Pair
EUR/USD
Summary
EUR/USD fell for the fifth straight trading day on Monday despite the uptick in the German bond yields. The currency pair dropped 0.10% on Monday, hav
Content
  • EUR/USD fell 0.10% on Monday, confirming the first five-day losing streak in three months.
  • EUR/USD dropped even though the German Bund yields ticked higher on stimulus talk.
  • Markets are likely worried that the German stimulus may not be strong enough to counter the economic slowdown.
  • A sustained rise in Germa yields may help the EUR end the five-day losing streak.

EUR/USD fell for the fifth straight trading day on Monday despite the uptick in the German bond yields.

The currency pair dropped 0.10% on Monday, having registered 0.38%, 0.29%, 0.28% and 0.15% losses on Tuesday, Wednesday, Thursday, and Friday, respectively.

That is the first five-day losing streak since mid-May. Back then, the pair had dropped for five straight days from May 13 to May 17.

Yields bounce on talk of German fiscal boost

The German 10-year bond yield rose more than six basis points to -0.64% on Monday on reports of German willingness to increase fiscal spending in order to support the struggling economy. The German government could come up with $55 billion (€50 billion) in the stimulus should the country's economy fall on hard times, German Finance Minister Olaf Scholz said in Berlin on Sunday, according to Bloomberg News.

The EUR/USD pair rose above 1.11 in the European trading hours on Monday, tracking the rise in the yields, only to end the day on a negative note at 1.1078.

EUR's inability to score gains despite the recovery in yields likely indicates concerns that Germany's stimulus, if any, will not be enough to buttress the economy.

So, while the path of least resistance remains to the downside, the common currency may end up snapping the five-day losing streak with moderate gains if the German yields continue to rise today. As of writing, EUR/USD is trading at 1.1087, representing 0.10% gains on the day.

An above-forecast German producer price index for July may strengthen the bid tone around the EUR. The data is scheduled for release at 06:00 GMT.

Technical levels

 


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1065 S2: 1.1052 S3: 1.1027 R1: 1.1103 R2: 1.1127 R3: 1.1140
Trend Index
Recommendation: StronglyBearish Strength: -5
OBOS Index
Recommendation: Neutral

Pair
GBP/USD
Summary
Although the EU and Ireland rejected the UK’s proposal to alter Irish backstop agreement, the GBP/USD pair recovers to 1.2133 won early Tuesday.
Content
  • GBP/USD recovers as the UK’s new government is appreciated by the US, Malaysia.
  • The EU, Ireland reiterate unpreparedness to renegotiate the Brexit deal.
  • PM Johnson’s visit to the German, France will be the key.

Although the EU and Ireland rejected the UK’s proposal to alter Irish backstop agreement, the GBP/USD pair recovers to 1.2133 while heading into the London open on Tuesday.

During the early Asian session, the UK Prime Minister (PM) Boris Johnson’s four-page letter concerning alternative way for Irish backstop and scope for Brexit deal renegotiation was firmly turned down by the EU, as per The Guardian. The report also mentions that the PM Johnson spent a few hours talking with his Irish counterpart to persuade him for the deal but failed to get any positive response.

On the other hand, the US President Donald Trump and Malaysian Prime Minister Mahathir Bin Mohamad showed upbeat response towards their future trade relations with the UK after Brexit.

Market sentiment remains mostly unchanged as traders await fresh clues from this week’s key events while same old stories concerning trade, Brexit and monetary policy easing are gaining less audience nowadays.

While the economic calendar is likely to portray another dull day, investors will brace for the UK PM’s two-day visit to Germany and France while the US Federal Reserve policymakers’ appearance at the Jackson Hole Symposium will also provide fresh impulse.

Technical Analysis

Buyers will keep an eye over 1.2210/15 area including August 06 high and July 29 low to aim for 1.2250 whereas 10-day exponential moving average (EMA) level of 1.2120 can drag prices to eight-day-old rising support-line at 1.2085 now.


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.2097 S2: 1.2067 S3: 1.2029 R1: 1.2165 R2: 1.2203 R3: 1.2233
Trend Index
Recommendation: Bearish Strength: -3
OBOS Index
Recommendation: Neutral

Pair

Summary
People's Bank of China (PBOC) Vice Governor Liu was on the wires last minutes, via Reuters, with the key headlines found below. China will not scrap b
Content

People's Bank of China (PBOC) Vice Governor Liu was on the wires last minutes, via Reuters, with the key headlines found below.

China will not scrap benchmark lending rate for the time being.

China still needs time to observe effects of LPR reform.

Future interest rate policy focus will be on the LPR, benchmark rates may not be changed in near term.

There is room for cuts in both the reserve requirement ratio and lending rate.

Interest rate differential between US and China poses no pressure on the yuan.

Urgency for interest rate reform due to China - US trade war, industrial transformation, rate cuts from global central banks.

China's economy is not experiencing deflation, market rates at a basically reasonable level.

Overall lending costs to small and medium-sized firms has dropped more than 1 pct point this year.

