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Alexboltyan

EUR/USD Resilient Above Parity, Hits Weekly HighsThe EUR/USD pair is advancing for the third day in a row on Wednesday as the euro remains resilient despite broader U.S. dollar strength. Higher-than-expected August EU inflation figures maintain alive expectations of a bolder move from the European Central Bank at its next meeting, underpinning the shared currency. Still, disappointing U.S. ADP data and cautiousness ahead of the official nonfarm payrolls report are making it hard for the EUR/USD bulls to gather momentum. At the time of writing, the EUR/USD pair is trading at the 1.0050 area, 0.36% above its opening price after volatile movements sent the pair a daily low of 0.9971 and a high of 1.0079. Automatic Data Processing Inc. showed today that U.S. private sector created 132,000 positions in August, the second straight monthly decline, down from 270,000 jobs created in July. As the Fed delivers its contractive monetary policy and the US GDP figures point to a technical recession, Nela Richardson, Chief Economist from ADP, stated: "Our data suggest a recent shift towards a more conservative hiring pace, possibly as companies try to decipher the economy's conflicting signals." Across the pond, August Eurozone CPI data came in higher than expected. Headline inflation rose to 9.1% YoY versus 9.0% expected and up from 8.9% in July. The core inflation rose to 4.3% YoY, higher than the 4.1% of consensus and the 4.0% July rate. Markets are betting on higher odds of 75%, a 75 bps hike for the ECB's meeting next week, and market participants are now pricing 250 bps of tightening over the next 12-month period, which would see the deposit rate peak near 2.5%. In such case, higher interest rates in the European Union may reduce the monetary policy divergence between the ECB and the Fed, helping the euro in the medium term. Still, with winter around the corner, the energy crisis might act in the opposite direction. According to the daily charts, the EUR/USD pair holds a short-term negative bias, but technical indicators show easing bearish momentum. The RSI holds a positive slope below its midline, while the MACD prints lower red bars, indicating decreasing selling interest. On the downside, the following support levels are seen at the 0.9955 level, followed by the cycle low of 0.9900 and then the 0.9700 area where the lower end of a descending channel from February highs stands. On the other hand, short-term resistance could be found at the 1.0100-10 zone, where the psychological level is reinforced by the 20-day SMA, followed by the 1.0150 area and then the 1.0200 level.
by Alex_Boltyan_FXAnalyst
Gold Threatens Monthly Lows Amid Dollar StrengthGold prices fell for a third consecutive day on Tuesday, with the spot XAU/USD retesting one-month lows at the $1720 area as the U.S. dollar strengthened during the New York session amid risk aversion. At the time of writing, the XAU/USD pair is trading at $1725 an ounce, 0.7% below its opening price, after peaking at a daily high of $1740 earlier in the session. With the Jackson Hole Symposium behind, market participants remain cautious amid expectations of a higher interest rate hike at the next FOMC meeting in September. Minneapolis Fed President Neel Kashkari stated on Monday that he was happy with the market’s reaction on Friday to Chair Powell’s speech as he believes that investors now understand the “seriousness” of the committee to bring inflation back down to 2%. As Fed officials reaffirm their aggressive stance, markets are now expecting that interest rates may remain high for an extended period, which will probably limit the upside for the non-yielding yellow metal. Looking ahead, attention turns to U.S. employment figures as the Fed has reiterated next decision remains data-dependent. ADP will publish the private-sector employment change on Wednesday, while the government’s nonfarm payrolls will be released on Friday. The short-term technical outlook for the XAU/USD pair remains bearish, according to the daily chart. The RSI points lower below its midline, while the MACD prints higher red bars, indicating growing selling interest. On the downside, the next support level could be found at the weekly low of $1720, followed by the $1700 area, and then the cycle low of $1680, struck on July 21. On the upside, the bulls must regain the $1750 to pave the way toward the 20-day SMA, currently at $1765, en route to the $1800 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Struggles To Consolidate Above ParityThe EUR/USD pair started the week on a positive note, although it is having a hard time consolidating above the parity level. The euro gained some traction thanks to the European Central Bank’s members leaning toward a larger interest hike in their next September meeting. On the other hand, the U.S. dollar, measured by the DXY, is retreating from a fresh cycle high of 109.47 reached during the European session. At the time of writing, the EUR/USD pair is trading at the 0.9990-1.0000 zone, 0.35% above its opening price, after bottoming at a five-day low of 0.9914 earlier in the session. Following last week’s hawkish minutes from the ECB, the Governing Council members are delivering a more aggressive line for the next monetary policy decision in September. In the context of the Jackson Hole Symposium, Isabel Schnabel, Martins Kazaks, and Francois Villeroy de Galhau all argued for forceful significant policy action as they assessed the high cost of inflation in the EU. Kazaks affirmed that he is open to discussing both 50 and 75 basis point hikes as possible moves. Villeroy argued that the neutral rate should be reached before the end of this year after a “big step” in September, while Schnabel focused on the fact that inflation expectations are too high, threatening to undermine the confidence in the ECB and that its officials need to make a forceful action to prove determination. WIRP suggests that a 50 bps hike is fully priced in for the September meeting and that market participants are betting on a 60% probability of a 75 bps move. From a technical perspective, the EUR/USD pair holds a short-term bearish outlook, according to indicators on the daily chart. The RSI has a positive slope well below its midline, while the MACD prints lower red bars, indicating decreasing selling interest. On the upside, the following resistance levels are seen at the 1.0100 area, followed by the 20-day SMA currently at 1.0125 and then the 1.0150 zone. On the downside, the bulls need to secure the parity level to gather momentum. If lost, the 0.9955 zone and the cycle low of 0.9900 could be retested.
