Forex News Timeline

Monday, October 3, 2022

Gold price is higher on the day at the start of a new week. XAU/USD eyes $1,700 as next recovery target, FXStreet’s Eren Sengezer reports. Daily close

Gold price is higher on the day at the start of a new week. XAU/USD eyes $1,700 as next recovery target, FXStreet’s Eren Sengezer reports. Daily close below $1,650 could be seen as a significant bearish development “Gold faces immediate resistance at $1,680, where the 20-day SMA is located. In case the yellow metal rises above that level and starts using it as support, it could target $1,690 (Fibonacci 38.2% retracement of the latest downtrend) and $1,700 (psychological level).”  “On the downside, $1,665 (Fibonacci 23.6% retracement) aligns as first support before $1,650 (static level). A daily close below the latter could be seen as a significant bearish development and cause XAU/USD to decline toward the end-point of the downtrend at $1,620.”

The USD/JPY pair trims a part of its modest intraday gains to over a one-week high and quickly retreats to sub-145.00 levels during the early European

A combination of factors fails to assist USD/JPY to capitalize on early gains to over a one-week top.Fears of intervention by the Japanese government extend support to the JPY and caps the pair.A softer tone around the US bond yields undermines the USD and attracts sellers at higher levels.The USD/JPY pair trims a part of its modest intraday gains to over a one-week high and quickly retreats to sub-145.00 levels during the early European session. Japan's finance minister Shunichi Suzuki said on Monday that the government stands ready to intervene in currency markets to prevent deeper losses in the domestic currency. This, along with the prevalent cautious market mood, offers some support to the safe-haven Japanese yen and caps the upside for the USD/JPY pair. Bearish traders further take cues from a softer tone surrounding the US Treasury bond yields, which fails to assist the US dollar to capitalize on its early positive move. This further exerts some pressure on the USD/JPY pair, though a combination of factors should help limit any meaningful slide, at least for the time being. A big divergence in the monetary policy stance adopted by the Bank of Japan and other major central banks might continue to weigh on the JPY. It is worth mentioning that the BoJ has been lagging behind other major central banks in the process of policy normalisation and remains committed to continuing with its monetary easing. In contrast, the US central bank is expected to stick to its aggressive policy tightening path to curb high inflation. In fact, the markets have been pricing in the possibility of another supersized 75 bps Fed rate hike move in November. This, in turn, is likely to act as a tailwind for the US bond yields and the greenback. The fundamental backdrop suggests that the path of least resistance for the USD/JPY pair is to the upside and any meaningful slide might still be seen as a buying opportunity. That said, traders might prefer to wait for the release of key US macro releases scheduled at the beginning of a new month, including the NFP report. A rather busy week kicks off with the release of the US ISM Manufacturing PMI, due later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics. Apart from this, the broader market risk sentiment should provide some meaningful impetus to the USD/JPY pair. Technical levels to watch  

BBC News reported on Monday that the UK government is expected to roll back the proposed scrapping of the higher rate of income tax that has sparked a

BBC News reported on Monday that the UK government is expected to roll back the proposed scrapping of the higher rate of income tax that has sparked a backlash in the ruling Conservative Party. No further details are provided on the same. Market reaction On the above headlines, the pound caught a fresh bid and jumped above 1.1200 against the US dollar. At the time of writing, GBP/USD is adding 0.84% on the day at 1.1252.

Open interest in gold futures markets dropped for the second session in a row on Friday, this time by around 21.3K contracts, the largest single-day d

Open interest in gold futures markets dropped for the second session in a row on Friday, this time by around 21.3K contracts, the largest single-day drop since March 10. Volume followed suit and shrank by around 32.8K contracts, adding to the previous daily drop. Gold: Next on the upside comes $1,688 Friday’s inconclusive price action in gold was on the back of shrinking open interest and volume, exposing further side-lined trading in the very near term. Extra gains, in the meantime, should initially target the weekly high at $1,688 per ounce troy (September 21).

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further losses in AUD/USD need to break below the 0.6360 level. Key Quot

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, further losses in AUD/USD need to break below the 0.6360 level. Key Quotes 24-hour view: “The sharp drop in AUD to a low of 0.6390 came as a surprise (we were expecting range-trading). The decline appears to be overdone and AUD is unlikely to weaken further. For today, AUD is more likely to trade between 0.6380 and 0.6480.” Next 1-3 weeks: “After AUD rebounded strongly from 0.6364, we highlighted last Thursday (29 Sep, spot at 0.6490) that downward momentum is beginning to wane and this coupled with the strong bounce suggests the weakness in AUD could stabilize soon. We added, ‘only a break of 0.6555 would indicate AUD is unlikely to weaken further’. While AUD subsequently dropped to 0.6390 on Friday, downward momentum has not improved much. However, the risk for AUD is still on the downside but it has to break below 0.6360 first before further sustained decline is likely. Resistance wise, a breach of 0.6510 (‘strong resistance’ level previously at 0.6555) would indicate that the weakness in AUD that started more than 2 weeks ago has stabilized. Looking ahead, the next support below 0.6360 is at 0.6330.”

