AUDUSD Technical Analysis – The greenback remains in the driving seat
https://www.forexlive.com/technical-analysis/audusd-technical-analysis-the-greenback-remains-in-the-driving-seat-20241023/
Fundamental
OverviewThe USD continues to reign
supreme despite the lack of catalysts. The main culprit for the recent strength
in the US Dollar has been the rally in long term Treasury yields. The yield
curve is bear flattening which is what you would expect with higher growth and
potentially higher inflation expectations. The catalyst for this was
of course the latest FOMC decision and the US NFP report added fuel to the
fire. There’s also been a good argument that the markets are already
positioning for a Trump victory which is expected to strengthen the higher
growth and less rate cuts expectations. For now, this is the trend
and it’s generally a bad idea to fight such trends without a catalyst.
Unfortunately, we don’t have much left for October as the main events will be
in the first weeks of November when we will get the top tier economic reports,
the US elections and the FOMC decision.On the AUD side, the latest
data has been pretty strong with the Australian labour market report (https://www.forexlive.com/news/australian-september-unemployment-rate-41-vs-42-expected-20241017/) last week beating expectations by a
big margin. Although it didn’t change much in terms of interest rate
expectations, it reinforces the RBA’s hawkish stance.AUDUSD
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that AUDUSD is getting closer to the 0.6622 level. If the price gets there,
we can expect the buyers to step in with a defined risk below the level to
position for a rally back into the 0.68 handle. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
0.64 handle next.AUDUSD Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see that the bearish momentum slowed down as the lower lows became shallower.
We have a downward trendline (https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/) defining the current momentum. The
sellers will likely keep on leaning on it to position for new lows, while the
buyers will look for a break higher to start targeting the 0.68 handle.AUDUSD Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see that we have a minor support zone around the 0.6650 level. The sellers will
want to see the price breaking lower to increase the bearish bets into the
0.6622 level, while the buyers might try to step in for a pullback into the
trendline. The red lines define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today. Upcoming
CatalystsTomorrow (https://www.forexlive.com/EconomicCalendar) we get the Australian and US Flash PMIs, and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
GBPUSD Analysis: Key levels to watch as we head into the new trading day.
https://www.forexlive.com/technical-analysis/gbpusd-analysis-keylevels-to-watch-as-we-head-into-the-new-trading-day-20241022/
At the start of the US session today I posted on the GBPUSD: (https://www.forexlive.com/news/maximize-trading-opportunities-with-market-insights-20241022/)GBPUSD: Traders have been targeting the 100 day MA and the 61.8% of the move up from the August low at 1.2962 and 1.2958. The low price today reached within 3 pips of the 100 day MA at 1.2965 and bounced to 1.2984. Break below and traders will target 1.2938 followed by 1.2844 to 1.2867. The overhead resistance is at 1.3000 where the low from September 11 bottomed (before bouncing). PS the price did break above the 1.3000 earlier today, but the high price also stalled at the falling 100 hour MA. That level comes in at 1.3010. So 1.3000 to 1.3010 is really my best topside resistance/bias defining level. Until broken, the selelrs are in more control.So what happened.The price did move below the 100-day MA and the 61.8% retracement but fell short of the next target that would have opened the downside for more probing. The low reached 1.29438. The price moved back above the 100 day MA and has moved up to 1.2983.The price is between the 1.3000 level and the falling 100-hour MA which is now at 1.30076 (and moving lower) and back above the 100 day MA at 1.29619. Looking at the hourly chart below, the high price today reached the 100 hour MA and stalled. That increases the levels importance going forward. So if the price reaches the 1.3000 level in the new day (it will), that will add to that level importance as well.
This article was written by Greg Michalowski at www.forexlive.com.
If stocks are so expensive, find a reason to sell.
https://www.forexlive.com/technical-analysis/if-stocks-are-so-expensive-find-a-reason-to-sell-20241022/
I am listening to CNBC and the pundits are mostly spewing How the stock market is overbought. How the stock growth rate over the next 10-years will average 3% per year. How Trump winning will be bullish (PS everyone was bearish in 2016 when he was elected and it lasted about 1/2 a day). How Harris win will be negative (if one is bullish the other must be bearish). How the Mag 7 now have to spend on capital and that is bearish.How Buffett is sitting on loads of cash with no-where to put itThen you get, "The market is dependent on how the earnings come out" How someone can see 10 years out is beyond me. By the way, if the fiscal situation is a major problem, 3% might seem good. The fact is no one knows. So what do we know.?The Dow and S&P are close to all-time highsThe Nasdaq closed at the highest level yesterday sans the July 10 high (the 2nd highest closing level on record)Stocks are at the highs. We also know that every bearish story written over the last few years (and for the majority of history), have not worked out too well. The price of the major indices - the Dow, S&P and the Nasdaq are all near all-time highs. The stories are not working. Those stories may one day work (for a while), but every bearish sentiment so far has not worked.So when can we sell?What we DO know is the price of every stock and therefore every index is an auctioned price between buyera and sellers. If there are more buyers, the price goes higher. If there more sellers, the price goes down. We also know if the price includes all the news and all the expectations for earnings now and going forward, the price is IT. It is everyone's consolidated view on the stock on the index , That includes all the buyers and the sellers.If the price is "IT", the price action tells a story too. That story can be bullish or bearish, but if the price is at an all-time high, the story is bullish. What would hurt that bullish story?That is where the charts come into play and the tools applied to them. For the S&P, the index is up 6 straight weeks. Is it overbought? If you applied a RSI to the daily chart, the RSI is actually diverging. That is the price is trading at new highs, but the RSI is lower than the previous hgih reached in July. The problem is it has been diverging since the price moved to a new high on September 19. That is the problem with oscilators is they tell you overbought or divergeent but markets can get more overbought and RSI can diverge for a while too.So what can you do?One thing is apply a simple moving average to the price action. What that helps you do is find a REASON to sell. How? If the price moves below the MA, the bias tilts to the downside. By definition, if the price moves back above the MA, it would tilt the bias back to the upside. So that defines risk. You just need to believe it.However, if you are anxios to sell, it makes the decision for you..Looking at the daily chart, the 50 day MA (orange line on the chart below), is at 5662.89. Traders might look at that as a potential sell point. If the price goes below it, the sellers are starting to "win". The problem is the 50-day is at 5662.89. The current price is at 5844. That is 182 points away. I am bearish now.So go to a shorter-term chart. Looking at the hourly chart, the 50-hour MA is at 5843.77. The price is at 5844. IN other words, the price is trying to move below that MA level right now. If the price starts to move below the 50-hour MA and then moves to and through the 100 hour MA at 5792.66, that would be bearish too. Both of those are still above the 50-day MA at 5662.89. The 200 hour MA at 5740.13 is also above the 50 day MA. Remember it is down at 5662. The same rules would apply to the hourly chart. That is, if the price breaks below the MA, the bias is shifting to the downside. By definition a move
EURUSD sellers making a play. Extends below the low from last week
https://www.forexlive.com/technical-analysis/eurusd-sellers-making-a-play-extends-below-the-low-from-last-week-20241022/
The EURUSD sellers are making a play in the US session with the price moving below the low from last week at 1.08103. The price has moved to a low of 1.0800, bounced back to 1.08148 but is back down to 1.0806. Buyers and seller battle. If the sellers play to the downside is for real, the next target comes in at 1.08767.Yesterday the market opened near its 200-day moving average and broken 61.8% retracement near 1.0874, and found willing sellers.