by Alex_Boltyan_FXAnalyst
U.S. Dollar Index Erases Daily Losses After Powell’s SpeechThe U.S. dollar, measured by the DXY, received a boost and jumped back above the 108.40 level following Fed Chairman Jerome Powell’s hawkish speech at the Jackson Hole Economic Symposium. At the time of writing, the DXY trades near daily highs at the 108.80 area, recording a 0.35% gain on Friday after falling to as low as 107.58 earlier in the session. Chair Powell highlighted that price stability is the bedrock of the economy and hinted that while July’s CPI reading was welcomed, the FOMC job is not yet done. He said current inflation levels “are far short of what the committee expects”. Powell confirmed that an unusually large interest increase would be appropriate for the upcoming September meeting, but the decision will depend on the incoming data. He also stated that the tighter financial conditions would produce “below-trend growth” and a “softening” of the labor market that might bring pain to households and businesses. Risk-off sentiment was triggered across markets as an immediate reaction. Capitals flew to safer assets, and the U.S. bond yields edged higher amid higher rate hikes expectations. According to WIRP, a 50 bps hike remains fully priced in for the September meeting, and the market participants are betting 60% odds of a 75 bps hike. Incoming inflation and labor data will dictate the pace of the market in the following days, as they will play a significant role in the size of the next FOMC rate hike. According to the weekly chart, the DXY holds a bullish technical outlook and remains poised for a second consecutive weekly gain. The upside bias is also present on the daily chart although indicators suggest a deceleration of the bullish momentum. The daily RSI holds a neutral slope near overbought levels, while the MACD prints lower green bars, indicating dwindling buying interest. On the upside, the next resistance level is seen at the 109.00 psychological mark. A break above would pave the way to advance towards the cycle highs hit on July 14 at 109.29. On the other hand, the 107.60 zone offers immediate support, which, if lost, would expose the 107.00 level and the 20-day SMA, currently at 106.85.
TVC:DXY
by Alex_Boltyan_FXAnalyst
EUR/USD Fails To Hold Above 1.0000, Eyes Powell’s SpeechThe EUR/USD pair ended Thursday virtually unchanged as upbeat U.S. economic data helped the dollar gather strength and reverse most of the European session losses. At the time of writing, the pair trades at the 0.9975 area, 0.15% above its opening price, having pulled back from a daily peak of 1.0033. Germany upwardly revised its GDP figures for Q2 and reported an increase of 1.7% YoY, better than the 1.4% previously estimated. In addition, August’s IFO survey data also helped the euro to get a boost as Business Climate figure Current Assessment and Expectations surveys rose above the market’s expectations. Additionally, the European Central Bank released its minutes from July’s meeting and showed that a vast number of the Governing Council members decided on the 50 bps hike. The report also noted that the officials agreed it was appropriate to take further steps on the path of monetary policy normalization. In the meantime, U.S. GDP for the second quarter was upwardly revised from -0.9% to -0.6%. Separated data showed Initial Jobless Claims for the week that ended on August 19 fell to 243,000. Market participants will keep an eye on the Jackson Hole Economic Symposium and Jerome Powell’s speech on Friday. From a technical perspective, the EUR/USD retains a short-term bearish bias as the pair has repeatedly failed to establish itself above parity. Still, indicators on the daily chart suggest a deceleration of the selling pressure, with the RSI holding a neutral slope below its midline while the MACD printed a lower red bar. On the upside, the immediate resistance level is seen at the 1.0000 psychological level, followed by the 1.0050 area and 1.0100. On the other hand, the next support level could be faced at the 0.9900 and 0.9800 levels. A break below could push the pair to the 0.9700 area, where the lower end of a descending channel drawn from February highs reinforces the psychological level.
