Daily Market Analysis

Market Focus

Stocks rose ahead of a key jobs report that will shape bets on the path of interest rates and the Federal Reserve’s massive bond-buying program. The S&P 500 closed at a fresh record, with energy and industrial shares among the biggest gainers. Technology underperformed. The U.S. probably added 725,000 jobs in August — a more moderate pace compared to each of the prior two months, but stronger than gains seen early this year. Atlanta Fed President Raphael Bostic said “we’re going to let the economy continue to run until we see signs of inflation,” before stepping in on rates.

Democrat senator Joe Manchin is demanding a “strategic pause” in action on President Joe Biden’s economic agenda, potentially imperiling the $3.5 trillion tax and spending package that Democratic leaders plan to push through Congress this fall.

“By placing a strategic pause on this budgetary proposal, by significantly reducing the size of any possible reconciliation bill to only what America can afford and needs to spend, we can and will build a better and stronger nation for all our families,” Manchin said in the op-ed.

Manchin’s resistance to the core of Biden’s economic plan caps a politically painful month for a White House that has grappled with a chaotic withdrawal from Afghanistan, a resurgent pandemic and a massive hurricane that cut a path of death and damage from Louisiana to New York.

In comments Wednesday at an event hosted by the West Virginia Chamber of Commerce, the moderate Democrat said his party should “hit the pause button.” Lawmakers, he said, have too many other pressing issues before them, including heightening national security concerns after the Taliban takeover of Afghanistan.

“Let’s sit back. Let’s see what happens. We have so much on our plate,” he said.

Main Pairs Movement:

The US dollar declined and gave a poor performance on Thursday, dropping to the lowest level since August 6 during American trading hours. The DXY index is at 92.226 as of writing, losing 0.29% on a daily basis. The greenback continues its bearish traction ever since Fed Chair Jerome Powell’s dovish speech last week. Market worries about that the rising US COVID-19 cases in recent weeks will stall the US economic recovery, therefore, postponed Fed’s bond tapering plan. Despite better-than-expected US economic data released today, as Initial Jobless Claims reduced to 340K, the reports failed to help the US dollar gather strength. Investor now wait for the critical US Nonfarm Payrolls this Friday, which reflects the recovery condition of US economy.

EUR/USD and GBP/USD both advanced on Thursday amid weaker US dollar across the board, trading at 1.1875 and 1.1833, respectively. EUR/USD recorded a fresh four-week high during American trading hours, climbing above the 1.1874 level and posting a 0.31% gain on the day as of writing.

USD/JPY edged lower today, hovering around 110 level most of the time. The pair is trading at 109.93 and posted a 0.04% loss on the day as of writing.

Gold slipped on Thursday, touching a two-day low during American session. The recent strong bullish momentum witnessed in the global equity markets continued to weigh on traditional safe-haven assets like gold. The precious metal is now trading at 1810.24, losing 0.17% on a daily basis. WTI Crude Oil, on the contrary, soared more than 2.1% on Thursday.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair made a good showing on Thursday, as the pair gained bullish momentum and climbed above 1.3800 level during American trading hours. The cable was last seen trading at 1.3835, rising 0.48% on the day as of writing. The bullish movement witnessed in GBP/USD is result from the diminishing demand of US dollar, meanwhile the improving market mood pushs Wall Street’s main indexes higher. For technical aspect, RSI indicator 68 figures as of writing, suggesting that the market is bullish, and the buying pressure is relatively higher. As for the Bollinger Bands, the price moves out of the upper band, indicates that a strong upward trend continuation can be expected.

In conclusion, we think market will be bullish as the pair heads to test the 1.3850 resistance. A break above that level will open the door for additional near-term profits. And the next resistance is at 1.3878. On top of that, UK Services PMI will be released on Friday, which is a leading indicator of UK overall economic performance.