China will keep individual mortgage lending basically stable, issue a plan on such lending.

China will keep benchmark deposit rate for a relatively long time.

Loan prime rate reform has no direct impact on yuan.

Markets remain cautious, as they assess the impact of the Chinese lending rate reform, effective today, with the Yen trading on the front foot while Asian equities hold moderate gains.


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
AUD/USD
Summary
AUD/USD, which traded around 0.6760 before the release of the Reserve Bank of Australia's August meeting minutes, jumped to 0.6783 a few minutes befor
Content
  • AUD/USD is better bid at press time, possibly due to the risk-on action in the markets.
  • The outlook remains neutral as the pair is still trapped in a narrow trading range of 0.6735 to 0.6822.

AUD/USD, which traded around 0.6760 before the release of the Reserve Bank of Australia's August meeting minutes, jumped to 0.6783 a few minutes before press time.

The RBA minutes confirmed the easing bias and offered no hawkish or dovish surprises. Even so, the AUD picked up a bid, possibly due to optimism about a US-China trade deal and the resulting rise in riskier assets.

For instance, the S&P 500 index, a global benchmark for equities, rose 1.21% on Monday, as the Trump Administration extended the reprieve on penalties for doing business the Chinese telecommunications equipment company Huawei.

Awaiting range breakout

The pair has risen by 20 odd pips in the last hour or two. However, the outlook remains neutral, as the pair is still trapped in a narrow range of 0.6735 to 0.6822.  The pair has been restricted to that trading range since Aug. 8.

An upside break would validate the long-tailed Doji candle created on Aug. 7 and open the doors for a stronger corrective bounce to the 50-day moving average, currently at 0.6943.

A downside break of the trading range would expose the low of 0.6677 set on Aug. 7. As of writing, the pair is trading at 0.6776.

Daily chart

Trend: Neutral

Pivot points

 


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6753 S2: 0.6743 S3: 0.6725 R1: 0.6781 R2: 0.6799 R3: 0.6810
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair
NZD/USD
Summary
NZD/USD remains below short-term important resistance-confluence as it trades near 0.6420 during early Tuesday.
Content
  • NZD/USD keeps trailing 100-HMA, seven-day-old descending trend-line.
  • An upside clearance can recall last week’s top, 0.6400 seem nearby key support.

NZD/USD remains below short-term important resistance-confluence as it trades near 0.6420 during early Tuesday.

A confluence including 100-hour moving average (HMA) and a seven-day-old downward sloping trend-line, at 0.6430/32, exert downside pressure while August 13 high surrounding 0.6472 can please buyers after the breakout.

In a case where prices rally past-0.6472, August 09 high of 0.6500 will be on the bulls’ radar.

Meanwhile, 0.6400 and the monthly low near to 0.6377 can entertain sellers during further declines whereas the year 2016 bottom close to 0.6348 may flash on bears’ list afterward.

NZD/USD hourly chart

Trend: Bearish

 


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6392 S2: 0.6376 S3: 0.6350 R1: 0.6433 R2: 0.6458 R3: 0.6474
Trend Index
Recommendation: Bearish Strength: -3
OBOS Index
Recommendation: Oversold

Pair

Summary
Reuters reports the latest comments from the People’s Bank of China (PBOC) after the Chinese central bank set the new (reformed) 1-year loan prime rat
Content

Reuters reports the latest comments from the People’s Bank of China (PBOC) after the Chinese central bank set the new (reformed) 1-year loan prime rate (LPR) at 4.25% – slightly lower than 4.31% seen under previous calculation. 

Key Headlines:

China's interest rate reform cannot replace monetary policy and other policies.

Will work with other govt departments to take measures to lower corporate funding costs, especially for small and private firms.

Also Read:

  • China introduces market driven lending rate to boost cheap funding for businesses

Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair

Summary
Australian Prime Minister Scott Morrison believes Australia and the rest of the world will need to get used to the trade war between the US and China
Content

Australian Prime Minister Scott Morrison believes Australia and the rest of the world will need to get used to the trade war between the US and China and look for opportunities in the trade tiff. 

Morrison told the Seven Network on Tuesday:

"I think we're going to have to get used to this for a while, this level of tension," Mr Morrison told the Seven Network on Tuesday.

We've just got to accommodate that, we've got to absorb it, we've got to see the opportunities in it, of which there are many.

It is worth noting that one of Australia's biggest agricultural competitors in China is America. So, the ongoing trade war between the US and China could be a blessing in disguise for the Australian farmers. 

"The US-China trade war could deliver Australian farmers a one-off $1 billion boost and generate an extra 3900 jobs just in time to offset the crippling cost of drought," according to a report by Shane Wright, a senior economics correspondent for The Sydney Morning Herald.


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
USD/TRY
Summary
USD/TRY is looking north, having breached a three-month-long falling wedge on the higher side on Monday. The pair closed at 5.6557 on Monday, confirmi
Content
  • USD/TRY's daily chart shows a falling wedge breakout, a bullish reversal pattern.
  • The daily chart RSI is also reporting bullish conditions.
  • The pair could test the immediate resistance at 5.77275 in the short-term.