by Alex_Boltyan_FXAnalyst
Gold Extends Recovery, But Upside Potential Seen Limited Gold prices increased slightly on Wednesday as the dollar weakened across the board during the New York session, even as U.S. yields remained at weekly highs. At the time of writing, the spot gold XAU/USD trades at the $1750 area, recording a 0.23% daily advance. On the data front, U.S. Durable Goods orders came in worse than expected at 0% versus the 0.6% increase expected. However, the details of the report showed more encouraging numbers. Market reaction to data was limited as investors focus on the Jackson Hole Symposium that starts on Thursday. At the same time, market participants keep assessing the global recession risk, which could benefit the yellow metal. Following worrisome PMI data from the U.S., U.K., and the E.U., Thursday’s Q2 GDP readings for the U.S. and Germany could warrant choppy trading. From a technical perspective, the XAU/USD holds a neutral short-term outlook term according to indicators on the daily chart. The RSI shows a slightly positive slope but remains below its midline, while the MACD printed a lower red bar, indicating decreasing selling interest. Even though the price remains below its main moving averages, the metal has posted a higher high and a higher low for the second consecutive day following a six-day losing streak. On the upside, immediate resistance levels are seen at the 20-day SMA, currently at $1770, followed by the $1800 psychological level. On the downside, supports could be found at the $1730 level, the $1700 psychological mark and then the cycle low of $1680 struck on July 21.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Bounces Off Lows But Remains Below ParityThe EUR/USD pair snapped a three-day losing streak and recovered some of the lost ground on the back of EU and U.S. PMI data. The euro-dollar bounced after hitting a fresh cycle low of 0.9899 and briefly rose above the parity level but failed to hold above the psychological mark. At the time of writing, the EUR/USD pair is trading at the 0.9960 area, 0.23% above its opening price. The Eurozone’s composite PMI published by S&P Global fell to 49.2 in August, down from 49.9 in July. Despite beating the market’s expectations of 49, the figure signaled a second successive contraction in business activity across the Eurozone. The report stated that the contraction was driven by the manufacturing activity, which fell for a third straight month as the manufacturing PMI dropped to 49.7 (26-month low) from July’s 49.8. The services sector index came in at 50.2 (17-month low) but still showing expansion in the sector. Across the pond, the U.S. composite PMI dropped to 45 (27-month low) from July’s 47.7 and below the 47.5 expected. According to the report, the reduction in output was “broad-based” as manufacturers and services providers registered lower activity. The manufacturing PMI slowed down to 51.3 (25-month low), while the service PMI fell to 44.1 (27-month low). The dollar weakened as the knee-jerk reaction to disappointing PMIs and fell across the board. The DXY pulled back from a high of 109.27 to the 108.10 area, alongside the pullback seen in U.S. yields across the curve. Investors’ attention remains on the Jackson Hole Symposium, which kicks off on Thursday. Federal Reserve Chair Jerome Powell is due to speak on Friday. From a technical perspective, the EUR/USD short-term outlook remains bearish, although indicators have lost downward momentum on the daily chart. The RSI gained a positive slope but remains near the oversold area, while the MACD continues to print longer red bars, indicating growing selling interest. On the downside, the following support levels are seen at the 0.9900 psychological level and then at the lower end of a descending channel drawn from February highs at around 0.9735. On the other hand, short-term resistances could be found at the 1.0010 area, followed by the 1.0100 zone and then the 20-day SMA, currently at 1.0170.
by Alex_Boltyan_FXAnalyst
EUR/USD Falls Below Parity To Lowest Level In Two Decades The EUR/USD pair broke below parity and hit its lowest level since December 2002 on Monday as the U.S. dollar continued to outperform most of its peers amid risk aversion. While the greenback remains underpinned by the Federal Reserve's hawkish stance, the sentiment towards the euro has continued to deteriorate amid recession fears in the Union. The EUR/USD hit its lowest intraday level in almost 20 years at 0.9926 and remains on track to close the day below 1.0000 for the first time since November 2002. The dollar has continued to strengthen as the Fed tightening expectations continue to adjust. The market players are now betting a 54.5% chance of a 75 bps in the September meeting and 45.5% of a 50 bps increase, while a week ago, the odds were 39% and 61%, respectively. Conversely, the euro depreciated further after the Bundesbank monthly report offered a worrisome outlook for Germany. The report stated, "German economic activity is likely to have more or less stagnated in Q2 of 2022" and that inflation will probably continue to accelerate to peak in double digits, around 10%, as the higher minimum wage and a weaker euro are causing price pressures. In that sense, the report noted that normalizing the ECB's monetary policy is appropriate as inflation risks remain highly elevated. According to the daily charts, the short-term technical outlook for the EUR/USD remains clearly bearish. The RSI holds a negative slop below its midline and approaches oversold area, while the MACD prints higher red bars, indicating a growing selling interest. Having fallen below the July low of 0.9952, the EUR/USD next support could be found at the 0.9900 psychological level. The lower end of a descending channel drawn from February highs could act as support at the 0.9750 area. On the other hand, short-term resistances are seen at the 1.0000 level, followed by the 1.0100 zone and then the 20-day SMA, currently at 1.0180.
