Based on last week’s price action and the close at .6680, the direction of the NZD/USD this week is likely to be determined by trader reaction to the 50% level or pivot at .6613.
Based on last week’s price action and the close at .7288, the direction of the AUD/USD this week is likely to be determined by trader reaction to the short-term 50% level at .7284.
It’s a tough call because we’re dealing with sentiment and not an absolute, but we could be looking at a risk-off trade this week if investors perceive the cancellation of trade talks between the United States and China as an escalation of the trade dispute between the two economic powerhouses. This could drive money into the safe-haven Japanese Yen.
While an easing of trade tensions between the United States and China may have been the catalysts behind last week’s rally in the Aussie and Kiwi, the possibility of renewed concerns could take the currencies lower early this week. This is because late Friday, China announced it was cancelling its meeting with the U.S., and wouldn’t resume negotiations until after the November U.S. mid-term elections.
The EUR/USD has been quite erratic since early 2015. The Eurozone economy has been showing signs of promise, with inflation finally hitting the 2% target and growth remaining decent. Unemployment is falling, although the periphery’s elevated levels keep it higher than many other western economies.
The trade dispute and the dollar will continue to drive the price action in gold this week. However, this week, the dollar could strengthen and gold could weaken. This is because China called off the trade talks with the United States and said it wouldn’t meet with high level negotiators until after the November mid-term elections. Also contributing to the movement in gold will be the outcome of this week’s two-day Federal Open Market Committee meeting which culminates with the Fed’s interest rate and monetary policy decision on Wednesday, September 26.
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A choppy week ahead, with Trump at the UN, Theresa May at Tory Party Conference and the FED delivering a rate hike and projections.
Based on the close at $1201.30 and Friday’s price action, the direction of the December Comex Gold futures contract is likely to be determined by trader reaction to the short-term 50% level at $1193.90.
Based on Friday’s close at .7288 and the late session weakness, the direction of the AUD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .7284. The main trend is up according to the daily swing chart. However, momentum may have shifted to the downside with the formation of a minor closing price reversal top.
Based on Friday’s close at 112.548 and the late session selling pressure, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to Friday’s low at 112.430. The USD/JPY could feel some pressure early Monday so be prepared. Late Friday, China announced it would not continue trade talks with the U.S. This raises the stakes in the trade dispute. We could be looking at a “risk off” day.
Based on Friday’s close at .6680, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the 50% level at .6675. Late Friday, China canceled the trade talks with the U.S. This is potentially bearish so watch the downside early Monday.
The U.S. Dollar finished lower against a basket of major currencies last week after an easing of tensions over the trade dispute between the United States and China encouraged investors to lift dollar hedges. The Reserve Bank of Australia (RBA) warned on risks to its outlook from U.S.-China trade tensions and weak wages, while reaffirming its next interest rate move would likely be a hike. The New Zealand Dollar was boosted after data showed its economy grew at a faster pace than expected in the second quarter. The Bank of Japan (BOJ) reiterated last Wednesday that it would keep interest rates extremely low “for an extended period,” holding to forward guidance it first introduced in July.
China dropped a potential bombshell late Friday when it canceled planned trade discussions with the United States. Gold prices edged lower on Friday as the U.S. Dollar firmed on renewed concerns over escalating trade tensions between the United States and China. A report showed OPEC and its allies were considering a coordinated increase in crude production.
Gold markets tried to rally during the week but found the $1215 level to be too resistive to go higher. In fact, we have formed a shooting star for the second week in a row, and that does suggest that we are really starting to try to break down from here.
The US dollar is pressing the downtrend line from a larger consolidation area in the form of a symmetrical triangle. If we can break above the weekly candle stick, that could be a very good sign. However, in the current trade war environment it’s hard to tell whether that’s going to happen or not.
The British pound initially tried to rally during the week, reaching towards the 1.33 level before pulling back to form a massive shooting star. This was in a negative sign, and I think it shows that we continue to follow the occasional headline as to where to go next. It looks as if the British pound is ready to roll over for a while, as Teresa May has suggested that the Brexit may be without a deal.
The British pound turned around rather drastically on Friday, as Teresa May announced that the end result of the Brexit negotiations may be no deal.
The Euro broke through a downtrend line during the week, testing the vital 1.18 level above. That’s an area that has been the top of the overall consolidation, so it makes sense that it caused a little bit of resistance. I believe at this point it’s likely that participants are taking a bit of a breather more than anything else.
The Australian dollar has exploded to the upside during the trading week, reaching towards the 0.73 handle. We have broken above the top of the previous couple of weeks, and I think it allows this market a little bit of bullish momentum going forward.
Gold markets got hammered during the trading session on Friday, as the $1215 level has offered too much in the way of resistance. Ultimately, this is a market that is reacting to the US dollar in general, which of course got a lift after volatility in the British pound.
The US dollar was relatively quiet during the trading session on Friday, after initially rallying. The pair tends to be correlated to the stock markets overall, which had been a bit more positive early in the day.
The British pound fell apart during the trading session on Friday, as Teresa May stated that she was sticking with her plan and wasn’t willing to bend watch when it comes to dealing with the European Union. With that being the case, the market looks very likely to continue to be very volatile.
The British pound collapsed on Friday, slicing through the previous downtrend line that had been resistance. By wiping out as much value as we have, it shows just how fickle the markets are going to be to headlines.
The Euro fails at major resistance during the early hours on Friday, as we continue to see the 1.18 level offer major supply.