USD/TRY is looking north, having breached a three-month-long falling wedge on the higher side on Monday.

The pair closed at 5.6557 on Monday, confirming an upside break of the falling wedge, represented by trendlines connecting May 9 and July 25 highs and June 5 and Aug. 8 lows.

A falling wedge breakout is a bullish reversal pattern, meaning the pullback from the May 9 high of 6.24579 has ended and the bulls have regained control.

The 14-day relative strength index (RSI) is also reporting bullish conditions with an above-50 print.

USD/TRY, therefore, looks set to test the resistance at 5.77275 (July 25 high). A close above that level would invalidate the bearish lower highs pattern and allow a rally to highs above 6.00.

The wedge breakout would be invalidated if the pair finds acceptance below Monday's low of 5.56252.

Daily chart

Trend: Bullish

Key levels

Resistance: 5.77275, 5.9326

Support: 5.56252, 5.44947

 

 


Chart
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Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
AUD/USD
Summary
Following the release of its profit report, Top global miner BHP Group’s Chief Executive Officer Andrew Mackenzie said that the US-China trade war is
Content

Following the release of its profit report, Top global miner BHP Group’s Chief Executive Officer Andrew Mackenzie said that the US-China trade war is not yet affecting demand for its commodities, as cited by Reuters.

Additional Headlines:

China’s iron ore imports surged 21% in July from the month before to their highest level since January, as supply grew from miners in Australia and Brazil.

Iron ore shipments to China from Australia’s Port Hedland terminal, the world’s biggest iron ore port and used by BHP, had risen more than 11% in June.

“While the trade dispute was putting a dampener on global economic growth, it had not yet affected demand for BHP’s commodities such as iron ore, copper and coal in China.”

"There's obviously been a slight cooling in appetite based on some of the concerns we have seen in the short-term for the global economy. We are not without some consideration as to what might be around the corner."

The Aussie is likely to derive support from the bullish news on the commodities, as Australia is heavily dependent on commodities’ exports for its revenues. At the press time, the AUD/USD pair is seen extending the bounce from 0.6755 lows, as the bulls aim to regain the 0.68 handle.

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6753 S2: 0.6743 S3: 0.6725 R1: 0.6781 R2: 0.6799 R3: 0.6810
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair

Summary
Gold closed well below $1,504 on Monday, validating the bearish outside bar candlestick pattern created on Friday. A bearish outside bar candle occurs
Content
  • Gold confirmed a bearish outside bar reversal with a close below $1,504 on Monday.
  • The daily chart MACD is about to cross below zero. That would indicate a bullish-to-bearish trend change.
  • A drop to the immediate support of $1,480 could be seen in a day or two.

Gold closed well below $1,504 on Monday, validating the bearish outside bar candlestick pattern created on Friday.

A bearish outside bar candle occurs when the price action for a specific day falls outside the high and low of the preceding day. That candlestick is widely considered a sign of indecision in the market place.

However, in Gold's case, that pattern indicated bullish exhaustion. After all, the outside bar appeared following a near 90-degree rise from $1,400 to $1,535.

Traders usually wait for confirmation of bearish reversal, preferably in the form a close below the outside bar's low.

As noted earlier, Gold found acceptance below $1,504 (outside bar's low) on Monday, confirming a short-term bullish-to-bearish trend change.

Supporting the case for a drop to the immediate support of $1,480 (Aug. 13 low) is the impending bearish crossover on the moving average convergence.

The bearish case would be invalidated if prices rise above Monday's high of $1,513. As of writing, the zero-yielding safe-haven metal is trading largely unchanged on the day at $1,495 per Oz. 

Daily chart

Trend: Bearish

Pivot points

 


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
USD/CAD
Summary
The US State department’s spokeswoman Morgan Ortagus said in a statement late-Monday, the US Secretary of State Mike Pompeo will travel to Ottawa for
Content

The US State department’s spokeswoman Morgan Ortagus said in a statement late-Monday, the US Secretary of State Mike Pompeo will travel to Ottawa for a day of meetings with Canadian leaders to discuss trade talks, Venezuela’s crisis and Canadians detained in China, Reuters reports.

Ortagus said: “The discussions will focus on the broad and multi-faceted U.S.-Canada strategic partnership and identify opportunities to advance our shared goals, including returning democracy to Venezuela and the release of the two Canadian citizens arbitrarily detained by China.”

Fresh developments surrounding the new North American trade pact between the United States, Canada and Mexico could have affect the USD/CAD pair alongside the market sentiment.


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.3270 S2: 1.3218 S3: 1.3184 R1: 1.3356 R2: 1.3390 R3: 1.3443
Trend Index
Recommendation: StronglyBullish Strength: 5
OBOS Index
Recommendation: Overbought

Pair

Summary
Reuters reports a story carried by the Japanese public broadcaster NHK reported on Tuesday, citing that the Group of Seven (G7) leaders summit may end
Content

Reuters reports a story carried by the Japanese public broadcaster NHK reported on Tuesday, citing that the Group of Seven (G7) leaders summit may end without a joint communique due to wide gaps between member nations on trade and climate issues.