by Alex_Boltyan_FXAnalyst
U.S. Dollar Index Poised For Biggest Weekly Gain Since 2020The U.S. dollar, measured by the DXY, is up for a third straight day on Friday as hawkish comments from Fed officials and a cautious market mood have kept underpinning the greenback. At the time of writing, the DXY trades at the 108.10 zone, posting a 0.6% daily advance after hitting its highest level in over a month at 108.21. The index is on track to post its biggest weekly gain since March 2020, climbing 2.28% since Monday’s opening. The dollar has also been supported by higher U.S. Treasury yields. The 10-year note yield advanced sharply on Friday to touch a one-month high of 2.998%. The 30-year yield peaked at 3.236%. The yield curve remains partially inverted as the rate on the 2-year note stands at 3.257%. Several Fed officials crossed the wires this week, fueling the Fed’s hawkish narrative. Mary Daly from San Francisco Fed favored either a 50 or 75 bps rate increase in the September meeting. James Bullard from the St. Louis Fed lent towards a 75 bps hike, adding that it’s too soon to say that inflation has peaked. Esther George from Kansas City Fed claimed that, while July’s CPI data was encouraging, it is too soon to declare victory and that the case for continuing rate hikes remains strong for the following meetings. Investors’ tightening expectations are still adjusting to the comments. According to WIRP, swaps markets are pricing 56.5% odds of a 50 bps hike for the September meeting and 43.5% odds in favor of a 75 bps hike. Looking ahead, market participants are pricing a 3.75% terminal rate, while at the start of the week, it stood at 3.50%. Back to the DXY, from a technical perspective, the index holds a bullish bias according to the weekly and daily indicators, while the price trades above its main moving averages and continues to move towards the cycle peak struck on July 14 at 109.30. Interim resistances for the DXY are seen at the 108.50 and 108.70, and 109.00 levels. On the other hand, short-term support levels could be faced at the 107.50 zone, followed by the 107.00 psychological mark and the 20-day SMA, currently at 106.32.
TVC:DXY
by Alex_Boltyan_FXAnalyst
EUR/USD Threatens Critical Support As Dollar Gathers StrengthThe EUR/USD pair fell sharply on Thursday amid broad-based dollar strength, which sent the euro to its lowest level in a month during the New York session. At the time of writing, the EUR/USD pair is trading at the 1.0085 area, recording a 0.9% daily loss after touching a one-month low at 1.0079. Following a phase of sideways trading, the U.S. picked up steam and rallied across the board despite lower U.S. yields amid a mixed market mood. On Wednesday, the minutes of July's FOMC meeting showed some members believe the policy rate should remain at a "sufficiently restrictive level" for some time to ensure the inflation rate returns to the 2% target. The Fed didn't provide specific guidance for the ongoing hikes, reaffirming that they would remain data-dependent. However, the minutes showed many participants were worried about over-tightening, which temporarily weighed on the greenback. On the data front, U.S. Initial Jobless Claims for the week that ended August 12 eased to 250,000 from 252,000 the previous week and below the 265,000 expected. On the other hand, July's Existing Home Sales reaffirmed a slowdown of the housing markets as they decreased to 4.81M, posting the sixth monthly decline in a row. Across the pond, the EU published its final estimates of July's inflation figures, which came in line with expectations. Headline CPI inflation rate was 8.9% YoY, while the core reading stood at 4%. From a technical perspective, the EUR/USD holds a short-term bearish bias according to indicators on the daily chart, while the price prints a bearish engulfing candle below the 20-day SMA. The RSI holds a negative slope below its midline, while the MACD made a bearish cross. A break below the 1.0080 area would expose a retest of the parity level and potentially the cycle low of July 14 at 0.9952. On the other hand, the 20-day SMA, currently at 1.0202, is the first resistance for the bulls to regain. A recovery of this level could allow a rise toward the 1.0250 and 1.0300 areas.
by Alex_Boltyan_FXAnalyst
Gold Trims Daily Losses After Fed Minutes Gold prices trimmed intraday losses during the New York session following the release of the Federal Reserve's latest meeting minutes. Spot gold, XAU/USD, jumped from a two-week low of around $1,760 an ounce toward the $1,780 area, taking back some of its early losses. However, the metal still posted a daily loss of 0.4%. The Federal Open Market Committee's latest minutes revealed that some participants believed that the policy rate should remain at a "sufficiently restrictive level" for some time to ensure that inflation was firmly on a path back to the Fed's target of 2%. On the other hand, many members pointed out that there was also a risk that the Committee could tighten the stance of policy "by more than necessary" to restore price stability. At the July meeting, Fed officials voted to raise their benchmark rate by 75 basis points for the second straight meeting, the fastest pace since the 1980s. The dollar weakened across the board after the minutes but overall retained gains versus most competitors. At the same time, U.S. yields pulled back across the curve, with the one on the 10-year note sliding to 2.879% from a daily peak of 2.919%. From a technical perspective, the XAU/USD maintains a short-term bearish bias with the price printing lower lows and lower highs on a daily basis, while technical indicators point to dwindling buying pressure on the daily chart. The RSI has crossed tits midline and points south, while the MACD continues to print lower green bars. Still, XAU/USD has climbed back above the 20-day SMA, which is acting as immediate support at around $1,765, followed by the $1,750 zone. On the other hand, the first resistance is seen at the $1,785 area and the $1,800 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Erases Daily Losses After Weak U.S. Housing DataThe EUR/USD pair trades with modest gains on Tuesday, having erased daily losses triggered by disappointing ZEW survey data from the E.U. and Germany. Weak U.S. housing data weighed on the greenback and helped the pair to move north. At the time of writing, the EUR/USD pair is trading at 1.0170, 0.13% above its opening price after bouncing from a two-week low of 1.0122. The German ZEW Economic Sentiment survey for August plunged to -55.3 and missed expectations of -53.8, while the sentiment for the whole union fell to -54.9, missing by far the market’s forecast of -42.5. Separated data showed June’s seasonally adjusted Trade Balance of the union posted a deficit €30.8 billion, worsening the economic outlook. Across the pond, the weakness of the U.S. housing market helped to halt the EUR/USD decline, as the July Building Permits fell by 1.3% on a monthly basis while the Housing Starts declined by 9.6%. The U.S. dollar, measured by the DXY index, pulled back from a daily high of 106.95 to trade virtually unchanged on the day at around the 106.50 level. From a technical perspective, the EUR/USD holds a short-term bearish outlook as daily indicators keep signaling a deceleration of the bullish momentum. The RSI hovers below its midline although the slope has flattened, while the MACD printed a lower green bar and it's close to breaking below its signal line. On the downside, the next support levels are seen at the 1.0150 zone, followed by the 1.0100 and then the parity level, which, if lost, would potentially open the door to new cycle lows. On the other hand, resistance levels could be found at the 20-day SMA, currently at 1.021, followed by the 1.0250 area and then the 1.0300 psychological mark.
