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Forex News Timeline

Friday, September 21, 2018

Analysts at Nomura note that the Japanese manufacturing PMI for September came in at 52.9, up 0.4pt from the August reading, indicating acceleration i

Analysts at Nomura note that the Japanese manufacturing PMI for September came in at 52.9, up 0.4pt from the August reading, indicating acceleration in manufacturing activity.Key Quotes“Among the five component indices, three made a positive contribution to the headline PMI: the new orders index rose 0.9pt to 53.3, the stock of items purchased index rose 1.8pt to 50.3, and the supplier delivery times index fell 1.0pt to 43.7 (a fall in this index pushes up the headline index). Meanwhile, the output index fell 0.2pt to 52.8 and the employment index fell 0.2pt to 51.3.” “We would note, however, that the data for the September PMI were collected between 12 and 19 September, which leads us to believe that the PMI may reflect the impact on manufacturing activity from the damage to infrastructure (including Kansai International Airport) caused by the large typhoon that hit the Kansai region on 4 September and the earthquake that hit the eastern part of the Iburi region of Hokkaido on 6 September.” “In particular, we think the drop in the supplier delivery times index and the rise in the stock of items purchased index in September may reflect the disaster damage to logistics infrastructure and a temporary lull in consumption, and we think this may have pushed up the PMI calculations.”

The GBP/USD heads into Friday's London market open sitting just below recent swing highs, with Thursday's peak of 1.3298 sitting close by. This week

The Sterling heads into Friday sticking close to the 1.33 target.Limited data for Friday will see continued focus given to Brexit talks, which see cold water beginning to splash on hopes for a peaceable workaround.The GBP/USD heads into Friday's London market open sitting just below recent swing highs, with Thursday's peak of 1.3298 sitting close by. This week has seen a resurgence in market risk appetite as traders shake off trade war fears and investor sentiment improved regarding Brexit, with hopes beginning to edge once again into higher territory that a workable solution will be reached. headlines late in the day on Thursday and  continuing into the Friday overnight session threw that confidence into question though, as the EU and the UK remain miles apart on several key points, mainly the lack of a solution on the Irish border problem, and the workability of a trade regime within the UK, and failure from the two sides to reach an agreement by the end of October will see the UK careening into a messy and disorderly Brexit. On the economic calendar little of note exists to carry the GBP through to the weekend, though 08:30 GMT will be seeing the UK's Public Sector Net Borrowing for August, which is expected to remain relatively steady, forecast to come in at £2.85 billion (last £2.872 billion), while the USD side of the major pair will be seeing US Markit PMIs at 13:45 GMT, with the headline preliminary Composite CPI for September expected to tick up to 55.0 after last coming in at 54.8.GBP/USD levels to watchThe Sterling's recent bullish move up has left the GBP/USD poised for further gains, yet moderately overextended, and a pullback could be in order before bulls manage to finish the run to 1.33; as FXStreet's own Valeria Bednarik noted, "in the 4 hours chart, the pair broke through a major Fibonacci level with a long candle, a sign of strong buying interest, with the 20 SMA now hovering near the mentioned Fibonacci support at around 1.3170. Technical indicators in the mentioned chart have lost upward strength and are currently flat in overbought territory, without indicating a possible upcoming decline, but rather suggesting a new leg higher for this Friday." Support levels: 1.3225 1.3170 1.3130 Resistance levels: 1.3295 1.3330 1.3380

The three-month Hong Kong Interbank Offered Rate (HIBOR) rose to 2.12518 percent Friday – the highest level since 2008 – according to Reuters News. 

The three-month Hong Kong Interbank Offered Rate (HIBOR) rose to 2.12518 percent Friday – the highest level since 2008 – according to Reuters News.     

Daily Chart Spot Rate: 71.85 Daily High: 71.9475 Daily Low: 71.82 Trend: Cautiously bearish Resistance R1: 71.9475 (daily high) R2: 72.30 (re

The USDINR pair is charting a double top pattern with a neckline at 71.525, the daily chart shows. A close below that level would confirm a short-term bullish-to-bearish trend change and allow drop to 70.15 (target as per the measured move method).The pair could drop below the neckline support in a day or two on risk rebound. Further, Indian government is reportedly considering measures like dollar window for oil firms, NRI bonds.The bearish pattern may fail to produce the desired result if the Trump administration shrugs off China's measured response to new tariffs and fires another shot in the trade war with the world's second-largest economy.A double bottom breakdown may remain elusive if the 10-year treasury yield rises above the weekly high of 3.10 percent.Daily ChartSpot Rate: 71.85 Daily High: 71.9475 Daily Low: 71.82 Trend: Cautiously bearishResistanceR1: 71.9475 (daily high) R2: 72.30 (resistance as per the hourly chart) R3: 72.98 (record high)SupportS1: 71.525 (neckline) S2: 70.15 (double top breakdown target) S3: 70.00 (psychological level)

According to Reuters, the US State Department announced late-Thursday that it would immediately impose sanctions on China’s Equipment Development Depa

According to Reuters, the US State Department announced late-Thursday that it would immediately impose sanctions on China’s Equipment Development Department (EDD), the branch of the Chinese military responsible for weapons and equipment, and its director, Li Shangfu, for engaging in “significant transactions” with Rosoboronexport, Russia’s main arms exporter.Additional Points:The sanctions are related to China’s purchase of 10 SU-35 combat aircraft in 2017 and S-400 surface-to-air missile system-related equipment in 2018. The administration also blacklisted an additional 33 people and entities associated with Russian military and intelligence, adding them to a list under the 2017 law, known Countering America’s Adversaries Through Sanctions Act, or CAATSA.