EUR/USD starts the week on the defensive in the sub-0.9800 region following the tepid bid bias surrounding the greenback. EUR/USD appears capped aroun

EUR/USD sheds some ground and drops below 0.9800.The greenback appears slightly bid at the beginning of the week.Eurogroup meeting, final Manufacturing PMIs next on tap in the region.EUR/USD starts the week on the defensive in the sub-0.9800 region following the tepid bid bias surrounding the greenback. EUR/USD appears capped around 0.9850, looks to data EUR/USD adds to Friday’s small downtick and slips back below the 0.9800 support at the end of the Asian trading hours on Monday. The move lower in the pair comes in tandem with the upbeat sentiment around the dollar, which in turn looks accompanied by a mild downside bias in US yields across the curve. In the same line, the German 10-year bund yields retreat for the third session in a row so far. In the euro docket, final Manufacturing PMIs are due along with the Eurogroup meeting. Across the pond, the final Manufacturing PMI will precede the key ISM Manufacturing PMI, Construction Spending and speeches by FOMC’s Bostic, Barkin and George. What to look for around EUR EUR/USD’s recovery from fresh cycle lows near 0.9350 has so far met a firm resistance area in the mid-0.9800s. In the meantime, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns and the Fed-ECB divergence. The latter has been exacerbated further following the latest rate hike by the Fed and the persevering hawkish message from Powell and the rest of his rate-setters peers. Furthermore, the increasing speculation of a potential recession in the region - which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – adds to the sour sentiment around the euroKey events in the euro area this week: Eurogroup Meeting, Germany, EMU Final Manufacturing PMI (Monday) – ECB Lagarde (Tuesday) – Germany Balance of Trade, EMU, Germany Final Services PMI (Wednesday) – Germany Construction PMI, EMU Retail Sales, ECB Accounts (Thursday) – Germany Retail Sales (Friday).Eminent issues on the back boiler: Continuation of the ECB hiking cycle. Italian post-elections developments. Fragmentation risks amidst the ECB’s normalization of its monetary conditions. Impact of the war in Ukraine and the persistent energy crunch on the region’s growth prospects and inflation outlook. EUR/USD levels to watch So far, the pair is retreating 0.05% at 0.9795 and faces the next support at 0.9535 (2022 low September 28) ahead of 0.9411 (weekly low June 17 2002) and finally 0.9386 (weekly low June 10 2002). On the flip side, the breakout of 0.9853 (weekly high September 30) would target 1.0050 (weekly high September 20) en route to 1.0197 (monthly high September 12).

Following the $1.50 bullish opening gap, WTI has entered a phase of upside consolidation just above the $81 mark, as investors digest the reports of s

Following the $1.50 bullish opening gap, WTI has entered a phase of upside consolidation just above the $81 mark, as investors digest the reports of sharp output cuts by OPEC and its allies when they meet on October 5. Further, Reuters reported that Saudi Arabia is considering raising prices for most crude grades it sells to Asia in November, as the world’s top oil exporter expects demand to recover and Chinese refineries to increase output. According to the median of the responses of five refining sources surveyed by Reuters, “the November official selling prices (OSP) for flagship Arab Light crude may rise by 25 cents a barrel.” developing story ...

Further advance in GBP/USD remains on the cards, although a test of 1.1300 seems out of favour for the time being, note FX Strategists at UOB Group Le

Further advance in GBP/USD remains on the cards, although a test of 1.1300 seems out of favour for the time being, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.  Key Quotes 24-hour view: “We highlighted last Friday that GBP ‘could continue to rise but a sustained advance above 1.1300 is unlikely’. However, GBP plummeted from a high of 1.1235 to 1.1025 before rebounding to close at 1.1165 (+0.41%). Upward pressure has subsided and GBP is likely to trade sideways for today, likely between 1.1030 and 1.1230.” Next 1-3 weeks: “We continue to hold the same view as from last Friday (30 Sep, spot at 1.1150) where the recent weakness in GBP has bottomed for now. While the strong rebound has scope to extend, the resistance at 1.1300 is unlikely to come under pressure. Overall, only a breach of 1.0800 (‘strong support’ level) would indicate that the rapid build-up in short-term momentum has eased.”

EUR/USD is now seen navigating the 0.9630-0.9950 range in the next weeks, suggest FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang. Key Quot

EUR/USD is now seen navigating the 0.9630-0.9950 range in the next weeks, suggest FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang. Key Quotes 24-hour view: “Last Friday, we held the view that EUR ‘is likely to advance to 0.9880 before a pullback is likely’. Our expectations did not materialize as EUR dropped from 0.9853 to 0.9733 before rebounding to close at 0.9799 (-0.15%). The price actions appear to be part of a consolidation and EUR is likely to trade between 0.9760 and 0.9860 for today.” Next 1-3 weeks: “We continue to hold the same view as from last Friday (30 Sep, spot at 0.9825). As highlighted, the recent EUR weakness has stabilized and EUR is likely to consolidate and trade between 0.9630 and 0.9950 for now.”