by Alex_Boltyan_FXAnalyst
EUR/USD Loses Critical Level Amid Risk-Off MoodThe EUR/USD fell back below the 20-day SMA on Monday as the markets started the week in risk-off mode triggered by weak Chinese data that exacerbated global recession fears. The EUR/USD pair slid below the 1.0200 level and hit a low of 1.0154 during the New York session. It last traded at the 1.0160 zone, recording a 1% loss on the day. During the Asian session, China published disappointing data that signaled slowing economic activity. Although Chinese retail sales were up 2.7% YoY in July and the Industrial production rose 3.8% in the same period, both readings missed by far the market’s expectations of 5% and 4.6%, respectively. Also, the PBOC (People’s Bank of China) unexpectedly cut a key medium-term policy interest rate, suggesting policymakers are worried about weaker growth. Against this backdrop, the US dollar, measured by the DXY, rose for a second straight day, posting a 0.8% gain at the 106.50 zone. The yield on the US 10-year note was down 2.19% around 2.77%, suggesting a higher demand for American bonds as the global economic outlook worsens. From a technical view, the short-term outlook for the EUR/USD has turned neutral, according to indicators on the daily chart. The RSI gained a negative slope and fell below its midline, while the MACD printed lower green bars, indicating dwindling buying interest. On the downside, support levels are seen at the 1.0150 area, followed by the 1.0100 psychological zone. A break below the latter would expose a retest of the parity level and potentially fresh cycle lows. On the other hand, the 20-day SMA at around 1.0213 is now the immediate resistance level to regain for the bulls. A recovery of this level could pave the way towards the 1.0250 zone en route to the 1.0300 area.
by Alex_Boltyan_FXAnalyst
GBP/USD Pushes Lower After UK GDP Data, Holds On To Weekly GainsThe GBP/USD pair fell further on Friday, facing renewed bearish pressure by the end of the week as investors lost interest in the sterling after UK GDP data and the dollar strengthened fueled by consumer confidence data. At the time of writing, the GBP/USD pair trades at the 1.2140 area, with 0.46% lower on the day and posting its second daily loss in a row. The UK Office for National Statistics (ONS) revealed that the British economy contracted by 0.1% during Q2 but expanded at an annualized rate of 2.9%. Despite the data coming in slightly better than the market's consensus of -0.2% and 2.8%, respectively, the British pound failed to attract investors as a recession is a foregone conclusion. The Bank of England (BoE) has forecasted a recession starting in Q4 that will last five quarters while it plans to continue tightening policy rate to control inflation. The swaps markets are pricing 150 bps hikes over the next 12 months that would locate the policy rate at 3.25%. Across the pond, the Michigan Consumer Sentiment Index came in at 55.1, up from 51.5 the previous month and higher than the market's expectations of 52.5. The US dollar, measured by the DXY index, received a boost from confidence data. The DXY got some traction and snapped a four-day losing streak. The index is currently trading around 105.70, 0.6% above its opening price. The GBP/USD is poised to close the week with gains, but the technical outlook remains bearish as the pair keeps printing lower highs and the candles suggest a weak bullish momentum on the weekly chart. The negative bias is not present on the daily chart yet, as the pair holds above the key 20-day SMA, and consolidation above would help the bulls gather momentum. The daily RSI has gained a significant negative slope but remains above its midline, while the MACD printed a lower green bar, indicating decreasing buying interest. On the downside, the 20-day SMA, currently at 1.2096, offers solid support. However, loss of the latter could expose a re-test of the 1.2000 level. On the other hand, resistance levels are seen at 1.2250, followed by the 1.2300 level and the 1.2350 area.
