Forex News Timeline

Monday, October 25, 2021

Major equity indexes in the US started the new week in a relatively calm manner amid varying performances of major sectors. As of writing, the S&P 500

Wall Street's main indexes opened near last week's closing levels.Energy stocks post strong gains on the back of rising crude oil prices.Technology shares underperform after the opening bell on Monday.Major equity indexes in the US started the new week in a relatively calm manner amid varying performances of major sectors. As of writing, the S&P 500 Index was unchanged on the day at 4,542, the Dow Jones Industrial Average was losing 0.1% at 35,642 and the Nasdaq Composite was flat at 15,092. Among the 11 major S&P 500 sectors, the Energy Index is up 1.1% supported by rising crude oil prices. Earlier in the day, the barrel of West Texas Intermediate (WTI) hit its strongest level in seven years at $85.35. On the other hand, the Communication Services Index is down 0.55% as the biggest decliner after the opening bell. Earlier in the day, the Federal Reserve Bank of Chicago reported that the economic growth lost momentum in September with its National Activity Index dropping to -0.13 from 0.05 in August. S&P 500 chart (daily)

Gold attracted fresh buying on the first day of a new trading week and built on the intraday positive move through the early North American session. T

Gold caught some fresh bids on Monday amid the latest COVID-19 breakout in China.Resurgent USD demand, elevated US bond yields could cap gains for the commodity.Acceptance above 100/200-day SMAs supports prospects for further near-term gains.Gold attracted fresh buying on the first day of a new trading week and built on the intraday positive move through the early North American session. The latest COVID-19 outbreak in China raised concerns about the imposition of economically damaging lockdowns amid the country's ‘zero-tolerance approach to the disease. This, to a larger extent, overshadowed the dominant risk-on mood in the markets and turned out to be a key factor that acted as a tailwind for the safe-haven XAU/USD. Apart from this, the uptick could further be attributed to some technical buying following Friday's break through the 100/200-day SMAs confluence hurdle. That said, a solid US dollar rebound from near one-month tops might hold bullish traders from placing aggressive bets around the dollar-denominated gold. The greenback was back in demand in the wake of the emergence of heavy selling around the shared currency and was further underpinned by elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond held steady above the 1.65% threshold amid growing acceptance that the Fed will tighten its policy sooner than anticipated. The Fed Chair Jerome Powell reaffirmed on Friday that the US central bank remains on track to begin rolling back its massive pandemic-era stimulus. Adding to this, worries that the recent widespread rally in commodity prices will stoke inflation have been fueling speculations about a potential interest rate hike in 2022. This could further collaborate to cap the upside for the non-yielding gold. Market participants now look forward to the Advance US GDP report, scheduled for release on Thursday for a fresh impetus. This, along with key central bank meetings in Canada, Japan and the Eurozone will infuse some volatility around gold during the second half of the week. In the meantime, the US bond yields will play a key role in influencing the USD price dynamics amid absent relevant market moving economic releases. Apart from this, traders might further take cues from the broader market risk sentiment to grab some short-term opportunities. Technical outlook From a technical perspective, Friday’s pullback from an intermediate resistance near the $1,812-14 region, or six-week tops warrants some caution for bullish traders. That said, the emergence of dip-buying near the 100/200-day SMAs confluence supports prospects for additional gains. Hence, a subsequent strength towards challenging the next major hurdle, around the $1,832-34 supply zone, remains a distinct possibility. On the flip side, the daily swing lows, around the $1,792 region, which coincides with the confluence resistance breakpoint, should continue to protect the immediate downside. Any subsequent fall could find decent support near the $1,782 horizontal zone, which if broken decisively will shift the near-term bias in favour of bearish traders. Gold prices might then turn vulnerable to accelerate the decline towards the $1,760 horizontal support en-route monthly swing lows, around the $1,745 region. Levels to watch  

Bank of England (BOE) policymaker Silvana Tenreyro noted on Monday that the recent moderation in the gross domestic product growth looks set to contin

Bank of England (BOE) policymaker Silvana Tenreyro noted on Monday that the recent moderation in the gross domestic product growth looks set to continue over the winter months, as reported by Reuters. Additional takeaways "Uncertainty over furlough scheme effects should be resolved over the coming months, which should help paint a clearer picture of labour market." "We will also continue to learn more about the persistence of disruptions to global and domestic supply chains and their impact on the UK inflation outlook." "There is a possibility that higher inflation or higher inflation expectations begin to feed through into higher wage demands." "There is also a risk that the end of the furlough scheme leads to a loosening in the labour market and moderation in wage pressures." Market reaction The GBP/USD pair continues to move sideways around mid-1.3700s following these comments.

Bank of England (BOE) policymaker Silvana Tenreyro said on Monday that some inflation drivers are expected to remain short-lived and added that the mo

Bank of England (BOE) policymaker Silvana Tenreyro said on Monday that some inflation drivers are expected to remain short-lived and added that the monetary policy can do little to affect them, as reported by Reuters. Additional takeaways "Since August, we have had large upside news for near-term inflation from energy prices, an effect which should fade quickly." "Effects of supply chain disruption should also be temporary but the speed of rotation back to normal is a key uncertainty." "Balance of recent news on the economy is unlikely to have a large effect on the amount of tightening required over the next few years." "Domestic cost pressures will depend on the evolution of the labour market now that the furlough scheme has ended." "My policy votes will aim to strike a balance between these different effects and risks." Market reaction These don't seem to be having a significant impact on the British pound's performance against its major rivals. As of writing, the GBP/USD pair was virtually unchanged on the day at 1.3752.

Belgium Leading Indicator came in at 4, above expectations (2.2) in October

The AUD/USD pair maintained its bid tone through the early North American session and was last seen trading around the 0.7485-90 region, up 0.35% for

The risk-on mood assisted the perceived riskier aussie to gain traction on Monday.Elevated US bond yields revived the USD demand and capped any meaningful gains.Investors now await the Australian CPI report and Advanced US GDP for a fresh impetus.The AUD/USD pair maintained its bid tone through the early North American session and was last seen trading around the 0.7485-90 region, up 0.35% for the day. The pair attracted fresh buying on the first day of a new trading week amid the dominant risk-on mood in the markets, which tends to benefit the perceived riskier aussie. However, a goodish pickup in the US dollar failed to assist the AUD/USD pair to capitalize on its move or find acceptance above the key 0.7500 psychological mark. The greenback drew some support from elevated US Treasury bond yields and staged a solid rebound from near one-month lows touched earlier this Monday. In fact, the yield on the benchmark 10-year US government bond held steady above the 1.65% threshold growing acceptance that the Fed will tighten its policy sooner than anticipated. The Fed Chair Jerome Powell reaffirmed on Friday that the US central bank remains on track to begin rolling back its massive pandemic-era stimulus. The markets have also been pricing in the possibility of a potential interest rate hike in 2022 amid worries that the recent widespread rally in commodity prices will stoke inflation. This, in turn, was seen as a key factor that kept a lid on any meaningful gains for the AUD/USD pair amid absent relevant market moving economic releases from the US. Investors also refrained from placing aggressive bets, rather preferred to wait on the sidelines ahead of this week's important macro data from Australia and the US. The quarterly Australian consumer inflation figures are due for release on Wednesday. This, along with the Advance US Q3 GDP report on Thursday, will help determine the next leg of a directional move for the AUD/USD pair. In the meantime, the USD price dynamics and the broader market risk sentiment will be looked upon for some trading impetus. Technical levels to watch  

The data published by the Federal Reserve Bank of Chicago showed on Monday that the National Activity Index (CFNAI) declined to -0.13 in September fro

Chicago Fed's National Activity Index fell into the negative territory in September.US Dollar Index continues to push higher toward 94.00.The data published by the Federal Reserve Bank of Chicago showed on Monday that the National Activity Index (CFNAI) declined to -0.13 in September from 0.05 (revised from 0.29) in August. This print suggests that the economic activity grew at a slower pace in September than it did in August.  "The CFNAI Diffusion Index, which is also a three-month moving average, edged up to +0.22 in September from +0.20 in August," the publication further read. Market reaction The greenback continues to outperform its rivals after this report and the US Dollar Index was last seen gaining 0.26% on the day at 93.85.

United States Chicago Fed National Activity Index declined to -0.13 in September from previous 0.29

Silver edged higher on the first day of a new trading week, albeit struggled to capitalize on the move and remained capped near the 100-day SMA resist

Silver gained some positive traction on Monday, albeit lacked any follow-through buying.The set-up seems tilted in favour of bullish traders and supports prospects for further gains.Any meaningful pullback might still be seen as a buying opportunity near the $24.00 mark.Silver edged higher on the first day of a new trading week, albeit struggled to capitalize on the move and remained capped near the 100-day SMA resistance around mid-$24.00s. From a technical perspective, last week's sustained strength beyond a short-term descending trend-line resistance validated an inverted head and shoulders bullish breakout. A subsequent move and acceptance above the 38.2% Fibonacci level of the $28.75-$21.42 downfall supports prospects for additional gains. The constructive set-up is reinforced by bullish technical indicators on the daily chart, which are still far from being in the overnight territory. Hence, some follow-through move beyond the $24.80-85 region, towards reclaiming the key $25.00 psychological mark, remains a distinct possibility. The latter coincides with the 50% Fibo. level, which if cleared decisively should set the stage for an extension of the appreciating move. The XAG/USD could then climb to an intermediate hurdle near the $25.55-60 region before eventually darting towards the $26.00 mark, or the 61.8% Fibo. level. On the flip side, any meaningful pullback might continue to attract some buying near the $24.00 mark, which now seems to act as a strong base for the XAG/USD. Failure to defend the mentioned support might prompt some technical selling and accelerate the corrective slide towards mid-$23.00s. This is closely followed by the $23.20-15 confluence support, comprising of the descending trend-line resistance breakpoint and the 23.6% Fibo. level. A convincing break below will shift the bias in favour of bearish traders and expose the next relevant support near mid-$22.00s. Silver daily chart Technical levels to watch  

After closing the second straight week in the positive territory, the NZD/USD pair edged higher during the Asian session on Monday but lost its bullis

NZD/USD struggles to gather bullish momentum on Monday.US Dollar Index edges higher toward 94.00 following a weak start to the week.Eyes on mid-tier macroeconomic data releases from the US.After closing the second straight week in the positive territory, the NZD/USD pair edged higher during the Asian session on Monday but lost its bullish momentum. As of writing, the pair, which touched a daily high of 0.7180, is virtually unchanged on a daily basis at 0.7150.  DXY rebounds toward 94.00 on rising yields The renewed USD strength during the European trading hours seems to be weighing on NZD/USD. The US Dollar Index is currently rising 0.26% on the day at 93.85. In the absence of high-tier macroeconomic data releases, the more-than-1% increase witnessed in the benchmark 10-year US T-bond yield is providing a boost to the greenback at the start of the week. The Federal Reserve Bank of Chicago's National Activity Index and the Dallas Fed Manufacturing Survey will be featured in the US economic docket later in the day. On Tuesday, Trade Balance data from New Zealand will be looked upon for fresh impetus. In the meantime, US stock index futures are up between 0.1% and 0.3%. In case Wall Street's main indexes gain traction after the opening bell, the dollar could have a hard time finding demand as a safe haven and NZD/USD could look to edge higher. Nevertheless, investors are likely to keep a close eye on the US T-bond yields as well. Technical levels to watch for  

The USD/TRY pair witnessed a modest pullback from a record high level of 9.8505 touched earlier this Monday and has now filled the weekly bullish gap

USD/TRY witnessed a modest pullback from fresh record highs touched earlier this Monday.Extremely overbought conditions seemed to be the only factor that prompted profit-taking.The near-term fundamental backdrop remains tilted firmly in favour favours bullish traders.The USD/TRY pair witnessed a modest pullback from a record high level of 9.8505 touched earlier this Monday and has now filled the weekly bullish gap opening. The Turkish lira plunged in reaction to developments over the weekend, wherein President Tayyip Erdogan told his foreign ministry to expel the ambassadors of 10 Western countries. This comes after the Turkish central bank (CBRT) last week decided to cut interest rates from 19% to 16%, which was seen as another factor that acted as a headwind for the domestic currency. On the other hand, the recent strong rally in the US Treasury bond yields continued lending some support to the US dollar. This, in turn, provided an additional lift to the USD/TRY pair, though extremely overbought conditions kept a lid on any further gains, rather prompted some profit-taking at higher levels. That said, the bias remains tilted in favour of bullish traders. Investors expect that the country’s business conditions could worsen if it gets into another conflict with the west. Adding to this, CBRT believes that high interest rates lead to high inflation and has adopted an unorthodox monetary policy. Conversely, growing market acceptance for an early policy tightening by the Fed supports prospects for the emergence of some dip-buying. Hence, it will be prudent to wait for a strong follow-through selling before confirming that the recent bullish trajectory has run out of steam and that the USD/TRY pair has topped out.

The Turkish lira is under pressure. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, expects the USD/TRY pair to reach new all-time highs a

The Turkish lira is under pressure. Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, expects the USD/TRY pair to reach new all-time highs at the psychological 10.0000 mark. Immediately bullish while above the October 20 low at 9.2010 “USD/TRY’s advance has reached all our daily Point & Figure upside targets and may touch the psychological 10.0000 mark around which it is expected to soon stall. If not, we would have to allow for an hourly 0.01 x 3 Point & Figure upside target at 11.0400 to be reached.” “We will stay immediately bullish while the cross remains above the October 20 low at 9.2010. Below it, a two-month support line can be found at 9.1721 and the September high at 8.9636. Further down sits the early October low at 8.8037. While remaining above the latter level, overall upside pressure should retain the upper hand.”

USD/BRL trades at levels last seen in April when the pair reached the 5.7560 mark. Above here lies 5.8795/5.9710 and the psychological 6.000 level, Ax

USD/BRL trades at levels last seen in April when the pair reached the 5.7560 mark. Above here lies 5.8795/5.9710 and the psychological 6.000 level, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. Recent surge higher has nearly reached the 5.7560 April high “USD/BRL’s rise is seen to accelerate higher and has practically reached the April high at 5.7560. The next higher March peak at 5.8795 may soon also be reached. Further up the May 2020 high can be found at 5.9710 and also the psychological 6.0000 mark.”  “While the currency pair stays above the 5.4342 mid-October low we will retain our short-term bullish view. Further down meander the 200 and 55-day moving averages at 5.3533/14 and lies the five-month uptrend line at 5.3022.”  