Citing European Union (EU) officials, the Financial Times (FT) reported on Monday, “Brussels wants to give EU capitals extra time to curb their debts

Citing European Union (EU) officials, the Financial Times (FT) reported on Monday, “Brussels wants to give EU capitals extra time to curb their debts and create space for public investment as part of a major overhaul of the EU’s deficit rules.” Additional takeaways “The European Commission will table a proposal at the end of October to reform the Stability and Growth Pact, under which it would work out multiyear, country-specific plans with capitals for getting their debt burdens under control.” “The idea is for member states to have greater ownership of their debt reduction plans, which they could fine-tune themselves more than they can do today.” “But once countries agree their plans with both commission and council, they would need to be delivered and would be easier to enforce.” “So it’s about balancing member state ownership with tighter enforcement.” Market reaction Ahead of the Euro Group meeting, EUR/USD is losing ground once again. The spot is trading at 0.9790, down 0.09% on the day.

Indonesia Core Inflation (YoY) below forecasts (3.6%) in September: Actual (3.21%)

Indonesia Inflation (YoY) registered at 5.95%, below expectations (6%) in September

Indonesia Inflation (MoM) came in at 1.17%, below expectations (1.26%) in September

Analysts at Scotiabank lean towards a 25 bps rate hike announcement from the Reserve Bank of Australia (RBA) on Tuesday, although the depreciation of

Analysts at Scotiabank lean towards a 25 bps rate hike announcement from the Reserve Bank of Australia (RBA) on Tuesday, although the depreciation of the Australian dollar against the US dollar could press the RBA to deliver a 50 bps lift-off. Key quotes “Minutes to the September 6th meeting ... indicated that there was discussion around both a 25bps hike and the 50bps increase they opted for which fans the impression that there may be rising appetite for slowing the pace of hikes especially given the reference to how “They acknowledged that monetary policy operates with a lag and that interest rates had been increased quite quickly and were getting closer to normal settings.” “A few days before the release of the minutes but after the meeting itself, Governor Lowe said he hoped that the cash rate would come to rest within a 2.5–3.5% rate with ‘a few’ more rate increases over coming meetings. This suggests that there is considerably more work to be done with the 2.35% current rate below the bottom of the range.” “The fly in the ointment is that both developments preceded the Federal Reserve’s more aggressive actions on September 21st with much of the emphasis placed upon the more hawkish dot plot.“ “The Australian dollar has been among the casualties in the face of the US dollar’s broadly based strength and has shed another couple of cents since then along a long-term declining trend from about 76 cents in April to roughly 65 cents now. This development might suggest a more pressing need for a bigger 50bps hike given the implications of ongoing currency weakening for import price pressures.”

The bears are emerging from a confluence of resistance on the long-term charts that is forcing the price out of last Wednesday's rally that petered ou

GBP/USD's confluence of resistance is playing into the nads of the bears at the start of the week.A break of the trendline support could be a key feature for the opening sessions. The bears are emerging from a confluence of resistance on the long-term charts that is forcing the price out of last Wednesday's rally that petered out on Friday at around 1.1235. The following illustrates the prospects of a significant sell-off for the start of the week so long as the US dollar index can find support from a recovery in US yields. DXY and 10-year yield analysis The 10-year yield which has taken a bit of a knock could be on the verge of a move up following the correction that has already started to decelerate into a 38.2% Fibonacci area of the prior bullish hourly leg. If this were to pan-out in the first sessions of the week, then that would bode well for the US dollar and the bearish thesis for GBP/USD. The DXY has formed a 15-min W-pattern and the price retested the neckline that subsequently acted as support, leading to the current bullish impulse that could find some legs into Frankfurt and beyond, solidifying the case for a blow-off to the downside in cable: GBP/USD H1 chart The price rose from Wednesday's lows of the week in three levels of rise across to Friday's high. This could lead to a sharp correction for the start of the week with a 1.0900 target on a break of 1.1020.  There is also a confluence of resistance on the weekly and daily charts as follows: The confluence of the 78.6% and and 61.8% Fibonaccis are aligned at the same spot! 

AUD/USD is paring back gains towards 0.6400, having met fresh supply on a rejection near the 0.6450 psychological level. Bears are fighting back contr

AUD/USD firms up at the start of the week, with all eyes on Tuesday’s RBA.US dollar is finding fresh demand as Asia’s factory activity weakens. Further upside appears capped in the aussie amid risk-aversion.AUD/USD is paring back gains towards 0.6400, having met fresh supply on a rejection near the 0.6450 psychological level. Bears are fighting back control, as the US dollar recovery is ganing traction amid strengthening risk-off flows in the late Asian session. The aussie is adding 0.50% on the day, at the time of writing, underpinned by a short-covering rally. Investors resort to repositioning ahead of Tuesday’s RBA policy decision. The Australian central bank is widely expected to hike rates by 50 bps but a dovih surprise of 25 bps cannot be ruled out, as recession fears mount. Despite the renewed upside, bulls have pulled back slightly over the last hours, as Asia’s factory activity weakens due to global slowdown and surging cost pressures, leaving investors on the edge. Further, falling commodities prices also add to the weight on the resource-linked aussie. Markets also remain cautious amid aggressive Fed tightening bets and ahead of the US payrolls data due for release this Friday. more to come ...

