The Japanese Yen was one of two currencies to close higher against the U.S. Dollar last week. This trend is likely to continue because of uncertainties over U.S.-China trade relations, a potential escalation of tensions in the Middle East, the U.S. money market squeeze and the Fed’s rate cut.
The SNB left its base rate unchanged while cutting growth and inflation view. In doing so, it said it “remains willing to intervene in the foreign exchange market as necessary.” The BOE surprised no one when it held its policy rate unchanged at 0.75% in a unanimous vote. The BOJ kept monetary policy on hold but hinted at possible action in October.
Geopolitics is in focus, with Brexit, Iran, and the U.S – China trade war likely to keep the markets busy. Stats and the RBNZ are also of influence.
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Holding above the downtrending Gann angle at $1518.20 will indicate that buyers are coming in ahead of the close. This could trigger a late session rally into a 50% level at $1528.50, followed by a Fibonacci level at $1537.40 and a downtrending Gann angle at $1542.20.
After surprising traders with a 50 basis point rate cut in August, many traders thought the RBNZ would pass on a September 24 rate cut and trim on November 12 instead. However, this week’s price action indicates that traders aren’t taking any chances with another surprise and have already begun to price in a rate cut for next week.
The British pound went back and forth during the week, testing the 1.25 level on both sides showing a bit of a neutral candle stick. However, we are running into a significant amount of resistance, so this could be a hit as to the next move.
Gold markets initially fell during the week but have found a bit of support at the crucial $1500 level yet again. At this point, the question is are we going to roll over, or are we entering consolidation?
The gold market continues to grind sideways in general, as we have found quite a bit of support just below. Ultimately, this is a market that continues to find buyers on these dips, as we continue to see Gold levitate. That of course is a very positive sign.
The US dollar continue to grind higher against the Japanese yen after initially gapping lower. Looking at this chart, it’s very obvious that the pair is approaching a major resistance barrier, and a major inflection point.
The British pound initially gapped lower after a reactive move to the Saudi drone attacks, as there were a lot of concerns about the global economy. Most of the week the market turned around to rally, but as we close out it looks like exhaustion is setting in.
The Euro broke down a bit during the week, to reach towards the 1.10 EUR level, an area that would make quite a bit of psychological importance to traders around the world. However, the overall downtrend should continue, although it is very choppy.
The Australian dollar initially tried to rally during the week, but then broke down significantly as we continue to see a lot of concerns when it comes to the US/China trade situation and of course global growth in general which Australia is highly sensitive to.
The British pound initially tried to rally during the trading session on Friday but gave back quite a bit of the gains and now seems to be ready to show signs of exhaustion and perhaps finally roll over for a longer-term move.
The British pound initially tried to rally but fell against the Japanese yen. The ¥135 level has caused a significant amount of resistance, and with the technical confluence in this area, it’s likely that the market will run into a significant amount of trouble.
The Euro initially tried to rally during the Friday session but continues to see plenty of selling pressure above, and it looks as if the EUR/USD pair is trying to break down rather significantly. Longer-term, this is a market that should continue to favor the downside in general.
The Australian dollar initially tried to rally during the trading session on Friday, but then struggled above the 0.68 level. By doing so, the market turned right back around to form a very bearish looking candle stick.
During September, the British pound is struggling to get out of the pit where it fell on the fear of no-deal Brexit. This decline sent GBPUSD in August and early September to levels that had not been consistently achieved since 1985. However, it also probably attracted the interest of speculators who consider the current historically low levels as an excellent opportunity to buy over-sold British currency.
The Canadian, Mexican and British currencies are trading sideways on Friday. With no U.S. fundamental releases on the schedule, I expect an uneventful North American session.
Investing.com -- Gold prices rose on Friday as investors drew in their horns at the end of a week that has ultimately done little to give the market any real sense of direction.
Dovish Fed speaker comments could be supportive for gold. Hawkish comments could put pressure on gold. Ultimately, however, it all depends on which way the wind blows the U.S. Dollar on Friday. Low volume could hold prices in a range.
There were no major economic reports out of Japan overnight and there aren’t any from the United States on Friday. However, several Fed speakers are on tap and they could move the Forex pair especially since the Federal Reserve was unclear about future rate cuts.