EUR/CHF maintains its breakdown below major support at 1.0704/1.0696. Subsequently, economists at Credit Suisse stay biased to the downside, with next

EUR/CHF maintains its breakdown below major support at 1.0704/1.0696. Subsequently, economists at Credit Suisse stay biased to the downside, with next support at 1.0660. EUR/CHF’s decline to take a breather at 1.0600 “EUR/CHF maintains its break below major support at 1.0704/1.0696, which turned our bias to the downside. Support is seen next at the 1.0660/57 low from November 2020, before retracement support at 1.0642, then another prominent price low at 1.0605/00, where we would expect to see another pause.”  “The magnitude of this potential breakdown suggests we could even move beyond here over the medium-term and move all the way to the long-term support level at the 2020 low at 1.0503/00, which is likely to be a much tougher support level if reached.”  “First resistance stays at 1.0726, then the recent high at 1.0764/67, before the 55-day average at 1.0789, with a break above here needed to instead suggest a false breakdown.”  

USD/RUB is seen slipping back towards the December 2018 high at 69.78. Below this mark lies the 2014-2021 uptrend at 69.52, Axel Rudolph, Senior FICC

USD/RUB is seen slipping back towards the December 2018 high at 69.78. Below this mark lies the 2014-2021 uptrend at 69.52, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. Russian rouble appreciates “USD/RUB continues its descent towards the December 2018 high at 69.78. The next lower 2014-2021 uptrend line at 69.52 may be reached as well. Below it sits the 68.04 June 2020 low.” “Minor resistance above the 71.55 June low is found at the 72.13 mid-October high and also at the 72.22 September low. Further minor resistance sits between the August and early September lows at 72.55/69. Still, further resistance comes in along the seven-month resistance line at 73.00.” “For any kind of (unexpected) bullish reversal to gain traction, a rise and daily chart close above the September 20 high at 73.62 would need to be seen. This scenario is highly unlikely, though.”  

The market attention shifts towards the European central Bank (ECB) decision. Meanwhile the EUR/USD is supported within range. Economists at OCBC Bank

The market attention shifts towards the European central Bank (ECB) decision. Meanwhile the EUR/USD is supported within range. Economists at OCBC Bank expect the pair to move between 1.1620-1.1670.  Consolidation phase ahead of ECB meeting “The tight 1.1620 to 1.1670 range for the EUR/USD may persist into the ECB decision, with firmer support/resistance levels at 1.1580/1.1700.” “Our bias remains to be selling the pair on rallies.”  

The EUR/USD pair started the new week on a firm footing and rose toward the top of its weekly trading range before reversing its direction. As of writ

EUR/USD lost its traction after pushing higher in Asian session.Germany's Bundesbank warns against slowdown in activity in Q4.US Dollar Index turns positive on the day above 93.70.The EUR/USD pair started the new week on a firm footing and rose toward the top of its weekly trading range before reversing its direction. As of writing, the pair was losing 0.2% on a daily basis at 1.1624. Warning signs from Germany hurt EUR The disappointing macroeconomic data releases from Germany and Bundesbank's worrisome growth outlook seems to be weighing on the shared currency. The headline Business Climate Index of the IFO Survey for Germany declined to 97.7 in October from 98.9 in September. This reading fell short of the market expectation of 97.9. Additionally, the Expectations Index fell to 95.4 from 97.4. Meanwhile, Bundesbank said that the full-year growth in 2021 was likely to be significantly lower than the June forecast of 3.7% due to persistent supply chain issues and the loss of momentum in the service sector's business activity.Germany's Bundesbank: Full-year growth to be significantly below June forecast of 3.7%.On the other hand, the cautious market mood and rising US Treasury bond yields help the greenback find demand on Monday. The US Dollar Index, which declined to 93.50 area earlier in the day, is currently up 0.15% at 93.75. Later in the session, the Federal Reserve Bank of Chicago's National Activity Index and the Federal Reserve Bank of Dallas' Manufacturing Survey will be looked upon for fresh impetus. Technical levels to watch for  

The USD/JPY pair attracted some buying on the first day of a new trading week and for now, seems to have stalled its recent corrective pullback from m

USD/JPY staged a modest intraday bounce from ascending channel support on Monday.The set-up favours bulls and supports prospects for the resumption of the prior uptrend.A convincing break below the trend-channel support would negate the positive outlook.The USD/JPY pair attracted some buying on the first day of a new trading week and for now, seems to have stalled its recent corrective pullback from multi-year tops. The pair held on to its modest intraday gains, around the 113.65-70 region through the mid-European session, albeit lacked any follow-through. The dominant risk-on mood undermined the safe-haven Japanese yen and was seen as a key factor that acted as a tailwind for the USD/JPY pair. Bulls further took cues from elevated US Treasury bond yields, which revived the US dollar demand and assisted the pair to defend the lower end of a short-term ascending channel. The mentioned support coincides with the 23.6% Fibonacci level of the 109.12-114.70 recent strong move up and should now act as a key pivotal point for short-term traders. A sustained break below will suggest that the USD/JPY pair has topped out already and pave the way for a deeper corrective pullback in the near term. Meanwhile, technical indicators on the daily chart have eased from the overbought territory and are still holding comfortably in the bullish territory. This, along with the emergence of dip-buying near the trend-channel support, favours bullish traders and supports prospects for the resumption of the prior well-established uptrend. Hence, a subsequent move beyond the 114.40 intermediate hurdle, towards retesting the recent swing highs near the 114.70 region, remains a distinct possibility. The momentum could get extended towards the 115.00 psychological mark, above which bulls could aim to challenge the trend-channel hurdle, around the 115.30-35 region. Conversely, a sustained break below the trend-channel support might prompt aggressive technical selling and turn the USD/JPY pair vulnerable to weaken further below the 113.00 mark. The next relevant support is pegged near the 112.70-65 region (38.2% Fibo. level) before the pair eventually drops to test the 112.00 round figure. USD/JPY daily chart Technical levels to watch  

Mexico Jobless Rate came in at 4.2%, below expectations (4.3%) in September

Mexico Jobless Rate s.a dipped from previous 4.1% to 3.9% in September

In its monthly report published on Monday, Germany's Bundesbank said that the full-year growth in 2021 is likely to be significantly below the June fo

In its monthly report published on Monday, Germany's Bundesbank said that the full-year growth in 2021 is likely to be significantly below the June forecast of 3.7% due to a slowdown in activity in the fourth quarter, as reported by Reuters. Bundesbank further noted that the momentum in the service sector is expected to slow considerably and added that industrial supply chain issues are forecast to persist. Regarding price pressures, Bundesbank said it sees inflation continuing to rise for the time being before gradually declining in 2022. Market reaction The EUR/USD pair remains on the back foot following this publication and was last seen losing 0.2% on the day at 1.1624.

The GBP/USD pair struggled to preserve its intraday gains to the 1.3800 neighbourhood and has now retreated to the lower end of its daily trading rang

GBP/USD surrendered a major part of its intraday gains to the 1.3800 neighbourhood.Elevated US bond yields underpinned the USD and exerted some pressure on the pair.A break below ascending channel support is needed to confirm a fresh bearish break.The GBP/USD pair struggled to preserve its intraday gains to the 1.3800 neighbourhood and has now retreated to the lower end of its daily trading range. The pair was last seen hovering around mid-1.3700s, just a few pips above lows touched during the Asian session. The US dollar attracted some buying amid elevated US Treasury bond yields, bolstered by expectations for an early policy tightening by the Fed. This, in turn, was seen as a key factor that prompted fresh selling around the GBP/USD pair and led to the intraday decline. The downfall dragged the GBP/USD pair back towards key pivotal support marked by the lower boundary of a one-month-old descending channel. A convincing break below will set the stage for an extension of the recent rejection slide from the very important 200-day SMA. Meanwhile, technical indicators on the daily chart – though have been losing positive traction – are still holding in the bullish territory. This makes it prudent to wait for a convincing break through the channel support before placing aggressive bearish bets. The mentioned support is currently pegged near the 1.3735 region. Some follow-through selling below the 1.3700 mark will reaffirm the negative outlook and turn the GBP/USD pair vulnerable to accelerate the fall towards the next relevant support near mid-1.3600s. On the flip side, the 1.3790-1.3800 area now seems to have emerged as immediate strong resistance. This is followed by a downward sloping trend-line resistance extending from late July, currently around the 1.3825 region ahead of the 1.3845-50 confluence barrier. The latter comprises of 200-day SMA and the top end of the ascending channel, which if cleared decisively will be seen as a fresh trigger for bullish traders. The momentum could then assist the GBP/USD pair to aim back to reclaim the 1.3900 round-figure mark. GBP/USD daily chart Technical levels to watch  

The AUD/USD pair was last seen hovering just below the key 0.7500 psychological mark. Economists at OCBC Bank expect the aussie to fail to surpass the

The AUD/USD pair was last seen hovering just below the key 0.7500 psychological mark. Economists at OCBC Bank expect the aussie to fail to surpass the 0.7550/60 resistance zone. AUD/USD may turn heavy “Traction above 0.7500 seems to be limited for the AUD/USD, with firm resistance out at the 0.7550/60 zone.” “Support at 0.7440/50 needs to be overcome for the pair to re-engage downside.” “Potential for the pair to turn heavy should the hawkish central banks spur another round of risk-off.”  

The USD/CAD pair bounced nearly 30 pips from the early European session lows and was last seen trading just a few pips below daily tops, around the 1.

USD/CAD was seen oscillating in a range through the first half of the trading action on Monday.Bullish crude oil prices underpinned the loonie and capped any meaningful gains for the major.Elevated US bond yields acted as a tailwind for the USD and extended some support to the pair.The USD/CAD pair bounced nearly 30 pips from the early European session lows and was last seen trading just a few pips below daily tops, around the 1.2370 region. The pair, so far, has struggled to capitalize on last week's modest recovery move from four-month lows and continued with its subdued/range-bound price action for the second straight session on Monday. The recent bullish run in crude oil prices to multi-year tops underpinned the commodity-linked loonie. This, in turn, acted as a headwind for the USD/CAD pair amid the lack of any meaningful buying around the US dollar. The dominant risk-on mood was seen as a key factor that weighed on the safe-haven greenback. That said, elevated US Treasury bond yields – amid prospects for an early policy tightening by the Fed – helped limit losses for USD and extended some support to the USD/CAD pair. The Fed Chair Jerome Powell reaffirmed on Friday that the US central bank remains on track to begin rolling back its massive pandemic-era stimulus. Moreover, bets for an interest rate hike in 2022 have been rising amid expectations that the recent rally in commodity prices would stoke inflation. The markets, however, seem to have fully priced in hawkish Fed expectations, which might hold the USD bulls from placing aggressive bets. This makes it prudent to wait for a strong follow-through buying before confirming that the USD/CAD pair has bottomed out in the near term. There isn't any major market-moving economic data due for release on Monday, either from the US or Canada. Hence, the US bond yields and the broader market risk sentiment will play a key role in driving the USD demand and provide some impetus to the USD/CAD pair. Apart from this, traders will further take cues from oil price dynamics to grab some short-term opportunities around the major. Technical levels to watch  

Gold price is once again testing offers above the $1800 mark, as the bulls look for acceptance above the latter after Friday’s quick retracement from

Gold price eyes a sustained move above $1800 amid USD weakness. Market sentiment remains mixed ahead of a critical week. Gold bears and bulls fight over $1,800, focus shifts to US GDP.Gold price is once again testing offers above the $1800 mark, as the bulls look for acceptance above the latter after Friday’s quick retracement from six-week tops of $1814. As risk remains relatively firmer on Monday, courtesy of easing China’s property sector concerns, the US dollar keeps losing additional ground vs. its main competitors, benefiting gold price. Meanwhile, with persistent rising inflation fears amid supply chain crisis and surging energy costs, gold price is likely to keep the upper hand as an inflation hedge. Read: Gold Price Forecast: A big technical breakout in the offing. Where is XAU/USD headed next?Gold Price: Key levels to watch The Technical Confluences Detector shows that gold has recaptured the $1800 mark, with bulls unstoppable, as they target the Fibonacci 23.6% one-day at $1807. If the buying interest accelerates, then a test of the pivot point one-day R1 at $1811 will be soon on the cards.   The next stop for gold bulls is seen at the previous day’s high of $1814, above which the pivot point one-week R1 at $1818 will be challenged. Further up, powerful resistance of the pivot point one-month R1 at $1820 will be a tough nut to crack for gold optimists.          Alternatively, sellers will probe the strong resistance-turned-support around $1800, which is the convergence of the Fibonacci 38.2% one-day, Fibonacci 23.6% one-week and Bollinger Band one-day Upper. Gold bears will then look out for the $1796 cap, which is the SMA5 four-hour. Further south, a dense cluster of healthy support levels around $1793 will test the bullish commitments. That area is the intersection of the Fibonacci 38.2% one-week, Fibonacci 61.8% one-day, SMAs100 and 200 one-day. The last line of defense for gold buyers is the SMA50 one-hour at $1789. Here is how it looks on the tool About Technical Confluences Detector The TCD (Technical Confluences Detector) is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size. 