EUR/USD is clinging to recovery gains above 0.9800 so far this Monday, reversing the early dip to near 0.9785 region. The bulls lack follow-through up

EUR/USD pauses its rebound amid a renewed USD uptick and cautious mood.Treasury yields turn south, limiting the downside in the major.  21 DMA appears a tough nut to crack for EUR bulls amid holiday-thinned markets. EUR/USD is clinging to recovery gains above 0.9800 so far this Monday, reversing the early dip to near 0.9785 region. The bulls lack follow-through upside bias after staging a decent comeback on Friday. The US dollar is catching a fresh bid amid a souring market mood, as investors remain worried over aggressive Fed rate hikes, in the facing of growing recessionary fears worldwide. Also, markets look forward to the US ISM Manufacturing PMI releases amid holiday-thinned trading conditions, as China, Australia and Germany observe their respective national holidays on Monday. Meanwhile, looming Russia-Ukraine tensions and the deepening European energy crisis continue to limit the upside attempts in the main currency pair. Last week, US President Joe Biden declared that a massive leak from the Nord Stream gas pipeline system in the Baltic Sea was an intentional act.  Although the downside in the pair remains cushioned by the renewed weakness in the US Treasury yields, as risk-off flows persist. The focus now shifts towards the Eurozone and US Manufacturing PMIs and Fedspeak for fresh trading impetus. Meanwhile, the European Union (EU) Finance and Economy Ministers are set to meet in Luxembourg. The meeting is chaired by Paschal Donohoe, President of the Eurogroup. The ministers will discuss the macroeconomic situation in the euro area and seek to set priorities for the Recovery and Resilience Plans. EUR/USD: Technical outlook Looking at EUR/USD’s daily chart, sellers keep lurking at higher levels so long as the bearish 21-Daily Moving Average (DMA) at 0.9890 is taken out decisively. Ahead of that, bulls need to seek acceptance above Friday’s high of 0.9853. The 14-day Relative Strength Index (RSI) is trading flatlined below the 50.00 level, warranting caution for bulls. EUR/USD: Daily chart Therefore, failure to sustain the recovery mode will reopen the downside towards the 0.9800 support area. Further down, Friday’s low of 0.9734 could come into play once again. EUR/USD: Additional levels to consider  

The gold price is 0.3% higher on the day at the start of a new week, month and quarter while the US dollar feels some heat as it breaks to the downsid

Gold bears are moving in and taking out a potentially critical short-term trendline support.The week ahead will be focussed once again on the Fed in the run-up to the NPFs.The gold price is 0.3% higher on the day at the start of a new week, month and quarter while the US dollar feels some heat as it breaks to the downside as per the DXY index that measures the greenback vs. a basket of currencies. At the time of writing, gold is trading at $1,665.50 having traveled between a low of $1,660.95 and $1,669.57 so far.  Markets are closed in China and Australia but there is movement in the FX space which is playing through into the greenback-denominated gold that is less expensive for overseas buyers as a result. Meanwhile, financial markets have been in turmoil and there is little light seen at the end of the tunnel in this regard which would be expected to continue to underpin the US dollar, weighing on the outlook for gold prices. The S&P 500 and the Nasdaq both fell an additional 1.5% on their final trading day of the quarter on Wall Street where the benchmarks fell by around 8-9% in September. However, gold recorded its best week since mid-August due to US  Treasury yields falling onto their back foot.  The yield on the US 10-year Treasury fell to a low of 3.682% before recovering to a closing high of 3.837%. However, rising geopolitical risks saw some safe-haven buying emerge into the precious metals complex.  Nevertheless, as we move across into the final quarter of the year, the focus on the Federal Reserve will be firmly back on the market's agenda for the start of the week with resolute policymakers advocating rate rises despite risks of a recession. On Friday, Fed Vice Chair Lael Brainard endorsed the same and added to a chorus of hawkish Fed speakers at the end o the month who are hellbent on curbing inflation. Such a stance has played havoc on the yellow metal as it strips its appeal for Rising interest rates dim bullion's appeal due to the cost of holding the non-yielding asset while the US dollar extends its bullish cycle.  ''Historically, gold prices tend to display a systematic and significant underperformance in the latter stage of hiking cycles, as rates enter into restrictive territory,'' analysts at TD Securities explained. ''And, considering the increase in inflation's persistence this cycle, a restrictive regime may last longer than historical precedents with the Fed likely to keep rates elevated for some time, even as recession risks rise, which argues for a prolonged period of pronounced weakness in precious metals. Pressure is rising on a small number of family offices and proprietary trading shops to finally capitulate on their massively bloated and complacent length in gold.'' For the week ahead, the main events to watch for will be US Nonfarm Payrolls that are due at the end of the week, while a flood of manufacturing PMI data out later on Monday will also give insight into the global economic outlook. ''Employment likely continued to advance strongly in September but at a less robust pace compared to recent months,'' analysts at TD Securities said with regards to the NFP report. ''We also look for wage growth to moderate to 0.3% m/m. Separately, regional surveys continue to point to loss of momentum in mfg activity. While we look for a decline in the ISM index, we note that it has failed to match prior weakness suggested by other indicators.'' Gold and DXY technical analysis The US dollar is attempting to recover which is weighing on the gold price that is being pressured below a key short tren trendline support as the following illustrates on the hourly and 15-min time frames: a break of horizontal support opens risk of  deeper move to the downside as follows: On the daily chart, there are prospects of the price forming the right hand shoulder of what would then complete a bullish inverse head and shoulders pattern:

