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Daily FX Brief, Sep 05 – Risk Sentiment On, Investors Await ADP Figures! 

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The U.S. dollar reversed on Wednesday, as the British Pound and euro were boosted by receding risks of a no-deal Brexit. The Dollar Index slipped 0.6% on the day to 98.40. Later today, the U.S. ADP private jobs report for August will be delivered (vs. +148,000 jobs expected).

The U.S. Federal Reserve published its Beige Book economic report, declaring that the economy expanded moderately through the end of August. It figured that even though tariffs and trade policy cautions the U.S. economy, the bulk of businesses have a bullish outlook for the near future.

Economic Events to Watch Today

Let’s took at these fundamentals…

The British pound jumped 1.3% to $1.2246. The U.K. parliament has passed a bill aimed at blocking a no-deal Brexit on Oct. 31. At the same time, Prime Minister Boris Johnson’s motion calling for an early election was rejected by the majority of the members of parliament. On the other hand, the Markit U.K. Services PMI slipped to 50.6 in August (vs. 51.0 expected) from 51.4 in July.

The euro climbed 0.6% to $1.1034. Official data showed that the eurozone retail sales declined 0.6% on month in July (as expected).

 


AUD/USD – Daily Analysis

The AUD/USD rose 0.6% to 0.6797 yesterday and continues to surge amid stronger Aussie. The Australian Dollar trade surplus narrowed to A$ 7,268 million during July from June’s surplus of A$ 8,036 million. The investors were awaiting a trade surplus of A$ 7,400 million.

The exports or outbound shipments increased by 1% during July, matching June’s performance. Meantime, imports or inbound shipments increased by 3%, after a 4% drop in June.

However, the decline in the export is slightly unexpected, given the instability in the external sector due to the United States and China trade tussle. In the meantime, the upward imports hint the domestic demand is holding above very well and may give support to the economy absorb the stock from the recession in the external sector.

We can say, the reason behind the higher movement in imports could be Australian dollar resilience to the unexpected weaker trade surplus. Moreover, the renewed uncertainty on the United States and China trade discussion is probably supporting the Aussie to keep high.

Looking at the technical side, the AUD/USD currency pair could extend increases more during the Asian session ahead as the technical charts after Wednesday gains 0.30%. A surge to 0.6832, however, may be led by a minor pullback. The bullish, however, would be neutralised only if the spot finds acceptance below 0.6770.


 

Daily Support and Resistance    

S3 0.6728

S2 0.6759

S1 0.6777

Pivot Point 0.6789

R1 0.6807

R2 0.6819

R3 0.685

AUD/USD – Trading Tips

Consider staying bullish above 0.6789 to target 0.6840 and bearish below 0.6840 to target 0.6789. 


USD/JPY – Daily Analysis

The USD/JPY currency pair flashed green and moved from 106.05 due to Honk Kong headlines which supported to push on a risk-on sentiment across markets. That gave support to the USD/JPY pair to hit the high in the 106.40s. By the way, the currency pair is presently trading at 106.42. Therefore Asian day started from 106.32.

As of writing, the United States 2-year treasury yields price action was mixed due to an opening buying in European markets to 1.47% before returning to 1.43% and another 2-year low. Meanwhile, the ten-year treasury yields move sideways between 1.44% and 1.50%. On the flip side, stocks were positive further.’

Finally, the Dow Jones Industrial Average, DJIA, put on 237.45 points to reach 26,355.47, a gain of 0.9% while the S&P 500 index added 31.51 points at 2,937.78 for a 1.1% gain. 

At the Brexit front, again the Brexit deal keeps on the unstable track. It looks like the date will be surely delayed in view that that Parliament is stacked up against the PM Boris Johnson and Brexiteers who is failing to lead MPs towards his Halloween Brexit target date. 


Daily Support and Resistance

    

S3 105.28

S2 105.76

S1 106.05

Pivot Point 106.25

R1 106.54

R2 106.74

R3 107.22

USD/JPY – Trading Tips

As you can see on the 4-hour chart, the USD/JPY has formed an ascending triangle pattern which is likely to drive the bullish trend in Japanese yen. However, failure to break above 106.650 may not drive the bullish trends until 107.200. Consider staying bullish above 106.25 and bearish below 107.200 today 


Gold – XAU/SUD- Daily Analysis

Gold prices flashing red due to international stocks recovered after news came concerning Hong Kong’s political development and reports that the United States decided to continue trade talks in the coming month.

Gold prices were down 0.4% at $1,553.55 per during the early Asian session, but the weaker risk-off sentiment has triggered the sell-off, and it’s trading at 1,544 now. The decline in the gold prices came due to the dismiss of a controversial extradition bill in Hong Kong.

Even though it is almost sure that the unrest in the city will remain due to the other four demands increased by protesters, such as the rights of the voters and citizens to select and vote for their leader according to their choices.


Although, the headline pushed stocks higher, as well as Hong Kongs Hang Seng Index climbing as much as 4% yesterday. Even after today’s declines, gold prices remain high more than 20% during this year, supported by fears of what will happen in trade war future, policial uncertainty in the UK and Europe and the potential for a global recession.

Daily Support and Resistance

S3 1487.35

S2 1513.75

S1 1530.44

Pivot Point 1540.15

R1 1556.84

R2 1566.56

R3 1592.96

Gold – Trading Tips

As forecasted, gold completed retracement at 1534 and reversed back up to violate 1544 resistance. For now, the same level is working as an immediate support level. While resistance stays at 1558. Sentiment remains bullish for gold.

All the best!  

 

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