This article was written by Greg Michalowski at www.forexlive.com.
AUDUSD bounces and retests 100 day MA. Seller lean against the level.
https://www.forexlive.com/technical-analysis/audusd-bounces-and-retests-100-day-ma-seller-lean-against-the-level-20241022/
Earlier today I wrote (https://www.forexlive.com/news/maximize-trading-opportunities-with-market-insights-20241022/):AUDUSD: The 50% midpoint of the move up from the August low comes in at 0.6645 and the low reached 0.6650 at the start of the new trading day today. The bounce higher has moved to a swing area between 0.6685 to 0.6695. At the 0.6695 level is also the key 100 day MA. The price needs to stay below that level today and going forward if the sellers are to remain more in control. The high today reached 0.66918 [so far}. So support and resistance held the range today.The price moved a smidge higher in the early US session reaching 0.66946 - just below the 0.66952 level. The price has moved lower and trades at 0.6682 currently. Traders who like the downside for the AUDUSD have their shot against the 100-day MA and swing area. If the price can stay below that level, downside probing can continue. THe low from last week at 0.66578 and the 50% midpoint at 0.6645 are downside targets.Conversely, if the 100-day moving average is broken, sellers are likely to be disappointed on the failed break to the downside, and look for higher levels with a broken 38.2% retracement at 0.6715. Above that, and a swing area between 0.6742 and 0.6760 would be targeted followed by the 100 and 200-bar moving averages on the 4-hour chart (see higher blue and green lines).
This article was written by Greg Michalowski at www.forexlive.com.
Kickstart the FX trading day for Oct 22 w/a technical look at EURUSD, USDJPY and GBPUSD
https://www.forexlive.com/technical-analysis/kickstart-the-fx-trading-day-for-oct-22-wa-technical-look-at-eurusd-usdjpy-and-gbpusd-20241022/
In the above video, I take a technical look at the 3 major currency pairs EURUSD: The EURUSD held below the 200-day MA and 61.8% of the move up from the June low near 1.0874 yesterday (bearish). The price low yesterday and today is pushing toward the low from last week at 1.0810. Move below would target 1.07767. Move below that level and traders would target a swing area between 1.07198 and 1.07346GBPUSD: Traders have been targeting the 100-day MA and the 61.8% of the move up from the August low at 1.2962 and 1.2958. The low price today reached within 3 pips of the 100-day MA at 1.2965 and bounced to 1.2984. Break below targets and 1.2938 followed by 1.2844 to 1.2867. The overhead resistance is at 1.3000 where the low from September 11 bottomed (before bouncing). PS the price did break above the 1.3000 but the high price today also stalled at the falling 100 hour MA. That level comes in at 1.3010. So 1.3000 to 1.3010 is really my best topside resistance/bias-defining level. It would take a move above to turn the bias around.USDJPY: The USDJPY has broken above the 100-day MA at 150.75 and the 50% of the move down from the July high at the same level. The price trades at 150.83. Staying above keeps the buyers in firm control (look for more upside probing - the 200 day MA is up at 151.345 as an intermediate target). Move below with momentum, and we should see buyers turn to sellers. For now, buyers in control.
This article was written by Greg Michalowski at www.forexlive.com.
GBPUSD Technical Analysis – The USD continues to gain amid rising yields
https://www.forexlive.com/technical-analysis/gbpusd-technical-analysis-the-usd-continues-to-gain-amid-rising-yields-20241022/
Fundamental
OverviewThe lack of catalysts
recently kept the US Dollar supported across the board despite the slowdown in
momentum. The market might now be looking forward to the first weeks of
November when we will get the key economic data, the FOMC decision and the US
elections.There’s been also a good
argument that the markets are already positioning for a Trump victory and that
should translate in USD strength as it should appreciate on higher growth and
less rate cuts expectations. Nevertheless, not all markets have been in sync
with this view.On the GBP side, we got the
UK CPI (https://www.forexlive.com/news/uk-september-cpi-17-vs-19-yy-expected-20241016/) report last week where the data missed
expectations across the board and prompted the market to expect another 25 bps
cut in December. In 2025, the market sees roughly four more rate cuts.GBPUSD
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that GBPUSD is now trading below the 1.30 handle although the pair remains
in a consolidation just beneath the key level. We are now getting close to the
major trendline (https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/) where we can expect the buyers to
step in with a defined risk below it to position for a rally into new highs.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 1.27 handle next.GBPUSD Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see that we have a minor downward trendline defining the current bearish momentum.
If the price gets there we can expect the sellers to lean on it to position for
new lows, while the buyers will look for a break higher to increase the bullish
bets into the 1.32 handle.GBPUSD Technical Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see more clearly the recent price action with kind of a range between the
1.2972 low and the 1.30 handle as resistance (https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/).