Further Details:

It would be the first time a G7 summit ends without a communique since meetings began in 1975.

The summit will be held Aug. 24-26 in the southwestern France city of Biarritz. The group comprises the United States, France, Britain, Japan, Germany, Italy, Canada and the European Union.

Any update on the trade issue from the G7 Summit is likely to have a significant impact on the fx markets the following Monday.


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair

Summary
Chin has set the new (reformed) 1-year loan prime rate (LPR) at 4.25% – slightly lower than 4.31% seen under previous calculation. Most banks were exp
Content

China has set the new (reformed) 1-year loan prime rate (LPR) at 4.25% – slightly lower than 4.31% seen under previous calculation. 

Most banks were expecting a drop of 10 to 25 basis points, according to zerohedge.

The People's Bank of China on Saturday announced a market based interest-rate mechanism to reduce financing costs for businesses struggling due to an economic slowdown.

  • China introduces market driven lending rate to boost cheap funding for businesses

 


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
USD/CHF
Summary
The USD/CHF pair’s one-week-old recovery seems to fade as the quote seesaws near 0.9814 during the Asian session on Tuesday.
Content
  • USD/CHF seesaws near two-week high amid overbought RSI conditions.
  • A confluence of six-day-old rising trend-line, 4H 200MA adds to the resistance.

The USD/CHF pair’s one-week-old recovery seems to fade as the quote seesaws near 0.9814 during the Asian session on Tuesday.

Not only repeated failures to cross 50% Fibonacci retracement of current month declines but overbought conditions of 14-bar relative strength index (RSI) also increases the odds of its pullback.

With this, sellers can target immediate trend-line support, at 0.9790, whereas 0.9750, 0.9690 and monthly bottom close to 0.9660 will please them afterward.

On the upside, pair’s rise beyond 50% Fibonacci retracement of 0.9820 will confront 200-bar moving average on the four-hour chart (4H 200MA) and nearly a week-long ascending trend-line at 0.9835/37.

If at all prices manage to rally above 0.9837, 61.8% Fibonacci retracement near 0.9855 and 0.9880 can lure buyers.

USD/CHF 4-hour chart

Trend: Pullback expected

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.9786 S2: 0.9755 S3: 0.9737 R1: 0.9835 R2: 0.9853 R3: 0.9884
Trend Index
Recommendation: Bearish Strength: -1
OBOS Index
Recommendation: Neutral

Pair
USD/JPY
Summary
Reuters quotes two people familiar with the matter, as saying that Japan has approved shipments of a high-tech material to South Korea for the second
Content

Reuters quotes two people familiar with the matter, as saying that Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export curbs last month.

A senior government official noted: “Tokyo’s latest export approval is positive for the local industry, but I don’t see Japan’s move as a conciliatory message to South Korea.”

South Korean Foreign Minister Kang Kyung-wha said, “I believe that (we are) in a very difficult situation.”

This development comes a day ahead of the bilateral meeting between the South Korean and Japanese trade teams in Beijing.

The market sentiment is pretty mixed so far this Tuesday’s Asian trading, as traders turn cautious ahead of the Fed’s Jackson Hole Symposium and the G7 meeting due later this week. The USD/JPY pair trades in a tight range just above the 106.50 level, almost unchanged on the day.


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 106.35 S2: 106.07 S3: 105.90 R1: 106.80 R2: 106.98 R3: 107.25
Trend Index
Recommendation: Bearish Strength: -1
OBOS Index
Recommendation: Neutral

Pair
AUD/JPY
Summary
AUD/JPY is barely moving in response to the minutes from the Reserve Bank of Australia's (RBA) August meeting released at 01:30 GMT. The currency pair
Content
  • AUD/JPY has seen little action following the RBA minutes.
  • The minutes confirmed the RBA's easing bias and that the central bank is in a wait-and-watch mode.
  • The minutes offered no hawkish or dovish surprise, leaving AUD/JPY at the mercy of broader market sentiment.

AUD/JPY is barely moving in response to the minutes from the Reserve Bank of Australia's (RBA) August meeting released at 01:30 GMT.

The currency pair is currently trading at 72.13, up five pips from 72.08 seen before the release of the RBA minutes.

Rates to remain low for an extended period

RBA board would consider a further policy easing, if needed, and would assess developments in domestic, global economies before considering easing, the minutes showed.

The policymakers also expect interest rates to remain low for an extended period and believe the recent slide in the AUD will help exports and tourism.

key points

  • Risks to economy tilted to the downside in the near term, more balanced further out.
  • The board reviewed the experience of developed nations with unconventional monetary policy.
  • Few signs of inflationary pressures emerging, downside risks to some CPI components.
  • The escalation in China-US trade dispute a downside risk to global growth.
  • Further monetary easing "widely expected" around the world.

All-in-all, the minutes confirmed the RBA's easing bias and the fact that it is now on a wait-and-watch mode. The central bank left rates unchanged at 1.00% on Aug. 6.

