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

Daily Market Analysis

Market Focus

U.S. equities were higher on a quiet day of trading ahead of the Federal Reserve’s Jackson Hole symposium later this week. The S&P 500 and Nasdaq gained on Wednesday, with both indexes topping record highs. The financial and energy sectors led the gains as Treasury yields and crude oil advanced. Dow Jones gained as shares of American Express, JPMorgan Chase and Goldman Sachs outperformed.

A bout of frenzied buying from dip-hunting retail traders over the last couple of days has helped spur a rally in Chinese stocks listed in the U.S. after a prolonged selloff. Net purchases of Chinese technology shares in New York by retail investors in the past five trading sessions topped the $400 million mark, according to Vanda Research.

The bargain-hunting helped push the Nasdaq Golden Dragon China Index up more than 13% in the past four days, for its best run since late June when Beijing’s increased regulations on technology and education companies added pressure on the shares.

“Since the regulatory crackdown started, retail investors increased their buying on dips, providing liquidity to institutional investors who were exiting long positions,” Ben Onatibia, senior strategist at Vanda said in a note.

While retail traders have chased momentum in more speculative names, demand has generally faded for Chinese ADRs as soon as their prices begin rising, according to Vanda, which tracks retail flows in the U.S.

“Retail attitudes towards stocks or ETFs can change over time, but we think demand is more likely to dry up in the coming days,” Onatibia said.

Main Pairs Movement:

The US dollar was trading higher in early trade on Wednesday and reached a two-day high in the beginning of American session, given the fact that the US Durable Goods Orders delivered a better-than-expected reading. However, the greenback then lost its bullish momentum and dropped to its fresh daily low, losing 0.03% on the day as of writing. The dollar has fallen for the fourth consecutive day, including last Friday. As markets are now doubting that whether Fed Chairman Jerome Powell will mention about taper plan during his speech at the upcoming Jackson Hole Symposium.

GBP/USD and EUR/USD both posted a gain on Wednesday, trading at 1.3759 and 1.1768, respectively. GBP/USD recorded a fresh weekly high then retreated modestly back towards 1.3760 level during American session. EUR/USD rebounded back after dropping to a two-day low, rising 0.14% on a daily basis. In addition, the European Central Bank (ECB) will release the Monetary Policy Meeting Accounts on Thursday.

USD/JPY touched a two-day high in the middle of the American session, then pulled back to 110.00 at the time of writing. The pair is rising 0.35% on the day. AUD/USD also advanced on Wednesday, posting a 0.26% gain.

Gold declined on Wednesday, keeping its bearish momentum that started from yesterday. Gold prices dipped lower during American session, trading at 1790.25 with a total 0.66% losses on a daily basis. WTI Crude Oil, on the contrary, continued its rally from Monday and posted a 3.32% gain on the day.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair dropped to daily low at the beginning of American session, for a time trading under 1.3700 level. The pair then rebounded back strongly towards 1.3750, now trading at 1.3759 at the time of writing with a total 0.22% gain on the day. The cable looks for extending its bullish momentum as US dollar starting to slip in the second half of the day. For technical aspect, RSI indicator 62 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish. For Bollinger Bands, the price is now trading near the upper band, which also indicates a bull market.

In conclusion, we think market will be bullish as the pair heading to test the 1.3769 resistance line. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.3867. With no important UK economic data scheduled to be released this week, investors now wait for Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium.

Resistance: 1.3769, 1.3867

Support: 1.3681, 1.3604

USDJPY (4- Hour Chart)

The USD/JPY pair surged on Wednesday, climbing to fresh daily high during American session and aiming to break above the 110.12 level. The pair is now trading at 110.10 as of writing, rising 0.44% on a daily basis at the time of writing. USD/JPY seems to be benefited greatly from the rising US Treasury bond yields as the pair continues to edge higher. For technical aspect, RSI indicator 61 figures as of writing, which means the market is near the overbought zone, and the buying pressure is relatively stronger. If we take a look at MACD indicator, a positive MACD histogram indicates 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. The next resistance is at 110.23. In addition to that, the US Initial Jobless Claims will be released on Thursday, a lower-than-expected reading should be taken as positive for the US dollar.

Resistance: 110.23, 110.55

Support: 109.51, 109.09, 108.72

XAUUSD (4- Hour Chart)

The XAU/USD pair was trading lower in early trade on Wednesday, then continued its downward traction during American session. The pair is now trading at 1792.48 at the time of writing, losing 0.59% on the day. Rising US Treasury bond yields are putting downward pressure on gold price. For technical aspect, RSI indicator 50 figures as of writing, suggesting that there is no obvious trend in the market now. If we take a look at MACD indicator, a negative MACD histogram shows that the market is bearish. For Bollinger Bands, the price is now trading below the 20 SMA line, which also indicates a bear market.

In conclusion, we think market will be bearish as the pair failed to break above the 1797.79 level. It’s heading down to test the 1776.55 support line. The metal is likely to maintain its downward correction.

Resistance: 1797.79, 1809.63, 1832.71

Support: 1776.55, 1741.68, 1725.21

Economic Data

Daily Market Analysis

Market Focus

U.S. equities rose to record highs as strong corporate earnings and a rally in commodity prices outweighed lingering concerns about the threat of Covid-19 to the global economy.