Crude oil is seeing some fall-back from recent highs after US President Donald Trump once again lashed out at OPEC on Twitter, imploring the oil mafia

Oil markets see some fallback after WTI clips closer towards 72.00.Rising bottoms in the oil charts see potential building for a renewed run at 75.00.Crude oil is seeing some fall-back from recent highs after US President Donald Trump once again lashed out at OPEC on Twitter, imploring the oil mafia to gain control of crude prices. On the opposite side of the same blade, US sanctions against Iran, due to come into effect in November, sees the US attempting to force Iran out of global oil markets, seeing a firm bolstering effect on crude barrel costs globally as traders brace for a disruption of supply lines from the Middle East. OPEC meets on Sunday in Algeria, but the discussion is slated to revolve around current output production levels, and making sure all participants are still on board with things as they currently are. Saudi Arabia recently admitted that their "happy range" with oil prices is in the $70-80 per barrel range, which is unlikely to draw much mirth from the US' Trump, who is insisting that OPEC should be striving to do more to alleviate upward price pressure from oil as Iran prepares to face extreme drawdowns in global demand.WTI levels to watchUS crude prices crept into the 71.50 region this week, but have slipped back into 70.20 after Trump demanded OPEC take down oil prices arbitrarily; long-side pressure have been on the rise, and WTI is marking in rising lows with the last major turnaround sitting near 66.80, with major resistance sitting just beneath the critical 75.00/barrel figure.

In its latest client note on the outlook for commodities, analysts at Goldman Sachs revised lower its gold-price forecasts. Key Details: Revised its

In its latest client note on the outlook for commodities, analysts at Goldman Sachs revised lower its gold-price forecasts.Key Details:Revised its 12-month gold price forecasts to $1,325/toz from $1,450/toz. 3-month projection is $ 1250 while 6-months target slashed to $ 1300. Dollar unlikely to derail its bullish view on commodities.    

The easing trade tensions and the resulting broad based sell-off in the USD pushed the EUR/USD pair to a 2.5-month high of 1.1785 yesterday. More imp

The EUR/USD closed well above 1.17 yesterday, signaling a continuation of the rally from August lows.The bullish technical breakout is backed by a drop in the demand for the EUR puts (sell EUR).An above-forecast Eurozone preliminary PMI releases could accentuate the bullish case.The easing trade tensions and the resulting broad based sell-off in the USD pushed the EUR/USD pair to a 2.5-month high of 1.1785 yesterday. More importantly,  the currency pair convincingly closed above 1.17, a level which was proving a tough nut to crack earlier this week, signaling a continuation of the rally from the August low of 1.1301. Further, the bullish breakout pushed up the one-month 25 delta risk reversals to -0.65 – the highest level since Aug. 1 – indicating the implied volatility premium for the EUR puts (or demand for the EUR puts) is at seven-week lows.   The options market data indicate the investors are expecting the common currency to extend gains further and hence are likely unwinding bearish bets. Looking ahead, the EUR could rise above 1.18 if the preliminary Eurozone PMI numbers, scheduled for release today, beat estimates and the risk assets remain well bid. At press time, the EUR/USD is trading at 1.1780.EUR/USD Technical LevelsResistance: 1.1791 (July 9 high), 1.1840 (June 6 high), 1.1852 (June 14 high) Support: 1.1751 (July 23 high), 1.1716 (5-day moving average), 1.1662 (200-day moving average)  

Hourly chart Spot Rate: 82.17 Daily High: 82.18 Daily Low: 81.90 Trend: Cautiously bullish Resistance R1: 82.30 (61.8% Fib R of June high/Aug

The AUD/JPY is extending the three-day winning streak in Asia, but the momentum could wane and the immediate resistance at 82.30 (61.8% Fib R of June high/Aug low) may hold, as the relative strength index (RSI) on the hourly and 4-hour chart is reporting overbought conditions.A pullback to 81.70-81.60 could happen if the pair dips below the lower end of the rising wedge seen in the hourly chart. That said, the pullback will likely be short-lived as the 5-day and 10-day moving average (MAs) are trending north indicating a bullish setup.Hourly chartSpot Rate: 82.17 Daily High: 82.18 Daily Low: 81.90 Trend: Cautiously bullishResistanceR1: 82.30 (61.8% Fib R of June high/Aug low) R2: 82.80 (Aug. 8 high) R3: 83.00 (psychological hurdle)SupportS1: 81.93 (200-day MA) S2: 81041 (5-day MA) S3: 81.03 (May 30 low)

S&P offers the following additional insights on their upward revision to the Australian outlook. The stable outlook reflects our expectations that th

S&P offers the following additional insights on their upward revision to the Australian outlook. The stable outlook reflects our expectations that the general government fiscal balance will return to surplus by the early 2020s. Expect steady government revenue growth supported by the strong labor market and relatively robust commodity prices. Sees property prices to continue orderly unwind, slowdown won't weigh heavily on consumer spending, financial system's asset quality. Very impressed with local forexlive blogger.  

The AUD/USD could test and possibly break above key resistance at 0.7303 as the rating agency S&P's decision to raise Australia's outlook to stable co

Risk rebound is boding well for the Aussie dollar.S&P's decision to raise Australia's outlook to stable from negative is icing on the cake for AUD bulls.AUD/USD is closing on 0.7303 - a confluence of trendline hurdle and 50-day moving average (MA).The AUD/USD could test and possibly break above key resistance at 0.7303 as the rating agency S&P's decision to raise Australia's outlook to stable could bolster the already bullish sentiment in the AUD market. The AUD picked up a strong bid on Tuesday, as China's watered-down response to new US tariffs raised hopes that further escalation of trade war could be avoided. At press time, the AUD/USD is trading at 0.7295, representing marginal gains on the day, having rallied in the last four trading days. Meanwhile, the trendline sloping downwards from January highs has met the 50-day moving average at 0.7303. The risk assets like the AUD will likely remain bid in the near-term unless the Trump administration surprises markets by firing another shot in the trade war with the US. Add to that, the S&P's upward revision of the outlook and the AUD/USD looks set to scale the confluence of trendline and 50-day MA at 0.7303. A UTC close above that level would signal the 9-month long bear market has ended.AUD/USD Technical LevelsResistance: 0.7303 (trendline hurdle  + 50-day MA), 0.7382 (Aug. 21 high), 0.7395 (100-day MA) Support: 0.7248 (5-day MA), 0.72 (psychological support), 0.7189 (200-hour MA)    

Japanese Finance Minister Taro Aso was on the wires last hour, via Reuters, speaking about the planned sales tax hike. Key Points: Need to make sure

Japanese Finance Minister Taro Aso was on the wires last hour, via Reuters, speaking about the planned sales tax hike.Key Points:Need to make sure we can raise sales tax next year as scheduled. Unsure of the size of the extra budget, but it will focus on recovery from recent natural disasters.