With the minutes offering no hawkish or dovish surprises, the AUD pairs are at the mercy of the broader market sentiment. It is worth noting that the US stocks put on a good show on Monday with the S&P 500 index rising 1.21%.

Hence, the anti-risk JPY may come under pressure during the day ahead, helping AUD/JPY eke out gains. 

Pivot points

 


Chart
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Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 71.96 S2: 71.79 S3: 71.62 R1: 72.30 R2: 72.47 R3: 72.64
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair
AUD/USD
Summary
The AUD/USD pair remains modestly changed at 0.6765 after the Reserve Bank of Australia (RBA) released minutes of its August 07 meeting on early Tuesday.
Content
  • AUD/USD shows less reaction to the RBA minutes.
  • Risk tone remains choppy amid a lack of fresh catalysts.
  • The US-China trade tussle confronts recently upbeat comments from the Fed policymaker.

The AUD/USD pair remains modestly changed at 0.6765 after the Reserve Bank of Australia (RBA) released minutes of its August 07 meeting on early Tuesday.

Although the Aussie central bank left its monetary policy unchanged at the August meeting, policymakers have been flashing mixed signals since then, which in turn highlighted the importance of minute details.

The RBA minute statement praises the Australia Dollar (AUD) weakness as being supportive of export, tourism while reiterating its view to consider further policy easing if needed. The statement also mentions that it is reasonable to expect an extended period of low interest rates.

Risk tone follows the general tendency of no major moves during the Asian session amid a lack of fresh catalysts. The US treasury yields previously rallied with the 10-year note offering 1.59% by the press time.

Traders show little reaction to the geopolitical tension concerning the Middle East while the US President Donald Trump seems tired of favoring China as his recent tweets concentrated on the UK and Kashmir issue.

The US President earlier opined 100 basis point Fed rate cut but market players gave more attention to the President of the Federal Reserve Bank of Boston who spread fewer worries.

While no major data is up for publishing, comments by the Federal Reserve officials and the Federal Open Market Committee (FOMC) Minutes will be closely observed to get the hints of the US central bank leaders’ major appearance at the Jackson Hole Symposium.

Technical Analysis

Unless breaking the 90-pip area between 0.6735 and 0.6825, the pair is less likely to register much momentum. However, overall weakness remains intact unless crossing 200-day simple moving average (DMA) level of 0.7060.


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6753 S2: 0.6743 S3: 0.6725 R1: 0.6781 R2: 0.6799 R3: 0.6810
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair
AUD/USD
Summary
The Reserve Bank of Australia (RBA) published the minutes of its August 6th, 2019 monetary policy meeting on Tuesday, with the key headlines found bel
Content

The Reserve Bank of Australia (RBA) published the minutes of its August 6th, 2019 monetary policy meeting on Tuesday, with the key headlines found below.  

AUD fall to support exports, tourism.

Board would consider further policy easing if needed.

To assess developments in domestic, global economies before considering easing.

Reasonable to expect "extended period" of low interest rates.

Risks to economy tilted to downside in near term, more balanced further out.

Board reviewed experience of developed nations with unconventional monetary policy

Noted a package of measures tended to be more effective than single steps.

AUD at lowest level in some years, recent fall to support exports, tourism.

Few signs of inflationary pressures emerging, downside risks to some CPI components.

More spare capacity in labour market than previously thought, to limit wage growth.

Saw firmer GDP growth in Q2, outlook for consumption more balanced than for some time.

Consumption supported by tax rebates, stabilisation in housing market.

Escalation in china - us trade dispute a downside risk to global growth.

Global companies had already significantly revised down investment intentions.

Further monetary easing "widely expected" around the world.

The AUD/USD pair kept its recovery intact from 0.6755 lows, as the RBA minutes had little impact on the Aussie dollar. 

About RBA minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6753 S2: 0.6743 S3: 0.6725 R1: 0.6781 R2: 0.6799 R3: 0.6810
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair

Summary
The US President Trump took out to twitter last hour, speaking about his conversation with the UK PM Johnson ahead of this weekend’s G7 meeting. Trump
Content

The US President Trump took out to twitter last hour, speaking about his conversation with the UK PM Johnson ahead of this weekend’s G7 meeting.

Trump tweeted: “Great discussion with Prime Minister @BorisJohnson today. We talked about Brexit and how we can move rapidly on a US-UK free trade deal. I look forward to meeting with Boris this weekend, at the @G7, in France!”


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
AUD/NZD
Summary
AUD/NZD chipping away at the upside the central bank divergence between the Reserve Bank of Australia and New Zealand. From a technical perspective, t
Content

AUD/NZD chipping away at the upside the central bank divergence between the Reserve Bank of Australia and New Zealand. From a technical perspective, the cross can continue higher while supported by rising moving averages within a bullish flag on the daily charts. Today, the RBA minutes could be the next catalyst in its northerly trajectory - We have heard a lot from the RBA since the meeting, in speeches and the quarterly statement so there may not be too much in this. However, a break of the 1.06 handle is required to for the pair to find traction above the 61.8% Fibo retracement. To the downside, the 38.2% is located around 1.0440 as a potential landing spot.