USD/JPY is consolidating the latest leg up from near 144.50, as the rebound remains capped below the 145.00 level amid a broadly softer US dollar and

USD/JPY treads water amid a broadly softer US dollar and light trading.The BOJ sticks to its easy policy stance in its Summary of Opinions.  USD/JPY bulls remain hopeful while above 21 DMA and ahead of US ISM. USD/JPY is consolidating the latest leg up from near 144.50, as the rebound remains capped below the 145.00 level amid a broadly softer US dollar and a mixed market mood. Chinese, Australian and South Korean markets are closed, which leaves the major gyrating in familiar ranges amid thin liquidity. Investors also trade with caution ahead of the US ISM Manufacturing PMI release later this Monday. Although the main event risk this week remains the September month American jobs report. In the meantime, the Fed and BOJ monetary policy divergence will continue to play out, with the US central bank highly likely to raise rates by 75 bps at its November meeting. Meanwhile, the BOJ must maintain current monetary easing until inflation stably exceeds 2%, the bank’s September meeting's Summary of Opinions stated. Further, yen bulls struggle as confidence among Japan’s large manufacturers unexpectedly worsened for three straight quarters following the local currency’s rapid depreciation and deterioration in the global economic outlook. From a short-term technical perspective, bulls keep their hopes high for a retest of the multi-decade highs of 145.90 so long as they hold above the bullish 21-Daily Moving Average (DMA). That support is now aligned at 143.57. Ahead of that, buyers need a sustained move above the 145.00 level. The 14-day Relative Strength Index (RSI) is pointing north above the midline, suggesting that there is more room to the upside. On the downside, the immediate cushion is seen at the 144.00 mark, below which the 21 DMA could be threatened. USD/JPY: Daily chart USD/JPY: Additional technical levels  

Japanese Finance Minister Shunichi Suzuki crossed the wires, via Reuters, in the last hour, making usual comments on the FX market moves. Key quotes N

Japanese Finance Minister Shunichi Suzuki crossed the wires, via Reuters, in the last hour, making usual comments on the FX market moves. Key quotes No comment on forex moves. Closely watching FX moves with a strong sense of urgency. Will respond appropriately against sharp FX moves. Important for FX to move stably reflecting econ fundamentals. Sharp currency moves are undesirable.

USD/CAD is on the move to the downside with 1.3750 on the bear's radar. The price is falling towards trendline support on the daily chart while having

USD/CAD bears have pounced from 1.3800 for a move into the 1.3750s.1.3750 is a key area of support given the daily trendline.USD/CAD is on the move to the downside with 1.3750 on the bear's radar. The price is falling towards trendline support on the daily chart while having already broken the 1.378- structure leaving the bias firmly on the downside for the time being: USD/CAD monthly chart The monthly chart's outlook is bullish although a meanwhile correction is starting to take shape with the key Fibonaccis lining up with the prior structure looking left. That being said, as the daily chart below illustrates, should the trendline support hold on what a[[ears to be an inevitable test, then the upside will remain the favored scenario. USD/CAD daily chart A break of the trendline, on the other hand, and subsequent support structures, then the downside correction will be well on its way. USD/CAD H1 chart At this juncture, the price has already bolted: The bears have moved into the kill for the 1.3750s. This is an area of imbalance that is being mitigated at the time of writing with bears pouncing from 1.3800 structure. If this area of support were to give, then 1.3700 will be the next reasonable target given the point of control. However, the daily trendline support should be noted which reinforces 1.3750 as support.