Reuters reports that the Japanese PM Abe and the US President Trump are scheduled to meet up over dinner on September 23. They are scheduled to hold

Reuters reports that the Japanese PM Abe and the US President Trump are scheduled to meet up over dinner on September 23. They are scheduled to hold a more formal meeting on September 26.

The US-based credit rating agency, Standard and Poors (S&P), raised Australia's outlook to stable from negative while maintaining the credit rating at

The US-based credit rating agency, Standard and Poors (S&P), raised Australia's outlook to stable from negative while maintaining the credit rating at ‘AAA’.

Reuters is out with the latest comments from the Japanese Economy Minister Motegi, with the key headlines found below. Will hold 2nd round of bilater

Reuters is out with the latest comments from the Japanese Economy Minister Motegi, with the key headlines found below. Will hold 2nd round of bilateral trade talks with the US on Sept 24 in New York. Japan's stance on opening up its agricultural market is unchanged.  Want to pursue 'win-win' outcome in trade talks with Lighthizer.  Don't expect talks with Lighthizer to lead to opening up of FTA negotiations.

The US Treasury yield curve is likely to invert - short-duration bond yields will rise above longer duration yields - in the next 1-2 years, according

The US Treasury yield curve is likely to invert - short-duration bond yields will rise above longer duration yields - in the next 1-2 years, according to Reuters poll of bond market experts. An inverted yield curve is widely considered an advance indicator of recession. So, it seems to say that the bond market strategists are expecting the US economy to dip into recession in the next 24 months. At press time, the spread between the two-year and 10-year yields is 27 basis points and is seen narrowing further to 17 basis points in a year from now.

NZD/USD Chart, 1-Hour Spot rate 0.6682 Relative change(current week) +2.06% High 0.6691 Low 0.6672

The NZD/USD is enjoying a decent run-up against the US Dollar, with broader markets throwing the gears into full risk-on mode. With the Kiwi staging a full recovery this week and quickly running out of room to run before hitting the resistance wall from August's consolidation zones near the 0.6700 technical level, buyers should be cautious about entering from here, and opting to wait for a decent pullback that successfully holds over the last bottom at the 0.6500 level, and mark in a higher low.Data has been thin lately for the Kiwi, but next week will be seeing the Reserve Bank of New Zealand (RBNZ) return with fresh statements, and bulls could be on the receiving end of some fairly bullish comments from the New Zealand central bank after the recent NZ GDP reading came in well above expectations.On the immediate technical side, the Kiwi is currently challenging the 50-day EMA, and a clear break from here will leave the path to 0.6700 open.NZD/USD Chart, 1-HourSpot rate 0.6682 Relative change(current week) +2.06% High 0.6691 Low 0.6672     Trend Bullish     Support 1 0.6646 (50-hour EMA) Support 2 0.6599 (200-hour EMA) Support 3 0.6538 (current week low)     Resistance 1 0.6727 (late August swing high) Resistance 2 0.6859 (July top) Resistance 3 0.6907 (200-day EMA)  

Daily Chart Spot Rate: 6.8334 Daily High: 6.8380 Daily Low: 6.8286 Trend: Bearish Resistance R1: 6.8540 (10-day MA) R2: 6.8927 (Sept. 18 high

The USD/CNH closed yesterday at 6.8350, confirming a rising wedge breakdown on the daily chart and dipped below the 50-day moving average a few minutes before press time. The key moving average has come into play for the first time in five months.The rising wedge breakdown indicates that sell-off from the Aug. 15 high of 6.9584 has resumed and could yield a re-test of 6.7810 (Aug. 27 low) in the near-term.The 5-day and 10-day MAs are beginning to roll over in favor of the bears. Further, 14-day relative strength index (RSI) is teasing a drop into bearish territory below 50.00.A break above 6.8927 (Sept. 18 high) will likely put the bulls back into the driver's seat.Daily ChartSpot Rate: 6.8334 Daily High: 6.8380 Daily Low: 6.8286 Trend: BearishResistanceR1: 6.8540 (10-day MA) R2: 6.8927 (Sept. 18 high) R3: 6.8955 (Aug. 24 high)SupportS1: 6.8224 (Sept. 13 low) S2: 6.7810 (Aug. 27 low) S3: 6.7380 (July 26 low)

The USD/JPY is bid around 112.50 and may rise to 113.00 during the day ahead on easing trade concerns and rising US-Japan yield differentials. China'

Risk rebound is weighing heavily over the anti-risk JPY.The two-year yield differential continues to widen in a USD-positive manner despite better-than-expected Japanese CPI data.The USD/JPY is bid around 112.50 and may rise to 113.00 during the day ahead on easing trade concerns and rising US-Japan yield differentials. China's watered-down response to new US tariffs earlier this week has likely raised hopes that further escalation of a trade war between the US and China can be avoided. As a result, the risk assets have put on a good show this week. For instance, the Dow closed at a record high yesterday and the Euro Stoxx 50 jumped above 3400. More importantly, the spread between the US two-year treasury yield and its Japanese counterpart widened to 292 basis points Friday - the highest level since September 2007 - despite an above-forecast Japanese CPI reading for August. Looking forward, the yield spread could continue to rise in the USD-positive manner, as the Fed is likely to raise rates by 25 basis points next week.USD/JPY Technical LevelsResistance: 113.00 (psychological hurdle), 113.23 (200-week MA), 113.75 (December 2017 high) Support: 112.29 (ascending 5-day MA), 112.15 (Aug. 1 high), 111.66 (Sept. 18 low)2Y spread 