The sellers will want to see the price breaking lower to increase the bearish
bets into the major trendline, while the buyers will look for a break higher to
target a rally into the downward trendline. The red line define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today.Upcoming
CatalystsThis week (https://www.forexlive.com/EconomicCalendar) is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash UK and US PMIs,
and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
Gold Technical Analysis – It's not worth it chasing this rally
https://www.forexlive.com/technical-analysis/gold-technical-analysis-its-not-worth-it-chasing-this-rally-20241022/
Fundamental
OverviewIn recent days, gold has
been making new highs despite the lack of bullish catalysts. Moreover, the
latest leg higher diverged with real yields which climbed to new highs since
last week. This divergence could point
to a pullback in gold ahead of the Flash US PMIs on Thursday, and if we get
strong data, it might even trigger a quick correction lower.In the bigger picture, gold
remains in a bullish trend as real yields will likely continue to fall amid the
Fed’s easing cycle. The pullbacks will likely be triggered by a repricing in
rate cuts but unless the Fed’s reaction function changes, the uptrend should
remain intact.One key event which could
trigger a strong selloff in gold is the upcoming US election. In fact, a Trump
victory will likely raise real yields on higher growth and less rate cuts
expectations. Gold
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that gold managed to rally into new highs despite the lack of bullish
catalysts and the rise in real yields. This might be a signal for the buyers to
be cautious here. From a risk management perspective, the buyers will have a
better risk to reward setup around the major trendline (https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/). The sellers, on the other hand,
will want to see the price breaking below the trendline to pile in for a drop into
the 2500 level. Gold Technical Analysis
– 4 hour TimeframeOn the 4 hour chart, we can
see that we have another minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to target new highs,
while the sellers will look for a break lower to target a drop into the previous
all-time high at 2685.Gold Technical Analysis
– 1 hour TimeframeOn the 1 hour chart, we can
see that yesterday we got a quick drop lower although it wasn’t triggered by
any catalyst other than some pressure coming from the rise in Treasury yields.
The market eventually erased the drop, and the price is now back around the
all-time highs. Although we might see new
highs, the risk of chasing the upside at the moment is too high. The red lines
define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today. Upcoming
CatalystsThis week (https://www.forexlive.com/EconomicCalendar) is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash US PMIs and the
US Jobless Claims figures.See the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
EURUSD tests recent low at 1.08103. Will it break and continue downtrend?
https://www.forexlive.com/technical-analysis/eurusd-retests-low-from-last-week-20241021/
The EURUSD is testing the low price from last Thursday at 1.08103. The low price just reached 1.08104. A break below the level will have traders looking toward the low price going back to August 1. That level comes in at 1.0777.Earlier today, the price tested the 200-day moving average in the early Asian session and the 61.8% retracement of the move up from the June low at 1.08709 and 1.08746 respectively. Staying below those levels gave the sellers the go-ahead to push to the downside.Sellers continue to push lower after testing the 2024 high just 3 weeks ago in the 1.1200 to 1.1213 area. Last Monday, the price of the EURUSD moved below the 50% of the move up from the June low at 1.0938, the 100 day MA at 1.0934.Today, the price is moving away from the 61.8% and the 200-day MA near 1.0872. Does the pattern continue and the pair trend lower tomorrow?
This article was written by Greg Michalowski at www.forexlive.com.
NZDUSD to lowest level since mid-August
https://www.forexlive.com/technical-analysis/nzdusd-to-lowest-level-since-mid-august-20241021/
The USD continues to move higher today, and the NZDUSD is not missing out on the run higher. A chief fundamental catalysts is the the 10-year note yield which is up 10.5 basis points on the day and now up around 55 basis points since the Fed cut. The 2-year yield is up 45 basis points. Banks - not averse to jumping on the higher yield bandwagon despite stellar earnings - has taken the 30 year mortgage up 71 basis points leading the charge to the upside. Maybe JPMorgan will reach and exceed its Net Interest Income targets after all. For the NZDUSD, the RBNZ cut 50 basis points at its last meeting. Of course, the Fed also cut by 50 basis points and although they are recalibrating, the data continues to be better. The Fed is still expected to cut by 25 basis points (85% chance for a 25 cut), it was at one point pricing a better chance for 50 basis points. Now there is a 15% chance for no cut. Technically, the pair spent most of last week below its 200-day MA (green line) currently at 0.60902. After reaching lower and to the the high of a swing area at 0.60313 and 0.60387, the price moved higher into the Friday close. Today, after first moving modestly higher to 0.6083 (on China stimulus news), the buyers turned back to sellers. The fall took the price to - and then through - the 61.8% of the range since August at 0.60509. More recently, the price has now dipped below the aforementioned swing area betwene 0.60313 and 0.60387. What next?More momentum to the downside would have the pair moving toward another swing area base from the early to mid-August trading period. That area comes between 0.5970 to 0.59836. What would take some of the wind out of the seller's sails?A move back above the broken 61.8% level at 0.60509.
This article was written by Greg Michalowski at www.forexlive.com.
European shares close lower. German DAX falls after closing at record high on Friday
https://www.forexlive.com/technical-analysis/european-shares-close-lower-german-dax-falls-after-closing-at-record-high-on-friday-20241021/
The German Dax closed at record highs on Monday, Thursday and Friday last week, moving above the high close going back to September 27. Today, however, the index fell by around 1% leading the way lower for the major European indices. A snapshot of the Europe closes fo the day are showing:German Dax, -1.02%France's CAC, -1.01%UK's FTSE 100, -0.48%Spain's Ibex, -0.71%Italy's FTSE MIB, -0.71%As London/European traders look for the exits, US indices are also lower:Dow industrial average -340 points or -0.78% at 42937.50S&P index -30.70 points or -0.52% at 5834.30.NASDAQ index -64 points or -0.35% at 18423.13US yields continue to move higher and trade at the day's highest levels: 2 year yield 4.025%, +7.0 basis points10 year yield 4.173%, +9.9 basis points30 year yield 4.475%, +9.4 basis points
This article was written by Greg Michalowski at www.forexlive.com.