The EUR/USD pair struggled to capitalize on its modest intraday gains and was last seen hovering around mid-1.1600s, nearly unchanged for the day. The

A subdued USD price action assisted EUR/USD to gain some intraday traction on Monday.Elevated US bond yields helped limit the USD losses and capped the upside for the major.Bulls remained on the sidelines following the release of mixed German IFO survey results.The EUR/USD pair struggled to capitalize on its modest intraday gains and was last seen hovering around mid-1.1600s, nearly unchanged for the day. The pair gained some positive traction on the first day of a new week, albeit struggled to capitalize on the move and remained well within a four-day-old trading range. The dominant risk-on mood in the markets weighed on the safe-haven US dollar and extended some support to the EUR/USD pair through the first half of the European session. However, a combination of factors held bulls from placing aggressive bets and capped the upside just ahead of the 1.1665-70 resistance zone, or monthly tops touched last week. Elevated US Treasury bond yields acted as a tailwind for the greenback and turned out to be a key factor that kept a lid on any meaningful gains for the major. In fact, the yield on the benchmark 10-year US government bond held steady near the 1.65% mark amid growing acceptance for an early policy tightening by the Fed. Apart from this, the disappointing release of the German IFO survey results failed to impress bullish traders or provide any meaningful impetus to the EUR/USD pair. The headline German IFO Business Climate Index dropped to 97.7 in October as against consensus estimates for a fall to 97.9 from 98.9 recorded in the previous month. Additional details revealed that the Current Economic Assessment edged lower to 100.1 from 100.4, while the IFO Expectations Index fell to 95.4 from 97.4 in September. Moving ahead, there isn't any major market-moving economic data due for release from the US. Hence, the US bond yields, along with the broader market risk sentiment will influence the USD price dynamics and provide some impetus to the EUR/USD pair. That said, the momentum is likely to be limited ahead of the European Central Bank meeting on Thursday. Technical levels to watch  

Touching upon the topic of monetary policy, the European Central Bank (ECB) Governing Council member and Spanish central bank chief Pablo Hernandez de

Touching upon the topic of monetary policy, the European Central Bank (ECB) Governing Council member and Spanish central bank chief Pablo Hernandez de Cos said, the general perception is that the ECB’s monetary policy will keep expansive tone 'during the dilated time'. “The longer the inflation increases lasts, the likelier it will gain persistence,” he added.

The EUR/GBP cross edged lower during the first half of the trading action on Monday and refreshed daily lows, around mid-0.8400s during the early Euro

EUR/GBP witnessed some selling on Monday, though lacked a strong follow-through.The formation of a rectangle might be categorized as a bearish continuation pattern.Mixed oscillators on hourly/daily charts warrant some caution for aggressive traders.The EUR/GBP cross edged lower during the first half of the trading action on Monday and refreshed daily lows, around mid-0.8400s during the early European session. The United Kingdom hinted at a compromise on the post-Brexit Northern Ireland trade rules. This, in turn, was seen as a key factor behind the British pound's relative outperformance and exerted some pressure on the EUR/GBP cross. The downside, however, remains cushioned amid a modest pickup in demand for the shared currency, which drew some support from a subdued US dollar demand. Moreover, diminishing odds for an early policy tightening by the Bank of England held traders from placing aggressive bullish bets around the sterling. Investors also seemed reluctant, rather preferred to wait on the sidelines ahead of the European Central Bank meeting on Thursday. This further contributed to limiting any meaningful slide for the EUR/GBP cross, at least for now. Looking at the technical picture, bulls, so far, have struggled to capitalize on last week's bounce from the lowest level since February 2020. The upside remained capped near the top boundary of a one-week-old trading range, which constitutes the formation of a rectangle. Given the recent sharp decline, the rectangle could still be categorized as a bearish continuation pattern. Meanwhile, the intraday decline, so far, has shown some resilience below the 200-hour SMA. Moreover, technical indicators on hourly charts have been gaining positive traction, though are yet to recover fully from the bearish territory on the daily chart. This further warrants some caution before placing any aggressive directional bets around the EUR/GBP cross. From current levels, bulls are likely to wait for a strong follow-through buying beyond the 0.8465-70 region before placing fresh bets. A sustained move beyond should allow the EUR/GBP cross to reclaim the key 0.8500 psychological mark. The recovery momentum could further get extended towards the next relevant hurdle near the 0.8525-20 supply zone en-route mid-0.8500s. On the flip side, the 0.8420-15 region, or the lower boundary of the mentioned trading band should continue to protect the immediate downside. A convincing break below will be seen as a fresh trigger for bearish traders and turn the EUR/GBP cross vulnerable to break below the 0.8400 mark. The downward trajectory could eventually drag the cross to the 0.8335 support area. EUR/GBP 1-hour chart Technical levels to watch  

The European Central Bank (ECB) Governing Council member and Spanish central bank chief Pablo Hernandez de Cos said Monday, “supply chain problems and

The European Central Bank (ECB) Governing Council member and Spanish central bank chief Pablo Hernandez de Cos said Monday, “supply chain problems and rising raw material prices affect negatively economic recovery pace.” “Recent developments anticipate a significant downward economic outlook revision for 2021,” said de Cos.

The FX market is continuing to weigh up the risk of more persistent inflation. Lee Hardman, Currency Analyst at MUFG Bank, expects the US dollar to st

The FX market is continuing to weigh up the risk of more persistent inflation. Lee Hardman, Currency Analyst at MUFG Bank, expects the US dollar to strengthen against the euro, the Swiss franc and the Japanese yen given that their central banks are set to keep a dovish stance shrugging off higher inflation.  Market is expecting more hawkish Fed if higher inflation persists “The Fed is beginning to display more concern over the risk that higher inflation could become more embedded in the economy. It provides justification for the Fed to begin QE tapering from next month and to bring QE to an end by around the middle of next year. That would then leave open the second half of next year for the Fed to begin raising rates if higher inflation proves more persistent than policymakers currently believe.”  “The US rate market has already moved along way to price in this scenario with two 25bps now priced into 2022 followed by a further three 25bps hikes in 2023. It is continuing to place upward pressure on US rates.” “Support for the US dollar from higher US yields has been dampened so far this month both by the improvement in global investor risk sentiment, and by similar rise in yields outside of the US on average in other G10 economies. As a result yield spreads have not moved decisively in favour of the US dollar.” “The case for a stronger US dollar is more compelling against the low yielding G10 currencies of the EUR, CHF and JPY where market participants are more comfortable that their domestic central banks will keep rates low despite higher inflation.”  

The CAD has continued to trade on a stronger footing over the past week with USD/CAD hitting an intra-day low of 1.2288. Fundamentals remain supportiv

The CAD has continued to trade on a stronger footing over the past week with USD/CAD hitting an intra-day low of 1.2288. Fundamentals remain supportive for CAD strength but risk/reward balance for further near-term gains less favourable now, economists at MUFG Bank report. Will the BoC or OPEC+ meetings spoil the CAD party? “The next key support area comes in at around the 1.2200-level.” “The Canadian rate market has moved sharply over the past month to price in both earlier BoC hikes and a larger hiking cycle. Weekly QE purchases are currently running at CAD2 B, and the BoC could announce plans to formally bring an end to QE this year. To reinforce upward momentum for the CAD, the BoC will also have to drop forward rate guidance.” “The CAD has been benefiting from the higher price of oil. Our oil analyst expects the higher price of oil to be sustained as the current fundamental setup couldn’t be more favourable, and has set a year end forecast for Brent at $85/barrel. It should help to support a stronger CAD heading into year-end although we are wary of downside risks posed by the upcoming OPEC+ meeting on 4th November which also coincides with the COP26 climate talks.”  “While momentum still favours further CAD gains in the near-term, the risk/reward balance has become less favourable at current stronger levels.”   

Following the release of the German IFO Business Survey, the institute’s Economist Klaus Wohlrabe said that “supply chain problems are causing trouble

Following the release of the German IFO Business Survey, the institute’s Economist Klaus Wohlrabe said that “supply chain problems are causing trouble for companies, production capacities are falling.” Additional quotes Supply chain problems are causing trouble for companies, production capacities are falling. In the manufacturing sector, business sentiment has fallen, same with services and trade. EUR/USD remains capped below 1.1670EUR/USD is keeping its range trade intact below 1.1670 amid a better market mood and mixed German data. The spot was last seen trading at 1.1657, adding 0.08% on the day.

Germany IFO – Expectations below expectations (96.4) in October: Actual (95.4)

more to come ... About German IFO The headline IFO business climate index was rebased and recalibrated in April after the IFO research Institute chang

German IFO Business Climate Index came in at 97.7 in October.IFO Current Economic Assessment rose to 100.1 this month.October German IFO Expectations Index arrived at 95.4, a miss.The headline German IFO Business Climate Index dropped further to 97.7 in October versus last month's 98.8 and the consensus estimates of 97.9. Meanwhile, the Current Economic Assessment arrived at 100.1 points in the reported month as compared to last month's 100.4 and 99.4 anticipated. The IFO Expectations Index – indicating firms’ projections for the next six months, fell to 95.4 in October from the previous month’s 97.3 reading and worse than the market expectations of 96.4 Market reactionEUR/USD remains unfazed by the mixed German IFO survey, keeping its range just above 1.1650. At the time of writing, the spot is up 0.10% on the day, trading at 1.1660. About German IFO The headline IFO business climate index was rebased and recalibrated in April after the IFO research Institute changed series from the base year of 2000 to the base year of 2005 as of May 2011 and then changed series to include services as of April 2018. The survey now includes 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction.

Euro Stoxx 50 has pushed beyond a multi month descending channel (4130pts). Economists at Société Générale expect the index to soar as high as 4350pts

Euro Stoxx 50 has pushed beyond a multi month descending channel (4130pts). Economists at Société Générale expect the index to soar as high as 4350pts. Holding above 4310pts is critical to see further gains  “A retest of the high formed in September near 4250pts can’t be ruled out. Next projections are located at 4350pts.” “Consolidation above the channel band near 4130pts will be crucial for persistence in the up move.”  

Germany IFO – Current Assessment came in at 100.1, above expectations (99.4) in October

Germany IFO – Business Climate came in at 97.7, below expectations (97.9) in October

XAU/USD is closing in on $1800. As FXStreet’s Dhwani Mehta notes, gold eyes symmetrical triangle breakout on the daily chart. Focus is on Monday’s clo

XAU/USD is closing in on $1800. As FXStreet’s Dhwani Mehta notes, gold eyes symmetrical triangle breakout on the daily chart. Focus is on Monday’s close, as above $1793 the yellow metal would target the $1900 level. Immediate downside appears cushioned around $1793-$1791 “Looking forward, the risk trends, the price action in the yields and the buck will continue to influence gold price amid a blackout period for the Fed and a quiet start to the week.” “Gold is teasing a symmetrical triangle breakout, with bulls awaiting a daily closing above the falling trendline resistance at $1793. The triangle breakout will open doors for a fresh uptrend towards the $1900 barrier. Ahead of that, the previous week’s high of $1814 will offer stiff resistance. Further up, September highs at $1834 will also emerge as a tough nut to crack for gold bulls.” “On the flip side, the immediate downside appears cushioned around $1793-$1791. The next critical support awaits at the horizontal 50-DMA at $1780. Selling resurgence could knock off gold price further towards the rising trendline support at $1775.”  

EUR/CHF has extended its phase of decline after sliding below 1.07. Economists at Société Générale expect the pair to drop towards the 1.0620/1.0580 r

EUR/CHF has extended its phase of decline after sliding below 1.07. Economists at Société Générale expect the pair to drop towards the 1.0620/1.0580 region. Downward momentum is still prevalent “Break below August trough (1.0700) denotes downward momentum is still prevalent.” “The pair is likely to head lower towards the lower limit of a multi-month channel at 1.0620/1.0580. Defending this can result in a bounce, however, last week's peak of 1.0765 is likely to cap.” “Lows of 2020 at 1.0500 could be a significant support.”  

EUR/USD stays afloat around mid-1.1600s. Economists at Société Générale expect the pair to tackle the 1.1730/50 resistance zone. A break above here wo

EUR/USD stays afloat around mid-1.1600s. Economists at Société Générale expect the pair to tackle the 1.1730/50 resistance zone. A break above here would open up the 1.1910 mark. Initial support seen at 1.1570 “EUR/USD is expected to extend its bounce after a brief pause.” “It is inching towards a multi month channel at 1.1730/1.1750. Reclaiming this will be essential for a retest of 1.1910.” “First layer of support is at 1.1570.”  

The AUD/USD pair maintained its bid tone through the early European session and was last seen hovering near daily tops, just below the key 0.7500 psyc

AUD/USD regained positive traction on Monday amid a subdued USD price action.The dominant risk-on mood also acted as a tailwind for the perceived riskier aussie.Elevated US bond yields helped the USD losses and should cap gains for the major.The AUD/USD pair maintained its bid tone through the early European session and was last seen hovering near daily tops, just below the key 0.7500 psychological mark. Following the previous session's good two-way price swings, the AUD/USD pair attracted some dip-buying on the first day of a new week and was supported by a combination of factors. The dominant risk-on mood in the markets was seen as a key factor that undermined the safe-haven greenback and acted as a tailwind for the perceived riskier aussie. Apart from this, the USD downtick lacked any obvious fundamental catalyst and remained cushioned amid elevated US Treasury bond yields, bolstered by the prospects for an early policy tightening by the Fed. In fact, Fed Chair Jerome Powell reiterated on Friday that the US central bank remains on track to begin tapering its bond purchases soon. Moreover, the markets have been pricing in the prospects for an interest rate hike in 2022 amid fears about a faster than expected rise in inflation. This, in turn, warrants some caution before placing aggressive bullish bets around the AUD/USD pair and positioning for an extension of the recent bullish move witnessed over the past one month or so. Investors might also prefer to wait on the sidelines ahead of this week's key releases of the quarterly Australian consumer inflation figures on Wednesday. This, along with the Advance US Q3 GDP report on Thursday, will play a key role in influencing the AUD/USD pair and assist investors to determine the next leg of a directional move. In the meantime, the US bond yields will drive the USD demand. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities around the AUD/USD pair. Technical levels to watch  

USD/JPY snapped a four-week winning streak and seems to have gone into a consolidation phase around mid-113.00s on Monday. Karen Jones, Team Head FICC

USD/JPY snapped a four-week winning streak and seems to have gone into a consolidation phase around mid-113.00s on Monday. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to hold above the 23.6% retracement at 113.38 to retest the 114.55 high. USD/JPY targets 114.55, then 115.60 “USD/JPY failed to close above the 114.55 October 2018 high last week, and has now eased back to the 23.6% retracement at 113.38. Provided this holds the downside we should see recovery and a reattempt on the 114.55 high.” “Failure at 113.38 will imply a deeper sell off to 112.56, the 38.2% retracement, and potentially the 111.66 July high.” “Above 114.55/70, we have 115.60, the 61.8% retracement of the move down from 2015 and then the 117.06 the 1998-2021 resistance line.”  