Resistance: 1.3850, 1.3878

Support: 1.3731, 1.3680, 1.3602

USDCAD (4- Hour Chart)

The USD/CAD pair tumbled on Thursday, touching the lowest level since August 16 during American session. The pair is trading at 1.2557 at the time of writing, posting a 0.49% loss on a daily basis. The surging oil prices and a weaker US dollar across the board both weighed on the USD/CAD pair, as it surrounded by heavy selling pressure. For technical aspect, RSI indicator 37 figures as of writing, suggesting bear-movement ahead. If we take a look at MACD indicator, a death cross should be taken as a selling signal.

In conclusion, we think market will be bearish as the pair failed to break the 1.2654 resistance, now heading to test the 1.2533 support. For the Bollinger Bands, the price is now at the outside of the lower band so a strong downward trend continuation can be expected. But if the price starts to move back inside the band, investors should pay attention to trend reversal. In addition to that, the risk flows keep pushing oil prices higher, therefore benefits the commodity-linked loonie.

Resistance: 1.2654, 1.2708

Support: 1.2533, 1.2502, 1.2453

AUDUSD (4- Hour Chart)

The AUD/USD pair was trading higher on Thursday and pushed higher during American session. AUD/USD gave a remarkable performance amid US dollar’s weakness and reached the highest level since August 5. The US economic data released today failed to support the greenback. At the time of writing, thr pair is trading at 0.7401, rising 0.50% on the day. For technical aspect, RSI indicator 75 figures as of writing, suggesting that the market is in overbought zone, which is an obvious selling signals for investors.

In conclusion, we think market will be bearish as long as the 0.7416 resistance line holds. For Bollinger Bands, the pair is now falling from the upper band after touching it, which indicates a bear market. Furthermore, Australia Retail Sales will be released on Friday, this is the foremost indicator of consumer spending.

Resistance: 0.7416, 0.7487

Support: 0.7356, 0.7303, 0.7222

Economic Data

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Daily Market Analysis

Market Focus

Megacap companies rallied to an all-time high as traders turned to defensive shares after the latest round of economic data suggested a slowdown in the labor-market recovery.

The NYSE FANG+ Index of pandemic darlings such as Apple Inc. and Amazon.com Inc. climbed about 1.5%. Tech, utilities and real-estate firms in the S&P 500 advanced, while energy and financial stocks fell. The benchmark gauge of American equities pared gains in afternoon trading, while still heading toward another record. The Dow Jones Industrial Average was little changed.

U.S. companies added fewer jobs than expected in August, ADP Research Institute data showed. While manufacturing expanded at a stronger-than-estimated pace, supply-chain bottlenecks were accompanied by labor constraints. Those figures came before Friday’s payrolls data, with economists expecting a deceleration from the rapid gain in the prior month and a drop in the unemployment rate.

Meantime, Citigroup Inc.’s Tobias Levkovich is sticking to his bearish call. The bank’s chief U.S. equity strategist predicts the index will end the year at 4,000 before reaching 4,350 by June 2022. Both levels sit below its last close of 4,522.68. Underpinning his view are stretched valuations and a planned tax rise that will hurt corporate profits.

Chinese stocks listed in the U.S. are gaining for a third consecutive day as investor sentiment begins to recover after a selloff fueled by Beijing’s sweeping regulatory crackdown.

Main Pairs Movement:

The Dollar greenback weakened amid downbeat ADP report, with the dollar index down 0.14% on Wednesday. The ADP private payrolls increased by 374,000 in August, missing expectation of 613,000 by large margin. Though ISM Manufacturing PMI came on top of expectation, printed 59.9 compared to forecasted 58.6, but employment figures remain to be the main focus for both Federal Reserve and market watchers. A big miss on Friday NFP report could significantly hamper Fed’s mood to initial taper in October, while a mild deviation from expectation could set the stage for stronger dollar in the fourth quarter.

Aussie was the best performer among its G-7 peers, gained 0.7% on the day. The pair is extending its rally towards 0.74, and conquered multiple resistance line along the way. The second quarter GDP (QoQ) was 0.7%, beating anticipated 0.5%. This upbeat data added to Aussie strength against the US dollar on Wednesday. However, the recent leg higher is a corrective move and we expect upward momentum to recede during next week.