Writing for the Nikkei Asian Review, former Bank of Japan (BoJ) member Sayuri Shirai is warning that the central bank's massive stock and bond purchas

Writing for the Nikkei Asian Review, former Bank of Japan (BoJ) member Sayuri Shirai is warning that the central bank's massive stock and bond purchasing programs are beginning to run out of roadway, with inflation still remaining trapped below the BoJ's 2% target, while investment demand for Japanese government bonds has disappeared with the BoJ left as the buyer of last resort.Key highlightsAccording to Sayuri Shirai, Japan's quantitative easing programs (QQE) was meant to stoke inflation and demand by using stock buying through ETFs, but Japan's strategy of buying stocks has seen little development in the way of inflation, while stock prices continue to soar. The BoJ's QQE program has also left the central bank as the second-largest purchasing interest in Japan, second only to the Japanese government's own Pension Investment Fund. After excluding all food and energy price fluctuations from CPI readings in July, inflation still sat at 0%, even after years of robust investment purchases, and now the BoJ is left as a principal holder of Japanese equities; any tapering activities in the future to reduce BoJ holdings will have to be taken with extreme caution, or risk sparking a run on Japanese stocks, wiping out all of the value that the central bank has spent years propping up. Further pitfalls await the BoJ, with downside risks to the Japanese economy waiting just over the horizon. Completing the process of tapering out purchases of ETFs and bonds, and eliminating the 10-year yield target may take much longer since the Japanese economy may face an economic slowdown after the 2020 Tokyo Olympic Games. - Nikkei Review

The People's Bank of China (PBOC) set the Yuan reference rate at 6.8357 vs Thursday's fix of 6.8530.

The People's Bank of China (PBOC) set the Yuan reference rate at 6.8357 vs Thursday's fix of 6.8530.

However, the euro continued to squeeze higher for little rhyme nor reason whereby it simply clings onto risk rallies despite the spread. Investor sent

Forex today was seeing a mixed price action on the board for the dollar once again.USD down vs the commodity-complex, up vs the yen and getting what it deserves vs the greenback following yet another impressive data set from the UK economy. However, the euro continued to squeeze higher for little rhyme nor reason whereby it simply clings onto risk rallies despite the spread. Investor sentiment was upbeat after China announced plans to reduce import tariffs on most nations that it does business with - but perhaps on the flip side that might be seen as a defensive measure while it fears the ramifications of a full-blown trade war with the US? Either way, investors liked it and global equities took off - The S&P 500 rallied 0.8% to a new high and The DJIA (new high) and NASDAQ were up almost 1%. The DXY was on its knees despite the benchmark 10yr treasury yield punching through 3% earlier this week and up to 3.08% on Thursday in NY. The US dollar made a low of 93.83 and a break below the 93 handle will turn up the panic selling in this long squeeze that could take the dollar all the way down to the 50 percent Fib at 92.62 where yield spreads and risk will likely be reassessed.Dollar down despite yet impressive data"US labour market indicators are holding strong with jobless claims falling to 201k (mkt: 210k; last: 204k) and continuing claims dropping to 1645k (mkt: 1705k; last: 1700k). The Philadelphia Fed business outlook survey rebounded to 22.9 (mkt: 18; last: 11.9; and is better news for the ISM following the weak Empire State print earlier in the week). The employment component lifted to 17.6 (last: 14.3) and new orders to 21.4 (last: 9.9). Notably, there was a sharp fall in pricing data – prices received fell to 19.6 (last: 33.2) and prices paid to 39.6 (last: 55). Existing home sales were flat, but median prices were up 4.6% y/y and average prices up 3.0%. Meanwhile, the Leading Index rose 0.4% m/m in August with solid contributions from jobless claims and ISM new orders. This follows a firm 0.7% gain in July, suggesting Q3 growth is on track for another solid print," - analyst at ANZ explained. Currency actionThe euro was unable to get above ground on the 1.17 handle and bulls are wearing out. A few more rejections at key resistance could lead to a sell-off in the absence of broad-based risk-on sentiment. Another factor going for the euro is the yen cross - EUR/JPY continues to support on dips which is headed for a test of 131.50. Us yields may well kick in anytime soon and technicals are turning bearish with an inverse H&S in the making. Sterling stole the show, finally rallying after yesterdays impressive CPI beat that is surely going to bring MPC members to the table and reconsider its latest rate hike projections delayed until after Brexit next year, otherwise they will be needing to get pen to paper and explain why inflation is where it is yet not doing anything about it - The governor must write a letter to the UK’s finance minister if inflation exceeds the 2 per cent target by more than 1 percentage point. Meanwhile, retail sales did the trick and took the pound higher in the absence of yet further disruptions forever conflicting Brexit headlines.  UK retail sales growth beat expectations in August, up 0.3% m/m (mkt: -0.2%; last: 0.9%) led by household goods and electronics and add to the firmer-than-expected CPI earlier this week.  Cable rallied to 1.3298 (from 1.3151 European low) before supply took it down to 1.3226 in NY, ending NY at 1.3164. EUR/GBP ended NorAm at 0.8876 and down 0.08% within Thurs range 0.8890-0.8847. USD/JPY was based on the 112 handle and looking for a break through 112.60. A close above 112.38 opens the 113.27 61.8% of the  2016-18 drop & 200-WMA target while the FOCM will hike next week. AUD/USD was again higher - supported on EM-FX and made a new short-term high of 0.7292 in NY. 0.73 is a big level but bulls continue to squeeze out the stale shorts with pair well above the 21-D SMA - eyes are on the 55-DMA & daily cloud base and 0.7365/85 - further out  0.7455/85 is a key target.Key events from US session:Wall Street closes substantially higher on upbeat data and easing geopolitical tensions 