by Alex_Boltyan_FXAnalyst
EUR/USD Edges Higher After Another Sign U.S. Inflation EasesThe EUR/USD pair extended gains into a fourth day on Thursday as another batch of data continued to point at inflation having already peaked in the U.S. and began to decelerate. At the time of writing, the EUR/USD pair trades at the 1.0320 zone, 0.23% above its opening price, having hit a daily high of 1.0364, a few pips shy of its one-month peak of 1.0368 struck on Wednesday. The U.S. Producer Price Index grew 9.8% over the 12 months to July, decelerating from June's 11.3% rate and below the market's consensus of 10.4%. The Core PPI rose by 7.6%, in line with expectations and easing from June's 8.4% reading. On Wednesday, U.S. Consumer Price Index surprised to the downside, rising 8.5% down from 9.1% in June. Softer CPI and PPI figures might be the early sign of cooling inflation that the Fed was waiting for. Tightening expectations continue to adjust in favor of a lower hike of 50 pbs in September instead of a 75 bps move, as it was the case in the last two meetings. The greenback, measured by the DXY index, is down for a second consecutive day and trades at around 1.0500 after finding support once again at the 104.60 area. The dollar could not benefit from higher yields. The U.S. 10-year note yield soared nearly 4% to 2.902%, while the 30-year yield reached 3.189%. According to the daily chart, the EUR/USD keeps a positive short-term bias as the price approaches a descending trendline and indicators hold in positive territory. The RSI continues to gain steeper positive slope and stands above its midline, while the MACD printed a higher green bar, indicating a growing buying interest. On the upside, immediate resistance levels are seen at the August 10 high of 1.0368, followed by the 1.0400 psychological mark, and then the 1.0410 area, where the upper end of a descending channel drawn from February's high stands. On the other hand, support levels are observed at 1.0300 and the 20-day SMA currently at 1.0203.
by Alex_Boltyan_FXAnalyst
EUR/USD Reaches One-Month Highs Above 1.0300 After U.S. CPI DataThe EUR/USD pair finally made an upwards decisive move after the U.S. Consumer Price Index data, following days of struggling to establish itself above the 1.0200 mark. The EUR/USD jumped to a one-month high of 1.0368 during the New York session before easing somewhat. The deceleration of the U.S. inflation rate lifted the market's mood and weighed on the greenback, as investors are now pricing a less aggressive move from the Fed at the September meeting. At the time of writing, the EUR/USD pair is trading at the 1.0300 area, posting a 0,9% gain on the day. The U.S. Bureau of Labor Statistics revealed that the annual CPI inflation slowed to 8.5% in July from 9.1% in June, versus the market's consensus of 8.7%. Additionally, core inflation remained steady at 5.9% versus expectations of a 6.1% rate. The greenback, measured by the DXY, fell to its lowest level since June 29 at 104.63 as a knee-jerk reaction to the inflation data. Yields on the 10-year U.S. note plunged to 2.675%. Investors have raised the bets of a 50 bps hike by the Fed to 62.5%, while on Tuesday, chances stood at 32%. At the same time, the odds of a bigger hike of 75 pbs have decreased to 37.5%. From a technical standpoint, the EUR/USD short-term outlook has turned slightly bullish according to the daily chart, with the price advancing further above the 20-day SMA. The RSI broke above its midline after being rejected twice this month, while the MACD printed a higher green bar, indicating growing buying interest. Immediate resistance levels are seen at the 1.0370 and the 1.0400 levels, followed by the upper end of a descending channel at around 1.0415. A decisive break above this level would improve the euro's perspective. On the other hand, supports are now seen at the 20-day SMA, currently at 1.0187, followed by the 1.0100 psychological level, which is being reinforced by the channel's midline.
by Alex_Boltyan_FXAnalyst
1
EUR/USD Clings To 1.0200 Ahead of U.S. CPI The EUR/USD pair posts its second consecutive day with gains as the dollar remains soft across the board ahead of Wednesday’s CPI figures. At the time of writing, the EUR/USD pair is trading 1.0210, 0.15% above its opening price, after reaching a daily high of 1.0247. The markets remain cautious as U.S. inflation data will set the pace for the September Fed meeting. The CPI inflation is expected to ease to 8.6% in July from 9.1% in June, although the core inflation is foreseen at 6.1% from 5.9% the previous month. The swap markets are pricing higher odds for another 75 bps rate hike, and they currently stand at 69.5%, which would take the rate to 3.75% by year-end. However, the U.S. Dollar Index, DXY, remains weak, having slipped below the 106.00 mark. On the other hand, the 10-year German Bund yields are giving traction to the euro, as they are up nearly 4%, trading at around 0.925%. The spread with the 10-year American yield is down for a second straight day, currently standing at 1.86%. From a technical perspective, the EUR/USD holds a neutral short-term outlook, according to indicators on the daily chart. The RSI slope is turning higher and testing its midline, while the MACD printed a higher green bar indicating that the bullish momentum has gained some steam. Still, the broader picture remains tilted to the downside, as the price continues to develop in a descending channel drawn from February highs. The immediate support level is seen at the 20-day SMA, currently standing at 1.0179, followed by the 1.0100 area where several lows were printed late-July. On the other hand, short-term resistance is seen at the 1.0250 area. A break past this level could pave the way for a test of 1.0300 and 1.0350.