Oil prices slipped after Russian oil minister Alexander Novak said Russian companies are ready to boost production beyond current levels, which was set by OPEC+. The Brent Futures was down 0.49%.

Technical Analysis:

CHFJPY (Daily Chart)

CHFJPY is approaching the lower part of a big ascending tunnel, and threatened for a breakout to the downside. Prices have been choppy in the past few sessions as a smaller descending trendline is capping further upward movements.

There was a obvious double-top pattern highlighted in blue, and price is now coming back to retest the neckline. We’ve seen strong rejection on Monday, which engulfed the entirety of previous candle, and signals upcoming bearish moves.

To the downside, bears will have to settle a solid close beneath the ascending trendline in order to attract more sell volume. A horizontal support of 119.2 is not far from the pivotal point near 119.7. Further in the south, 50% Fibonacci of 118 handle could provide some support.

Resistance: 120.55, 122.8

Support: 119.2, 118, 116.9

EURUSD (Daily Chart)

Euro dollar has recovered most of losses in July. However this pair failed to overcome a downward trendline on Wednesday as selling bias remains robust for the sharerd currency.

Price traveled from the bottom of Bollinger Band all-the-way to the upper bound within few days, and there was not much frictions. We suspect the latest rally to be bears’ profit-taking, rather than a reversal. That being said, we could at least see move lower toward 23.6% Fibonacci of 1.18 in the next day or so.

Investors should be prudent to wait for Friday’s Non-Farm Payroll release to determine a much clear direction. On the upside, modest resistance sits around 1.19, next to 1.196. Conversely, bulls’ defense line would be around 1.18 and 1.166.

Resistance: 1.19, 1.196, 1.2

Support: 1.18, 1.166

XAUUSD (Daily Chart)

The picture for Gold was little changed as market participants are eyeing for Friday NFP report for fresh trading incentives. Price has overcame DMA20, and retraced to validate the breakout was solid. Yesterday’s attempt to break below $1800 was defended by 50% Fibonacci of $1804.

Looking at a broader picture, the precious metal previously underwent a double-top pattern. Price took a dive straight to $1690 after the neckline of the double-top was defeated. Normally, if price comes back to retest the neckline, it will meet abundant pressure around this level.

The fact that current trade pattern failed to fulfill this thesis suggests short positions have been overwhelmed by longs. Therefore, we do not expect to see a significant pullback in the near term. That being said, price looks to advance further into 61.8% Fibonacci resistance around $1830.

Resistance: 1830, 1863, 1917

Support: 1804, 1777, 1744

Economic Data

Daily Market Analysis

Market Focus

The stock-market euphoria abated in the last trading day of August as investors assessed whether lofty valuations could withstand the unwinding of pandemic-era stimulus. S&P 500 dropped from an all-time high, Nasdaq slid 0.04%, and Dow Jones declined 0.11%. Wells Fargo & Co. (NYSE: WFC) tumbled after news reported that the bank risks regulatory action over the pace of restitution. Traders also sifted through data showing a slide in U.S. consumer confidence and a surge in home prices.

Five years into scandals that have already cost Wells Fargo & Co. more than $5 billion in fines and legal settlements, regulators are privately signaling they’re still not satisfied with the bank’s progress in compensating victims and shoring up controls.

The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau have warned the firm they may bring new sanctions over the company’s pace in fulfilling those obligations, according to people with knowledge of the situation. The bank, which signed so-called consent orders with the agencies three years ago, has sought more time to get the work done, the people said. It isn’t clear when the watchdogs might proceed.

The bank’s stock erased earlier gains and slumped 5.6% in regular New York trading on Tuesday, its biggest drop since mid-June, after Bloomberg reported on regulators’ concerns.

Fresh sanctions would be especially notable if they fault progress under Wells Fargo’s new management team, which took over in late 2019 to clean up scandals that triggered lawmakers’ ire and prompted the Federal Reserve to cap the bank’s growth. Chief Executive Officer Charlie Scharf — who joined the firm after a string of predecessors stepped down — has called satisfying U.S. authorities his highest priority.