Initially reported by CNN Money, the massive Walmart corporation is beginning to weigh in on the US' protectionist trade rhetoric, delivering a cautio

Initially reported by CNN Money, the massive Walmart corporation is beginning to weigh in on the US' protectionist trade rhetoric, delivering a caution-laced letter to the US Trade Representative Robert Lighthizer.Key highlightsWalmart issued a stern warning letter to Lighthizer this week, raising concerns that the mega-corporation may be forced to begin raising prices across the board, impacting both consumers and other US businesses, including manufacturers. The letter quickly follows US President Donald Trump's announcement on Monday that the US would be imposing a 10% tariff on another $200 billion USD worth of Chinese goods. “The immediate impact will be to raise prices on consumers and tax American business and manufacturers,” Walmart said, according to the CNN Money report. - Reuters

As reported by Bloomberg, the US Dollar and US Treasury yields are facing downside pressure as risk appetite attempts a recovery this week. Key highl

As reported by Bloomberg, the US Dollar and US Treasury yields are facing downside pressure as risk appetite attempts a recovery this week.Key highlightsUS Treasury yields are closing in on seven-year highs as traders dump US T-bills in favor of riskier, higher-yielding assets while the US Dollar sees renewed selling pressure against the broader G10 marketscape. Normally, rising bond yields would introduce some buoyancy to the USD, helping to prop up the currency, demand for emerging-market currencies as well as other high-risk assets is seeing the Greenback deflate across the board. Markets are also adjusting their expectations for another US Fed rate hike, bringing broader forecasts in-line with the Fed's own playbook, while broad-market buying of any other yield is seeing the standard dynamic of yields up, Dollar up begin to break down. "Focus is starting to shift on the tightening prospects of other developed nations, diminishing the dollar’s appeal in an otherwise “very bullish set up,” according to Brad Bechtel, global head of foreign exchange at Jefferies LLC. “We are likely to see this theme of ‘buy everything else’ re-emerge back to the forefront of the market’s mindset,” Bechtel wrote in a note to clients. “This will help EM rally, G-10 as well, and put some slight downward pressure on USD.” - Bloomberg

Japan Nikkei Manufacturing PMI registered at 52.9, below expectations (53.1) in September

Analysts at Nomura offered their model's projection for today's fix in USD/CNY. Key Quotes: "Model projection: 6.8420 versus 6.8530 previous (110 pi

Analysts at Nomura offered their model's projection for today's fix in USD/CNY.Key Quotes:"Model projection: 6.8420 versus 6.8530 previous (110 pips lower; 108 pips lower from the previous official spot close). Model projection with counter-cyclical factor: 6.8374 (156 pips lower from previous fix)."

The AUD/JPY is moving quietly in thin early Friday markets, testing into the 82.00 technical level after Japan's national CPI saw little market reacti

Quiet Friday markets sees the AUD/JPY holding steady near current highs.Markets have gone risk-on as investors shake off current trade war angst.The AUD/JPY is moving quietly in thin early Friday markets, testing into the 82.00 technical level after Japan's national CPI saw little market reaction. This week saw little notable data or info from within Australia, and the Reserve Bank of Australia's (RBA) latest bulletin delivered nothing new for traders to digest. Broader market sentiment has seen investors shake off trade war fears, and riskier assets have been seeing some bullish action against the safe-haven JPY. Japan's national CPI came in above expectations, with the headline annualized figure into August clocking in at 1.3% (forecast 1.1%, last 0.9%), though with the national inflation reading lagging the Tokyo CPI print by several weeks, market reaction has been muted with an uptick in Japan's inflation already priced into the AUD/JPY.AUD/JPY levels to watchThe Aussie has closed in the green against the Japanese Yen for three straight trading days, bumping into the 82.00 handle after lifting from September's lows at 78.70, and buyers will be seeing resistance from early August's peaks near 82.80 with support building in from previous support at 79.70.

Spot gold was as high as 1208 at one stage in the USD session on dollar weakness with the DXY falling further as investors continue to pile into risk-

Gold is making a case for a break to the key 2011 level as the dollar bulls continue to get squeezed.Gold is looking tot he FOCM as the next catalyst outside of geopolitics.Spot gold was as high as 1208 at one stage in the USD session on dollar weakness with the DXY falling further as investors continue to pile into risk-on asset classes, albeit doing so cautiously in the absence of trade war headlines. We now head towards next week's FOMC meeting as the biggest risk for the precious metal outside of further geopolitical headlines.  The FOMC is expected to rates twice this year which is factored into the dollar already, but the detail in the FOMC's outlook will be the key mover for the dollar one way or the other - bulls in need of some uber hawkishness or, indeed, some stark warnings over trade conflicts might just do the trick as well. Analysts at  Casting minds back, the August CPI missed sharply to the downside, but analysts at TD Securities argued that the details were more upbeat than the headline misses suggest: "This report will not stir the hawks but is still consistent with gradual rate hikes back toward neutral. Our bias remains for two more rate hikes this year and three in 2019."DXY to break key support?Meanwhile, the DXY bulls are on thin ice and a break of the 93 handle will turn up the panic selling in this long squeeze that could take the dollar all the way down to the 50 percent Fib at 92.62 where yield spreads and risk will likely be reassessed.Gold levelsOn the wider picture, gold remains in a sideways consolidation between 1214 and 1182. The market is heavily short of gold, (net speculative short positions, or bets an asset’s price will fall, in gold, are up 275% year to date). Bulls need to get and hold above the 50-D SMA at 1211 to convince. In doing so, the bulls can then go on to target 1214 which is resistance ahead of the 200-W SMA at 1233 that will need to be challenged. To the downside, a retry of the downside now should target 1146/20 monthly levels.