USDCAD runs to a new high with the broader USD. Extends toward high from last week.
https://www.forexlive.com/technical-analysis/usdcad-runs-to-a-new-high-with-the-broader-usd-extends-toward-high-from-last-week-20241021/
The USDCAD is pushing to the upside (with the broader USD advances today) and in the process is stretching toward the high from last week at 1.3837. A move above that level would have traders targeting a swing area off the daily chart point back to 2022 between 1.3859 and 1.3898. Move above that level and traders start talking about the 2024 high at 1.39458 and the 2022 high at 1.3977. What was a key last week, was that at session lows last week, the price did hold the 61.8% retracement of the 2024 trading range at 1.37445. Holding that level buyers the go-ahead to push higher.This week, the Bank of Canada will announce its rate decision on Wednesday. The odds-on-favorite is up for a 50 basis point cut. That bias has weakened the CAD over the last few weeks of trading.Also helping the USD today is that rates are moving higher with the two year up 5.6 basis points at 4.010%, the 10 year is up 8.1 basis points at 4.1559%
This article was written by Greg Michalowski at www.forexlive.com.
Kickstart the FX trading day for Oct 21 w/ a technical look at the EURUSD, USDJPY & GBPUSD
https://www.forexlive.com/technical-analysis/kickstart-the-fx-trading-day-for-oct-21-w-a-technical-look-at-the-eurusd-usdjpy-gbpusd-20241021/
As the new trading week begins, the USD buyers are exerting their control. EURUSD: The EURUSD sellers (USD buyers) are moving away from the 100 hour MA at 1.08623, the 200 day MA at 1.0871, the 61.8% of the move up from the end of June low at 1.08746. The current prices trading at 1.08539. If the buyers are to start to take back more control, they first need to get above the 100 hour moving average and then the 200 day moving average and 61.8% retracement respectively. Absent that in the buyers are losing. The sellers are winning and the path of least resistance is to the downside.USDJPY: The USDJPY has been within a range of 148.835 and 150.316 of the last seven trading days. That dynamic has allowed the 100 and 200-hour moving average to catch up with the price. On Friday, the price fell back below its 100-hour moving average and stayed below it in the early Asian session today. The push lower extended below its 200-hour moving average for the first time since October 2. However, momentum cannot be sustained toward the low of the recent range and buyers returned pushing the price back above the moving average levels. Going forward, it would take a move back below the 100-hour moving average at 149.61, and the 200-hour moving average at 149.373 to tilt the bias back in favor of the sellers. Absent that, and the buyers are in controlGBPUSD:The GBPUSD started the day trading above and below its 200-hour moving average, but then sellers push the price lower and also below its 100-hour moving average of 1.30283. The price is just below that 100-hour moving average at 1.3026. Nevertheless, if the buyers are to take control they still need to get above both those moving averages. Absent that in the sellers are in control.
This article was written by Greg Michalowski at www.forexlive.com.
EURUSD watch 1.1184. USDJPY higher after BOJ.GBPUSD moves to highest high since March 2022
https://www.forexlive.com/technical-analysis/eurusd-watch-11184-usdjpy-higher-after-bojgbpusd-moves-to-highest-high-since-march-2022-20240920/
In the kickstart video for September 20, 2024, I take a look at three the major currency pairs - the EURUSD, USDJPY and GBPUSD - from a technical perspective.The EURUSD has traded up and down today but stayed below the 1.1184 – 1.11897 area. The 1.1184 level was initiated as a technical level going back to 2021. Other swing highs are going back to August up to 1.11897. The point is that buyers on Wednesday Thursday and Friday stalled near that area. The high price for the year reached in August extended up to the 1.1200 level. That will also be important on the topside. On the downside, the 100-hour moving average at 1.11338 is between a swing area between 1.1131 and 1.1140.The USDJPY is being impacted by a dovish no change in policy from the Bank of Japan. At session lows today, the price moved down to test the 100 and 200-hour moving averages, and bounced as the decision was interpreted. It didn't take long for the buyers to push higher and higher. Traders stalled the rally ahead of the 50% midpoint off the daily chart from the January 2023 low at 144.58. On the downside, traders will ID 50% of the move down from the September high to the September low at 143.35.The GBPUSD moved to a new high going back to March 2022 and moved further into a swing area going back to that period between 1.3277 and 1.3358. The current price is trading at 1.3309. Also in play is the swing high going back to August which peaked at 1.3266. That level is close support in trading today.
This article was written by Greg Michalowski at www.forexlive.com.
The GBP is the strongest and the JPY is the weakest as the NA session begins.
https://www.forexlive.com/technical-analysis/the-gbp-is-the-strongest-and-the-jpy-is-the-weakest-as-the-na-session-begins-20240920/
As the North American session begins, the GBP is the strongest and the JPY is the weakest. The USD is stronger. The Bank of Japan (BOJ) left interest rates unchanged at 0.25% during its September 2024 monetary policy meeting. This was as expected. The BOJ noted that Japan’s economy is recovering moderately, though some weaknesses remain. Inflation expectations are rising moderately, with inflation likely to align with the BOJ's price target by the second half of the projection period, extending through fiscal 2026. Consumption is increasing gradually, and the economy is expected to grow above potential. The BOJ also highlighted the need to monitor financial and foreign exchange market fluctuations, as their impact on prices has grown.In his press conference afterwards, BOJ Governor Ueda's on various topics said:Japan's Economy and Recovery:Japan's economy is recovering moderately, though some weaknesses remain.Recent data confirms the economy is moving in line with the BOJ's outlook.Private consumption is improving as wages grow, leading to an improved economic outlook.Inflation and Prices:Inflation risks have diminished somewhat, reducing the urgency for immediate policy changes.Recent data suggests the BOJ may raise its outlook on underlying inflation.The impact of a weak yen on import price inflation is expected to fade.Wage hikes are starting to reflect in services prices.Monetary Policy:The BOJ will continue adjusting the degree of easing if the economic and price outlook materializes.Japan's interest rate is likely still below the neutral rate despite hikes.Monetary policy will not be used to control forex rates.Easy monetary conditions remain in place as real rates are negative.Financial and Market Uncertainty:High uncertainties surrounding the economy and prices require vigilant monitoring.Financial markets remain unstable, but BOJ will take the next policy step when the economic outlook is clearer.Criticism on insufficient communication after the July market rout is acknowledged, and the BOJ plans to communicate more frequently.Global