Main Pairs Movement:

Despite trying to bounce back during American session, the US dollar edged lower on Tuesday and once dropped to a three-week low. The DXY index is at 92.672 as of writing, losing 0.02% on a daily basis. The Conference Board’s Consumer Confidence showed a disappointing outcome as it declined to 113.8 in August, which is lower than market’s expectation of 124.0. Investor now wait for the US Nonfarm Payrolls this Friday, which reflects the recovery condition of US economy.

EUR/USD and AUD/USD both advanced on Tuesday amid weaker US dollar across the board, trading at 1.1806 and 0.7312, respectively. EUR/USD recorded a three-week high during European trading hours, climbing above the 1.1840 level for a time. But the pair then retreated modestly back, posting a 0.09% gain on the day. The Eurozone Core CPI YoY showed a remarkable reading of 1.6%, which provided bullish momentum for the EUR/USD pair.

USD/JPY also rose today, climbing above the 110 level during American session. The pair is trading at 110.03 and posted a 0.1% gain on the day as of writing.

Gold posted a decent gain on Tuesday, as it rebounded strongly from daily low during American session. The decline witnessed in European trading hours might be a correction of last week’s rally. The precious metal is now trading at 1814.51, rising 0.28% on a daily basis. WTI Crude Oil, on the contrary, slumped more than 0.84% on Tuesday.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair was trading higher on Tuesday, rising above the 1.3800 level. However, the bullish momentum didn’t last long as the pair pulled back during American session. The cable is losing 0.07% on the day at the time of writing. The bearish movement witnessed in GBP/USD is result from the raising demand of US dollar, as the greenback rebounded in the second half of the day. For technical aspect, RSI indicator 50 figures as of writing, suggesting no obvious trend now. But for Bollinger Bands, the price is falling from the upper band and crossing below the moving average, which indicates a selling signal and the lower band becomes the loss target.

In conclusion, we think market will be bearish as the pair heads to test the 1.3734 support. A break below that level will open the door for additional near-term losses. And the next support is at 1.3680. On top of that, UK Manufacturing PMI will be released on Wednesday, a higher-than-expected data should be taken as positive for the British Pound.

Resistance: 1.3833, 1.3878, 1.3949

Support: 1.3734, 1.3680, 1.3602

USDCAD (4- Hour Chart)

The USD/CAD pair advanced on Tuesday, touching a fresh two-day high during American session. The pair then retreated modestly back as of writing, posting a 0.19% gain on a daily basis. USD/CAD was lifted up by both disappointing GDP report in Canada and strong selling pressure surrounding the crude oil. These two reasons further weighed on the Canadian dollar. For technical aspect, RSI indicator 46 figures as of writing, suggesting selling pressure is slightly higher. If we take a look at MACD indicator, a near-zero Diff points out that the trend may reverse in the near future.

In conclusion, we think market will be bearish as the pair failed to break the 1.2670 resistance. The price is now falling from the 20 SMA line in the Bollinger Bands, which also indicates a selling signal. In addition to that, the EIA will released US Crude Oil Inventories on Wednesday and the commodity-linked loonie is likely to be affected.

Resistance: 1.2670, 1.2708, 1.2834

Support: 1.2570, 1.2502

AUDUSD (4- Hour Chart)

The AUD/USD pair was trading higher on Tuesday and recorded a two-week high right before the European trading hours, but it pulled back to 0.7310 level during American session. The pair was benefited by weaker US dollar across the board, rising 0.27% on the day. For technical aspect, RSI indicator 61 figures as of writing, suggesting bull-movement ahead. For Bollinger Bands, the pair is now trading between upper band and moving average, which indicates a bull market.

In conclusion, we think market will be bullish as long as the 0.7303 support line holds. The pair is now trying to test the 0.7341 resistance while further profits can be expected if price break above that level. The market focus now shifts to Australia’s GDP report on Wednesday.