Japan Foreign investment in Japan stocks: ¥-1481.7B (September 14) vs previous ¥-1063.2B

Japan Foreign bond investment increased to ¥2312B in September 14 from previous ¥297.6B

According to analysis by Société Générale (SG), there are seven key points that will be affecting markets in the medium- to long-term on a horizon of

According to analysis by Société Générale (SG), there are seven key points that will be affecting markets in the medium- to long-term on a horizon of three months to three years across the range of issues.Key highlightsAfter recent market action, some asset groups have taken a pounding, but SG sees cherry-picking opportunities in the weeks and months ahead, and are looking at long positions on copper against short positions on the AUD. On emerging markets, SG sees short positions beginning to come into play on the BRL and AUD against the MXN, while a more complex basket sees SG going short on the ZAR and BRL against both the RUB and MXN. With trade tensions falling away for the interim, the trade war rhetoric still remains close to the surface, and without any hard solutions in place SG is seeing a potential hedge against tariff tensions in shorting the KRW and EUR against the JPY. In Europe, political tensions over both Italy and the still-unresolved Brexit negotiations sees opportunities in longing the GBP/USD, as well as the MXN/BRL. Credit spreads continue to remain under pressure, but no direct FX pairs can be used to accommodate this scenario with the US Dollar currently facing renewed pressures as well. With the global economy seeing the potential for entering a late-stage cycle, SG suggests playing crude oil prices against the RUB. On the matter of low-probability events, including a potential 'significant' economic slowdown in the US, or an impeachment of the current president, long EUR/USD positions on a long-term basis could serve to hedge against any potential pitfalls regarding major events that have low odds of occurring (for the time being).

Japan's national Consumer Price Index reported y/y inflation through August at 1.3%, coming in above the forecast 1.1% and improving on the previous r

Japan's national Consumer Price Index reported y/y inflation through August at 1.3%, coming in above the forecast 1.1% and improving on the previous reading of 0.9%.

Japan National CPI Ex-Fresh Food (YoY) in line with forecasts (0.9%) in August

Japan National CPI Ex Food, Energy (YoY) meets forecasts (0.4%) in August

Japan National Consumer Price Index (YoY) came in at 1.3%, above forecasts (1.1%) in August

Analysts at Westpac offered a snapshot preview of next week's RBNZ. Key Quotes: "The RBNZ announced that it now expected to keep the OCR at its curr

Analysts at Westpac offered a snapshot preview of next week's RBNZ.Key Quotes:"The RBNZ announced that it now expected to keep the OCR at its current low level “through 2019 and into 2020,” longer than previously forecast. Assistant Governor John McDermott went further in commentary to the media, when he said that the RBNZ had “been pushed nearer to that trigger point” for cutting the OCR. McDermott said that the RBNZ’s OCR forecast was predicated on the economy accelerating – if that acceleration failed to materialise, the RBNZ would have to consider cutting. We took this warning about a possible cut seriously, but predicted that an impending bout of strong data would stay the RBNZ’s hand. Specifically, we predicted that June quarter GDP would be around 1%, compared to the RBNZ’s forecast of 0.5%. Furthermore, we noted that the falling exchange rate would diminish the case for OCR cuts. That seems to be the way things are panning out". "We expect the RBNZ will leave the OCR unchanged at next week’s OCR Review. However, there is still a one in three chance that the RBNZ cuts the OCR over the coming year. We expect the tone of the OCR Review to be either neutral or dovish from a market point of view. A neutral Review would simply restate that the next move could be “up or down.” The other possibility is that the RBNZ adopts a “soft” easing bias, explicitly warning that if the economy fails to accelerate as expected, the OCR could fall. This would match RBNZ comments made in the media, and would be in the spirit of open and frank communication that the RBNZ has embraced. It seems very unlikely that the RBNZ will issue a hawkish statement that causes interest rates and the exchange rate to rise. The balance of risks for next week’s OCR Review is in the direction of lower interest rates and a lower exchange rate."
 

Analysts at Scotiabank explained that EUR/USD remains well supported, wide/widening spreads against the USD notwithstanding.  Key Quotes: "EUR/USD i

Analysts at Scotiabank explained that EUR/USD remains well supported, wide/widening spreads against the USD notwithstanding. Key Quotes:"EUR/USD is—unsurprisingly—showing reduced measured correlations with spreads across the curve on our correlations studies. Correlations are positive but are flirting with statistically less significant levels." "The 10Y spread/spot correlation has slipped under 60% today while the 2Y spread/spot correlation has lagged recent and weakened more obviously to less than 40% in Europe. Wider spreads yet may not have that much impact on the EUR." 

According to Reuters, the European Union is beginning to push hard for a Brexit agreement to be finalized by October of this year, or else the UK risk

According to Reuters, the European Union is beginning to push hard for a Brexit agreement to be finalized by October of this year, or else the UK risks facing a messy exit process.Key highlightsOn Thursday the EU warned UK Prime Minister Theresa May that if she doesn't begin giving up more ground on trade or the Irish border issue, she runs the risk of Britain experiencing a hard crash on its way out the EU door. Meanwhile, PM May is promising Ireland that it will not see a 'hard border' with Britain, though PM May is also warning that she too is not afraid to see a hard exit from the EU, bringing the round-table discussions in Salzburg to a rough standstill as both sides throw around the concept of a hard-Brexit as more of a negotiating tactic than an outright threat. "But leaders also tried to put a positive spin on their 24 hours of talks. Summit chair Donald Tusk said he was more optimistic about getting agreements both to ease Britain out gently and to sketch out a future free trade pact. Tusk said a Brussels summit on Oct. 18 would be a “moment of truth” to overcome remaining big problems and leaders penciled in the weekend of Nov. 17-18 to formalize a final agreement." - Reuters