Japan Jibun Bank Manufacturing PMI below forecasts (51.5) in September: Actual (50.8)

The Bank of Japan's September meeting's summary of opinions states that Japan's core consumer inflation is likely to accelerate toward the year-end wi

The Bank of Japan's September meeting's summary of opinions states that Japan's core consumer inflation is likely to accelerate toward the year-end with a narrow pace of increase thereafter. Key notes Expect wide range of goods to see price rises ahead. Challenges remain to achieve boj's 2% inflation target as yet to confirm japan will see sustained wage rises. We must be humble, carefully scrutinise without any preset idea risk japan's inflation may sharply overshoot expectations including via fx moves. We must scrutinise wage moves, mechanism behind japan's price moves as existing indicators swayed largely by import price moves. There is chance japan will see high wage growth given tight labour market. Pandemic-relief programme ought to be phased out as japan only half-way in seeing end to pandemic BoJ must maintain easy policy as output gap remains negative, even though there is significant risk inflation may overshoot expectations. BoJ must maintain current monetary easing until inflation stably exceeds 2%, driven by rise in trend such as services prices. No immediate need to change monetary policy guidance now as we are in a phase where close scrutiny needed on whether japan will see positive cycle of wage, prices. Some point to interest rate divergence as factors driving yen declines. Desirable to maintain current foward guidance with dovish bias as impact of pandemic uncertain, inflation likely to slow next fiscal year and onward  When right timing comes, important to have appropriate communication with market on exit strategy from easy policy. USD/JPY under pressure Meanwhile, financial markets have been in turmoil which has been playing into the hands of the US dollar. With that being said, bears are moving into USD/JPY as follows: 144.60/70 is the support structure and a close below here on an hourly basis could be significant and open the way for a run on liquidity below 144 the figure. 

Ireland Purchasing Manager Index Manufacturing up to 51.5 in September from previous 51.1

Australia TD Securities Inflation (MoM) increased to 0.5% in September from previous -0.5%

The AUD/USD pair has rebounded sharply in the Tokyo session after dropping below 0.6400. The rebound move is still a pullback after a healthy decline

Aussie bulls to test the two-year low at 0.6360.A bear cross, represented by the 20-and 50-EMAs adds to the downside filters.The antipodean has failed to capitalize on the recent DXY's correction.The AUD/USD pair has rebounded sharply in the Tokyo session after dropping below 0.6400. The rebound move is still a pullback after a healthy decline and should not be considered a reversal for now. Last week, the aussie bulls found a cap at around 0.6530, the level is expected to remain a key hurdle if the asset extends its recovery. On an hourly scale, the aussie bulls are expected to re-test their two-year low placed at 0.6363, recorded on Wednesday. Traders should be aware of the fact that a recent corrective action in the US dollar index (DXY) is not enjoyed by the commodity-linked currencies while the shared continent and pound region have performed extremely better. Therefore, a pullback move in the DXY will result in a plunge in the antipodean. The 20-and 50-period Exponential Moving Averages (EMAs) have delivered a bear cross around 0.6480, which indicates more weakness ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00 but is trying to overstep 40.00. A drop below the two-year low at 0.6363 will drag the asset towards the 16 April 2020 low at 0.6264, followed by the round-level support at 0.6100. On the flip side, a break above the previous week’s high at 0.6538 will drive the asset towards and September 22 high at 0.6670 and September 18 high at 0.6734. AUD/USD hourly chart      

A price of a barrel of oil has rallied in the open of the week while markets price in OPEC risk against a poor economic backdrop and rising supply sid

WTI rallies in the open in thin liquidity and bulls eye the 82.50s.OPEC is the driver as speculation mounts for a production cut this week. A price of a barrel of oil has rallied in the open of the week while markets price in OPEC risk against a poor economic backdrop and rising supply side issues. The OPEC+ alliance is due to meet on 5 October to review its production agreement and there is talk of a 1m barrel cut to output per day. The group has already signaled that it is willing to intervene to support prices. ''This comes as oil prices come under pressure amid concerns of weaker demand,'' analysts at ANZ Bank explained. ''We suspect it will be moved to counteract the excessive bearishness in the market by announcing a cut to production. Anything less than 500kb/d would be shrugged off by the market. Therefore, we see a significant chance of a cut as large as 1mb/d.'' The spike in prices comes despite Friday’s news that China has issued new crude oil import and export quotas as it seeks to revive its economy. The giant consumer has issued at least 2.89 million tonnes of crude oil import quotas to non-state refiners in the third round of allotments for 2022. NASDAQ reported the new allowances bring China's total non-state import quotas to 164.61 million tonnes this year, comparing to 162.25 million tonnes during the same period in 2021. Most importantly, however as argued by analysts at TD Securities, ''OECD inventories continue to decline at a fast pace, and the end of US SPR releases this November will exacerbate implications for prices. An OPEC+ likely production cut in the range of 500k-1m bpd at next week's Oct 5th meeting could suggest that, barring a very hard landing, the bottom is in for crude prices.'' WTI technical analysis The gap can be considered as a candle that goes to making a W-formation. This is a reversion pattern and speculators may be inclined to look to lower time frames for bearish structure for the day ahead that could be leaned against while seeking a setup to go short while the price remains below resistance: With that being said, while the support structure remains intact, as per the 1-min chart above, the bias remains to the upside. 