The S&P 500 and Nasdaq 100 gained as Best Buy Co. became the latest U.S. retailer to report robust consumer demand while the price of oil and iron ore similarly gained on improving sentiment.

Energy, consumer discretionary and materials stocks were among the best performers as investors also awaited insights from Federal Reserve Chairman Jerome Powell’s address from Jackson Hole this week.

While markets started the week with a strong global rally, equities in the U.S. and Europe remain volatile on concern over the spread of the delta variant and tighter monetary policy. Economic data so far this week have painted a mixed picture, with manufacturing purchasing managers’ indexes in Europe and the U.S. showing continued growth, though slowing from last month’s levels.

Earlier in the session, a rebound in Chinese tech stocks drove gains in global equities after solid results at JD.com Inc. drew in investors including Cathie Wood. Iron ore climbed on expectations additional support from the Chinese government will boost demand. WTI crude rallied to above $67 a barrel. Treasuries fell and the dollar was weaker.

Main Pairs Movement:

The US dollar edged lower on Tuesday, reaching the lowest level since August 17. At the time of writing, the greenback is losing 0.08% on the day at 92.897. Markets now await the Jackson Hole Symposium that begins this Thursday, a hawkish tone from the Fed chairman Jerome Powell could support the US dollar. The Fed is expected to start bond tapering later this year after July’s FOMC meeting minutes released.

GBP/USD and EUR/USD both posted a gain on Tuesday, trading at 1.3727 and 1.1754, respectively. GBP/USD recorded a daily high at 1.3747 but pulled back toward 1.3700 during American session. EUR/USD continues to climb higher amid US dollar’s weakness, rising 0.10% on a daily basis.

USD/JPY touched a fresh weekly low at the beginning of the American session, but then rebounded and recovered some of its losses. The pair is now trading at 109.65, losing 0.03% for the day.

Gold lost its positive traction after reaching its highest level since August 5 during American session, pulling back to 1803.68 at the time of writing. Gold is now losing 0.09% on a daily basis. WTI continues its rally from Monday, surged 3.32% for the day.

Technical Analysis:

EURUSD (4-hour Chart)

The EUR/USD pair advanced on Tuesday, reaching a one-week high during American session. The pair is now trading at 1.1747 at the time of writing with a total 0.03% gain for the day. EUR/USD continues to benefit from a weaker US dollar across the board. For technical aspect, RSI indicator 59 figures as of writing, suggesting bull-movement ahead. If we take a look at MACD indicator, a positive MACD histogram shows that the market is bullish. For Bollinger Bands, the price is now trading above the 20 SMA line, which also indicates a bull market.

In conclusion, we think market will be bullish as long as the 1.1784 resistance line holds. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.1805. On top of that, the German Ifo Business Climate Index, a data that rates the current German business climate, is scheduled to be released on Wednesday. A higher-than-expected reading should be taken as bullish for the Euro.

Resistance: 1.1784, 1.1805

Support: 1.1724, 1.1694, 1.1664

AUDUSD (4- Hour Chart)

The AUD/USD pair climbed to fresh weekly high during American session on Tuesday, but then retreated modestly back from that, now trading at 0.7253. The pair is rising 0.68% on a daily basis. For technical aspect, RSI indicator 63 figures as of writing, which means the market is near the overbought zone, and the buying pressure is relatively stronger. If we take a look at MACD indicator, a positive MACD histogram indicates that the market is bullish.

In conclusion, we think market will be bearish, as the pair is now testing the 0.7270 resistance line. Meanwhile, the Bollinger Bands shows that the price moves out of the bands first, and then move immediately back inside the band, which is considered as a selling signal. In addition to that, the assist governor of Reserve Bank of Australia Luci Ellis will speaks on Wednesday, investors can try to find some clues about Australia’s future monetary policy.

Resistance: 0.7270, 0.7319, 0.7389

Support: 0.7218, 0.7106

USDCAD (4- Hour Chart)

The USD/CAD pair declined on Tuesday, reaching its lowest level since August 17 during American session. USD/CAD continues to fell as crude oil prices rise more than 3%. The pair is now trading at 1.2595 and losing 0.4% for the day. For technical aspect, RSI indicator 32 figures as of writing, suggesting that the selling pressure is relatively higher, traders should pay attention to buying signals. If we take a look at MACD indicator, a negative MACD histogram shows that the market is bearish. For Bollinger Bands, the price is now trading below the 20 SMA line, which also indicates a bear market.

In conclusion, we think market will be bearish as it heads to test the 1.2584 support line. A break below that level could leads the pair to edge lower, and the next support is 1.2490. The forecast of the USD/CAD pair remains negative with the oil’s strength. Moreover, US Crude Oil Inventories, which influences the price of petroleum product, will be released on Wednesday. This data is likely to impact the demand of crude oil, as well as the commodity-linked loonie.