GBP/JPY continues to push higher, having printed a fresh high at 158.22 last Friday. Benjamin Wong, Strategist at DBS Bank, expects the pair to lurch

GBP/JPY continues to push higher, having printed a fresh high at 158.22 last Friday. Benjamin Wong, Strategist at DBS Bank, expects the pair to lurch even higher. Strong momentum being augmented “A quick look at the daily Ichimoku charts shows bullish momentum remains in a feverish pitch, and there is no affirmation that the 158.22 highs is a verified absolute top. Hence, we remain open to the possibility of the cross assailing higher levels before it ends terminally the bull run that currently came off 148.47, the July 2021 lows.” “On the monthly charts, 162.13 is a keenly watched 200-month moving average as well.”  

The USD has lost ground against all other G10 currencies with the exception of the JPY since the start of the month. Economists at Rabobank consider t

The USD has lost ground against all other G10 currencies with the exception of the JPY since the start of the month. Economists at Rabobank consider the move to be corrective in nature given the recent run up in long USD positions. This next round of G10 central bank policy meetings will be crucial in injecting more clarity into the outlook for G10 currencies. Next round of central bank meetings to be crucial to inject more clarity  “We view the current softer tone of the USD as corrective. CFTC data show that speculators’ added to their long USD index positions for an eighth consecutive week last week and that these positions are holding at their highest levels since October 2019. After such a sharp change in allocation of positions, some pullback or consolidation is not exceptional and should allow market participants to catch their breath.” “The recent ‘catch-up’ moves in the money market rates of other countries has contributed to the stronger tone of other G10 currencies vs the USD. In many cases, however, it is likely that movements in the short end of several curves are overdone.” “A reiteration of cautious positions from central banks such as the ECB, BoJ, SNB, RBA and the Riksbank is likely to settle markets and should allow the USD to pull back some ground.” “We retain our view that difficult conditions for emerging markets caused by concerns such as higher US rates, slowing Chinese growth and rising energy prices remains a USD positive dynamic.”  

Turkey Manufacturing Confidence fell from previous 113.4 to 109.6 in October

Turkey Capacity Utilization fell from previous 78.1% to 78% in October

EUR/CHF is at new lows for the year. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to hold above the 1.0643

EUR/CHF is at new lows for the year. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to hold above the 1.0643/1.0623 area though a break below here would expose the 1.0505 2020 low. Near-term rallies to find initial resistance at the 1.0790 55-DMA “EUR/CHF sold off into new lows for the year last week and we are now very close to our downside target of the 1.0623/43 November 2020 low, the 2016 low and 78.6% retracement at 1.0643. This is a major band of support and we would expect the market to at least hold the initial test.” “Failure at 1.0623/43 would target the 1.0505 2020 low.” “Near-term rallies will find initial resistance at the 55-day ma at 1.0790 and will stay offered while capped there. Above the 55-day ma lies the 1.0865 24th September high.”  

EUR/USD has met fresh supply near the 1.1670 region, retracing towards 1.1650 ahead of the German IFO survey. The pair ignores the broad-based US doll

EUR/USD is fading the upside momentum despite weaker USD, Treasury yields. 200-SMA on the 4H chart at 1.1667 offers strong resistance to the EUR bulls. RSI ticks down but holds above 50.00, keeping downside limited. EUR/USD has met fresh supply near the 1.1670 region, retracing towards 1.1650 ahead of the German IFO survey. The pair ignores the broad-based US dollar weakness alongside the extended retreat in the Treasury yields, as the EUR bulls run into a key technical hurdle on the four-hour chart. Its worth noting that the retracement could be also in the wake of the upcoming European Central Bank policy decision and US GDP report this week. The rejection at higher levels is also backed by the latest downtick in the Relative Strength Index (RSI). However, the leading indicator still remains well above the midline, keeping the buyers hopeful. A four-hourly candlestick closing above the 200-Simple Moving Average (SMA) at 1.1667 will revive the bullish momentum, opening doors towards the 1.1700 psychological level. Further up, the next resistance zone is seen near the 1.1720 region. EUR/USD: Four-hour chart Meanwhile, if the latest pullback gathers steam, then a test of the mildly bullish 21-SMA at 1.1640 will be inevitable. Bears will then aim for the upward-sloping 50-SMA at 1.1621. EUR/USD: Additional levels to consider  

Here is what you need to know on Monday, October 25: The dollar struggles to find demand at the start of the week amid the mixed market mood but the o

Here is what you need to know on Monday, October 25: The dollar struggles to find demand at the start of the week amid the mixed market mood but the overall trading action remains relatively subdued as investors await this week's high-impact macroeconomic data releases and events. IFO Business Climate Index and Expectations Index from Germany will be featured in the European economic docket on Monday ahead of the Chicago Fed's National Activity Index and the Dallas Fed's Manufacturing Survey.Risk mood: China's SSE Composite Index is up 0.45% but the Nikkei 225 Index is losing 0.65%. US Stock index futures are trading flat and major European equity indices remain on track to open near Friday's closing levels. Meanwhile, the benchmark 10-year US Treasury bond yield, which fell 4% on Friday, is clinging to modest daily gains near 1.65%. In an interview with CNN on Sunday, US House Speaker Nancy Pelosi said that Democrats have almost reached an agreement on a scaled-back version of US President Joe Biden's spending bill. Pelosi further added that they are looking to vote on it later in the week.EUR/USD stays afloat in the upper half of last week's trading range around mid-1.1600s, supported by the modest USD weakness. The pair might need a fundamental catalyst to break out of this range. Gold surged above $1,800 on Friday but erased a large portion of its gains before closing a little above $1,790. Currently, XAU/USD is closing in on $1,800 and it could gather bullish momentum in case US T-bond yields start to push lower. The EU and the UK will continue talks on post-Brexit trade rules for Northern Ireland on Tuesday in London. The role of the European Court of Justice in upholding and implementing those rules remains the biggest sticking point. GBP/USD, which closed the last two days of the previous week modestly lower, is now edging higher toward 1.3800.USD/JPY snapped a four-week winning streak and seems to have gone into a consolidation phase around mid-113.00s on Monday. The data from Japan showed that the Leading Economic Index declined to 101.3 in August from 104.1 in July but this reading was largely ignored by market participants.Cryptocurrencies: Following Wednesday's record-setting rally, Bitcoin extended its correction over the weekend and briefly declined below $60,000 before regaining its traction. Currently, BTC is up nearly 2% on a daily basis at $62,000. Ethereum continues to fluctuate above $4,000.

FX option expiries for October 25 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1615 372m 1.1660 453m 1.1720-25

FX option expiries for October 25 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1615 372m 1.1660 453m 1.1720-25 638m 1.1770 534m - GBP/USD: GBP amounts         1.3700 513m - USD/JPY: USD amounts                      112.50 780m 113.00 886m 114.00 480m 114.25 421m 114.50 450m - USD/CAD: USD amounts        1.2500 620m 1.2600 685m

The focus shifts to US GDP while XAU/USD bears and bulls fight over $1,800. FXStreet’s Eren Sengezer expects gold to head towards $1,825 before $1,840

The focus shifts to US GDP while XAU/USD bears and bulls fight over $1,800. FXStreet’s Eren Sengezer expects gold to head towards $1,825 before $1,840 on a break above the aforementioned $1,800 resistance. Neither sellers nor buyers have control of the critical $1,800 level “On Thursday, the European Central Bank (ECB) will announce its Interest Rate Decision and release the Monetary Policy Decision Statement. In case the ECB event highlights the policy divergence with the Fed, the greenback could regather its strength and bring forth XAU/USD weakness.” “The US Bureau of Economic Analysis will release its first estimate of third-quarter Gross Domestic Product (GDP) growth. On a yearly basis, the GDP is expected to expand by 3.2% following the 6.7%. A GDP reading near the market consensus could trigger another leg higher in US T-bond yields. On the other hand, a big miss could cause investors to price in a delay in the reduction of the Fed’s asset purchases and weigh heavily on the dollar.” “It's difficult to say that the outlook is bullish unless gold makes a decisive move above the $1,795/$1,800 area. Above that hurdle, $1,825/30 area (Fibonacci 38.2% retracement of the April-June uptrend, static level) could be seen as the next target before $1,840 (static level).” “On the downside, $1,780 (50-day SMA) aligns as the first support ahead of $1,770 (former resistance, Fibonacci 61.8% retracement). Sellers are likely to maintain control of the action as long as the above-mentioned resistance holds.”  

GBP/USD remains firm on the first trading day of the week in the early European session. The pair managed to gather momentum, following the previous t

GBP/USD edges higher on Monday in the European trading hours.The US dollar remains subdued following lower US Treasury yields, ebbed inflation fears.Upbeat data, Brexit headlines, and hawkish BOE fuels gains in the sterling.GBP/USD remains firm on the first trading day of the week in the early European session. The pair managed to gather momentum, following the previous two session’s fall-off . At the time of writing, GBP/USD is trading at 1.3780,up 0.19% for the day. The sterling keeps its foot firmly against the majors amidst the expectation that the Bank of England (BOE) will be probably the first major central bank to raise interest rates in the post-pandemic cycle but economists warned that markets are already pricing the early rate hikes. The Brexit-led optimism uplift the sentiment surrounding the sterling, following the positive comments from the UK government on the Northern Ireland (NI) protocol. The IHS Markit/CIPS UK Composite PMI jumped to 56.8 in October, beating the market expectations of 54.0.
 
The greenback edges lower on Monday, following the Fed Chair Jerome Powell’s comment that the US Fed is ready to start tapering but remained tight-lipped on the timeline to raise interest rate hikes. Investors took remarks as a signal that the other major central banks may hike rates sooner than the Fed.
 
As for now, traders keep their focus on the Bank of England’s(BoE) Tenreyro speech  to gauge market sentiment. GBP/USD additioanl levels  

WTI bulls remain dominant, refreshing the seven-year peak during early Monday. That said, the black gold seesaws around $84.15, up 0.53% intraday, aft

WTI rises to the fresh high since October 2014, sidelined of late.Ascending trend line from March, overbought RSI challenge the bulls.Convergence of monthly support line, 10-DMA restricts immediate downside.WTI bulls remain dominant, refreshing the seven-year peak during early Monday. That said, the black gold seesaws around $84.15, up 0.53% intraday, after renewing the multi-year peak to $84.38 before a few minutes to the European session’s start. It should be noted, however, that the further upside remains doubtful as the RSI line pokes overbought region as the oil prices flirt with an ascending resistance line from March, near $84.45-50 at the press time. In a case where WTI buyers manage to flash a daily closing past $84.50, the early 2010 levels near $87.50 may probe the run-up targeting the $90.00 psychological magnet. During the quote’s pullback moves, a confluence of 10-DMA and an ascending trend line from late September, near $82.10, will be the key to watch. Should oil’s profit-booking extends below $82.10, also conquer the $82.00 threshold, the $80.00 round figure and July’s high near $76.40 will be in focus. WTI: Daily chart Trend: Pullback expected  

Singapore Consumer Price Index (YoY) above expectations (2.4) in September: Actual (2.5)

US Dollar Index (DXY) refreshes monthly low around 93.50, extending Friday’s losses as European traders brush their screens for Monday’s tasks. The gr

US Dollar Index extends Friday’s losses to refresh multi-day bottom.US stimulus hopes, China headlines weigh on US dollar’s safe-haven demand.Fed’s Powell favored tapering but not the rate hikes.Second-tier data eyed ahead of Thursday’s advance reading of Q3 GDP.US Dollar Index (DXY) refreshes monthly low around 93.50, extending Friday’s losses as European traders brush their screens for Monday’s tasks. The greenback gauge tracks downbeat US Treasury yields amid a quiet start to the key week including the first estimation of the US Q3 GDP. The reason could be linked to the risk-on mood, mainly taking clues from US stimulus hopes and Evergrande-led relief in China. It should be noted, however, the last lot of the Federal Reserve (Fed) officials, including Chairman Jerome Powell, kept flashing the need for tapering despite staying away from the rate hike signals. Even so, markets seem to have digested the news long back and hence the latest reaction to the hawkish Fedspeak has been minimal. Amid these plays, US 10-year Treasury yields drop one basis point (bp) to 1.642% while the S&P 500 Futures turn positive, poking record top marked on Friday. Given the greenback sellers’ rejection of the Fed tapering concerns, firmer US GDP will extra support to the DXY should the growth numbers arrive firmer. However, soft numbers may well extend the latest bearish consolidation of the US Dollar Index. Ahead of Thursday’s US GDP, today’s second-tier activity numbers and Wednesday’s Durable Goods Orders for September will join the aforementioned risk catalysts to entertain the DXY traders. Technical analysis US Dollar Index drops to the three-week low, battling one-month-old horizontal support and the 200-SMA. It’s worth observing that the US Dollar Index portrays a short-term falling wedge bullish chart pattern, on the four-hour play and hence confirmation of the same, with an upside break of 93.70 will theoretically hint at a fresh north-run towards the monthly high, also the yearly peak surrounding 94.55.  Alternatively, 200-SMA and the stated monthly support restrict short-term DXY declines around 93.55-50 before the wedge’s support line, close to 93.40.  

