https://www.dailyfx.com/news/forex-usd-zar-price-forecast-brics-jackson-hole-oppose-rand-upside-wv-20230828.html

2023-08-29 01:19

USD/JPY PRICES, CHARTS AND ANALYSIS: USD/JPY Looks to Advance Beyond Last Weeks High Following Temporary Pause. USD/JPY Bulls Remain Cautious Ahead of a Busy Data Week and the Continuous Cloud of FX Intervention. IG Client Sentiment Has the Majority of Traders Holding Short Positions on USDJPY. The Yen looked to pare back some losses this morning following the release of the updated Economic outlook by the Japanese Government. This was followed by further attempts from Chinese authorities to bolster the economy which led to a slight risk-on mood in the Asian session and weighing on the US Dollar. However, as the day has progressed and with low liquidity thanks to the UK banking holiday, we have seen USDJPY continue its advance, eyeing a break of last week’s high. JAPAN MONTHLY ECONOMIC OUTLOOK REPORT The Japanese Government released its monthly economic outlook report for August overnight with no changes of any significance. The Government sees private consumption picking up with business investment also showing positive signs. The government also expressed satisfaction with the industrial production numbers and corporate profits which are improving moderately as a whole. Consumer prices are rising but remains below the Central Banks target with ultra easing monetary policy needed as a result. The recent tentative moves we have witnessed in JPY pairs could be down to the ongoing fears of FX intervention by Japanese authorities. Historically these have come without warning and has the potential to stoke volatility. Last year's FX intervention saw whipsaw price action follow with USDJPY enjoying a wild day of swings with a 600-odd pip move from the low to high of the day. With this in mind we could be in for some form of hesitancy as USDJPY continues to trickle higher with bulls cautious about overcommitting in case FX intervention becomes a reality. DATA PACKED WEEK AHEAD A lot on the calendar this week in the form of risk events particularly from the US. As Central Banks globally are expected to see monetary policy divergence moving forward this is even more pronounced between the BoJ and the US Fed. At the Jackson Hole Symposium we heard Fed Chair Jerome Powell keep the door open for further hikes while stressing the need for data dependency. This makes the week ahead even more intriguing given some key data releases expected out of the US. GDP 2nd estimates, Core PCE and of course the NFP jobs report all lie ahead this week and could give market participants a clearer indication of what to expect from the FED. Positive data prints here could further aid the US Dollar rally as market participants are likely to hawkishly reprice a potential Fed peak rate. FINAL THOUGHTS AND TECHNICAL OUTLOOK USD/JPY looked on course for a deeper retracement last week following positive technical signs. A double top on the Daily timeframe was followed by a daily candle break and close below the 145.00 handle. The break of the 145.00 handle looked significant at the time but was followed up by a bullish engulfing candle illustrating the weakness and lack of conviction by JPY bulls at the moment. As things stand, we are trading at a resistance area around the 146.50 mark. A convincing break above here and we do have a lot in terms of resistance all the way up to the 150.00 psychological level. Given the constant fear around FX intervention, I do not expect a move higher to be swift and without some short-term pullbacks. Key Intraday Levels to Keep an Eye On: Support levels: 145.90 145.00 (Psychological Level) 144.50 Resistance levels: 146.50 147.50 150.00 (psychological level) USD/JPY Daily Chart – August 28, 2023 Source: TradingView, Chart Created by Zain Vawda IGCS shows retail traders are currently Net-Short on USDJPY, with 78% of traders currently holding SHORT positions. https://www.dailyfx.com/news/forex-japan-maintain-economic-outlook-usd-jpy-catches-its-breath-at-weekly-high-20230828.html