Japan Tankan Non - Manufacturing Outlook below expectations (15) in 3Q: Actual (11)

Japan Tankan Large Manufacturing Outlook below forecasts (11) in 3Q: Actual (9)

Japan Tankan Non - Manufacturing Index above expectations (13) in 3Q: Actual (14)

Japan Tankan Large All Industry Capex came in at 21.5%, above forecasts (18.8%) in 3Q

Japan Tankan Large Manufacturing Index came in at 8 below forecasts (11) in 3Q

The NZD/USD pair has rebounded firmly after picking bids around 0.5600 in the Tokyo session. Last week, the asset witnessed a steep decline after fail

NZD/USD has picked bids from around 0.5600 on soaring hawkish RBNZ bets.The RBNZ is expected to escalate its OCR 50 bps consecutively for the fifth time.The gloomy outlook for US ISM PMI data is weakening the DXY.The NZD/USD pair has rebounded firmly after picking bids around 0.5600 in the Tokyo session. Last week, the asset witnessed a steep decline after failing to cross the critical hurdle of 0.5750. The kiwi bulls witnessed an intense sell-off despite a decline in the monthly Consumer Price Index (CPI) data. The monthly inflation data declined to 6.8% from the prior release of 7%. Also, the downbeat Caixin Manufacturing PMI data kept the antipodean on the tenterhooks. The economic data has landed at 48.1, lower than the expectations and the prior release of 49.5. It is worth noting that New Zealand is a leading trading partner of China and a weaker-than-projected Caixin Manufacturing PMI data carries a significant impact on NZ exports. This week, investors’ focus will be on the interest rate decision by the Reserve Bank of New Zealand (RBNZ). Reuters poll on RBNZ rate hike forecast claims a fifth consecutive rate hike by 50 basis points (bps). A fifth half-a-percent rate hike by the RBNZ Governor Adrian Orr will push the Official Cash Rate (OCR) to 3.5%. It would be worth watching whether an OCR above 3% is sufficient to anchor the galloping inflation. Meanwhile, the US dollar index (DXY) is expected to drop below the immediate cushion of 112.00. The DXY is likely to witness a sheer decline ahead of US ISM Manufacturing PMI data. The continuation of ‘the hawkish’ stance on interest rates by the Federal Reserve (Fed) has shrunk the extent of manufacturing activities. Firms have postponed their expansion plans due to higher interest rates and bleak demand growth. As per the projections, the US ISM Manufacturing data will decline to 52.3 vs. the former release of 52.8. Also, the US ISM New Orders Index data, which is an indicator that reflects forward demand is expected to drop significantly to 49.6 against the prior reading of 51.3.  

The GBP/USD pair is struggling to smash the immediate hurdle of 1.1200 in the early Tokyo session. The cable has displayed a modest upside move after

GBP/USD is expected to smash 1.1200 as the DXY is displaying a subdued performance.Weaker consensus for US ISM Manufacturing PMI would keep the DXY on the back foot.The UK economy reported upbeat GDP data despite various headwinds.The GBP/USD pair is struggling to smash the immediate hurdle of 1.1200 in the early Tokyo session. The cable has displayed a modest upside move after the termination of the corrective move to near 1.1022. The major is expected to continue its lackluster performance in the 1.1100-1.1170 range and will later display a bullish imbalanced move. On Friday, the pound bulls didn’t respond in expectation to the upbeat UK Gross Domestic Product (GDP) data. The UK National Statistics reported that the economic activities in the UK economy have grown by 0.2% against the expectation of a decline of 0.1% on a quarterly basis. Also, the annual data has improved dramatically to 4.4% vs. the projections and the prior release of 2.9%. There is no denying the fact that the deepening energy crisis has hurt the sentiment of UK households. Apart from that, galloping price pressures, weak economic fundamentals, and the inability to generate decent employment opportunities have created chaos for the Bank of England (BOE) policymakers. Despite the several headwinds the pound region has managed to display an uptick in the GDP data. Meanwhile, the ongoing bond-buying program by the BOE to bring stability to the financial markets is offsetting the impact of hawkish monetary policy to a certain point. The US dollar index (DXY) is expected to drop below the immediate support of 112.00 on lower consensus for the US ISM Manufacturing PMI data. According to the estimates, the US ISM Manufacturing data will release at 52.3 vs. the former release of 52.8. Accelerating interest rates by the Federal Reserve (Fed) to bring price stability to the economy has forced the corporate to withdraw their expansion and investment plans. Adding to that, the US ISM New Orders Index PMI data will trim sharply to 49.6 vs. the prior release of 51.3.  