USD/CNH takes offers around $6.3775, down 0.10% intraday as European traders brace for Monday’s bell. In doing so, the offshore Chinese currency (CNH)

USD/CNH prints three-day south-run, stays pressured around intraday low.Oversold RSI probes bears, 5-DMA guards immediate upside.USD/CNH takes offers around $6.3775, down 0.10% intraday as European traders brace for Monday’s bell. In doing so, the offshore Chinese currency (CNH) pair extends the previous week’s U-turn from a support-turned-resistance line from July towards the monthly low, also the lowest level since May. It should be noted, however, that the oversold RSI conditions may challenge the USD/CNH bears around the five-month low of $6.3524, also the yearly bottom. In a case where the pair sellers ignore RSI conditions and refresh the yearly low, bottom marked during the mid-May 2018 near $6.3195 may challenge the quote ahead of directing them to the $6.3000 threshold. On the contrary, the 5-DMA level of $6.3855 challenges the quote’s immediate upside ahead of the stated resistance line, previous support, near $6.3990. During the USD/CNH upside past $6.3990, September’s low around $6.4250-45 will gain the buyer’s attention. USD/CNH: Daily chart Trend: Further weakness expected  

Japan Leading Economic Index: 101.3 (August) vs previous 101.8

Japan Coincident Index fell from previous 91.5 to 91.3 in August

USD/INR struggles to cheer the broad US dollar weakness, down 0.08% intraday around 75.00 heading into Monday’s European session. The reason could be

USD/INR print three-day uptrend, picks up bids of late.Markets doubt RBI Minutes terming rise in inflation as softer than expected amid firmer oil prices.DXY refreshes three-week low amid risk-on mood, helped by China.USD/INR struggles to cheer the broad US dollar weakness, down 0.08% intraday around 75.00 heading into Monday’s European session. The reason could be linked to the concerns over the Reserve Bank of India’s (RBI) inaction, as well as inflation view, amid surging oil prices. On Friday, minutes of the latest RBI meeting conveyed that India's monetary policy committee sees the need for continued policy accommodation as the economic recovery remains fragile, with the rise of inflation less steep than expected. However, Goldman Sachs (GS) recently rang the inflation alarm and the need for monetary policy change. “India Monetary Policy Committee’s (MPC’s) concerns on persistent core inflation amid high commodity prices coming to fore,” said GS per Reuters. Improvement in India’s covid conditions and strong vaccinations should have also helped the Indian rupee (INR) but does not as market players seem to prepare for future tightening of the RBI. As per the latest government figures, there are 14,306 new cases versus 15,906 reported yesterday. Further, the government claims to have jabbed over 1.02 billion population, running the world’s biggest vaccination drive. On a different page, China’s ability to regain the formal seat at the United Nations (UN) and the People’s Bank of China’s (PBOC) efforts to safeguard the financial system, recently by a net 190 billion yuan injection, underpin the positive sentiment, weighing on the US dollar. Further, the latest comments from the US policymakers, including President Joe Biden and House Speaker Nancy Pelosi, also signaled nearness to the much-awaited infrastructure spending deal of late and dragged down the US Dollar Index (DXY). Above all, the Fed tapering chatters seemed to have failed to underpin the US Treasury yields. Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan gains 0.20% intraday whereas S&P 500 Futures reverse the early Asian losses to poke the record high flashed on Friday. Looking forward, USD/INR traders remain at the mercy of the US dollar moves and the market’s preparation for the RBI’s action. However, the US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October can offer intermediate clues. Technical analysis USD/INR recovery needs to conquer the 75.10 hurdle, comprising 10-DMA and a two-week-old resistance line, to aim for the monthly high near 75.65, failures to do so can recall the bears.  

AUD/JPY trades higher in the Asian trading hours on Monday morning. The pair retreated after testing the fresh yearly highs on Thursday at 86.25 . As

AUD/JPY edges higher on Monday following the previous session’s downside momentum.The cross-currency pair posts gains after two days’ of sell-off.The momentum oscillator holds onto the overbought zone with receding upside momentum.AUD/JPY trades higher in the Asian trading hours on Monday morning. The pair retreated after testing the fresh yearly highs on Thursday at 86.25 . As of writing, AUD/JPY is trading at 85.03, up 0.35% for the day. AUD/JPY daily chart After rising from the lows of 78.85 made one month ago, the pair put its paddle on accelerator and tested the fresh yearly highs above 86.20 on Thursday. The AUD/JPY bulls look exhausted near the higher levels and pushed lower amid corrective pullback.  If the price continues to move higher it could touch the 85.50 horizontal resistance level again, followed by the yearly highs of 86.25. Further, a close above the mentioned level would open the gates for the February, 2018 highs at 88.12 Alternatively, if  the price reverses direction on further profit booking it could retarced back to the 84.50 horizontal support level. A decisive break of the ascending trendline at 84.00, which extends from the low of 78.85 would mean more pain for the pair. The AUD/JPY bears would recapture the 83.50 horizontal support zone. The overbought Moving Average Convergence Divergence (MACD) teases bears to test the low of October,12 at 83.01. AUD/JPY additional levels  

In the view of the analysts at JP Morgan, EUR/USD is foreseen at 1.1400 by December and 1.1200 next year. Key quotes “We are bringing forward and exte

In the view of the analysts at JP Morgan, EUR/USD is foreseen at 1.1400 by December and 1.1200 next year. Key quotes “We are bringing forward and extending the projected slippage in EUR to reflect these developments, but principally the increased uncertainty about the duration of a soft-patch in global growth that is now impacting the Euro area as well.”  “European industry has been wrestling with supply disruptions for some time - German car output is 50% below pre-pandemic levels - and to compound matters there is now a potentially major drag from the surge in natural gas prices, to which Europe is particularly exposed.”

Gold trades with gains on Monday extending the previous week’s upside momentum. The US benchmark 10-year Treasury yields tardes below 1.65% with 0.78%

XAU/USD extends the previous session’s gains on Monday near  $1,780.Gold posts the gains for the fifth straight session.Lower US Treasury yields undermine the demand for the US dollar.Gold trades with gains on Monday extending the previous week’s upside momentum. The US benchmark 10-year Treasury yields tardes below 1.65% with 0.78% losses enhancing non-yielding bullion’s appeal. The US Dollar Index, which tracks the performance of the greenback against the basket of six major currencies, book fresh losses below 93.50 with 0.15% losses, making gold attractive for  the other currencies holders. The greenback weighed down as investors digested the relative pace of interest rate hikes expectations from the major central banks. Global stock market remained edgy amidst a deterioration in investor risk sentiment linked to comments made by the Chairman of the Fed’s Chairman Jerome Powell. He reiterated his outlook that the US central bank is on confirmed track to reduce its monthly asset purchase before the end of the year. Further, he added that the monthly purchases are expected to end by mid-2022. The precious metal rallied to its highest level since early September above $1,800 on Friday before trimming gains, following Fed’s chairman Powell’s statement on the timing of interest rates hike, especially the given current labor market conditions. US Treasury Secretary Janet Yellen remained on the same line on inflation as she said the US is in control of inflation, and it could return to normal by the second half of next year. As per the US Commodity Futures Trading Commission's data released on Friday, traders cut their net long positions in gold in the week to October,19.
 
Technical levelsXAU/USD daily chart On the daily chart, XAU/USD rose for fifth consecutive sessions after forming a Doji candlestick on October,18. The prices crossed above the 200-day Simple Moving Average (SMA) at $1,793.43 for the first time since early September. The prices moved in the upward channel from the lows of $1,722.31 made on September 30, indicating the current underlying bullish current. The Moving Average Convergence Divergence (MACD) holds above  the midline with a bullish crossover. Any uptick in the MACD indicator would amplify the buying pressure and the prices would approach the $1,810 horizontal resistance level . A daily close above the mentioned level would encourage bulls to retest the high made on September, 7 at $1,827.32. XAU/USD bulls could meet the upper trendline of the upward channel at $1,840 as the next upside target. Alternatively, if the prices break below the 200-day SMA, it could retrace back to the $1,780 horizontal support level. Furthermore a successful break of the bullish sloping line could mean more downside for gold toward the $1,765 horizontal support level, followed by the October, 12 low at $1,750.81. XAU/USD additional levels
 

Asian equities portray a positive week-start heading into Monday’s European session, thanks to headlines from China. Also contributing to the risk-on

Asian shares track Wall Street gains amid softer US Treasury yields.Evenrgrande restarts 16 cites after paying US bond coupons, PBOC stays defensive.Australia eyes booster shots, NZ markets are off.Firmer oil probes equity bulls amid a quiet start to the key week.Asian equities portray a positive week-start heading into Monday’s European session, thanks to headlines from China. Also contributing to the risk-on mood are the US stimulus hopes and downbeat US Treasury yields. US policymakers, including President Joe Biden and House Speaker Nancy Pelosi, signaled nearness to the much-awaited infrastructure spending deal of late. The same joins China’s Evergrande’s comments suggesting it has resumed construction work on 16 cites, including the latest six, to brighten the mood. Further, China’s ability to regain the formal seat at the United Nations (UN) and the People’s Bank of China’s (PBOC) efforts to safeguard the financial system, recently by a net 190 billion yuan injection, also underpin the positive sentiment. On the contrary, fresh covid fears from China, as conveyed by Mi Feng, a spokesman at the National Health Commission, joins the Fed tapering chatters, underpinned by Fed Chairman Jerome Powell on Friday, challenge the mood. Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan gains 0.20% intraday. However, Japan’s Nikkei drops 0.85% at the latest after an insurance company Meiji Yasuda Life hints at further yen strength. Elsewhere, Australia eyes COVID-19 booster shots soon after the virus-led activity restrictions ease, per Reuters, which in turn joins recently softer Aussie virus numbers to help ASX gain 0.35% by the press time. That being said, Chinese stocks are mildly bid whereas those from Indonesia India, and South Korea follows the suit. On a broader front, S&P 500 Futures reverse the early Asian losses to poke the record high flashed on Friday whereas the US 10-year Treasury yields drop 1.3 basis points (bps) to 1.642% at the latest. It’s worth noting that Wall Street closed firmer the previous day even as Fed Chair Jerome Powell backed tapering and refrained from terming inflation as ‘transitory’. Read: S&P 500 Futures, US Treasury yields wobble amid quiet markets

AUD/USD again rebounds from a monthly support line, snapping a two-day downtrend while refreshing the daily high around 0.7485 ahead of Monday’s Europ

AUD/USD snaps two-day losses, refreshes intraday top of late.Firmer MACD, strong RSI add to the bullish bias.Convergence of 200-DMA, three-month-old resistance line becomes a tough nut to crack for the bulls.AUD/USD again rebounds from a monthly support line, snapping a two-day downtrend while refreshing the daily high around 0.7485 ahead of Monday’s European session. Given the firmer RSI line, not overbought, coupled with the bullish MACD signals, AUD/USD prices are likely to remain firm, suggesting the 0.7500 threshold break on hand. However, the latest swing high near 0.7550, also the highest since early July, will precede the convergence of the 200-DMA and an upward sloping trend line from July 29 to challenge the AUD/USD upside close to 0.7565. Should the pair buyers ignore RSI conditions and overcome the 0.7565 hurdle, the late June’s peak of 0.7617 will be in focus. Meanwhile, a daily closing below the stated support line, near 0.7455 by the press time, will aim for the 100-DMA level of 0.7397 to probe the AUD/USD bears. In a case where the quote remains weak past 100-DMA, July’s low near 0.7290-85 should return to the chart. AUD/USD: Daily chart Trend: Further upside expected  

China property firms to meet with NDRC on Tuesday – Cailianshe more to come ...

China property firms to meet with NDRC on Tuesday – Cailianshe  more to come ...

EUR/USD takes the bids to cross a key short-term resistance line around 1.1655 heading into Monday’s European session. The currency major pair cheered

EUR/USD refreshes intraday high, extends Friday’s recovery moves.Downbeat US Treasury yields, mixed sentiment weigh on US dollar.ECB, US GDP in focus but China headlines, Fed tapering concerns add to the watcher’s list.Second-tier German, US data eyed for fresh impulse.EUR/USD takes the bids to cross a key short-term resistance line around 1.1655 heading into Monday’s European session. The currency major pair cheered US dollar weakness, amid broad risk-on mood, the previous day but the stated resistance line probed the quote’s following advances. Though, the latest drop in the greenback enables the EUR/USD bulls to cross the immediate hurdle ahead of an important week comprising the European Central Bank (ECB) monetary policy meeting and the preliminary readings of the US Q3 GDP. US Dollar Index (DXY) pressures a three-week low, extending Friday’s losses around 93.50, as the recent softening of the US 10-year Treasury yields join sentiment-positive catalysts from China. Also, hopes that the ECB policymakers will keep their hawkish rhetoric during this week’s monetary policy meeting add to the EUR/USD strength. That said, the US 10-year Treasury yields drop 1.3 basis points (bps) to 1.642% while the S&P 500 Futures turn positive, poking record top marked on Friday. Behind the moves could be the headlines suggesting US policymakers’ optimism towards reaching the agreement on the much-awaited infrastructure spending deal. On the same line was news from China’s Evergrande which said it has resumed construction work on 16 cites, including the latest six. The troubled real-estate player paid $83.5 million in interest on a U.S. dollar bond and relieved the market’s stress the last week. Further, the People’s Bank of China’s (PBOC) efforts to safeguard the financial system, recently by a net 190 billion yuan injection, also brighten the market’s mood. It should be noted, however, that Friday’s comments from Fed Chair Jerome Powell turned out in sync with the rest of the Fed policymakers who favor tapering and challenge the EUR/USD bulls. Also, covid fears in China add to the catalysts underpinning the US Treasury yields. Mi Feng, a spokesman at the National Health Commission said during the weekend, per Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. Moving on, German IFO numbers October will precede the US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October to entertain the intraday bulls. Though, major attention will be given to the US Treasury yields ahead of crucial events on Thursday. Technical analysis EUR/USD stays firmer above 10-day and 21-day EMAs amid bullish MACD signals, suggesting further advances towards the downward sloping resistance line from September 22, near 1.1655. However, August month’s low around 1.1665 will validate the quote’s additional upside towards the late September’s peak near 1.1755. Meanwhile, the stated EMAs, close to 1.1630-25, challenge the short-term EUR/USD declines ahead of the 1.1600 threshold and the 1.1570 support levels.  