2023-08-29 01:17

GBP/USD ANALYSIS The British pound gained ground against the U.S. dollar, but its advance was limited, as traders embraced a cautious position and avoided taking large directional bets ahead of the August U.S. payrolls report due for release on Friday. Given the Fed’s data-dependent approach, labor market incoming information will play a crucial role in determining the FOMC’s next moves, with strong job gains bolstering the case for more monetary tightening and weak employment growth diminishing the prospects of further policy firming. Taking a look at the technical picture, GBP/USD has started to perk up after encountering support at 1.2555 late last week following a sharp sell-off, but the bounce seems to lack conviction on Monday, a sign that cable is not out of the woods yet. For clues on the outlook, traders should closely watch price action in the coming days. That said, if GBP/USD manages to extend its rebound, the first ceiling to consider rests at 1.2620, followed by 1.2680. On further strength, the bulls could muster the momentum for an attack on trendline resistance at 1.2750. Conversely, if sellers regain the upper hand and spark a bearish reversal, initial support appears at 1.2555, and 1.2445 thereafter. In the event of a breakdown, the crosshairs will be fixed on the 200-day simple moving average, followed by 1.2315, the 61.8% Fib retracement of the 2023 rally. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView GBP/JPY ANALYSIS Sterling also rose against the Japanese yen on Monday, extending its recovery for the second consecutive trading session after bouncing off technical support at 183.30 last Friday, with the latest advance likely bolstered by dovish comments from the Bank of Japan over the weekend. BoJ Governor Kazuo Ueda said policymakers will maintain the current monetary easing framework as core inflation remains "a bit below target." These statements suggest the central bank will probably not adjust its yield curve control program again this year following July’s surprise tweak, nor will it abandon negative interest rates for the foreseeable future. BoJ’s ultra-accommodative stance will prevent the yen from gaining much traction against the British pound for now, especially if Bank of England continues to hike interest rates as part of a strategy to curb price pressures in the economy. By way of context, the UK has the most persistent inflation in G10, with headline CPI clocking in at 6.8% y-o-y in July. Focusing on technical analysis, GBP/JPY remains entrenched within an undisputable uptrend despite recent softness, with prices trading above key moving averages and displaying impeccable higher highs and higher lows. However, to be confident in the bullish outlook, the pair needs to break above the 2023 peak at 186.76 in the near term. If this scenario plays out, buying interest could gain impetus, paving the way for a move to 189.00. In the event of a pullback, initial support lies at 183.30, followed by 182.65. On further weakness, we could see a drop towards 181.00. GBP/JPY TECHNICAL CHART https://www.dailyfx.com/news/forex-british-pound-forecast-gbp-usd-awaits-nfp-as-gbp-jpy-cheers-ueda-s-dovish-views-20230828.html

2023-08-29 01:16

GOLD, RETAIL TRADER POSITIONING, TECHNICAL ANALYSIS – IGCS UPDATE Gold prices extend recent push higher to trendline Retail traders are becoming slowly more bearish Gold prices have been aiming higher in recent weeks. In response retail traders have been cautiously increasing downside exposure. This can be seen by taking a look at IG Client Sentiment (IGCS), which often functions as a contrarian indicator. With that in mind, could further upside progress be in store for the yellow metal in the coming sessions? Gold Sentiment Outlook - Bearish The IGCS gauge shows that about 75% of retail traders are net-long gold. Since most of them are biased to the upside, this hints that prices may continue falling down the road. Meanwhile, downside exposure has increased by 23.58% and 26.59% compared to yesterday and last week, respectively. With that in mind, recent changes in positioning hint that the price trend may soon reverse higher despite overall exposure. XAU/USD Daily Chart On the daily chart below, gold has extended a cautious push higher above the 38.2% Fibonacci retracement level of 1903.46. That is now placing the focus on the falling trendline from earlier this year. The latter could reinstate the broader downside focus, pushing XAU/USD back to the mid-August swing low of 1884.89. Otherwise, clearing above the falling trendline, as well as the 1936.90 inflection zone, exposes the 23.6% level of 1971.63 as key resistance. Extending gains beyond that could open the door to revisiting the 2048.79 – 2081.82 resistance zone. https://www.dailyfx.com/analysis/gold-price-outlook-xau-usd-may-rise-as-retail-traders-become-bearish-20230828.html

2023-08-25 06:18

BRITISH POUND, GBP/USD, TECHNICAL ANALYSIS, RETAIL TRADER POSITIONING – IGCS UPDATE British Pound sees the worst 24 hours since late July Retail traders have increased upside GBP/USD bets Bearish Head & Shoulders chart pattern still in focus The British Pound closed at its lowest against the US Dollar since the middle of June over the past 24 hours after GBP/USD dropped almost 1% in the worst 24-hour period since the end of July. In response, retail traders have started to increase upside exposure. This can be seen by looking at IG Client Sentiment (IGCS), which often functions as a contrarian indicator. With that in mind, could further pain be in store for Sterling? GBP/USD Sentiment Outlook – Bearish The IGCS gauge shows that about 62.44% of retail traders are net-long GBP/USD. Since most of them are biased higher, this hints that prices may fall down the road. This is as upside exposure increased by 23.86% and 25.24% compared to yesterday and last week, respectively. With that in mind, the combination of current sentiment and recent changes offers a stronger bearish contrarian trading bias. British Pound Daily Chart On the daily chart below, GBP/USD had fallen to the neckline of a developing bearish Head & Shoulders chart formation. On top of this, prices have broken under the 100-day Moving Average (MA), opening the door to an increasingly bearish technical conviction. Further downside confirmation exposes the May low of 1.2308. Meanwhile, in the event of a turn higher, the right shoulder peak is sitting just below 1.2848. Pushing above this price opens the door to undermining the chart formation, placing the focus on the former rising trendline from last year. https://www.dailyfx.com/analysis/british-pound-at-risk-amid-bullish-retail-traders-gbp-usd-head-shoulders-still-eyed-20230824.html