GBP/JPY Chart, 4-Hour Spot rate 149.28 Relative change(current week) +1.97% Weekly high 149.31 Weekly

The GBP/JPY pairing is challenging a four-month high at the 150.00 major handle, and a continued bull-run will see the Guppy on pace to break through April's highs as well, though a bearish correction could be likely in the current zone, having already been rejected from the 149.00 - 150.00 zone twice before.Support for the current bullish play is stacked in at the 50- and 200-hour EMAs, sitting at 148.18 and 146.70 respectively, while the familiar s/r level at 145.50 will be putting in a floor underneath any medium-term selloffs.Technical indicators on the 4-hour and Daily candles have the slow stochastics and RSI reaching firmly into overbought territory, warning against establishing long positions at these levels. GBP/JPY Chart, 4-HourSpot rate 149.28 Relative change(current week) +1.97% Weekly high 149.31 Weekly low 146.32     Trend Bullish     Support 1 148.18 (50-hour EMA) Support 2 146.70 (100-hour EMA) Support 3 145.50 (previous resistance level)     Resistance 1 149.31 (May 18th swing high) Resistance 2 150.00 (major technical handle) Resistance 3 152.72 (April 26th swing high  

New Zealand Visitor Arrivals (YoY): 5.4% (August) vs 1.4%

Analysts at TD Securities explained that GBP August retail sales (ex-fuel) surprised to the upside at +0.3% (mkt: -0.2%, TD: 0.0%) on the back of upwa

Analysts at TD Securities explained that GBP August retail sales (ex-fuel) surprised to the upside at +0.3% (mkt: -0.2%, TD: 0.0%) on the back of upward revisions.Key Quotes:"Sales were solid in the core ex-food measure (+1.2%) whereas food stores and clothing/footwear corrected." "Overall the August release indicates continued momentum into Q3 after the surge in spending in July, upholding our Q3 GDP tracking of 0.5%."
 

With respect to the NZ economy, Greg Gibbs, Founder, Analyst, & PM at Amplifying Global FX Capital Pty Ltd, an Australian financial services company e

With respect to the NZ economy, Greg Gibbs, Founder, Analyst, & PM at Amplifying Global FX Capital Pty Ltd, an Australian financial services company explained that Q2 was a good quarter after a lacklustre three quarters.  Key Quotes:"Government spending is starting to kick in and may help support the economy, but business activity and consumer confidence surveys suggest growth will sag through the rest of the year.  The RBNZ is likely to retain a neutral policy message in its statement next week, waiting for clearer evidence on the economy from Q3 labour and inflation reports.  The ANZ business activity survey next week may be important for near-term sentiment.  NZD gathered momentum from the GDP report and a broad rebound in global assets. The market continues to seek a big-picture top in the USD, but rising US inflation and tariff policy remain key supports for the USD."

Analysts at ANZ Bank New Zealand Limited explained that China is reportedly planning to cut tariffs on a number of imports from most of its trading pa

Analysts at ANZ Bank New Zealand Limited explained that China is reportedly planning to cut tariffs on a number of imports from most of its trading partners from as early as October.Key Quotes:"This is a move that should not only prop up Chinese domestic consumption (in the face of rising import prices) but could also offset some of the negative global demand impacts of the US trade war." "Details are lacking at present so it’s anybody’s guess how this might directly impact New Zealand exports (or how imports from the US will be treated for that matter), but even if key New Zealand exports don’t make the list, there are still indirect benefits to be had through higher-than-otherwise Chinese disposable incomes."
 

NZD/USD extended its gains following yesterday's surprise GDP data, despite the results likely to be temporary. Analysts at ANZ yesterday explained th

NZD/USD: strong Q2 GDP figures support Kiwi higher for now.NZD/USD: positive global risk sentiment underpins commodity-complex.NZD/USD extended its gains following yesterday's surprise GDP data, despite the results likely to be temporary. Analysts at ANZ yesterday explained that yesterday's print was "boosted by temporary factors", although, the "underlying strength in the print "will give the RBNZ some breathing room to continue to “watch, worry and wait”". "The data will give the RBNZ space to remain in data-watching mode, seeking further clarity about the strength of economic momentum into the second half of the year, with concerns about domestic demand already casting a shadow over today’s strong print," the analysts explained, adding, "While the data provides some reassurance, the RBNZ will not be complacent about downside risks - The economy is grappling with headwinds, recent drivers of growth are waning, and there is a risk that downbeat business expectations become self-fulfilling – with employment and investment having turned negative." Finally, the analysts argued that at the OCR review next week, they expect that the RBNZ will reiterate their willingness to do what it takes to support the economy, restating that the next move in the OCR could be “up or down”."Price action all one wayThe price action today was pretty much all one way until liquidity dried up and the price momentum stalled at 0.6693 with the bird now in full flight above the trend line resistance - "We retain a medium-term bearish bias, but don’t think now is the time to fade this move just yet," the analysts at ANZ argue.NZD/USD levelsSupport located at 0.6650 and resistance is located at 0.6720. The trend line resistance has been left behind and eyes are on 0.6850. However, 0.6711 would be the 76.4% retracement of the daily downtrend from 0.7393. The next target would be the 61.8% retracement target of the same sell-off at 0.6841 (this falls in line with the lows of 15th May). A continuation of the downside and break of 0.6500 would open up 0.6344 and 0.6306 on the wide. 