EUR/GBP remains muted on Monday in the Asian session . The cross-currency stayed in a relatively narrow trade band with no meaningful traction. At the

EUR/GBP trades marginally lower on Monday in the Asian trading hours. Minimum wage rise, positive Brexit headlines, upbeat data support the gains for the sterlings.Dovish ECB's stance weighs on the euro.EUR/GBP remains muted on Monday in the Asian session . The cross-currency stayed in a relatively narrow trade band with no meaningful traction. At the time of writing, EUR/GBP is trading at 0.8457, down 0.08% for the day. The downbeat economic data and dovish ECB makes the euro weaker against the sterling. The IHS Markit Eurozone Services Purchase Managers Index (PMI) dropped 54.7 in October below the market projections of 55.5. The Eurozone business activity stutters as supply chain woes intensify. In addition to that, a Reuters poll reported that the European Central Bank (ECB) will be the last major central bank to raise interest rates after the COVID-19 pandemic. It is worth mentioning that, S&P 500 Futures is  trading at 4,525, down 0.24% for the day. On the other hand, the sterling enjoyed the gains on combination of factors. UK’s Finance Minister Rishi Sunak prepares to push the minimum wage to £10 an hour by the next General Election along with an additional £ 6 billion budget to its National Health Service. The IHS Markit/ CIPS UK Manufacturing PMI jumped 57.7 in October beating the market forecast of 55.8.  Furthermore, the UK government said that the talks between London and Brussels remained constructive so far over the troubled Northern Ireland Protocol. As for now, traders are waiting for the German Business Climate data, and UK BoE’s Tenreyro speech to gauge market sentiment data. EUR/GBP additional levels  

China’s President Xi Jinping said on Monday, he opposes unilateralism, protectionism and zero-sum games. more to come ...

China’s President Xi Jinping said on Monday, he opposes unilateralism, protectionism and zero-sum games.   more to come ...

In its latest Commodity Markets Outlook report released over the weekend, the World Bank warned that the recent surge in oil price is unlikely to reve

In its latest Commodity Markets Outlook report released over the weekend, the World Bank warned that the recent surge in oil price is unlikely to reverse until 2023. Key takeaways “Average crude prices are expected to end the year at US$70 a barrel, 70 percent higher than in 2020.” “The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries.” “The World Bank uses an average of Brent, WTI and Dubai crude which it said will ‘remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease’.” “Additional price spikes may occur in the near-term amid very low inventories and persistent supply bottlenecks.” Related readsSaudi Energy Minister: OPEC+ should remain cautious over outputWTI pokes multi-month top near $84.00 despite sluggish sentiment

Analysts at Goldman Sachs slash China’s 2022 GDP growth forecasts to 5.2% vs. 5.6% projected earlier amid the government’s efforts to reduce property

Analysts at Goldman Sachs slash China’s 2022 GDP growth forecasts to 5.2% vs. 5.6% projected earlier amid the government’s efforts to reduce property debts. Key quotes “China’s economy will probably expand 5.2% next year, down from a previous projection of 5.6%.” “On a year-on-year basis, growth is set to slow to 3.1% this quarter.” “The long-term policy direction such as property deleveraging remains unchanged as evidenced by the latest news on starting property tax trials in select cities.”  Read: China warns of further spread in latest COVID-19 flare-up

As illustrated below, USD/INR is contained in a flag pattern as it moves towards the support area as marked an eclipse. On the other hand, should US y

USD/INR bulls meeting support on daily basis. Above 0.7440, the bias is bullish. All eyes on the US dollar for the week ahead. As illustrated below, USD/INR is contained in a flag pattern as it moves towards the support area as marked an eclipse. On the other hand, should US yields and the greenback pick up steam, then the correction will likely be over and there will be probabilities of an upside extension.  USD/INR daily chart On the downside, however, the price would need to break below 0.7440.  DXY daily chart The US dollar is meeting a critical support structure which would be expected to hold and potentially lead to a break back towards 94.50. This would be more probable should the US yields continue to climb in the current bullish form of late as follows: The US 10-year yield has been climbing in a classic impulse, correction, impulse shape and the current dynamic trendline support are about to come under pressure, which could lead to the next bullish impulse. 

“Oil producers shouldn't take the rise in prices for granted because the coronavirus pandemic could still hit demand,” Saudi Arabia Energy Minister Pr

“Oil producers shouldn't take the rise in prices for granted because the coronavirus pandemic could still hit demand,” Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said in a Bloomberg TV interview over the weekend.  Additional quotes “OPEC+ should remain cautious over output.” “Saudi Arabia wants to be a top supplier of hydrogen.” Market reaction WTI was last seen changing hands at $84, up 0.37% on the day.WTI pokes multi-month top near $84.00 despite sluggish sentiment

Market players remain divided on mixed signals during early Monday. While portraying the mood, the S&P 500 Futures ease from Friday’s record top of 4,

S&P 500 Futures consolidate recent gains, mildly offered around record top.US 10-year Treasury yields remain pressured, extends Friday’s pullback from five-month high.Fed tapering concerns remain elevated, China flags covid risk but Evergrande tries to placate bears amid a light calendar.US stimulus headlines, second-tier data may entertain traders.Market players remain divided on mixed signals during early Monday. While portraying the mood, the S&P 500 Futures ease from Friday’s record top of 4,551 whereas the US 10-year Treasury yields drop one basis points (bps) to 1.645%, keeping the previous day’s pullback from May 2021 levels. China’s fresh covid fears join Fed tapering concerns to weigh on the stock futures. Friday’s comments from Fed Chair Jerome Powell turned out in sync with the rest of the Fed policymakers who have been favoring asset purchase adjustments, but stay away from a rate hike. Elsewhere, as per the latest comments from Mi Feng, a spokesman at the National Health Commission, shared by Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. On the same line were fears that another real estate firm from China, namely Modern Land, is said to struggle to pay $250 million 12.85% senior notes due October 25. Alternatively, the US policymakers, including President Joe Biden and House Speaker Nancy Pelosi, signaled nearness to the much-awaited infrastructure spending deal. Further, China’s Evergrande said it has resumed construction work on 16 cites, including the latest six. The troubled real-estate player paid $83.5 million in interest on a U.S. dollar bond and relieved the market’s stress the last week. It should be noted that the People’s Bank of China’s (PBOC) efforts to safeguard the financial system, recently by a net 190 billion yuan injection, adds to the sentiment-positive catalysts. Amid these plays, the US Dollar Index (DXY) picks up bids to 93.66, up 0.07% intraday, whereas prices of crude oil and gold remain lackluster, recently easing, around the latest peaks. Moving on, market players seek clarity over US stimulus and hence updates from the House may entertain the bulls. On the economic calendar, the preliminary readings of Q3 2021 GDP will be the key, but today’s US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October may offer intermediate direction.

Silver (XAG/USD) stays mildly bid around $24.35 during early Monday. The bright metal refreshed multi-day high the previous day before reversing from

Silver eases from key SMA, keeps late Friday’s pullback from seven-week top.Bullish candlestick formation, MACD conditions keep buyers hopeful.September’s high add to the upside filters, fortnight-old support line probe sellers.Silver (XAG/USD) stays mildly bid around $24.35 during early Monday. The bright metal refreshed multi-day high the previous day before reversing from $24.82. In doing so, the quote potrayed a bullish candlestick, namely inverted hammer on the daily chart. The bullish MACD signals and a fortnight-long support line also favor the XAG/USD bulls. However, 100-DMA near $24.55 guards the quote’s immediate upside. Additionally challenging the silver buyers is a horizontal area comprising highs marked since early September, near $24.85. In a case where the metal prices rally beyond $24.85, the $25.00 threshold may challenge the bulls ahead of directing them to the August month’s high of $26.00 On the flip side, a daily closing below an ascending support lien from October 12, around $23.85, becomes necessary for silver sellers to take entries. Following that, mid-October high near $23.60 and a nine-week-old horizontal support, close to $22.90, will be in focus. Silver: Daily chart Trend: Further upside expected  

Reuters came out with an analytical piece suggesting a divide between the markets pricing of the Reserve Bank of Australia’s (RBA) interest rate hike

Reuters came out with an analytical piece suggesting a divide between the markets pricing of the Reserve Bank of Australia’s (RBA) interest rate hike and the Aussie central bank’s efforts to tame the yields. “On Friday, the Reserve Bank of Australia (RBA) spent A$1 billion ($750 million) buying in the bond market to try and calm investors who had been testing its resolve to anchor near-term rates at crisis levels,” said Reuters. The analysis argues, “Yet a yawning gap remains between policymakers - who have repeatedly said they do not expect hikes before 2024 - and the market, which has priced 100 basis points of hikes before the end of 2023, beginning in the second half of 2022,” The piece also marks the stated divergence between the RBA policymakers and the market bets as the starkest suggesting, “A bumpy resolution that could flow through to credit markets and even housing costs.” “Government bond futures are traded more heavily than cash bonds, and Australian three-year bond futures touched a two-year low this week and 10-year futures slid to a seven-month trough,” Reuters adds. It should be observed that RBA Governor Philip Lowe’s latest comments accepted reflationary pressures in Australia but the policymaker stepped back from suggesting tighter policy unless sustainable higher wages growth. FX implications As per the latest readings, Australia’s 10-year Treasury yields remain firmer around the yearly peak marked in February, close to 1.78%, whereas the 3-year coupon recovers from a one-week low to 0.75% at the latest. Also read: AUD/USD struggles below 0.7500 on mixed concerns, sour sentiment

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.3924 vs the last close of 6.3850. About the fix China maintains stric

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) at 6.3924 vs the last close of 6.3850. About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.

The price is meeting an area of strong support. However, the corrective candle was very strong so the momentum to the upside keeps the price offered a

NZD/USD is trying to break higher on the daily and weekly charts. NZD/USD holds in the daily support area and consolidates. The price is meeting an area of strong support. However, the corrective candle was very strong so the momentum to the upside keeps the price offered as per the below daily chart: If the support breaks, the price could easily move through the volumes to reach at least 38.2% Fibonacci retracement of the bullish impulse. This will be the last defence for the 50% mean reversion target.  The weekly chart below shows that the price could move back into the triangle and head towards the dynamic trendline support:

The GBP/JPY cross-currency pair remains upbeat on the fresh trading week. The pair opened lower but managed to catch the upside momentum. At the time

GBP/JPY accumulates gains on Monday in the early Asian trading hours.The cross-currency pair took a breather near 156.00 following a two days sell-off.The momentum oscillator holds onto the overbought zone, throwing caution for aggressive bids.The GBP/JPY cross-currency pair remains upbeat on the fresh trading week. The pair opened lower but managed to catch the upside momentum. At the time of writing, GBP/JPY is trading at 156.47, up 0.21% for the day. GBP/JPY daily chart On the daily chart, the GBP/JPY cross currency pair seems exhausted near a fresh six-year high made on Wednesday. The double top near 158.22 prompts bears to take some action, which resulted in two days sell-off of more than 300-pips.  The price sustained the 156.00 psychological level and is on the way to climb back to the 157.00 horizontal resistance level. A successful daily close above 157.00 would again prompt the bulls to test the multi-year highs above 158.20. Alternatively, the Moving Average Convergence and Divergence (MACD) trades in the overbought zone. Any downtick in the MACD along with the break of 156.00 would bring selling opportunities in the pair. In that case,the first downside target appears at the low of October, 15 at 155.42, followed by the 155.00 horizontal support level.  Next, the market participant would aim at the 154.00 horizontal support zone. GBP/JPY additional levels  

One-month risk reversal on the British pound (GBP), a gauge of calls to puts, prints a four-week uptrend, per the latest data provided by Reuters. The

One-month risk reversal on the British pound (GBP), a gauge of calls to puts, prints a four-week uptrend, per the latest data provided by Reuters. The options market gauge stays positive for the fourth week while recently flashing the +0.021 figure at the latest, considering the weekly data from Reuters. The positive reading indicates call options are drawing a higher premium (option price) than puts or bears bets. In other words, the options market favors bulls ahead of this week’s Brexit talks in the UK, as well as the US preliminary GDP for Q3 2021. That said, GBP/USD refreshes intraday high to 1.3775, up 0.14% on a day by the press time of early Monday. Read: UK says substantial differences remain with EU over Northern Ireland trade

US Dollar Index (DXY) extends Friday’s weakness, also the two-week south-run, while taking the bids around 93.61 during Monday’s Asian session. The gr

DXY remains pressured after two-week downtrend, flirts with resistance line of bullish chart pattern.Sluggish momentum challenges the up-moves but 200-SMA, monthly horizontal support keep buyers hopeful.US Dollar Index (DXY) extends Friday’s weakness, also the two-week south-run, while taking the bids around 93.61 during Monday’s Asian session. The greenback gauge dropped to the three-week low on Thursday before bouncing off one-month-old horizontal support. Also challenging the DXY weakness is the 200-SMA and sluggish Momentum line ever since the quote reversed from the yearly top during mid-October. It’s worth observing that the US Dollar Index portrays a short-term falling wedge bullish chart pattern, on the four-hour play. Hence, confirmation of the stated wedge, with an upside break of 93.70 will theoretically hint at a fresh north-run towards the monthly high, also the yearly peak surrounding 94.55.  During the run-up, the 94.00 threshold may offer an intermediate halt. Alternatively, 200-SMA and the stated monthly support restrict short-term DXY declines around 93.55-50. Following that, the wedge’s support line, close to 93.40, acts as an extra filter to the south before dragging the quote towards 61.8% Fibonacci retracement of September-October upside, at 92.94 by the press time. DXY: Four-hour chart Trend: Recovery expected  

AUD/NZD prints fresh gains on Monday in the initial Asian trading hours. The cross-currency pair opened lower but quickly traveled higher. At the time

AUD/NZD edges higher on Monday in the Asian trading hours.The cross-currency pair finds support near the 21-day SMA.The momentum oscillator holds onto the overbought zone with receding momentum.AUD/NZD prints fresh gains on Monday in the initial Asian trading hours. The cross-currency pair opened lower but quickly traveled higher. At the time of writing, AUD/NZD is trading at 1.0449, up 0.16% for the day. AUD/NZD daily chart On the daily chart, the AUD/NZD cross-currency pair has been under selling pressure after testing high above 1.0610 on October, 12. The downside took a breather near the 50-day Simple Moving Average (SMA) at 1.0431.  A daily close above the 50.0% Fibonacci retracement level, which extends from the low of 1.0278 at 1.0443 would result in the meeting the previous session’s high at 1.0497. The Moving Average Convergence (MACD) trades above the midline. Any uptick in the MACD suggests the possibility of  the 1.0550 horizontal resistance level followed by the high made on October, 14 at 1.0610.
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Alternatively, if the price moves lower, it would first retest the 61.8% Fibonacci retracement level at 1.0405. Next, on the bear’s radar will be the 1.0350 horizontal support level and then September, 17 low of 1.0294. AUD/NZD additional levels  

