Fed gave a helping hand to the dollar but for how long?
In the wake of the FOMC meeting last night, dollar purchases increased in the markets, and stock indices began to fall. EURUSD was briefly below 1.1740 at the start of trading today, a low for more than a month.
The S&P500 lost around 0.46% on Wednesday and futures on the index lost 1% more this morning and moved close to the 50-day MA, support where it bounced from last week.
It remains to be seen how sustainable this impact will be.
Recently, USDJPY quickly went below 105 after a brief jump. The EURUSD gained support after touching the 50-day average.
Closing the day, or better, the week, above the 50-day average for EURUSD, S&P500 and Nasdaq100 could be an essential signal of sustained dollar pressure and a sign of renewed market optimism.
https://fxpro.news/daily-forex-outlook/fed-gave-a-helping-hand-to-the-dollar-but-for-how-long-20200917/
In the wake of the FOMC meeting last night, dollar purchases increased in the markets, and stock indices began to fall. EURUSD was briefly below 1.1740 at the start of trading today, a low for more than a month.
The S&P500 lost around 0.46% on Wednesday and futures on the index lost 1% more this morning and moved close to the 50-day MA, support where it bounced from last week.
It remains to be seen how sustainable this impact will be.
Recently, USDJPY quickly went below 105 after a brief jump. The EURUSD gained support after touching the 50-day average.
Closing the day, or better, the week, above the 50-day average for EURUSD, S&P500 and Nasdaq100 could be an essential signal of sustained dollar pressure and a sign of renewed market optimism.
https://fxpro.news/daily-forex-outlook/fed-gave-a-helping-hand-to-the-dollar-but-for-how-long-20200917/
#WaveAnalysis
#WTI rising inside wave (ii)
Likely to reach 43.55
https://fxpro.news/market-snapshots/wti-wave-analysis-16-september-2020-20200916/
#WTI rising inside wave (ii)
Likely to reach 43.55
https://fxpro.news/market-snapshots/wti-wave-analysis-16-september-2020-20200916/
The Dollar sticks to its weakness for good
As we noted previously, the impulse for the strengthening of the US currency has proved to be very unstable. The dollar index has turned down many times since late July from 93.60 over the last month and a half. Yesterday was no exception. For EURUSD the support lies at 1.1750.
Both the dollar index and the EURUSD pair changed the trend sharply after touching the 50-day average. The gold rate, as well as the S&P 500 and Dow Jones, are similarly supported after a dip to their respective 50-DMA.
This behaviour is a sign of investors’ desire to stay within the short-term trend, i.e. within the weakening USD trend.
Assuming that this trend continues to weaken and that there is an overall increase in demand for risk assets, we would not be surprised if EURUSD could soon move beyond 1.2000.
https://fxpro.news/analysis-and-insight/the-dollar-sticks-to-its-weakness-for-good-20200918/
As we noted previously, the impulse for the strengthening of the US currency has proved to be very unstable. The dollar index has turned down many times since late July from 93.60 over the last month and a half. Yesterday was no exception. For EURUSD the support lies at 1.1750.
Both the dollar index and the EURUSD pair changed the trend sharply after touching the 50-day average. The gold rate, as well as the S&P 500 and Dow Jones, are similarly supported after a dip to their respective 50-DMA.
This behaviour is a sign of investors’ desire to stay within the short-term trend, i.e. within the weakening USD trend.
Assuming that this trend continues to weaken and that there is an overall increase in demand for risk assets, we would not be surprised if EURUSD could soon move beyond 1.2000.
https://fxpro.news/analysis-and-insight/the-dollar-sticks-to-its-weakness-for-good-20200918/
#WaveAnalysis
#CHFJPY broke support zone
Likely to fall to 114.00
https://fxpro.news/market-snapshots/chfjpy-wave-analysis-18-september-2020-20200918/
#CHFJPY broke support zone
Likely to fall to 114.00
https://fxpro.news/market-snapshots/chfjpy-wave-analysis-18-september-2020-20200918/
Macroeconomic data for the UK remains on the bright side, despite a recent increase in the number of new coronavirus cases and new restrictive measures.
As in the USA, UK Retail Sales indexes have quickly overcome the coronavirus collapse and are reaching new highs. In August, excluding fuel, sales were 4.3% above the level of the same month a year earlier and slightly better than predicted.