by Alex_Boltyan_FXAnalyst
EUR/USD Climbs Back Above 1.0200 As The NFP Dust Settles The EUR/USD pair trades a tad higher on Monday while the markets keep digesting last week's Nonfarm payrolls data from the U.S. At the time of writing, the EUR/USD is trading at 1.0208, 0.26% above its opening price, after bottoming at 1.0159 during the European session. The last U.S. employment reports showed that nearly a million jobs were created in the previous two months, driving the unemployment rate to a new cycle low of 3.5%. More importantly, wages also continued to grow. In that sense, market participants lifted the odds of a 75 bps hike in the September meeting to 66.5% as they assume that a strong labor market will give the FOMC more room to be aggressive to achieve its goal of cooling down inflation. These prospects could limit EUR/USD upside. Across the pond, minor data was released in the EU and had a limited impact on the euro. The August Sentix Investor Confidence was worse than anticipated, printing at -25.2 vs the -24.7 consensus. The U.S. calendar will remain empty ahead of Wednesday's July CPI figures, so risk impulses will likely set the pace of the market for the rest of the day. According to the daily chart, the short-term technical outlook for the EUR/USD remains neutral, slightly skewed to the downside as the bulls fail to make decisive upwards movements. The RSI gained a modest positive slope and stands below its midline, while the MACD keeps printing lower green bars, indicating decreasing buying interest. On the upside, the following resistance levels are seen at the 1.0250 zone, followed by last Tuesday's peak of 1.0294 and then the 1.0350 area. On the other hand, a steeper decline can be expected if the pair loses the 20-day SMA, currently at 1.0169, which will pave the way to retest the 1.0100 level and then the 1.0000 mark.
by Alex_Boltyan_FXAnalyst
U.S. Dollar Index Gains Traction After NFP DataThe U.S. dollar, measured by the DXY index, trades in positive territory with solid gains at the end of the week as the U.S. nonfarm payrolls surprised with significant gains in July. Following the NFP report, tightening expectations for the Fed’s September meeting increased, favoring the greenback rally. At the time of writing, the DXY trades at the 106.50 area, 0.70% above its opening price, after peaking at a daily high of 106.93. The U.S. Bureau of Labor Statistics revealed that nonfarm payrolls rose by 528,000 in July, more than doubling the market’s consensus of 250,000 and bringing back overall employment back above pre-pandemic levels. On the other hand, the unemployment rate edged lower to 3.5% back to February 2020 levels, while the average hourly earnings expanded 0.5%, and the yearly reading stood at 5.2%. While the FOMC continues its contractive monetary policy cycle, rate hikes could erode consumer spending power and demand, which might cool off the labor market in the following months. Some analysts expect an unemployment rate of 4.9% by the end of the year. Despite other sectors of the U.S. economy showing signs of weakness, the report showed that the labor market remains strong, so the Fed may have more room to be aggressive in the next September meeting. The market is now pricing a higher likelihood of a bigger hike as they are now pricing a 64.5% probability of a 75 bps increase and a 34.5% of a 50 bps, while the odds of the former stood at 34% before the NFP report. According to the weekly chart, the long-term technical outlook for the DXY remains bullish and poised to close the week with gains. On the daily chart, the bias remains neutral, and the DXY stands at a critical level near the 20-day SMA, with its indicators showing a deceleration of the bearish momentum. The daily RSI gained a significant positive slope to jump back above its midline, while the MACD printed a lower red bar, indicating dwindling selling interest. The DXY needs a break above the 20-day SMA, currently at 106.90, to pick up bullish momentum. That should pave the way to the 107.45 zone and the 108.00 psychological level. On the downside, support levels are seen at 105.05, followed by the 104.75 zone and then the 103.60 area.
TVC:DXY
by Alex_Boltyan_FXAnalyst
GBP/USD Stabilizes After BoE Decision, U.K. Recession Forecasts The GBP/USD pair fell during the European session and hit a six-day low at 1.2065 before recovering and reversing daily losses during the New York session. The dovish tone of Bank of England's Monetary Policy Report and Governor Andrew Bailey's conference prompted the sterling's sell-off. At the time of writing, GBP/USD is trading around 1.2160, having regained the lost ground and trading 0.22% above its opening price, as the dollar weakened on the back of disappointing U.S. data. The Bank of England (BoE) raised its benchmark interest rate by half a percentage point, the biggest rate hike since 1995, to 1.75%. The decision was almost unanimous, voted by all Monetary Policy Committee (MPC) members but Silvana Tenreyro, the only one who did not support the increase. The projections, Andrew Bailey's brutal honesty and the Monetary Policy Report initially weakened the pound. At a press conference, the BoE governor assured that inflation will reach a peak of 13% in the coming months and that it will remain "very high" in 2023, only to drop to the long-term target of 2% in 2024. As for the GDP, the report detailed that the British economy will enter a prolonged recession in the fourth quarter, whose recovery will also come in 2024. The gloomy outlook for the U.K. economy worsened the GBP/USD outlook. Many analysts believe the forecasts will become a self-fulfilling prophecy, which could lead to further declines in the near term. Meanwhile, Friday’s calendar will feature the U.S. nonfarm payrolls report, expected to show the economy added 250K jobs in July. From a technical standpoint, the short-term perspective for the GBP/USD pair looks neutral to slightly positive, thanks to the bounce seen during the second half of the day. The RSI remains almost flat above its midline, while the MACD prints declining green bars, indicating a slowdown in buying interest. On the upside, the first resistance to overcome is seen at today's highs in the 1.2215 area, followed by the weekly high of 1.2290 and then the 1.2350 area. On the downside, the 20-day SMA, currently at 1.2028, offers solid support. Below this latter, the 1.1960 area and the psychological level of 1.1900 are the following levels to consider.