Resistance: 0.7341, 0.7381

Support: 0.7303, 0.7285, 0.7237

Economic Data

Daily Market Analysis

Market Focus

Stocks climbed, led by some of the world’s largest technology companies. Traders also assessed the impacts from Tropical Storm Ida, which sank insurers and energy firms, while pushing gasoline higher.

The S&P 500 notched its 12th all-time high in August, and the Nasdaq 100 rallied as Apple Inc.’s market value topped $2.5 trillion. Robinhood Markets Inc. and Charles Schwab Corp. slid as Securities and Exchange Commission’s Chairman Gary Gensler told Barron’s that a full ban of payment for order flow is “on the table.” Zoom Video Communications Inc. sank in late trading after giving a sales forecast that fell short of some analysts’ estimates.

As the earnings season draws to a close, the S&P 500 is on track for its seventh straight monthly advance — the longest winning streak since January 2018. Federal Reserve Chair Jerome Powell did just enough last week to preserve the view that his goals align with investors’: growth that is fast enough to boost hiring and corporate profits, but not inflation. U.S. pending home sales fell in July, while traders looked to Friday’s payrolls data for a guide as to whether there’s any slowdown.

A few days after Prime Minister Scott Morrison called for an independent international probe into the origins of the coronavirus, Chinese bots swarmed on to Australian government networks. It was April 2020.

Main Pairs Movement:

The dollar index traded in tight range on Monday amid UK’s Bank Holiday and a scarce economic calendar, gained as little as 0.03%. Momentum from Jackson Hole failed to carry over to Monday’s session, and raise question whether speculators are fully buying into the divorce between tapering and rate hikes. Powell explicitly stated the timing of rolling back Fed’s current asset purchases does not necessarily imply anything about lifting interest rates. Powell tried his best to cushion the downside risk in equity market with some dovish speech, but also mentioned the labor market is well on course of a recovery, therefore fueling a persistent bullish run in stocks market. For now, market’s primary focus remains to be the timing and amount of the long-eyed taper program.

The Swiss Franc was the weakest performer within the G-7 space, lost 0.63% and 0.56% against the US dollar and the Euro respectively. The independent move in the Franc series might suggest institutional investors might be positioning for SNB’s potential intervention to curb CHF’s strength. “We still think the fundamental outlook points to a weaker Franc ahead, but it will take some stabilization in the global growth outlook for this trend to resume”, commented by analysts at Goldman Sachs.

Technical Analysis:

GBPNZD (Daily Chart)

GBPNZD has been sitting conformtably inside the Bollinger Band for several months, indicating this currency pair was little affected by recent dollar driven headlines such as last week’s Jackson Hole Symposium. That does not mean there is little trading opportunity in this pair, in fact GBPNZD is reaching a pivotal point where a breakout from below could provide strong sell incentives. Price has gradually receded toward a support zone between 1.96 and 1.966, which sellers failed to penectrate since June. This support band also coincides with a decent ascending trendline, adding strengths to bulls’ defense. If bears could pull off a mirrical breakthrough from current levels, then they could look to capitalize further downside spaces. But we believe the heavy defense line will hold-off, and price looks to rebound from here.

Resistance: 1.981, 2.0,

Support: 1.96, 1.939, 1.92

AUDUSD (Daily Chart)

Aussie continues its descending trend as price was capped under DMA20 since June. It is also meeting horizontal resistance at 23.6% Fibonaaci of 0.732, measured from 0.738 to August’s low of 0.7107. The recent V-shaped recovery acts more like correction rather than a bullish reversal after RSI stepped into oversold region. Selling bias should still be robust given the uncertainties surrounding the Delta-variant, risk appetite could stage a significant pullback if infections persist to be higher.

The fact that Aussie is not carrying over its gains from last Friday’s dollar unfriendly speech suggests the surge was a one-time off move. We believe AUDUSD will edge lower in the near term, at least prior to Friday’s Non-Farm Payroll release.