EUR/USD is flat in the open this week at 1.1645 at daily resistance with the US dollar trying to hold up. Investors have taken profits since the dolla

The move higher in yields in recent weeks presents a challenge to the ECB.EUR/USD remains capped by daily resistance.EUR/USD is flat in the open this week at 1.1645 at daily resistance with the US dollar trying to hold up. Investors have taken profits since the dollar index hit a one-year high last week as they build expectations for sooner rate increases in other currencies. However, the dollar pared losses on Friday and Treasury yields fell after Federal Reserve Chairman Jerome Powell said the US central bank should begin reducing its asset purchases soon, but should not yet raise interest rates. However, there were no massive surprises in his comments but he said the impacts from global supply-chain constraints are having a longer-lasting effect on prices. Nevertheless, he still expects inflation to move back towards 2% over time. This led to US rates selling-off initially with 10y UST yields down sharply to 1.63%. US equities were also lower. In US data, Markit Manufacturing PMI dropped more than expected in October, to 59.2 vs the expected 60.5.  However, the service index improved more than expected, to 58.2 vs the expected 55.2). ''The impacts of the supply-chain constraints were evident in the details, with the indices for input prices rising to series highs,'' analysts at ANZ Bank explained. ''Likewise, measures of backlogs and manufacturing times were also the highest on record.'' Domestically, the preliminary composite PMI for October fell to 54.3 vs the expected 55.2. This was in large part attributable to a decline in activity in the German service PMI which fell by 3.6pts to 52.4. Meanwhile, the EA manufacturing PMI was relatively stable, falling 0.1pts to 58.6. ''The data suggest that growth in Q4 for Europe will slow, but with the recovery, still intact,'' the analysts at ANZ explained. ''Encouragingly, the composite employment index rose 1.2pts to 56.1 and the future output index rose 0.3pts to 67.2.'' ECB in focus  Looking ahead to the week, the European Central Bank is what matters most. ''While October was meant to be a simple placeholder meeting on the road to the Governing Council's big December "re-assessment" of its policy stance, the move higher in yields in recent weeks presents a challenge,'' analysts at TD Securities explained. ''While we think words are more likely than actions, an increase in the pace of PEPP purchases can't be completely ruled out.''  

AUD/USD seesaws around 0.7470, flirting with the monthly support line near the one-week low. That said, the quote remains indecisive as contrasting he

AUD/USD remains sidelined, pokes monthly support line amid a quiet session.Risk appetite worsens amid fresh covid fears from China, another Beijing-based firm’s nearness to bond default.Moody’s site Australia’s rising prices, stagnant wages, Fed tapering concerns remain elevated.Second-tier US data, risk catalysts in focus amid light calendar in Asia.AUD/USD seesaws around 0.7470, flirting with the monthly support line near the one-week low. That said, the quote remains indecisive as contrasting headlines from China and home trouble traders. Among them, fears of another COVID-19 wave in China battle positive headlines concerning Evergrande. Also in the play are the chatters over the Fed tapering and credit crisis of one more Chinese real estate firm. At home, vaccine optimism fails to stop the global rating giant Moody’s from conveying fears for Aussie housing markets. As per the latest comments from Mi Feng, a spokesman at the National Health Commission, shared by Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. On the other hand, Evergrande’s latest communication to have restarted 10 projects in six cities including Shenzhen tame fears emanating from the struggled real-estate player. It’s worth noting that the US policymakers, including President Joe Biden, signaled nearness to the much-awaited infrastructure spending deal but there hasn’t been any notable progress and that adds to the market’s boredom. Also contributing to the latest risk-off mood is the Fed tapering concerns, recently backed by Federal Reserve Chairman Jerome Powell, as well as news that another real estate firm from China, namely Modern Land, is said to struggle to pay $250 million 12.85% senior notes due October 25. Reuters came out with the news saying, “Australia looks to roll out COVID-19 booster shots soon as curbs ease,” which in turn keeps AUD/USD buyers hopeful amid the US dollar weakness. However, Moody’s comments like, “housing affordability in Australia will continue to worsen over the rest of 2021 and into early 2022 as property prices rise amid stagnant wages,” challenge the pair buyers. Amid these plays, US 10-year Treasury yields remain pressured around 1.65%, after stepping back from a five-month high the last week, whereas the S&P 500 Futures drop 0.23% by the press time. Considering a mixed play of catalysts, AUD/USD traders will wait for clearer factors for short-term direction. This may highlight today’s US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October for immediate direction. Technical analysis Although overbought RSI dragged AUD/USD back from a 10-week-old resistance line, a monthly support line near 0.7460 restricts the quote’s short-term declines. In a case where bears manage to conquer the stated support line, the 100-DMA level of 0.7400 will be crucial to watch. Meanwhile, an upside clearance of the stated trend line resistance, around 0.7530, will direct the pair buyers toward the 200-DMA and late June’s peak, respectively close to 0.7565 and 0.7620.  

WTI remains firmer around $83.85, up 0.15% intraday during Monday’s Asian session. The energy benchmark refreshed the seven-year high the previous day

WTI picks up bids towards the fresh high since October 2014, flashed the previous day.Market sentiment dwindles amid mixed headlines concerning China, Evergrande.US dollar weakness keeps oil buyers hopeful, second-tier data eyed.WTI remains firmer around $83.85, up 0.15% intraday during Monday’s Asian session. The energy benchmark refreshed the seven-year high the previous day amid softer US dollar and hopes of further energy demand. However, the recently mixed concerns probe the oil buyers of late. US Dollar Index (DXY) dropped on Friday, marking the seventh daily fall in the last eight amid firmer mood and a pullback in the US 10-year Treasury yields from the five-month top. The same helped oil buyers to renew the highest levels since October 2014. Also favoring the black gold were headlines concerning China’s struggling real-estate firm Evergrande. Following the firm’s ability to pay $83.5 million in interest on a U.S. dollar bond, the property company announced it have restarted 10 projects in six cities including Shenzhen. On the contrary, the recent covid conditions in China and Russia have been grim and challenge the risk-on mood, as well as the commodities. As per the latest comments from Mi Feng, a spokesman at the National Health Commission, shared by Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. On the same line, another real estate firm from China, namely Modern Land, is said to struggle to pay $250 million 12.85% senior notes due October 25. Additionally, Fed’s tapering and firmer US Treasury yields also challenge the oil buls. It should be observed, however, that chatters over energy supply outage and OPEC+ support an only gradual increase in output versus the push for more add to the WTI’s strength. While portraying the mood, the S&P 500 Futures print -0.15% intraday loss while the US Dollar Index (DXY) remains pressured at the latest, favoring commodity buyers. Given the mixed catalysts and a light calendar in Asia, qualitative factors may gain major attention for fresh clues before ahead of the US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October, up for publishing today. Technical analysis A two-month-old support line, near $79.80 by the press time, keeps WTI bulls directed towards November 2012 lows near $84.10. However, overbought RSI conditions and an ascending resistance line from March will challenge the oil buyers around $84.50 afterward.  

USD/CHF keeps its footing firm on Monday in the early Asian session. After hitting the high of 0.9185, the pair recorded a fall of more than 30-pips a

USD/CHF manages to start the fresh trading week on a higher note.Lower US Treasury yields undermine the demand for the US dollar.Fading US interest rate bets, higher inflation concerns, and risk-off mood casts a spell on the greenback. USD/CHF keeps its footing firm on Monday in the early Asian session. After hitting the high of 0.9185, the pair recorded a fall of more than 30-pips and touched the monthly lows around 0.9150 in the previous session. At the time of writing, USD/CHF is trading at 0.9163, up 0.11% for the day. The US Dollar Index (DXY), which tracks the greenback performance against its six rivals, trades near 93.50, following lower US benchmark 10-year Treasury bond yields. The US Fed Chairman Jerome Powell hinted that the central bank is prepared to begin tapering its monthly bond purchases but warned that inflation is likely to remain elevated into 2022. In addition to that, US Treasury Secretary Janet  Yellen said that US inflation is under control in an interview with CNN on Sunday. On the other hand, the Swiss franc gains momentum on its safe-haven appeal. It is worth noting that, S&P 500 Futures are  trading at 4,529, down 0.16% for the day. As for now, traders are looking for the US Chicago Fed National Activity Index to take fresh trading insight. USD/CHF additional levels
 

The price of gold ended the week back below $1,800 after spiking to fresh highs for October near $1,813. At the time of writing, XAU/USD is trading fl

Gold  is back to daily support following a spike beyond $1,800 on Friday.US dollar longs have been dialled back which has supported rival currencies and gold.  XAU/USD bears and bulls fight over $1,800, focus shifts to US GDPThe price of gold ended the week back below $1,800 after spiking to fresh highs for October near $1,813. At the time of writing, XAU/USD is trading flat at $1,793 following the US dollar paring losses made on Friday after Federal Reserve Chairman Jerome Powell said the Fed should begin reducing its asset purchases soon, but should not yet raise interest rates. Powell also said employment is still too low and high inflation will likely abate next year as pressures from the COVID-19 pandemic fade. DXY touched a one-year high last week as investors presumed that inflation will remain stubbornly high for longer.  US dollar slides vs G10 In the month to date, all other G10 currencies with the exception of the JPY have out-performed the USD.  The ‘catch-up’ move in money market rates for other currencies has been a contributing factor as investors unwind very long positions in the greenback. Ten-year breakeven yields are firming at their highest levels since 2012, highlighting that inflation is top of mind for global investors. Looking to the positioning data, speculators have only marginally added to their length and despite higher inflation expectations, with modest short-covering as prices edge higher.  The dollar rally has also faded as investors build in expectations for sooner rate increases in other currencies. Meanwhile, data on Friday showed that US business activity rising solidly in October, suggesting economic growth picked up at the start of the fourth quarter as COVID-19 infections subsided. ''While gold prices have historically outperformed most major asset classes in periods of high inflation, investors are cautious about the yellow metal as they remain intensely focused on pricing the Fed's exit,'' analysts at TD Securities explained. ''Yet, we argue that market pricing for Fed hikes remains far too hawkish, as it fails to consider that a rise in inflation tied to a potential energy shock and lingering supply chain shortages would be unlikely to elicit a Fed response.'' Additionally, the analysts argued that the market is increasingly pricing in a policy mistake that is unlikely to take place, considering that central banks are likely to look past these disruptions as their reaction functions have been historically more correlated to growth than inflation. ''Reasons to own the yellow metal are growing more compelling as Fed pricing is likely to unwind. In this context, gold prices are tremendously underperforming against historical analogs, but a breakout in the yellow metal from its multi-month downtrend could signal that inflation-hedging flows are finally trumping the speculative exodus tied to Fed pricing.'' A US fiscal drag and the end of extraordinary unemployment benefits should slow the pace of economic gains, which should ultimately see Fed pricing reverse in support of gold prices. Gold technical analysis From a daily perspective, gold has been attempting the upside Friday's price action shows, below. Friday's wick high of the candle is a probable target for the sessions ahead. $1,835 guards territory to $1,880 as follows:    

USD/CAD remains sidelined around 1.2370, flirting with the 61.8 Fibonacci retracement (Fibo.) of June-August upside during Monday’s Asian session. The

USD/CAD struggles to defend rebound from four-month low.10-DMA guards immediate upside amid downbeat RSI conditions.Late June’s swing low challenges bears, bulls need validation from July 30 bottom.USD/CAD remains sidelined around 1.2370, flirting with the 61.8 Fibonacci retracement (Fibo.) of June-August upside during Monday’s Asian session. The pair bounced off a four-month low the last week but failed to cross 10-DMA. The rebound, however, seems to the momentum strength per RSI line and hence keeps the bears hopeful. It's worth noting that the latest bottom close to 1.2290 precedes the June 23 low of 1.2252 in restricting the short-term USD/CAD declines. However, any further weakness won’t hesitate in challenging the 1.2200 round figure, a break of which will direct the quote towards the yearly low marked in June around the 1.2000 threshold. Meanwhile, an upside clearance of the 10-DMA level surrounding 1.2370 will need validation from late July’s low near 1.2425 before directing USD/CAD bulls toward the 50% Fibo. level near 1.2480. Also acting as an upside filter is the September’s low near 1.2495 and the 1.2500 psychological magnet. USD/CAD: Daily chart Trend: Further weakness expected  

GBP/USD trades cautiously on Monday following the previous session's decline. The pair stayed in a narrow range band with an upside bias. At the time

GBP/USD edges higher on the first trading day of the week in the Asian trading hours.The pair faces strong resistance near 1.3850 below the bearish sloping line.MACD signals sideways momentum with the underlying neutral sentiment.GBP/USD trades cautiously on Monday following the previous session's decline. The pair stayed in a narrow range band with an upside bias. At the time of writing, GBP/USD is trading at 1.3763,up 0.08% for the day. GBP/USD daily chart On the daily chart, the GBP/USD pair has been in the continuous downward trend since the high made on July 30 at 1.3983. The descending trendline from the mentioned level acts as a strong barrier for GBP/USD. Further, the spot trades below the 100-day Simple Moving Average (SMA) at 1.3792, which strengthen the current downside momentum.  If the pair sustains the intraday high it could go back to test the psychological 1.3800 mark, breaking above the 100-day SMA. A successful break of the 100-day SMA could pave way for the 1.3850 horizontal resistance level. The Moving Average Convergence Divergence (MACD) indicator holds above the midline. Any uptick in the MACD could bring more upside momentum for the spot. The bulls would approach the psychological 1.3900 level in that case.  Alternatively, a break below the intraday’s low would result in the continuation of the prevailing trend with the first downside target at Tuesday’s low of 1.3723 followed by the 1.3700 horizontal support zone. Next, the bears would not mind taking out the low made on October 14 at 1.3655. GBP/USD additional levels  