 

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.0532 S2: 1.0507 S3: 1.0487 R1: 1.0577 R2: 1.0596 R3: 1.0621
Trend Index
Recommendation: Bullish Strength: 3
OBOS Index
Recommendation: Overbought

Pair

Summary
The People's Bank of China (PBOC) has set the Yuan reference rate at 7.0454 vs Friday's fix of 7.0365.
Content

The People's Bank of China (PBOC) has set the Yuan reference rate at 7.0454 vs Friday's fix of 7.0365.


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
USD/CAD
Summary
The USD/CAD pair’s sustained trading beyond 200-day simple moving average (DMA) enables it to remain firm around 1.3330 during Tuesday’s Asian session.
Content
  • USD/CAD keeps it strong above 200-DMA.
  • The Loonie pair still remains below the monthly top.
  • The US Dollar (USD) registers across the board gains while WTI witnesses pullbacks.

The USD/CAD pair’s sustained trading beyond 200-day simple moving average (DMA) enables it to remain firm around 1.3330 during Tuesday’s Asian session.

Despite geopolitical tension in Syria, and also concerning Iran, oil prices fail to rise as the USD’s overall strength disappoints commodity buyers. As a result, the Loonie pair also have to register gains.

It should also be noted that uncertainty surrounding the US-China trade talks is offering additional weight on the commodity-linked currencies, like the Canadian Dollar (CAD).

The greenback buyers have an additional reason to cheer. That is comments from the Federal Reserve Bank of Boston’s President reducing the scope of further Fed rate cuts.

Given the absence of major data/event, investors will keep an eye over news/headlines for fresh impulse.

Technical Analysis

Repeated failures to cross the monthly high around 1.3345/50 makes it the key towards June month top surrounding 1.3435. On the downside, 1.3250 and 50-DMA level of 1.3180 will be important for sellers to watch.


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.3270 S2: 1.3218 S3: 1.3184 R1: 1.3356 R2: 1.3390 R3: 1.3443
Trend Index
Recommendation: StronglyBullish Strength: 5
OBOS Index
Recommendation: Overbought

Pair
EUR/USD
Summary
Having bounced off 13-day old support-line, EUR/USD takes the bids to 1.1085 during early Tuesday.
Content
  • EUR/USD remains firm above the short-term rising support line.
  • 23.6% Fibonacci retracement and 4H 100MA seem near-term key resistances.

Having bounced off 13-day old support-line, EUR/USD takes the bids to 1.1085 during early Tuesday.

Not only its pullback from rising trend-line since August 01 but oversold conditions of 14-bar relative strength index (RSI) also increases the odds for its increase.

In doing so, 23.6% Fibonacci retracement of June-August declines near 1.1120 and 100-bar moving average on the four-hour chart (4H 100MA) at 1.1150, becomes the key to watch.

Should there be increased upside beyond 1.1150, a downward sloping trend-line since late-June, at 1.1200, grabs buyers’ attention.

Alternatively, pair’s break of 1.1070 support-line can quickly fetch it to 1.1055 and then to a recent low near 1.1027. Though, 1.10000 becomes the tough nut to crack for bears during further downside.

EUR/USD 4-hour chart

Trend: Pullback expected

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1065 S2: 1.1052 S3: 1.1027 R1: 1.1103 R2: 1.1127 R3: 1.1140
Trend Index
Recommendation: StronglyBearish Strength: -5
OBOS Index
Recommendation: Neutral

Pair
USD/JPY
Summary
USD/JPY holds in the newly acquired 106 territories, boosted again overnight in a risk-on environment where US stocks moved sharply higher. Trump anno
Content
  • USD/JPY holds on the 106 handle as a return of risk props up the pair.
  • Technical indicators in the mentioned time-frame remain within positive levels.

USD/JPY holds in the newly acquired 106 territories, boosted again overnight in a risk-on environment where US stocks moved sharply higher. Trump announced that restrictions on Huawei operations would be delayed 90 days, giving US telecom companies more time to untangle their systems from reliance on the company’s technology. This, however, followed weekend comments from Trump over twitter warning that it would be difficult to reach a trade deal if China “did something violent” in Hong Kong.

The Dow Jones Industrial Average DJIA, +0.96% rose around 250 points, or 1%, to end near 26,136, according to preliminary figures, while the S&P 500 SPX added 35 points, or 1.2%, to close near 2,924. The Nasdaq Composite put on around 107 points to end the day near 8,003, a gain of 1.4%.  The US dollar was broadly stronger, supported by higher yields. The Washington Post reported that the White House was considering cutting the payroll tax to stimulate growth. USD/JPY rose from 106.30 to 106.70. 