Resistance: 0.732, 0.743, 0.76

Support: 0.723, 0.711, 0.7

XAUUSD (Daily Chart)

Gold pared some of its gains from last Friday’s surge, which was powered by Powell’s somewhat dovish tone. Price has overcame DMA20, and retraced to validate the breakout was solid, then followed by some bullish moves.

Looking at a broader picture, the precious metal previously underwent a double-top pattern. Price took a dive straight to $1690 after the neckline of the double-top was defeated. Normally, if price comes back to retest the neckline, it will meet abundant pressure around this level. The fact that current trade pattern failed to fulfill this thesis suggests short positions have been overwhelmed by longs. Therefore, we do not expect to see a significant pullback in the near term. That being said, price looks to advance further into 61.8% Fibonacci resistance around $1830.

Resistance: 1830, 1863, 1917

Support: 1804, 1777, 1744

Economic Data

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Daily Market Analysis

Market Focus

U.S. equities gained to record highs as investors took assurance from comments by Jerome Powell that the withdrawal of stimulus would be gradual.

The S&P 500 and Nasdaq 100 rose during the Federal Reserve chairman’s much-anticipated address from Jackson Hole, where he reinforced the message that it would be appropriate to begin tapering bond purchases by the end of the year. Treasury yields and the dollar fell. Gold gained.

Powell said the economy has now met the test of “substantial further progress” toward the Fed’s inflation objective while the labor market has also made “clear progress.” The remarks come as the latest reading of a closely watched measure of inflation remained elevated, highlighting the case for starting policy normalization despite the threat of the delta virus variant on the economic recovery.

During the speech, Powell also drew a line between asset purchases and interest rates, saying the Fed wouldn’t be in a hurry to begin increasing rates after it begins tapering its $120-billion-a-month bond-buying program.

The Stoxx Europe 600 index gained on track for the seventh straight month of gains, the longest streak in eight years. Stocks climbed in China, where the central bank signaled targeted steps to cushion the economy. West Texas Intermediate crude headed toward its best week since June 2020. Bitcoin rose to $48,000.

Main Pairs Movement:

The US dollar tumbled on Friday, as bear took over after Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium. The DXY index is at 92.652 as of writing, losing 0.42% on a daily basis. Powell mentioned that employment in US has been improving since July, but he also worried about the spread of the Delta variant which might influence labor conditions. Furthermore, he said that current inflation is a concern but likely to be temporary. More significantly, timing and pace of taper should not be taken as a direct signal regarding the timing of interest rate liftoff. Conclusively, the Fed could start bond tapering later this year, offering no specific timeline.

GBP/USD and EUR/USD both advanced on Friday amid weaker US dollar across the board, trading at 1.3766 and 1.1792, respectively. GBP/USD recorded a weekly high after Powell’s speech, climbing above the 1.3780 level for a time. But then retreated modestly back, posting a 0.48% gain on the day. EUR/USD also reached the highest level since August 16 with a 0.37% gain on a daily basis.

USD/JPY slipped on Friday amid US dollar’s weakness, dropping to a two-day low during American session. The pair is losing 0.22% on the day as of writing. AUD/USD rebounded strongly, surging 1.02% on a daily basis.

Gold prices rose more than $20 from the daily low, as the precious metal find demand after Powell’s dovish tone in his speech. Gold is trading at 1817.65 with a 1.40% gain on the day at the time of writing. WTI Crude Oil, in a similar way, climbed more than 1.43% on Friday.

Technical Analysis:

EURUSD (4-hour Chart)

The EUR/USD pair slipped under 1.1740 level at first, then took a strong rebound during American session. The pair is now trading at 1.1791 at the time of writing and posted a 0.34% gain on a daily basis. The bullish momentum witnessed in EUR/USD is result from US dollar’s weakness across the board, as the greenback dived right after Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium. For technical aspect, RSI indicator 64 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a golden cross indicates that the trend is reversing and market will be bullish.