Total sales in the first 8 months of the year were 4.8% lower than in the same period a year earlier. This is an intermediate result between China and the USA. In China, the drop is twice as large, while in the US, it is less than 2%. It is easy to see the reverse correlation between the harshness of lockdown and a decline in retail sales.
On the other hand, production in China is gaining momentum much faster than in the US and the UK, which makes it much more difficult to answer the question of which government response is better for the economy.
As in the USA, UK Retail Sales indexes have quickly overcome the coronavirus collapse and are reaching new highs. In August, excluding fuel, sales were 4.3% above the level of the same month a year earlier and slightly better than predicted.
Total sales in the first 8 months of the year were 4.8% lower than in the same period a year earlier. This is an intermediate result between China and the USA. In China, the drop is twice as large, while in the US, it is less than 2%. It is easy to see the reverse correlation between the harshness of lockdown and a decline in retail sales.
On the other hand, production in China is gaining momentum much faster than in the US and the UK, which makes it much more difficult to answer the question of which government response is better for the economy.
#WaveAnalysis
#Corn rising inside waves (iii) and (3)
Likely to rise to 385.90
https://fxpro.news/market-snapshots/corn-wave-analysis-18-september-2020-20200918/
#Corn rising inside waves (iii) and (3)
Likely to rise to 385.90
https://fxpro.news/market-snapshots/corn-wave-analysis-18-september-2020-20200918/
Why are Asian currencies growing? The answer is fear of endless QE…
Asian currencies are enjoying steady investor demand, continuing to rise against the dollar.
Investors are already accustomed to chronically low inflation in Japan and see that the country’s central bank cannot break it up despite Quantitative and Qualitative Easing being held for years. Its impact has been largely reflected in market expectations and financial instrument quotes. However, at the start, the yen experienced a serious slump, falling from 76 yen to the dollar to above 120 in less than four years.
The Federal Reserve in late August announced a change of strategy for monetary policy. However, as early as March, the FOMC has launched several robust programmes that have turned the US currency towards decline.
For investors in dollars, this could also be the start of a multi-year trend, as it was for the yen.
https://fxpro.news/daily-forex-outlook/why-are-asian-currencies-growing-the-answer-is-fear-of-endless-qe-20200921/
Asian currencies are enjoying steady investor demand, continuing to rise against the dollar.
Investors are already accustomed to chronically low inflation in Japan and see that the country’s central bank cannot break it up despite Quantitative and Qualitative Easing being held for years. Its impact has been largely reflected in market expectations and financial instrument quotes. However, at the start, the yen experienced a serious slump, falling from 76 yen to the dollar to above 120 in less than four years.
The Federal Reserve in late August announced a change of strategy for monetary policy. However, as early as March, the FOMC has launched several robust programmes that have turned the US currency towards decline.
For investors in dollars, this could also be the start of a multi-year trend, as it was for the yen.
https://fxpro.news/daily-forex-outlook/why-are-asian-currencies-growing-the-answer-is-fear-of-endless-qe-20200921/
#WaveAnalysis
#NZDUSD reversed from resistance area
Likely to fall to 0.6600
https://fxpro.news/market-snapshots/nzdusd-wave-analysis-21-september-2020-20200921/
#NZDUSD reversed from resistance area
Likely to fall to 0.6600
https://fxpro.news/market-snapshots/nzdusd-wave-analysis-21-september-2020-20200921/
#WaveAnalysis
#Natural gas broke support zone
Likely to fall to 1.800
https://fxpro.news/market-snapshots/natural-gas-wave-analysis-21-september-2020-20200921/
#Natural gas broke support zone
Likely to fall to 1.800
https://fxpro.news/market-snapshots/natural-gas-wave-analysis-21-september-2020-20200921/
Markets dangerously flirt with correction
Yesterday, at the close of the day, the S&P 500 managed to hammer back some of the losses, which should be seen as a sign of optimism by professional market participants, who are most active at the close of trading. The index found some support after a 23.6% correction from the March-September rally. In the case of increased bear pressure, the next significant support for S&P500 is seen in the area of 3100, where the 200-day moving average resides.