Trends and Impact:Overseas trends, especially uncertainties, are a concern for the inflation outlook.The BOJ’s main scenario is for the U.S. economy to achieve a soft landing, which would have minimal negative impact on Japan's economy.Yesterday, the BOE kept rates unchanged. BOE policymaker Catherine Mann weighed in "the day after" and emphasized the need to maintain restrictive monetary policy to combat persistent inflationary pressures in the UK. She advocated for keeping rates higher for longer, suggesting that cutting rates too soon could risk a resurgence in inflation. Mann noted that inflation risks, particularly in services, remain elevated in the UK, which influenced her decision not to vote for a rate cut in August. She holds a cautious stance on beginning the rate-cutting cycle, agreeing that inflation may remain above target for an extended period, making her reluctant to support rate cuts under current conditions.Today UK retail sales beat on estimates again in August (+1.0% vs +0.4% estimate) with a rise in almost all categories. Some supermarkets and clothing retailers reported a boost because of warmer weather and end-of-season sales. And looking to sales volumes in the three months to August, that is seen up 1.2% when compared with the three months to May. Overall, it's a positive picture to wrap up the summer period in the UK. That will help to give the BOE more breathing room in keeping rates higher for the time being. Below is a look at the change in the different categories.Last week, the ECB cut rates as expected. Today, ECB Vice President Luis de Guindos emphasized that the European Central Bank will have more substantial data by December compared to
USDJPY Technical Analysis – Higher Treasury yields revive the carry trade
https://www.forexlive.com/technical-analysis/usdjpy-technical-analysis-higher-treasury-yields-revive-the-carry-trade-20241023/
Fundamental
OverviewThe USD continues to reign
supreme despite the lack of catalysts. The main culprit for the recent strength
in the US Dollar has been the rally in long term Treasury yields. The yield
curve is bear flattening which is what you would expect with higher growth and
potentially higher inflation expectations. The catalyst for this was
the latest FOMC decision and the US NFP report added fuel to the fire. There’s also
been a good argument that the markets are already positioning for a Trump
victory which is expected to strengthen the higher growth and less rate cuts
expectations. For now, this is the trend
and it’s generally a bad idea to fight such trends without a catalyst. Unfortunately,
we don’t have much left for October as the main events will be in the first
weeks of November when we will get the top tier economic reports, the US
elections and the FOMC decision.USDJPY
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that USDJPY eventually shot higher and reached the 152.00 handle. This is
where we can expect the sellers to step in with a defined risk above it to
position for a drop back into the 149.40 level, while the buyers will likely increase
the bullish bets into the 160.00 handle next.USDJPY Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see more clearly the recent price action with a strong push higher in the last
two days. From a risk management perspective, the buyers will have a better
risk to reward setup around the trendline (https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/)
as today’s move might be overstretched. The sellers, on the other hand, will
look for a break lower to increase the bearish bets into new lows. USDJPY Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see that the price in the Asian session rallied quickly into the upper bound of
today’s average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/). Chasing the rally at these levels might
not be a good idea. We have a minor upward trendline defining the current
momentum. We can expect the buyers to lean on it to target new highs, while the
sellers will look for a break lower to pile in for a drop into the next trendline.Upcoming
CatalystsTomorrow (https://www.forexlive.com/EconomicCalendar) we get the Flash Japanese and US PMIs, and the US Jobless Claims
figures. On Friday, we conclude the week with the Tokyo CPI report.See the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
back above would be bullish. In other words, the MAs define and limit the risk. They give traders a reason to do the trade. They also tell the trader when wrong. Move back above the MA (give it some room), and they are wrong. Stay below and look for the next targets. So talk all you want about being bearish, but all bearish stories going back have failed. The stocks are near all-time highs. However, if you are bearish and dont want a "story" with all the fundamental reasons, have your story be a technical one. Afterall, the price tells ALL the fundamental stories anyway. It just does it with the price action, and tools applied to the price action.
This article was written by Greg Michalowski at www.forexlive.com.
Crude oil tests 200 hour MA
https://www.forexlive.com/technical-analysis/crude-oil-tests-200-hour-ma-20241022/
The price of crude oil futures are trading higher by $1.73 or 2.47% at $71.78. The move to the upside has the price testing its 200-hour moving average at $71.76. A move above is needed to increase the bullish bias with the 38.2% retracement of the move down from the October 7 high at $72.10 as the next target.Sellers looking for a level/area to sell would not want to see the price move materially above the 200-hour moving average and 38.2% retracement. Risk is defined. Buyer need these levels to increase the bullish bias from a technical perspective.
This article was written by Greg Michalowski at www.forexlive.com.
USDCHF technical story remains the same. The EURCHF sellers are making a play to downside
https://www.forexlive.com/technical-analysis/usdchf-technical-story-remains-the-same-the-eurchf-sellers-are-making-a-play-to-downside-20241022/
Earlier today (https://www.forexlive.com/news/maximize-trading-opportunities-with-market-insights-20241022/)in a post I summarized the technical for the USDCHF by writing:USDCHF: The USDCHF remains above the 38.2% of the move down from the July high at 0.86318. Yesterday support buyers came in against the level increasing its importance going forward. Stay above is bullish. Move below and I would expect some selling on the disappointment. On the topside, the highs from last week remain a hurdle at 0.86684. Get above and traders will look toward the falling 100-day MA at 0.8698 as the next key target.\A few hours later the story remains the same with the price in the middle of those risk and bias defining levels. Traders are waiting for a break. In the above video, you get to hear the story - in my own words. For the EURCHF, on Monday in the Asian session, the price was testing its 200 and 100-bar moving average on the 4-hour chart and found willing sellers. SInce then, the price has moved lower and has been trading above and below a rising trend line, but so far trying to find support at the 61.8% of the range since August. That level comes in at 0.93515. Break below opens the door for more selling momentum.
This article was written by Greg Michalowski at www.forexlive.com.