Australia S&P Global Manufacturing PMI below forecasts (53.9) in September: Actual (53.5)

Gold price (XAU/USD) has given an upside break of the minor consolidation, in early Asia, formed in a $1,660.20-1,663.32. The precious metal is marchi

Gold price is advancing towards $1,680.00 as US ISM Manufacturing data carries subdued expectations.A decline in US ISM New Orders Index data indicates sluggish demand ahead.Subdued forward demand could be the outcome of lower households’ purchasing power.Gold price (XAU/USD) has given an upside break of the minor consolidation, in early Asia, formed in a $1,660.20-1,663.32. The precious metal is marching towards the critical hurdle of $1,680.00 as the market participants are expecting a decline in the US ISM Manufacturing PMI data, which will release on Monday. As per the preliminary estimates, the US ISM Manufacturing data will release at 52.3 vs. the former release of 52.8. Accelerating interest rates by the Federal Reserve (Fed) to bring price stability to the economy has forced the corporate to withdraw their expansion and investment plans. This is resulting in a decline in manufacturing activities in the US economy. What is more haunting for the US dollar index (DXY) is a significant decline in the consensus for ISM Manufacturing New Orders Index data. The economic data is seen at 49.6 vs. the prior release of 51.3. The economic indicator determines future demand by firms to cater to retail demand. A decline in New Orders Index data indicates sluggish demand ahead, which could be the result of a vigorous decline in the purchasing power of households due to mounting price pressures. Gold technical analysis Gold prices have entered the prior balanced area, which is placed in a range of $1,653.30-1,688.43 on an hourly scale. The balanced area indicates the highest auction region where most of the trading activity took place. A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at $1,635.03 adds to the upside filters. While the Relative Strength Index (RSI) (14) will display a bullish momentum if it will overstep 60.00 decisively. Gold hourly chart        

The EUR/USD pair is displaying back-and-forth moves around 0.9800 in the early Tokyo session. The asset has turned sideways in a 0.9780-0.9815 range a

EUR/USD turns sideways around 0.9800 as the focus has shifted to the US NFP data.As expected, the DXY didn’t respond well to the higher-than-expected US core PCE data.German markets are closed on account of the Day of German Unity.The EUR/USD pair is displaying back-and-forth moves around 0.9800 in the early Tokyo session. The asset has turned sideways in a 0.9780-0.9815 range as the currency domain is developing itself ahead of the US employment data. For a while, the shared currency bulls are expected to drive the asset higher as it has concluded the corrective move below 0.9750 after hitting a high of 0.9850. On Friday, the US dollar index (DXY) displayed a lackluster performance despite a higher-than-expected core Personal Consumption Expenditure (PCE) Price Index, Federal Reserve (Fed) preferred inflation tool to gauge inflation. The economic data landed at 4.9%, higher than the expectations and the prior release of 4.7%. The impact was expected lower as the market participants have already displayed their response toward the more-than-predicted release of the headline Consumer Price Index (CPI) and core CPI for September. In response to that, the Fed also hiked the interest rate by 75 basis points (bps) for the third consecutive time. Going forward, the US employment data will hog the limelight. As per the consensus, the US Nonfarm Payrolls (NFP) will land at 250k vs. the prior release of 315k. While the Unemployment Rate will remain steady at 3.7%. On the Eurozone front, the Eurozone Retail Sales data will be of utmost importance. The economic data is expected to decline by 1.7% against a decline of 0.9% reported earlier. In times, when the inflation rate is mounting firmly, a decline in Retail Sales is a cause of worry. Meanwhile, investors should be aware that German markets are closed on Monday on account of the Day of German Unity.    

AUD/USD corrected from a key area on the charts on Friday with a test back through 0.64 the figure hardly left a mark on the downtrend that remains th

The focus will be on the RBA as a meanwhile distraction this week for the pair.AUD/USD bears took out key monthly support in September.AUD/USD corrected from a key area on the charts on Friday with a test back through 0.64 the figure hardly left a mark on the downtrend that remains the bias for the start of the week and ahead of the Reserve Bank of Australia.  In the RBA Sep minutes, the Board judged that it may be appropriate 'at some point' to scale back to 25bps hikes, but we think it is too soon for that. Data on balance is still strong, which suggests the economy is holding up well, as analysts at TD Securities noted. ''Thus, this affords room for the RBA to front-load hikes further as the Governor notes the current cash rate is "still probably on the low side".'' Meanwhile, the focus is firmly on the greenback, and prospects of more upside to follow as we move into a new quarter, as per the following analysis:US dollar Price Analysis: Bullish prospects for the start of the weekMeanwhile, domestically, going forward Australian growth is set to slow, analysts at Rabobank argued.  ''The central bank forecasts growth at 3¼ per cent over 2022, underpinned by growth in consumption and a recovery in investment and service exports. Growth is then expected to slow to around 1¾ per cent over both 2023 and 2024. This outlook compares favorably with the Eurozone, UK and the US all of which are at risk of recession next year.'' '' We had anticipated a pullback to AUD/USD0.69 on the back of dollar strength.  We continue to see scope for AUD/USD to clamber back to 0.71 on a 6-month view.'' AUD/USD technical analysis Bears took the reigns again last month and broke a key structure as illustrated on the above chart, leaving the focus on the downside. However, breakout traders could come under heat on any corrections for the days/weeks ahead.  AUD/USD daily chart The daily chart, however remains bearish while below the trendline resistance.
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