As reported by Bloomberg, China is planning to make further sweeping cuts to import tariffs in an effort to jump-start domestic spending. Key highlig

As reported by Bloomberg, China is planning to make further sweeping cuts to import tariffs in an effort to jump-start domestic spending.Key highlightsAs the US-China trade war steepens, China is taking a step in the opposite direction of the US, dropping border tariffs on imported goods and encouraging trade with other major partners, reducing import fees on key domestic goods. China first made cuts to import levies back in July, and according to Bloomberg citing unnamed sources, the next tariff cut from China could come as soon as next month. “This is in line with China’s longstanding strategy of opening,” said Nicholas Lardy, a China expert at the Peterson Institute for International Economics in Washington. “It has the additional advantage that it will make U.S. firms complain more loudly that Trump’s strategy is blocking their access to the China market.” - Bloomberg

Analysts at Nomura explained the key data results form the US economy and calendar overnight and offer their GDP tracker update. Key Quotes: "Initia

Analysts at Nomura explained the key data results form the US economy and calendar overnight and offer their GDP tracker update.Key Quotes:"Initial jobless claims: Initial claims for the week ending on 15 September declined by 3k to 201k, marking the lowest reading since November 1969. The 4-week average continued to decline to 206k from 208k in the previous week. The continued downtrend in initial claims likely reflects persistent improvement in the labor market. Continuing claims declined to 1645k for the week ending 8 September. In the coming weeks, however, jobless claims will pick up due to Hurricane Florence, but those increases would likely be transitory." "Philly Fed survey: The Philly Fed manufacturing survey index for September jumped 11.0pp to 22.9 in September, above expectations (Nomura: 15.0, Consensus: 18.0). The strong gain follows a sharp 13.8pp drop in August. The new orders index advanced 11.5pp to 21.4 and the shipments index rose 3.0pp to 19.6. These readings suggest that strong domestic demand remain supportive for manufacturers’ sentiment despite uncertainties on trade policies. Consistent with the robust momentum in the economy, employment indicators improved further from their already lofty levels. Six-month ahead business conditions index and capital expenditures index still remain elevated in August albeit lower than the levels earlier this year. That said, the recently announced 10% US tariffs on additional Chinese goods effective on 24 September could dampen forwardlooking elements in the October survey." "In addition, prices paid index dropped sharply by 15.4pp to 39.6, indicating easing of inflationary pressure on input costs. The easing likely reflects the recent plateauing in key commodity prices such as crude oil and steel. Also, aluminum prices have trended down since the imposition of US tariffs on steel and aluminum. The prices received index also decreased sharply by 13.6 points to 19.6." "Existing home sales: Existing home sales for August remained flat at 5.34mn saar, slightly below expectations (Nomura: 5.36mn, Consensus: 5.37mn). Both single-family home and condos/co-op sales were unchanged from their levels in July. Slowing sales suggest demand could weaken amid deteriorating home affordability. Moreover, rising mortgage rates and housing prices appear to be pushing down housing market turnover, which will continue to constrain future home sales." "GDP tracking update: Existing home sales in August were slightly weaker than our expectations, indicating a sharper decline in brokers' commissions in Q3 which are a component of residential investment. After rounding, we lowered our real GDP tracking estimate by 0.1pp to 3.3% q-o-q saar."
 

The AUD/USD is riding a wave of broad-market US Dollar selling as investors take a bold step further into riskier assets as market sentiment recovers

Broader markets are throwing down the USD, sending the AUD higher up the charts.This week has seen a notable lack of data from the Aussie side of things; US Markit PMIs to close out the week's action.The AUD/USD is riding a wave of broad-market US Dollar selling as investors take a bold step further into riskier assets as market sentiment recovers from trade war angst and begin to crawl out of safe-havens. This week saw little of note on the Australian side of things, with the Reserve Bank of Australia (RBA) delivering the standard information that has seen little adjustment for over two years, and while the Aussie's domestic economy remains a subdued affair with cautiously-bullish notes, the AUD is getting dragged along the rails into recovery territory as the non-USD G10 marketscape takes a step higher. The Friday calendar is devoid of Aussie data to cap off an already-quiet week, though US Markit PMIs will be dropping later in the day at 13:45 GMT, which could spur some action on the USD-side of things for late Friday.AUD/USD levels to watchThe Aussie's rebound this week has the AUD/USD running up into the 0.73 major handle, as well as three-week highs, and Aussie bulls will be looking to cap the week off on a high note; as FXStreet's own Valeria Bednarik noted: "the technical picture indicates that the bullish potential remains firmly in place and that the current rally could extend on a break above the 0.7300 figure, as, in the 4 hours chart, the pair has held above the 61.8% retracement of its latest daily decline, at around 0.7255. Furthermore, the 20 SMA maintains a sharp upward slope above the 100 SMA and en route to surpass the 200 SMA, while technical indicators resumed their advances after a modest correction from overbought readings, with the RSI now accelerating north at around 73." Support levels: 0.7255 0.7225 0.7190    Resistance levels: 0.7300 0.7330 0.7360

  S&P500 daily chart Spot rate:                  2,933.25 Relative change:       0.83%      High:                         2,933.50 Low:        

The S&P500 Index printed a new record high this Thursday.The Index is trading well above its rising and widening 50, 100 and 200-day simple moving averages (DMA) while the RSI, MACD and Stochastics remain bullish.The next targets are seen near 2,938.00 and 2,950.00 (161.8% Fibonnacci extension (Aug-Sept, high/low). 
S&P500 daily chartSpot rate:                  2,933.25
Relative change:       0.83%     
High:                         2,933.50
Low:                          2,906.25 Main trend:               Bullish Resistance 1:           2,938.00, 138.2% Fibonnacci extension (Aug-Sept, high/low)
Resistance 2:           2,950.00, 161.8% Fibonnacci extension (Aug-Sept, high/low)
Resistance 3:           3,000.00 round figure Support 1:                2,917.00 August 29 high
Support 2:                2,900.00 figure
Support 3:                2,877.00 January swing high
Support 4:                2,863.75 August 7 high
Support 5:                2,853.00 August 9 low

South Korea Producer Price Index Growth (YoY): 3% (August) vs 2.9%

South Korea Producer Price Index Growth: 0.5% (August) vs 0.4%