In conclusion, we think market will be bullish as the pair is now testing the 1.1805 resistance line. A break above that level will open the door for additional near-term profits. And the next resistance is at 1.1857. On top of that, the Bollinger Bands shows that the price moves out of the upper band, which means a strong upward trend continuation can be expected.

Resistance: 1.1805, 1.1857

Support: 1.1726, 1.1692, 1.1664

USDCAD (4- Hour Chart)

The USD/CAD pair plunged on US dollar’s weakness after Powell’s speech, although the pair was trading higher in early trade on Friday. The pair is losing 0.59% on the day, trading around 1.2614 at the time of writing. The Canadian dollar is supported by the outstanding performance of Crude oil, plus the heavy selling pressure on the US dollar. For technical aspect, RSI indicator 42 figures as of writing, suggesting tepid bear-movement ahead. For Bollinger Bands, the price is falling from the upper band and crossing below the moving average, which also indicates a selling signal and the lower band becomes the loss target.

In conclusion, we think market will be bearish as the pair failed to break the 1.2708 resistance, now heading to test the 1.2579 support. Further losses can be expected if price dig under that level. In addition to that, WTI crude oil perserves its bullish momentum that started from August 23, as the approval of a Covid-19 vaccine in the US and a production outage in Mexico both taken as positive for oil prices. Therefore, the forecast of the commodity-linked loonie is possibly bullish.

Resistance: 1.2708, 1.2834

Support: 1.2579, 1.2528, 1.2453

XAUUSD (4- Hour Chart)

The XAU/USD pair was trading higher in early trade on Friday and reinforced its bullish momentum to gain further profits during American session. The pair is now trading at 1815.55 as of writing with a remarkable 1.30% gain on the day. Gold was lifted up by the fact that the greenback tumbled for 0.40% after Powell’s dovish speech. For technical aspect, RSI indicator 70 figures as of writing, suggesting that the market is in overbought zone now, and the buying pressure is relatively high. Investors should pay attention to selling signals.

In conclusion, we think market will be moderately bearish as long as the 1819.56 resistance line holds. Meanwhile, the Bollinger Bands shows that the price moves out of the bands first, and now seems to move back inside the band, which is considered as a selling signal. Gold prices reached a fresh three-week high, so a short-term correction could be possible in next trading week..

Resistance: 1819.56, 1831.78

Support: 1780.09, 1744.03, 1717.81, 1690.61

Economic Data

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Daily Market Analysis

Market Focus

U.S. equities fell Thursday as markets turned cautious after explosions in Afghanistan and ahead of a Federal Reserve gathering that may provide more clues about its approach to paring stimulus. The S&P 500 and Nasdaq slid as U.S. and civilian casualties were reported from blasts outside the Kabul airport, escalating tensions as the U.S. evacuates the area. Energy shares led the decline as crude oil fell. Dow Jones closed red as well, down 0.54%.

Escalating concerns about the crisis in Afghanistan added to the risk-off mood. The Pentagon confirmed on Thursday that an explosion took place at the Kabul airport, leaving an unconfirmed number injured or dead as the U.S. evacuation of the region continued.

Investors have also been awaiting the start of the Federal Reserve’s Jackson Hole symposium, which is being held as a virtual event due to the virus. Fed Chair Jerome Powell is set to give a closely watched speech on the economic outlook on Friday, which will divulge more of his and the central bank’s thinking about the timing and scope of tapering the Fed’s pandemic-era asset purchase program.

Some Fed officials have struck a more hawkish tone in recent remarks, however, adding to jitters that a shift away from accommodative monetary policy may come in the near-term. Esther George, the president of the Federal Reserve Bank of Kansas City, told Yahoo Finance in a recent interview that she was in favor of beginning the tapering process “sooner rather than later.”

Main Pairs Movement:

The US dollar bounced back on Thursday, ending its four-day losing streak. The DXY index is at 93.072 as of writing, posting a 0.27% gain on the day. The bullish momentum witnessed on US dollar might result from the fact that worries about Delta variant of the coronavirus has been dissipated. As the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech Covid-19 vaccine, which convinced investors that the Fed might still start bond tapering later this year. The focus now shifts to Powell’s speech at the Jackson Hole Symposium this Friday, as the Fed Chairman will talk about the recovery status of US economic.