Resistance: 1.2664, 1.2834

Support: 1.2584, 1.2490, 1.2422

Economic Data

Daily Market Analysis

Market Focus

U.S. equities rose Monday as the Covid-19 immunization drive was bolstered by U.S. regulators granting full approval for the vaccine made by Pfizer Inc. and BioNTech SE.

The S&P 500 and Nasdaq 100 rebounded from lows last week as the approval could lead to more vaccine mandates amid a surge in delta variant cases that has threatened the momentum of the global economic recovery. Mixed U.S. data Monday showed July home salescoming in higher than expected while growth at U.S. services and factories slowed to an eight-month low. 

The Covid-19 vaccine made by Pfizer Inc. and BioNTech SE was granted a full approval by U.S. regulators, a milestone expected to help bolster the immunization drive amid a renewed surge in infections.

The Food and Drug Administration said in a statement on Monday that it had cleared the shot for the prevention of the disease caused by the novel coronavirus in people 16 and older. It will be marketed under the name Comirnaty. 

The approval is the first for a Covid vaccine in the U.S., and it arrives at a crucial time, as the country is ensnared in a wave of illness sparked by the highly transmissible delta variant. The Biden administration has made increasing vaccinations a priority in its efforts to tamp down the latest outbreak, and hopes the approval will increase confidence in the shot among people who say they are wary of its rapid-fire development.

Main Pairs Movement:

The US dollar declined sharply on the first day of a new trading week, surrounding by strong selling pressure. At the time of writing, the greenback is losing 0.52% on the day at 92.971. The depreciation of the greenback is likely due to the negative market mood, as the world is now facing the threat of the Delta variant. Investor worries about that the increasing cases of the Covid-19 could hinder the global economic recovery and impacts the plans of the Federal Reserve to start bond tapering. In addition, the US Manufacturing PMI and Services PMI released on Monday are both lower than expected, which is bearish for the US dollar.

GBP/USD and EUR/USD both advanced on Monday, trading at 1.3731 and 1.1747, respectively. GBP/USD picked up today after reaching a monthly low at 1.360 last week, despite a lower UK PMI data in August compared to July. EUR/USD continues to climb higher during American session, rising 0.39% on a daily basis.

USD/JPY was trading higher during Asia session, but then lost its momentum and pulled back from daily high. The pair is now trading at 109.67, losing 0.09% for the day.

Gold price surged 1.32% on Monday owing to the US dollar’s weakness, now trading at 1804.22 at the time of writing. WTI jumped for 5.63% on a daily basis, following last week’s steep decline. The crude oil is rising on Monday as a result of improved market sentiment. Also, China’s covid outbreak is under control, reporting zero local cases in the day.

Technical Analysis:

GBPUSD (4-hour Chart)

The GBP/USD pair took a recovery from last week’s one-month lows on the first day of a new trading week, rising 0.7% for the day. The cable surged on US dollar’s weakness, which is now trading around 1.3729 at the time of writing. For technical aspect, RSI indicator 58 figures as of writing, suggesting 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 long as the 1.3786 resistance line holds. If the price breaks above that level, it will open the door for additional near-term profits. And the next resistance is at 1.388. On top of that, The UK Purchasing Managers Index (PMI) released on Monday had a lower reading compared to July’s data, as the Manufacturing PMI fell to a five-month low level of 60.1 in August. Nevertheless, the UK PMI prints for August seems to have only slight influence on the GBP/USD pair.

Resistance: 1.3786, 1.3888, 1.4001

Support: 1.3602, 1.3572

USDCAD (4- Hour Chart)

The USD/CAD pair slumped on Monday, retreating back from a yearly high recorded last week, as it dipped 1.21% for the day. The pair is now trading at 1.2648 at the time of writing while surrounding by strengthened bearish market mood. For technical aspect, RSI indicator 37 figures as of writing, suggesting bear-movement ahead, and the selling pressure is relatively stronger. If we take a look at MACD indicator, a negative MACD histogram indicates that the market is bearish.

In conclusion, we think market will be bearish, as the pair failed to break above the 1.2957 resistance line. The USD/CAD pair is continually heading down and trying to test the 1.2588 support. The depreciation of US dollar and upsurge in crude oil prices made the pair fall deeper during the American session. In addition to that, Canada will release its Wholesale Sales on Wednesday, which is a leading indicator of consumer spending. Investors can take note of what kind of effect it will bring to the Canadian dollar.

Resistance: 1.2807, 1.2957

Support: 1.2588, 1.2422, 1.2013

XAUUSD (4- Hour Chart)

The XAU/USD pair surged on Monday, breaking above the 1800 level. The pair is now trading at 1805.03 and rising 1.33% on a daily basis. For technical aspect, RSI indicator 68 figures as of writing, suggesting that the market is near the overbought zone, traders should pay attention to selling signals. 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 it heads to test the 1814.92 resistance line. A break above that level could leads the pair to advance higher, and the next resistance line sits at 1831.78. With the US dollar coming under strong selling pressure, gold is gathering bullish momentum at the start of the week. On top of that, US New Home Sales is scheduled to released on Tuesday, a lower-than-expected reading could help XAU/USD to edge higher.

Resistance: 1814.92, 1831.78

Support: 1776.55, 1741.68, 1717.81, 1690.61

Economic Data