Fed president Rosengren advocating for the Fed to pause 

Boston Fed president Rosengren who dissented against the rate cut in July, advocating for the Fed to pause at this stage, bullish on the US economy and showing little concern for overseas doom and gloom. In turn, US 2-year Treasury yields climbed from 1.50% to 1.55% while the 10-year yield rose from 1.58% to 1.61%. Still, markets expect a rate cut as soon as September - " Markets are pricing 29bp of easing at the 19 September Fed meeting, and a terminal rate of 0.97% (Fed funds rate currently 2.13%)," analysts at Westpac explained. 

USD/JPY levels

Valeria Bednarik, the Chief analyst at FXStreet explained that the USD/JPY pair hast spent the last American session consolidating gains in the 106.50/60 region, maintaining a neutral stance in the short term:

"In the 4 hours chart, the 20 SMA has turned flat below the current level, while the 100 SMA maintains its bearish slope, approaching the mentioned Fibonacci resistance. Technical indicators in the mentioned time-frame remain within positive levels, lacking directional strength and off their daily highs."


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 106.35 S2: 106.07 S3: 105.90 R1: 106.80 R2: 106.98 R3: 107.25
Trend Index
Recommendation: Bearish Strength: -1
OBOS Index
Recommendation: Neutral

Pair

Summary
With the lack of fresh directives, Gold remains below $1,500 during the Asian session on Tuesday.
Content
  • Gold awaits fresh clues to extend the latest declines below 10-DMA.
  • The US President Trump’s tweets supporting Fed rate cut confront Rosengren’s comments.
  • US-China trade stalemate continues.

With the lack of fresh directives, Gold remains below $1,500 during the Asian session on Tuesday.

The yellow metal previously slipped under 10-day simple moving average (DMA) as the US President Donald Trump’s rate cut demands were tamed by the Federal Reserve Bank of Boston’s President Eric Rosengren. Upbeat expectations surrounding the US-China trade deal, mainly due to the US favor for Huawei, also added to market’s recently risk recovery.

With this, equities and bond yields recover latest losses while safe-havens like the Japanese Yen (JPY) and Gold had to suffer.

Recently, the US President has been offering incentives to China ahead of their September trade talks. Elsewhere, global central banks keep their dovish outlook intact but wait for this week’s Jackson Hole Symposium event to announce the same.

Other than that, political tension surrounding the Middle East and the UK can keep offering intermediate trading opportunities amid a light economic calendar.

Technical Analysis

While 10-DMA level of $1,506 acts as immediate resistance, $1,510 and $1,528 can act as buffers before fueling the quote towards $1,535. Meanwhile, a downside break of $1,480 can recall July month high surrounding $1,452.


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair

Summary
The price of oil is resting up in the high end of the 55 handle in WTI while the price finally got above the 20 daily moving average and then pierced
Content

 

The price of oil is resting up in the high end of the 55 handle in WTI while the price finally got above the 20 daily moving average and then pierced the 50-DMA into the 56 handle overnight.  Bulls are back in control and there is room for an advance to the 58 handle to meet trend line resistance from here while on the downside, bears can target a drop to the 52 handle and the 61.8% Fibo at 51.70 on the wide. 

 


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair

Summary
With its sustained trading beyond the key support confluence, the USD/IDR pair flashes 14,266 as a quote during early Tuesday.
Content
  • USD/IDR seesaws near 38.2% Fibonacci retracement.
  • 50-DMA and 23.6% Fibonacci retracement offers strong downside support.

With its sustained trading beyond the key support confluence, the USD/IDR pair flashes 14,266 as a quote during early Tuesday.

Despite repeated failures to cross 38.2% Fibonacci retracement of 2018 swing high to 2019 swing low, prices remain firm unless closing below the 14,150/38 support confluence including 50-day simple moving average (DMA) and 23.6% Fibonacci retracement.

As a result, buyers can still target 38.2% Fibonacci retracement of 14,384, a break of which will trigger a fresh upside to 14,500 round-figure.

However, a downward sloping trend-line since November 2018 and 50% Fibonacci retracement, near 14,570 and 14,582 respectively, will question buyers.

On the contrary, pair’s dip beneath 14,138 will target three-month-old support-line at 14,000.

USD/IDR daily chart

Trend: Bullish

 


Chart

Technical Analysis
Date: open: close: high: low: bid: ask: pct:
Key Level
S1: S2: S3: R1: R2: R3:
Trend Index
Recommendation: Strength:
OBOS Index
Recommendation:

Pair
EUR/USD
Summary
Forex today was more favourable for risk-FX on, yet again, mixed trade headlines where on one hand, Trump said he wasn't ready to do a deal with China
Content
  • Forex today was more favourable for risk-FX on and Dollar firmed with yields up. 
  • DXY got a boost from Boston Fed President Rosengren, (hawk).

Forex today was more favourable for risk-FX on, yet again, mixed trade headlines where on one hand, Trump said he wasn't ready to do a deal with China yet the US confirmed a 90-day extension to US tech companies' business with Huawei. Additionally, Germany and the US are contemplating fiscal stimulus. 

While central banks are likely to be the next key focus with the Jackson Hole coming up as well as the FOMC minutes as well as the Reserve Bank of Australia's today, geopolitics remains in the driving seat and volatility can be expected to continue. Economic contingency plans from Germany and talk of one from the White House which could be triggered in the event of a recession sounds good on paper but will unlikely to pair off the risks of a protracted trade war and desperate measures from central banks reacting to deteriorating economic activity. 