GBP/USD and EUR/USD both declined on Thursday amid stronger US dollar across the board, trading at 1.3698 and 1.1750, respectively. EUR/USD reached a fresh weekly high then pulled back towards 1.1750 level during American session, losing 0.17% on a daily basis. The ECB Publishes Account of Monetary Policy Meeting was released earlier in the day, which showed that the ECB will continue the bond purchases and review its monetary policy at the September meeting. Hence, we may see further decline on EUR/USD.

USD/JPY consolidated on Thursday, hovering around 110.02. The pair is rising 0.01% on the day as of writing. AUD/USD was surrounded by selling pressure, losing 0.50% on a daily basis.

Gold edged higher on Thursday as the precious metal took a lift during American session, trading at 1792.24 with a 0.12% gain on the day at the time of writing. WTI Crude Oil, on the contrary, failed to continue its rally from Monday while posted a 0.21% loss on the day.

Technical Analysis:

AUDUSD (4-hour Chart)

The AUD/USD pair was trading lower on Thursday, touching a fresh daily low during American session. The pair is now trading at 0.7248 at the time of writing, losing 0.37% on a daily basis. The selling pressure witnessed in AUD/USD is attributable to US dollar’s strength across the board, as the greenback is now posting a 0.19% gain on the day. For technical aspect, if we take a look at MACD indicator, a near-zero MACD histogram suggests bear-movement ahead. For Bollinger Bands, the price is falling from the upper band and crossing below the moving average, which also indicates a selling signal and the lower band becomes the loss target.

In conclusion, we think market will be bearish as the pair is now testing the 0.7237 support line. If the price breaks below that level, it will open the door for additional near-term losses. And the next resistance is at 0.7201. On top of that, Covid-19 cases in Australia hit a new daily high on Wednesday as New South Wales reported 919 new infections, which can be negative for the Australian dollar.

Resistance: 0.7280, 0.7341

Support: 0.7237, 0.7201, 0.7107

GBPUSD (4- Hour Chart)

The GBP/USD pair declined on Thursday as it failed to persist a six-day rally, in spite of attempting to rebound during American session. The pair is now trading at a daily low of 1.3695 as of writing, losing 0.50% on a daily basis. Increase in the demand of US dollar and rising US Treasury bond yields put selling pressure around the cable. For technical aspect, the MACD indicator shows a death cross, which is considered as a selling signal. For Bollinger Bands, the price is now trading below the 20 SMA line and touching the lower band, suggesting that the market is bearish.

In conclusion, we think market will be bearish as the pair heads to test the 1.3691 support, further losses can be expected if price dig under that level. The next support sits at 1.3602. In addition to that, the epidemic situation in UK seems like not improving at all, despite the government’s successful vaccination program. New cases is over 35k a day now in UK.

Resistance: 1.3768, 1.3888, 1.3958

Support: 1.3691, 1.3602

USDCAD (4- Hour Chart)

The USD/CAD pair was trading higher in early trade on Thursday and preserved its bullish traction to gain further profits during American session. The pair is now trading at 1.2684 at the time of writing with an outstanding 0.75% gain on the day. USD/CAD surged on oil’s weakness, as the WTI crude oil is losing 0.77% on Thursday. For technical aspect, RSI indicator 55 figures as of writing, suggesting tepid bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish.

In conclusion, we think market will be bullish as the Bollinger Bands shows that the price moves out of the upper band, which means a strong upward trend continuation can be expected. Moreover, the Canada Raw Materials Price Index (RMPI) will be released on Friday. It is a leading indicator of consumer inflation, and a higher-than-expected reading is positive for the Canadian dollar.

Resistance: 1.2731, 1.2834, 1.2949

Support: 1.2587, 1.2502

Economic Data