The dynamics of the currency market may be an important indicator for stock indices. If the dollar bulls manage to get the upper hand from current levels today, we should be prepared for a new storm in the markets and a sharper recovery of USD.
https://fxpro.news/daily-forex-outlook/markets-dangerously-flirt-with-correction-20200922/
Yesterday, at the close of the day, the S&P 500 managed to hammer back some of the losses, which should be seen as a sign of optimism by professional market participants, who are most active at the close of trading. The index found some support after a 23.6% correction from the March-September rally. In the case of increased bear pressure, the next significant support for S&P500 is seen in the area of 3100, where the 200-day moving average resides.
The dynamics of the currency market may be an important indicator for stock indices. If the dollar bulls manage to get the upper hand from current levels today, we should be prepared for a new storm in the markets and a sharper recovery of USD.
https://fxpro.news/daily-forex-outlook/markets-dangerously-flirt-with-correction-20200922/
RBA considers further ways to support the economy, praising a weak AUD
The Australian dollar lost 1.6% yesterday during the European session, dropping from 0.7320 to 0.72. Today a new wave of decline was launched by RBA Deputy Governor Guy Debelle. In his speech, he considered possible options for the Central bank to further support the economy.
These included FX interventions, negative rates, and to buy bonds further along the curve. The latter option seems the most likely and least risky for the Aussie Dollar.
However, the very fact that RBA is considering new support methods and is talking about the benefits of a lower exchange rate has alerted buyers of the Australian currency.
AUDUSD on Tuesday updated it's one month low at 0.7180, following many other risk-sensitive instruments testing a 50-day average. The result of this bull and bear battle will define whether there will be an early development of the correction to 0.70, or a retest of highs above 0.74.
The Australian dollar lost 1.6% yesterday during the European session, dropping from 0.7320 to 0.72. Today a new wave of decline was launched by RBA Deputy Governor Guy Debelle. In his speech, he considered possible options for the Central bank to further support the economy.
These included FX interventions, negative rates, and to buy bonds further along the curve. The latter option seems the most likely and least risky for the Aussie Dollar.
However, the very fact that RBA is considering new support methods and is talking about the benefits of a lower exchange rate has alerted buyers of the Australian currency.
AUDUSD on Tuesday updated it's one month low at 0.7180, following many other risk-sensitive instruments testing a 50-day average. The result of this bull and bear battle will define whether there will be an early development of the correction to 0.70, or a retest of highs above 0.74.
#WaveAnalysis
#USDJPY reversed from support zone
Likely to rise to 105.20
https://fxpro.news/market-snapshots/usdjpy-wave-analysis-22-september-2020-20200922/
#USDJPY reversed from support zone
Likely to rise to 105.20
https://fxpro.news/market-snapshots/usdjpy-wave-analysis-22-september-2020-20200922/
The melting of the dollar reversed by top US economic officials
Mnuchin and Powell noted during the Congressional hearing that the US economy is recovering better than expected, but still needs support.
Separately, Evans, a voting member of the FOMC next year, made relatively hawkish comments. He noted that the Fed could start raising rates before the inflation averages 2%.
The Fed’s mix of hopes for new stimulus and a less relaxed approach than expected has returned investor interest in US assets. Moreover, it happened at a critical moment. The dollar index emerged from the depths, where it consolidated from the end of July.
https://fxpro.news/daily-forex-outlook/the-melting-of-the-dollar-reversed-by-top-us-economic-officials-20200923/
Mnuchin and Powell noted during the Congressional hearing that the US economy is recovering better than expected, but still needs support.
Separately, Evans, a voting member of the FOMC next year, made relatively hawkish comments. He noted that the Fed could start raising rates before the inflation averages 2%.
The Fed’s mix of hopes for new stimulus and a less relaxed approach than expected has returned investor interest in US assets. Moreover, it happened at a critical moment. The dollar index emerged from the depths, where it consolidated from the end of July.
https://fxpro.news/daily-forex-outlook/the-melting-of-the-dollar-reversed-by-top-us-economic-officials-20200923/
#WaveAnalysis
#PepsiCo reversed from support zone
Likely to rise to 135.00
https://fxpro.news/market-snapshots/pepsico-wave-analysis-22-september-2020-20200922/
#PepsiCo reversed from support zone
Likely to rise to 135.00
https://fxpro.news/market-snapshots/pepsico-wave-analysis-22-september-2020-20200922/
The increase in the number of new COVID-19 cases in Europe has hurt business activity indices. One after another, preliminary PMI estimates from European countries fell short of expectations. The service sector of the euro area has returned to decline. Although manufacturing has mostly exceeded expectations, the PMI Composite index has been dragged down by Services.