The data was light, although the DXY got a boost from Boston Fed President Rosengren who dissented against the rate cut in July, advocating for the Fed to pause at this stage, bullish on the US economy and showing little concern for overseas doom and gloom. In turn, US 2-year Treasury yields climbed from 1.50% to 1.55% while the 10-year yield rose from 1.58% to 1.61%. Still, markets expect a rate cut as soon as September. 

As for currency action, analysts at Westpac summed it up as follows: 

  • The US dollar was broadly stronger, supported by higher yields - The Washington Post reported that the White House was considering cutting the payroll tax to stimulate growth.
  • EUR/USD fell from 1.1110 to 1.1080.
  • GBP/USD was choppy, overall a little lower, around 1.2130.
  • USD/JPY rose from 106.30 to 106.70.
  • AUD/USD ground lower from 0.6785 to 0.6765. NZD similarly fell from 0.6425 to 0.6407. AUD/NZD found resistance at 1.0570.
  • Eurozone core inflation for July was finalised at 0.9% yoy, as expected, although the headline measure was revised lower from 1.1% to 1.0%.

Key notes from Wall Street: 

Wall Street moves sharply higher on better risk appetite

Key events ahead: 

RBA minutes are up today.

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 1.1065 S2: 1.1052 S3: 1.1027 R1: 1.1103 R2: 1.1127 R3: 1.1140
Trend Index
Recommendation: StronglyBearish Strength: -5
OBOS Index
Recommendation: Neutral

Pair
AUD/USD
Summary
The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its August 07 monetary policy meeting at 01:30 GMT on Tuesday.
Content

The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its August 07 monetary policy meeting at 01:30 GMT on Tuesday. The central bank met market-wide expectations of announcing no change to its benchmark cash rate during the meeting. However, the central bank’s quarterly monetary policy report holds its dovish stand, renewing fears of additional rate cuts during the year. As a result, investors will seek more details of the catalysts that led to such a decision in order to predict any such upcoming moves and predict near-term trade direction of the AUD/USD pair.

Ahead of the minutes, TD Securities spotted clues that investors will seek in the minutes:

Labour outcomes remain key to further RBA easing. Any indication the RBA sees other Central Banks as potentially easing further would be viewed as bond bullish.

On the other hand, Westpac turns down the importance of the meeting minutes as it says:

The steady hand on the cash rate at 1.0% was fully expected. The statement on the day said it “is reasonable to expect that an extended period of low interest rates will be required” and that the RBA will “ease monetary policy further if needed.” We have obviously heard a lot from the RBA since the meeting, in speeches and the quarterly statement.

How could the minutes affect AUD/USD?

While recent statistics at home and China have failed to lure bulls, traders will seek clues that can stop the central bank’s rate cut trajectory at least during the current year.

Technically, buyers will enter only if the pair manages to cross monthly tops surrounding 0.6822, which in turn opens the door for a fresh leg up to June low surrounding 0.6831 and then to May bottom near 0.6860. It should also be noted that an area between 0.6750/45 and 0.6735 offers strong downside support to the pair ahead of dragging it to sub-0.6700 region.

Key Notes

AUD/USD stays below 0.6800 ahead of RBA minutes

AUD/USD Analysis: bearish ahead of RBA Minutes

About the RBA minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 0.6753 S2: 0.6743 S3: 0.6725 R1: 0.6781 R2: 0.6799 R3: 0.6810
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral

Pair
GBP/JPY
Summary
GBP/JPY rests on an immediate rising trend-line, inside short-term rising wedge, as it trades near 129.27 during the early Asian session on Tuesday.
Content
  • GBP/JPY rests on three-day-old support-line inside a week-long rising wedge formation.
  • Either side break of 129.75 or 128.70 becomes the key.

GBP/JPY rests on an immediate rising trend-line as it trades near 129.27 during the early Asian session on Tuesday.

While a break of the three-day-old support-line, at 129.20 now, can drag prices to the short-term rising wedge support of 128.70, pair’s further downside will confirm the bearish technical pattern and can drag the quote towards last week's low of 126.55.

However, 127.50 and 126.80 could offer intermediate halts during the pair’s south-run.

Alternatively, an upside clearance of 129.75 negatives the bearish formation and can trigger fresh run-up to 130.00 round-figure.

It should also be noted that 130.30 and 130.65 will entertain buyers past-130.00 breakout.

GBP/JPY hourly chart

 Trend: Bearish

 


Chart
Null
Technical Analysis
Date: 0001-01-01T00:00:00 open: 0 close: 0 high: 0 low: 0 bid: 0 ask: 0 pct: 0
Key Level
S1: 128.99 S2: 128.68 S3: 128.40 R1: 129.58 R2: 129.86 R3: 130.17
Trend Index
Recommendation: Bullish Strength: 1
OBOS Index
Recommendation: Neutral