USDCAD backs off after rising to swing area. Traders may be feeling overbought conditions
https://www.forexlive.com/technical-analysis/usdcad-backs-off-after-rising-to-swing-area-traders-may-be-feeling-overbought-conditions-20241022/
The USDCAD has been racing to the upside over the last few weeks with the low price at 1.3472 back on October 2. The high price yesterday reached 1.38475 on October 21. That's a big move in a relatively short amount of time. The price also reached to a new high going back to August 6. My guess is that oscillators are probably pointing toward over-bought conditions (and probably diverging in RSI). Today, the price has backed off a bit from a swing area between 1.3833 and 1.38475. There's support down at 1.3788 to 1.3792. Profit takers can lean against the swing area above and reestablish on a break above the area. .Traders who might look to short for a corrective probe lower can also lean against the swing area above, but if broken be careful. The trend is still intact (it is just overbought). As far as the downside, if the price can get below 1.3788 we could return to the broken 61.8% at 1.3744 area and see what might happen there. Understand, however, there would probably need to be some USD bearish catalyst. So sellers are sticking a toe in the water but only because there is a level to lean against at 1.3833 to 1.3847 (and overbought?). Absent that, and the buyers are still more in control.
This article was written by Greg Michalowski at www.forexlive.com.
USDCAD Technical Analysis – We are near a key resistance zone
https://www.forexlive.com/technical-analysis/usdcad-technical-analysis-we-are-near-a-key-resistance-zone-20241022/
Fundamental
OverviewThe lack of catalysts
recently kept the US Dollar supported across the board despite the slowdown in
momentum. The market might now be looking forward to the first weeks of
November when we will get the key economic data, the FOMC decision and the US
elections.There’s been also a good
argument that the markets are already positioning for a Trump victory and that
should translate in USD strength as it should appreciate on higher growth and
less rate cuts expectations. Nevertheless, not all markets have been in sync
with this view.On the CAD side, the latest
Canadian CPI (https://www.forexlive.com/news/canada-september-cpi-16-vs-18-expected-20241015/) missed expectations and sealed the
50 bps cut at the upcoming meeting with the market seeing now a 99% probability
from 48% before the inflation report. The market then sees another rate cut of
at least 25 bps in December and roughly four more in 2025.USDCAD
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that USDCAD eventually bounced back above the 1.3785 level and extended the
rally into the 1.3850 level. We are now near a key resistance (https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/) zone. This is where we can expect
the sellers to step in with a defined risk above the 1.3860 resistance to
position for a drop back into the 1.36 support. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
new highs.USDCAD Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see more clearly the break above the 1.3785 level that led to a more bullish
price action into the key resistance. There’s not much else we can glean from
this timeframe, so we need to zoom in to see some more details.USDCAD Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely keep on leaning on it to position for further upside,
while the sellers will want to see the price breaking lower to target a drop
back into the 1.3785 level. The red lines define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today.Upcoming
CatalystsTomorrow (https://www.forexlive.com/EconomicCalendar) we have the BoC rate decision. On Thursday, we get the Flash US PMIs,
and the US Jobless Claims figures. On Friday, we conclude the week with the
Canadian retail sales data.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
EURUSD Technical Analysis – New highs in Treasury yields boost the USD
https://www.forexlive.com/technical-analysis/eurusd-technical-analysis-new-highs-in-treasury-yields-boost-the-usd-20241022/
Fundamental
OverviewThe lack of catalysts
recently kept the US Dollar supported across the board despite the slowdown in
momentum. The market might now be looking forward to the first weeks of
November when we will get the key economic data, the FOMC decision and the US
elections.There’s been also a good
argument that the markets are already positioning for a Trump victory and that
should translate in USD strength as it should appreciate on higher growth and
less rate cuts expectations. Nevertheless, not all markets have been in sync
with this view.On the EUR side, the ECB (https://www.forexlive.com/centralbank/ecb-cuts-key-rates-by-25-bps-in-october-monetary-policy-decision-as-expected-20241017/)
last week cut interest rates by 25 bps as expected but didn’t offer anything
new in terms of forward guidance as the central bank remains data dependent and
it’s not pre-committing to a particular rate path. The market is pricing an 86%
chance of another 25 bps cut in December with 14% probabilities of a larger 50
bps cut. Further ahead, the market sees the ECB cutting four more times in 2025.EURUSD Technical
Analysis – Daily TimeframeOn the daily chart, we can
see that EURUSD extended the drop further into the 1.08 handle. The price is
now near a key swing level at 1.0777. If the price gets there, we can expect
the buyers to step in with a defined risk below the level to position for a
rally into the 1.10 handle. The sellers, on the other hand, will want to see
the price breaking lower to increase the bearish bets into the 1.06 handle
next.EURUSD Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see that the pair has been trading inside a falling channel. We are seeing a
bit of a pullback this morning and if the price reaches the top of the channel,
we can expect the sellers to lean on that trendline (https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/) to position for a drop into new
lows. The buyers, on the other hand, will want to see the price breaking higher
to start targeting the 1.10 handle. EURUSD Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see that we got a quick selloff yesterday although it wasn’t triggered by any
catalysts other than some pressure from rising Treasury yields. The market is
currently erasing the drop and we might see the price getting back to the top
of the channel. For now, we have a range
here between the 1.0810 support (https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/)
and the 1.0870 resistance. The sellers will want to see the price breaking
lower to extend the drop into the 1.0777 level, while the buyers will look for
a break higher to start targeting the 1.10 handle. The red lines define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today. Upcoming
CatalystsThis week (https://www.forexlive.com/EconomicCalendar) is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash Eurozone and US
PMIs, and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
GBPUSD moves toward low from last week and 100 day MA/61.8% retracement
https://www.forexlive.com/technical-analysis/gbpusd-moves-toward-low-from-last-week-and-100-day-ma618-retracement-20241021/
The GBPUSD is trading near its lows for the day and looks to test:Low from last week at 1.29729100-day MA at 1.296061.8% retracement at 1.2958As the day comes to a close, those levels will be key targets in the new trading day. If broken - and stays broken - it opens the door for more downside probing with the next target at 1.2938, followed by a swing area between 1.2845 and 1.2867.
This article was written by Greg Michalowski at www.forexlive.com.
Crude oil futures settle at $70.56
https://www.forexlive.com/technical-analysis/crude-oil-futures-settle-at-7056-20241021/
Crude oil futures are settling at $70.56. That's up $1.34 or 1.94% on the day.The low for the day reached $68.50. The high for the day reached $70.36.Looking at the daily chart, support comes and $66.76 – $67.69. Resistance between $71.44 and $72.43.
This article was written by Greg Michalowski at www.forexlive.com.