Strong Manufacturing performance is good news for Germany and provided short-term support for the euro, which now has a chance to counteract the dollar's growth impulse.
In general, investors and traders of the euro should note the speed in which the Composite index returned dangerously close to the level separating decline from growth.
This is yet another reminder of how fragile the recovery in the eurozone is. The same indices for the USA published a few minutes ago managed to exceed expectations by remaining firmly in the growth area. This data could extend the momentum of the euro's decline against the dollar in the coming days.
Strong Manufacturing performance is good news for Germany and provided short-term support for the euro, which now has a chance to counteract the dollar's growth impulse.
In general, investors and traders of the euro should note the speed in which the Composite index returned dangerously close to the level separating decline from growth.
This is yet another reminder of how fragile the recovery in the eurozone is. The same indices for the USA published a few minutes ago managed to exceed expectations by remaining firmly in the growth area. This data could extend the momentum of the euro's decline against the dollar in the coming days.
#WaveAnalysis
#AUDUSD broke support area
Likely to fall to 0.7000
https://fxpro.news/market-snapshots/audusd-wave-analysis-23-september-2020-20200923/
#AUDUSD broke support area
Likely to fall to 0.7000
https://fxpro.news/market-snapshots/audusd-wave-analysis-23-september-2020-20200923/
A harder dollar push
The US dollar returned to growth yesterday afternoon, but this time stock indices failed to accompany it.
Further strengthening of the dollar is a working scenario for nearest days and weeks, unlikely for months.
Further growth from current levels opens a direct path for USDX to 96.3, where it reversed upward in December 2019 and resisted pressure in June.
The performance of the euro pair shows a high potential for further decline, with the area of 1.1500 promising to be a next major target.
Complicated negotiations on Brexit and the increased correlation of the pound with risk demand are forcing us to seriously consider the return of GBPUSD to 1.2000.
https://fxpro.news/daily-forex-outlook/a-harder-dollar-push-20200924/
The US dollar returned to growth yesterday afternoon, but this time stock indices failed to accompany it.
Further strengthening of the dollar is a working scenario for nearest days and weeks, unlikely for months.
Further growth from current levels opens a direct path for USDX to 96.3, where it reversed upward in December 2019 and resisted pressure in June.
The performance of the euro pair shows a high potential for further decline, with the area of 1.1500 promising to be a next major target.
Complicated negotiations on Brexit and the increased correlation of the pound with risk demand are forcing us to seriously consider the return of GBPUSD to 1.2000.
https://fxpro.news/daily-forex-outlook/a-harder-dollar-push-20200924/
US weekly unemployment claims once again fell short of expectations. The number of initial claims rose from 866K to 870K with expectations of 845K. The number of continued claims fell from 12.75M to 12.58M, worse than the expected 12.3M.
Continued claims numbers are falling, albeit at a much slower pace than expected, while the stabilization of initial applications for benefits at 880K over the last four weeks is a worrying sign.
The current level is four times higher than before the pandemic hit and without further decline, it will signal a possible halt in the economic recovery.
Strictly speaking, this is more negative news for markets, but the big question now is, isn’t the market tired of the sell-off?
Continued claims numbers are falling, albeit at a much slower pace than expected, while the stabilization of initial applications for benefits at 880K over the last four weeks is a worrying sign.
The current level is four times higher than before the pandemic hit and without further decline, it will signal a possible halt in the economic recovery.
Strictly speaking, this is more negative news for markets, but the big question now is, isn’t the market tired of the sell-off?
#WaveAnalysis
#EURUSD broke support zone
Likely to fall to 1.1560
https://fxpro.news/market-snapshots/eurusd-wave-analysis-24-september-2020-20200924/
#EURUSD broke support zone
Likely to fall to 1.1560
https://fxpro.news/market-snapshots/eurusd-wave-analysis-24-september-2020-20200924/