USD/TRY offers a gap-up start to the week’s trading, before refreshing the record high with $9.8505, during Monday’s Asian session. The pair takes clu

USD/TRY takes the bids to renew all-time high during the four-day uptrend.Turkish President Erdogan seeks expulsions of ambassadors from US and other nine countries.CBRT announced 200 bps rate hike on Friday, Fed Chair Power backs tapering.Second-tier US data, headlines from Turkey will be the key directives.USD/TRY offers a gap-up start to the week’s trading, before refreshing the record high with $9.8505, during Monday’s Asian session. The pair takes clues from the weekend headlines, also ignoring the Central Bank of the Republic of Turkey (CBRT) moves, to please the bulls. Reuters came out with the news quoting Turkish Recep Tayyip Erdogan as ordered the expulsion of the ambassadors of the United States and nine other Western countries. “By Sunday evening, there was no sign that the foreign ministry had yet carried out the president's instruction, which would open the deepest rift with the West in Erdogan's 19 years in power,” the news adds. It’s worth noting that the USD/TRY prices rallied the last week even after the CBRT surprised markets with 200 basis points (bps) of a rate cut versus to 16% benchmark interest rate versus the expectations of a 50 bps cut. The market’s reaction to the rate cuts could largely be linked to Turkish President Erdogan’s ousting of the central bank governors and staff, including those who opposed rate cuts. On the other hand, the US Federal Reserve (Fed) Chair Jerome Powell backed tapering and stayed away from terming inflation pressure as ‘transitory’ during his latest speech on Friday. Elsewhere, positive news from China’s Evergrande battles fresh fears of the coronavirus from Beijing and Russia, as well as the Fed tapering concerns, to challenge the sentiment. Amid these plays, Wall Street benchmarks refreshed record, before easing a bit, whereas the US 10-year Treasury yields also stepped back from a five-month high. Following that, the S&P 500 Futures print 0.12% intraday losses by the press time. Looking forward, the US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October may entertain USD/TRY traders but major attention will be given to the risk catalysts, mainly from Turkey. Technical analysis USD/TRY bulls are likely heading towards the $10.0000 psychological magnet unless declining back below the resistance-turned-support from November 2020, near $8.9470.

Rishi Sunak is drawing up plans to push the minimum wage to £10 an hour by the next General Election, the UK's Mirror reports. Key notes ''The Chance

  Rishi Sunak is drawing up plans to push the minimum wage to £10 an hour by the next General Election, the UK's Mirror reports.  Key notes ''The Chancellor will announce an increase in the present £8.91 rate in Wednesday’s Budget.'' ''And some experts predict he could go as far as £9.50 to make up for the £20 cut in Universal Credit for 3.2 million working families.'' ''Borrowing is £135billion lower than predicted so Mr Sunak has more money for the three-year spending review to be unveiled alongside his Budget.'' ''That could put him on course for £10.50 minimum pay by 2024 with the qualifying age lowered from 25 - 21 to overtake Labour’s pledge of £10 an hour.'' Sunak also pledged earlier Sunday to continue to plow more money into public services even though the overall package is likely to restrained compared to the largess the Treasury offered to protect the economy from the pandemic. Here are the measures announced before this week’s Budget and Spending Review include: 6.9 billion pounds of funding for local transport 5 billion pounds of spending over three years to increase health-related research and development 3 billion pounds of investment to improve skills in those age 16 and over The extension of the Recovery Loan Scheme for a six months until June 30, and 312 million pounds of funding for the British Business Bank’s Start-Up Loans program 1.4 billion pounds for the Global Britain Investment Fund, which will provide grants to encourage international companies to invest in the U.K. That includes 354 million pounds for life sciences and more than 800 million pounds for electric vehicle production and supply chains 850 million pounds for local museums, galleries and cultural hotspots 703 million pounds of funding to improve border security, including on coastal patrol ships 700 million pounds for local sports clubs 560 million pounds to improve adult maths education 500 million pounds to support families, including 80 million pounds to fund a network of “family hubs” to support young families 435 million pounds of funding to tackle crime, including improving street lighting and CCTV 5 million pounds of support for veterans  Meanwhile, rising interest rates and inflation are likely to impact borrowing heavily, so the question is to what degree the Chancellor cuts elsewhere vs accepts a more sustained deficit. The pound has been regarded as a risk currency due to the UK's twin  

EUR/USD picks up bids to 1.1642, keeping the two-day advances intact during the early Asian session on Monday. In doing so, the currency major pair st

EUR/USD keeps latest rebound from 10-day EMA, off intraday low.Bullish MACD, sustained trading beyond short-term moving averages favor buyers.August month’s low adds to the upside filters.EUR/USD picks up bids to 1.1642, keeping the two-day advances intact during the early Asian session on Monday. In doing so, the currency major pair stays firmer above 10-day and 21-day EMAs amid bullish MACD signals, suggesting further advances towards the downward sloping resistance line from September 22, near 1.1655. It should be noted, however, that August month’s low around 1.1665 will validation the quote’s additional upside towards the late September’s peak near 1.1755. Meanwhile, the stated EMAs, close to 1.1630-25, challenge the short-term EUR/USD declines ahead of the 1.1600 threshold and the 1.1570 support levels. In a case where the pair bears dominate past 1.1570, the yearly low near 1.1525 and the 1.1500 round figure will be in focus. Overall, EUR/USD gains upside momentum but bulls need validation. EUR/USD: Daily chart Trend: Further upside expected  

USD/JPY moves lower for the fourth straight day on Monday following the consistent downward pressure on the US dollar. The pair retreated from the hi

USD/JPY starts the fresh trading  session on a lower tone.The pair posts a loss for a straight fourth day on a softer US dollar.Investors discount interest rate hike expectations amid Powell's comment.
USD/JPY moves lower for the fourth straight day on Monday following the consistent downward pressure on the US dollar. The pair retreated from the highs of 2018 high near 114.69 on Wednesday. At the time of writing USD/JPY is trading at 113.47, down 0.05% so far. A combination of factors downplayed the greenback. Fed’s President Jerome Powell warned of persistent higher inflation but sounded soft on the pace of rate hikes. Fed’s tapering expectations remained  intact, which provided ground for the lower level of the US dollar. In addition to that, traders enjoyed the optimism surrounding reaching a deal on social spending legislation, following talks between Democratic Senators Chuck Schumer and Joe Manchin with US President Joe Biden. Furthermore, House Speaker Nancy Pelosi also hinted at the finalization of agreement on a social spending bill ahead of an infrastructure bill in the coming week. The US benchmark 10-year T bond yields trades lower at 1.63% which undemins the demand for the greenback. The yields took a tour to the south following US Treasury Secretary Janet Yellen remarks on inflation where she expected US inflation to return to normal by the second half of 2022. On the other hand the Japanese yen gained momentum on upbeat PMI data,  and the Bank of Japan’s (BOJ) view on growth amid reducing COVID-19 loan program if the coronavirus infections continue to decline. As for now traders are waiting for Japan’s Coincident Index Final, and US Chicago Fed National Activity Index SEP to gauge the market sentiment. USD/JPY additional levels
 

“The United Kingdom said on Saturday that talks with the European Union over post-Brexit trade rules for Northern Ireland had been constructive, but s

“The United Kingdom said on Saturday that talks with the European Union over post-Brexit trade rules for Northern Ireland had been constructive, but substantial differences remained,” per Reuters. The news quotes statements released on Saturday from UK Prime Minister Boris Johnson's office saying, “The talks this week were constructive and we've heard some things from the EU that we can work with - but the reality is that we are still far apart on the big issues, especially governance.” “Whether we're able to establish that momentum soon will help us determine if we can bridge the gap or if we need to use Article 16,” adds the statement, per Reuters. It was also mentioned that Britain said talks with EU negotiators would move to London from Brussels next week, and that its Brexit minister David Frost would meet European Commission Vice President Maros Sefcovic at the end of the week. FX reaction GBP/USD remains pressured at the week’s start, around 1.3750 by the press time of Monday’s Asian session, following the news. Also read: UK Chancellor Sunak prioritizes NHS, skills and leveling up in Budget windfall – FT

“Rishi Sunak will use this week’s Budget to shore up the UK’s fragile public finances, while focusing remaining resources on the NHS, the ‘levelling u

“Rishi Sunak will use this week’s Budget to shore up the UK’s fragile public finances, while focusing remaining resources on the NHS, the ‘levelling up’ agenda, skills and helping hard-pressed families,” said Financial Times (FT) in the latest news. Key quotes The chancellor is expected to be given a short-term Budget windfall by the Office for Budget Responsibility, which is set to upgrade its forecasts to show stronger growth in 2021 and 2022. Sunak will use some of this fiscal boost to pay for key government priorities — including helping families through a cost-of-living crunch this winter — but he will also bank some of it as insurance against future economic shocks. The chancellor admitted on Sunday that Britain’s public finances were more exposed to changes in interest rates than most other advanced economies, while the Covid crisis remains a threat to the economy. Sunak’s Budget will also deliver cash for the government’s levelling up agenda, including £150m of funding for regional “angel investors” to help small businesses outside London access early funding. FX implications GBP/USD fails to react to the positive news, staying pressured around 1.3750 amid the early Asian session on Monday.

"US inflation levels are not expected to decrease to acceptable levels until the latter part of 2022," US Treasury Secretary Janet Yellen told CNN's J

"US inflation levels are not expected to decrease to acceptable levels until the latter part of 2022," US Treasury Secretary Janet Yellen told CNN's Jake Tapper on Sunday. “It would be the middle to second half of 2022,” adds the US policymaker. Key quotes (from CNN) Monthly rates of inflation have already fallen substantially from the very high rates that we saw in the spring and early summer. On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement ... by the middle to end of next year, second half of next year. She also attempted to downplay concerns over rising inflation, telling Tapper she doesn't believe the US is losing control over inflation, and she pushed back against criticism from former Treasury Secretary Larry Summers, who has been ringing the alarm on inflation rates and spending. FX implications The news failed to get major attention as the Antipodeans begin the week’s trading without surprise moves. However, the comments confirm Fed Chair Jerome Powell’s strong support for tapering and hence may help the US Dollar Index (DXY) to consolidate recent losses.

NZD/USD begins the week’s trading with fewer moves around 0.7150 as New Zealand (NZ) celebrates Labour Day holiday. The kiwi pair’s last two consecuti

NZD/USD stays near Friday’s closing, avoids surprises on Labour Day holiday.Mixed PMIs, Fed’s Powell joined Treasury yields’ pullback to keep buyers hopeful.Evergrande, US stimulus news battle fresh covid woes in China, Fed tapering concerns to entertain traders.Second-tier US data, risk catalysts to watch for fresh impulse.NZD/USD begins the week’s trading with fewer moves around 0.7150 as New Zealand (NZ) celebrates Labour Day holiday. The kiwi pair’s last two consecutive weekly advances put it near the highest levels since June amid the US dollar weakness. The up-moves, however, have been questioned of late, after hitting the multi-day top, amid mixed clues. On Friday, the US Dollar Index (DXY) dropped for the seventh day in the last eight as market sentiment improved on headlines concerning the US stimulus, as well as from China. Also weighing on the greenback were mixed prints of the US preliminary PMI readings for October. While the US policymakers, including President Joe Biden, signaled nearness to the much-awaited infrastructure spending deal, China’s Evergrande managed to pay $83.5 million in interest on a U.S. dollar bond and relieved the market’s stress. On the same line, Evergrande’s latest communication to have restarted 10 projects in six cities including Shenzhen tame fears emanating from the struggled real-estate player. Furthermore, the US and China sound hopeful over the phase one trade deal despite the latter’s inability to match the trade commitments, which in turn favor the market sentiment and help the Antipodeans like NZD/USD. Alternatively, the Fed policymakers’ latest comments before the blackout period kept showing the tapering as the favored outcome while flashing fewer signals over rate hikes. On Friday, US Fed Chairman Jerome Powell said, “I do think it's time to taper; not time to raise rates,” per Reuters. It’s worth observing that the recent covid conditions in China and Russia have been grim and challenge the risk-on mood, as well as the commodities. As per the latest comments from Mi Feng, a spokesman at the National Health Commission, shared by Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. Amid these plays, Wall Street refreshed record tops and the US 10-year Treasury yields eased from a five-month high, keeping the DXY near the lowest levels since last September. Given the off in New Zealand and a light calendar in Asia, NZD/USD may remain sidelined during the early hours of Monday’s trading session. However, risk catalysts, mainly from China, may entertain the momentum traders ahead of the US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October. Technical analysis NZD/USD keeps pullback from a four-month-long ascending resistance line, previously targeting the 200-DMA level surrounding 0.7100. However, bullish MACD and firmer RSI line, not overbought, dim prospects of the pair’s further weakness, which if ignored will need validation from August month’s peak of 0.7089 before convincing the sellers. On the flip side, the 0.7200 threshold and the stated trend line resistance line near 0.7220 guards the quote’s short-term recoveries.  

Reuters reported that China's latest COVID-19 outbreak is increasingly likely to spread further. This warning comes from a health official who spoke o

Reuters reported that China's latest COVID-19 outbreak is increasingly likely to spread further. This warning comes from a health official who spoke on Sunday while authorities urged all regions to step up monitoring and called for a reduction in travel across provinces. Key notes ''China has largely contained the virus but it is determined to stamp out any sporadic local outbreaks, particularly in the run-up to the 2022 Winter Olympics in February.'' ''More than 100 locally transmitted cases have been confirmed over the last week across 11 provincial areas, with most linked to 13 different tour groups.'' ''There is increasing risk that the outbreak might spread further, helped by "seasonal factors", Mi Feng, spokesman at the National Health Commission, told reporters on Sunday.'' ''The Delta variant causing the outbreak is also highly transmissible, said commission deputy director Wu Liangyou, adding that sequencing showed it to be different from the source of an earlier outbreak, and suggesting that the new cases came from a new source from abroad.''  
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