AUDUSD moves to lowest level since September 11. Looks toward 50% and 200 day MA.
https://www.forexlive.com/technical-analysis/audusd-moves-to-lowest-level-since-september-11-looks-toward-50-and-200-day-ma-20241021/
The AUDUSD traded above and below the 100-day MA last week at 0.9695. The price moved above the MA on Thursday/Friday and closed above that MA tilting the bias in the buyers favor.However, today, the price moved below the MA in the European session and stayed below in the US session. What I like is the price did stayed below the 100 day MA as traders shifted from bullish above the 100 day MA to bearish below the 100 day MA. That - along with higher yields, and a USD moving higher - has now taken the price of the pair to the low from last week at 0.66578 and now below that level. Traders will look for more selling with the 50% of the move up from the August low at 0.6645 as the next target, followed by the 200-day MA at 0.66268. Typically, those two technical indicators are key levels for both buyers and sellers. They tell the longer-term bias for all traders. With the price moving toward those levels, I would expect some buyers near the levels. Of note, is back in mid-September, the price moved down to test the 200-day MA and found early buyers against the MA level. That also helps to increase the levels importance going forward.
This article was written by Greg Michalowski at www.forexlive.com.
USD higher. Yields higher. Stocks lower.
https://www.forexlive.com/technical-analysis/usd-higher-yields-higher-stocks-lower-20241021/
The USD is moving higher. Looking at the dollar index (DXY) the price is testing the 200 day MA at 103.79. The price moved above that level on Friday reaching a high of 103.88, before failing and rotating lower. The high has just extended to 103.803. Get and stay above to 200 day MA, and the door opens for more upside momentum. On the top side, the 61.8% retracement of the move down from the 2024 high to the 2024 low comes in at 104.074. That would be the next key target.Meanwhile, the EURUSD is trading to a new low at 1.0828. The low price from last week comes in at 1.08106 and is the next downside targetGBPUSD has fallen below the September 11 low target and natural support near 1.3000. The low price from last week reached 1.2974 and is the next downside target.USDJPY is trading to a new session high at 150.266 and stretches toward the high price from last week at 150.316. Its 100-day moving average and 50% midpoint of the move down from the July 2024 high comes in and at 150.757. That is a key target on the top side for the pair.Yields are moving higher which is helping the USD move higher. Looking at the yield curve:2-year yield is back above 4% at 4.023%, up 7.0 basis points5-year yield is at 3.961%, 8.4 basis points10-year yield is at 4.160%, 8.6 basis points30-year yield 4.464%, +8.2 basis pointsThe 10-year yield is trading at its highest level since July 31, and is stretching toward its 200-day moving average at 4.187%. The 50% midpoint of the 2024 trading range is near that level at 4.172%. That midpoint and the 200 day moving average are technical targets that if broken would tilt the technical bias more to the upside for yields. Stay below and we could see a rotation back to the downside. The 10 year yield reached a low of 3.605% in September. With yields moving higher, stocks are moving lower. Dow industrial average is now down -340 points or -0.78% at 42935.87S&P -36.4 points or -0.63% at 5027.25.NASDAQ index is now down -101 points or -0.54% at 18388.50.The small-cap Russell 2000 is faring the worst when they decliner -34.15 points or -1.50% at 2241.90The three major indices closed higher for the sixth consecutive week which is the longest streak in 2024.Meanwhile, gold traded to a new all-time high of $2740.57 (its 43rd new record high this year), but has since backed off and trades near unchanged at $2720.30 as it reacts today higher dollar/higher rates.
This article was written by Greg Michalowski at www.forexlive.com.
USDCHF tests 38.2% support. Will buyers hold support. EURCHF stays below 100/200 bar MAs
https://www.forexlive.com/technical-analysis/usdchf-tests-382-support-will-buyers-hold-support-eurchf-stays-below-100200-bar-mas-20241021/
To start the new trading week, the buyers are holding onto control, but for the EURCHF, the sellers are holding the stronger hand (and in control).USDCHF: Last week, the USDCHF moved above its 38.2% retracement of the move down from the July high to the September low at 0.86318. Midweek, the price tested that moving average but bounced higher. In trading today, the price has moved down to retest that retracement level but has so far found willing buyers. If the price can stay above that retracement level, a rotation back toward the high prices from last week near 0.8670 would be targeted, followed by the 100-day moving average and 0.8700. Conversely, a move below the 38.2% retracement would have traders targeting a swing area between 0.86078 and 0.8619.EURCHF: For the EURCHF, the price on Thursday last week bounced off a trend line and retracement level near 0.9352. The subsequent move higher on Friday saw the pair retesting the 100 and 200-bar moving averages on the 4- hour chart above and below 0.9400. In trading today, the high price in the Asian session stalled right near the 0.94013 level (200 bar moving average only four hour chart), and moved lower. That kept the sellers in control. On the downside, the rising trendline cuts across at 0.9358. Below that the 61.8% retracement of the range since October comes in at 0.93512.
This article was written by Greg Michalowski at www.forexlive.com.
Copper Technical Analysis – New easing measures from the PBoC trigger a rally
https://www.forexlive.com/technical-analysis/copper-technical-analysis-new-easing-measures-from-the-pboc-trigger-a-rally-20241021/
Fundamental
OverviewLast Friday, the PBoC
announced new easing measures which included further rate cuts (https://www.forexlive.com/centralbank/pboc-governor-says-7-day-reverse-repo-rate-will-be-lowered-by-02-20241018/) and stock buyback
funding (https://www.forexlive.com/centralbank/pboc-has-officially-ramped-up-support-for-the-stock-market-relending-facility-launched-20241018/). Moreover, we got
some positive economic
data (https://www.forexlive.com/news/china-sept-retail-sales-32-yy-expected-25-industrial-production-54-yy-46-20241018/) with Retail Sales
and Industrial Production beating expectations by a big margin. These catalysts
provided support for copper which erased most of last week’s losses.Copper
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that copper bounced around the 4.32 support (https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/) zone where we had also the 61.8% Fibonacci retracement (https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/) level for confluence (https://www.forexlive.com/Education/technical-analysis-confluence-20220318/). This is where the buyers stepped
in and then increased the bullish bets following the new easing measures
announcement from the PBoC. The sellers will want to
see the price turning around and breaking below the 4.32 support to start
targeting the trendline around the 4.20 level.Copper Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see that the price broke above the downward trendline increasing the bullish
momentum as more buyers piled in. The first target should be the swing level at
4.51 which the buyers will need to break to extend the rally into the 4.70
resistance next. The sellers, on the other hand, will likely step in around the
4.51 level to position for a drop back into the 4.32 support.Copper Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see that we now have a minor upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to position for further
upside, while the sellers will look for a break lower to position for a drop
back into the 4.32 support. The red lines define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today. Upcoming
CatalystsThis week (https://www.forexlive.com/EconomicCalendar) is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash Japanese and US
PMIs, and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
October, leaving policy decisions open for future deliberation. He highlighted the uncertainty in current economic conditions, stressing the need for flexibility. De Guindos suggested that the ECB is prepared to act based on incoming information, keeping the possibility of further adjustments on the table. Cut... keep rates steady...cut, etc is the pattern (although they can't explicitly say it). The Federal Reserve is coming off its first cut since March 2020 this week, and Philadelphia Fed Pres. Harker is scheduled to be the first speaker (https://www.forexlive.com/centralbank/federal-reserve-bank-of-philadelphia-president-harker-speaking-on-friday-20240920/) (at 2 PM). There may be others who come out of the "black out" room and express their views on the Fed's "recalibration" of the policy rate.A snapshot of the other markets as the North American session begins shows:Crude oil is trading down -$0.27 or -0.3% at $70.88. At this time yesterday, the price was at $70.57Gold is trading up $28.70 or 1.11% at $2614.70. At this time yesterday, the price was $2588.70Silver is trading up $0.55 or 1.79% $31.32. At this time yesterday, the price is at $31.14Bitcoin is trading at $63,475. At this time yesterday, the price was at $62,587. Ethereum is trading at $2548.20. At this time yesterday, the price was at $2433.20In the premarket, the snapshot of the major indices trading lower after sharp gains yesterdayDow Industrial Average futures are implying a gain of 5.25 points. Yesterday, the index rose 522.09 points or 1.26% at 42,025.19S&P futures are implying a loss of -12.39 points. Yesterday, the price rose 95.38 points or 1.70% at 5713.64Nasdaq futures are implying a loss of -58 points. Yesterday, the index rose 440.68 points or 2.51% at 18013.98Yesterday, the small-cap Russell 2000 was higher by 46.36 points or 2.10% in 2252.70European stock indices are trading mostly lower:German DAX, -0.65%France CAC, -0.76%UK FTSE 100, -0.78%Spain's Ibex, +0.28%Italy's FTSE MIB, -0.18% (delayed 10 minutes).Shares in the Asian Pacific markets closed higherJapan's Nikkei 225, +1.53%China's Shanghai Composite Index, +0.03%Hong Kong's Hang Seng index, +1.36%Australia S&P/ASX index, +0.21%Looking at the US debt market, yields are mixed with the shorter end higher and the longer lower (flatter yield curve):2-year yield 3.610%, +0.6 basis points. At the same Friday, the yield was at 3.577%5-year yield 3.408%, +0.1 basis points. At this time Friday, the yield was at 3.473%10-year yield 3.735%, -0.4 basis points. At this time Friday, the yield is at 3.715%30-year yield 4.061%, -1.3 basis points. At this time Friday, the yield is at 4.046%Looking at the treasury yield curve, is similar to yesterday's levels at this timeThe 2-10 year spread is +12.4 basis points. At this time yesterday, the yield spread was +13.3 basis points.The 2-30 year spread is +45.1 basis points. At this time yesterday, the yield spread was was 45.1 basis points.In the European debt market, the 10 year yields are little changed:
This article was written by Greg Michalowski at www.forexlive.com.
USDCAD Technical Analysis – Waiting for a breakout of the range
https://www.forexlive.com/technical-analysis/usdcad-technical-analysis-waiting-for-a-breakout-of-the-range-20240920/
Fundamental
OverviewOn Wednesday, the Fed
finally started its easing cycle (https://www.forexlive.com/news/forexlive-americas-fx-news-wrap-18-sep-fed-starts-rate-cuts-with-a-50-bp-cut-20240918/) and decided to do it with a 50 bps
cut. The market was already leaning towards a 50 bps move, so it wasn’t a
surprise. The larger cut was framed
as kind of an “insurance” cut with the dot plot showing two more 25 bps cuts by
the end of the year and less than the market expected in 2025. The US Dollar didn’t get a
boost despite the rise in Treasury yields. Now that the decision is behind us,
the focus will be on the economic data. If we start to see an
improvement, then Treasury yields will likely continue to rise and lead to a
reprising in the dovish expectations supporting the greenback in the
short-term. Conversely, if the data
weakens, the market will likely go ahead with expecting more 50 bps cuts by
year-end and weighing on the US Dollar.On the CAD side, the latest
soft Canadian
CPI (https://www.forexlive.com/news/canada-august-cpi-20-vs-21-expected-20240917/) raised the probabilities for a 50 bps cut at the upcoming meeting as
BoC’s Macklem hinted to a possibility of delivering larger cuts in case growth
and inflation were to weaken more than expected.USDCAD
Technical Analysis – Daily TimeframeOn the daily chart, we can
see that USDCAD probed above the key resistance (https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/) around the 1.36 handle but
eventually got smacked back down. The price action remains choppy as the market
now awaits more data to pick a direction. The buyers will want to see the price
breaking higher to start targeting the 1.38 handle, while the sellers will
likely keep on defending the resistance for now.USDCAD Technical
Analysis – 4 hour TimeframeOn the 4 hour chart, we can
see that the pair is trading in a tight range between the 1.3550 support and
the 1.36 resistance. The buyers will want to see the price breaking out to the
upside to increase the bullish bets into new highs, while the sellers will look
for a break lower to pile in for a drop back into the 1.34 handle. USDCAD Technical
Analysis – 1 hour TimeframeOn the 1 hour chart, we can
see more clearly the choppy price action. There’s not much else to add here as
the market participants will wait for a breakout on either side. The red lines
define the average daily range (https://www.forexlive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/) for today.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