by Alex_Boltyan_FXAnalyst
EUR/USD On The Defensive After U.S. And EU Economic Data The EUR/USD pair retreated for the second day in a row on Wednesday as the euro struggles to find demand after disappointing economic data. Also, despite U.S. House Speaker Nancy Pelosi finally leaving Taiwan to resume her Asian tour, tensions between the U.S. and China linger, inciting a more risk-averse market environment. At the time of writing, the EUR/USD pair is trading at around 1.0150, little changed on the day after hitting a daily low of 1.0122. On the data front, the EU S&P Global Services and Composite PMIs were upwardly revised, but business output contraction was confirmed as the Composite PMI reading stood at 49.9. In addition, EU retail sales fell 1.2% MoM in June and 3.7% YoY, missing market consensus and fueling the euro’s sell-off. Across the pond, the US S&P Global Services and Composite PMIs were upwardly revised but remained in contraction territory. However, the greenback gained traction after the ISM services PMI came in at 56.7, above the market consensus of 53.5 and pointing to expansion in the sector. In that sense, the U.S. dollar measured by the DXY index advanced to 106.82 before easing. According to the daily chart, the short-term technical outlook for the EUR/USD continues to worsen as indicators suggest a deceleration of the bullish momentum gathered in the last few days. The RSI has turned south and crossed below its 14-day SMA, while the MACD printed a lower green bar, suggesting decreasing buying interest. On the downside, the next support levels are seen at 1.0100, followed by 1.0000 and then the cycle low of 0.9952. On the other hand, the EUR/USD needs to close above the 20-day SMA, currently at 1.0155, to ease the immediate pressure. In that case, the following resistances are seen at Tuesday’s peak of 1.0294 and then the 1.0350 level.
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Recovery Despite Risk-Off Mood The EUR/USD pair advanced for the fourth day in a row on Monday after the release of EU and US PMIs, as the greenback struggles to find demand across the board, with the DXY dropping below 105.30 to its lowest level in nearly a month. At the time of writing, the EUR/USD trades at 1.0260, 0.33% above its opening price, having reached an 11-day high of 1.0275. The euro shrugged off disappointing June retail sales data from Germany – which fell by 8.8% YoY and missed the market’s consensus – and EU manufacturing PMI. The S&P Global Eurozone Manufacturing PMI contracted to 49.8 in July from 52.1 in June, showing the first contraction (below the 50-point threshold) since June 2020. However, the contraction was slightly above the preliminary estimates of 49.6. Across the pond, recession fears in the US continue to mount as the manufacturing sector registered a weak improvement in operating conditions during July. The S&P Global Manufacturing PMI came in at 52.2, down from June’s 52.7 and according to the report, the decrease in the headline figure was in part linked to a renewed drop in production during July as output fell for the first time in two years. From a technical perspective, the daily chart shows a short-term bullish bias for the EUR/USD, as the pair finally established itself above the 20-day SMA, while the indicators remain the positive ground. The RSI pierced through its midline, while the MACD continues to print higher green bars, indicating increasing buying interest. The next resistance levels for the EUR/USD are seen at the 1.0300 psychological level, followed by the 1.0350-60 area (previous support turned resistance) and then the 1.0400 mark. On the downside, immediate support level could be found at the 20-day SMA, currently at 1.0160, followed by 1.0100 and the 1.0000 mark.
by Alex_Boltyan_FXAnalyst
Gold Extends Weekly Gains Amid Lower Yields Gold prices rose for the third day in a row on Friday and were headed to post their second consecutive weekly gain as the yellow metal benefits from the risk-off mood and the U.S. yields drop. The spot price, XAU/USD, extended the advance and printed a 23-day high of $1768 as U.S. yields – which could be considered gold’s opportunity cost – fell to multi-month lows. At the time of writing, the metal was trading at $1762, up 0.35% on the day and posting a 2% weekly gain. U.S. yields accelerated lower after the FOMC meeting, fueling the XAU/USD rally. The US 10-year yield fell to 2.618%, and the 30-year rate hit a low of 2.95%. On Friday, data showed the U.S. PCE price index – the Fed’s preferred inflation gauge – rose by 6.8% over the 12 months to June, while core inflation jumped by 4.8% in the same period. Rising inflation and negative growth – as shown by GDP figures this week – continue to fuel fears of stagflation, putting the Fed in a tough spot, although Powell & Co. downplayed recession prospects after hiking rates on Wednesday. From a technical perspective, the XAU/USD short-technical outlook has turned bullish, according to indicators on the daily chart, while the price has continued to post higher highs after breaking above the 20-day SMA. Still, the longer-term bias remains tilted to the downside according to the weekly chart, with crucial support at the 200-week SMA at the $1660 area. On the upside, immediate resistance is seen at the $1770-80 area, followed by the $1800 psychological level and then the early July highs at the $1815 area.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst