Forex

USD/CNH: Rebound could re-visit 6.8600 – UOB
Forex

USD/CNH: Rebound could re-visit 6.8600 – UOB

Further upside in USD/CNH is likely to test the 6.8600 region in the next weeks, according to FX Strategists at UOB Group. Key Quotes 24-hour view: “Last Friday, we expected USD to ‘trade sideways between 6.8000 and 6.8400’. USD subsequently traded within a narrower and slightly higher range than expected (6.8110/6.8448) before closing little changed at 6.8236 (-0.05%). Momentum indicators are mostly neutral and further sideway-trading would not be surprising, likely between 6.8100 and 6.8400.” Next 1-3 weeks: “Two days ago (22 Sep, spot at 6.7900), we highlighted that the ‘month-long negative phase has run its course’. We held view that the ‘rebound in USD has room to extend higher but any advance is viewed as part of a broad 6.7500/6.8300 range’. While our view was not wrong, the pa...
NZD/USD Price Analysis: Runs into 5-day SMA hurdle, bias remains bearish
Forex

NZD/USD Price Analysis: Runs into 5-day SMA hurdle, bias remains bearish

NZD/USD prints gain to test key SMA hurdle.  Daily chart shows a double top bearish reversal pattern.  NZD/USD is pushing against the 5-day simple moving average (SMA) hurdle at 0.6564, having picked up a bid 0.6541 early Monday. The uptick could be associated with the gains in the US stock index futures and the dollar's broad-based moderate losses. However, the bias remains bearish, with the pair trading well below 0.6601 – the double top neckline breached to the downside on Sept. 23. Also, the 14-day relative strength index continues to report bearish conditions with a below-50 print. The 10-day and 50-day simple moving averages (SMAs) are about to produce a bearish crossover. The support is located at 0.6507 (100-day SMA) and 0.6489 (Aug. 20 low), and resistances are seen...
Coronavirus update: France reports 14,412 new cases, J&J’s vaccine shows strong immune response
Forex

Coronavirus update: France reports 14,412 new cases, J&J’s vaccine shows strong immune response

According to the latest data published by the French Health Ministry on Saturday, the number of new coronavirus cases in the country spiked by a whopping 14,412, bringing up the tally to 527,446. Note that a daily record of 16,096 new infections was set earlier this week. France reported 39 new deaths as the total fatalities rose to 31,700. Meanwhile, the UK recorded 6,042 new coronavirus cases and 34 deaths a day before, despite the latest activity restrictions. The official data showed the rolling seven-day average of daily cases has surged by 54% in a week. The death toll now stands at 41,971. Infectious disease modeling expert Professor Graham Medley, who sits on the Scientific Advisory Group for Emergencies (SAGE), said: 'At a level of 10,000 (cases) we are seeing now, means tha...
Forex Today: Risk-off, Brexit, and a pinch of hope
Forex

Forex Today: Risk-off, Brexit, and a pinch of hope

Here is what you need to know on Monday, September 28: Coronavirus concerns continued to weigh upon risk sentiment and backing a dollar’s rally. The American currency closed the week higher against all of its major rivals. EUR/USD traded as low as 1.1611,  settling not far above the level. The escalation in the number of coronavirus cases through all Europe and the announcement of restrictive measures in several countries will likely continue to pressure the shared currency. The GBP/USD pair held above 1.2700, amid renewed hopes for a Brexit trade deal. The EU and the UK will start their ninth round of talks this Tuesday, the final stage of Brexit trade talks ahead of the EU summit that will take place in Brussels in mid-October. CBI head,  Carolyn Fairbairn,  said during the weekend t...
Gold Price Analysis: XAU/USD holds onto 100-DMA support ahead of the NFP week
Forex

Gold Price Analysis: XAU/USD holds onto 100-DMA support ahead of the NFP week

Gold looks south, with the focus on the key 100-DMA support. $1932/42 zone is the level to beat for the bulls. Focus on US NFP release for the next direction in gold. Following the 4.5% weekly loss, Gold (XAU/USD) has locked itself in a $100 range stepping into the critical US Non-Farm Payrolls week, as depicted by the daily chart. The metal fell to the lowest in two months last week after it faced rejection at the two-month-long falling trendline resistance on several occasions. Adding credence to the breakdown, the 21-day Simple Moving Average (DMA) pierced the 50-DMA from above. The bright metal delivered a weekly closing at $1862, although remained well above the 100-day Simple Moving Average (DMA) at $1845. Note that the price bounced-off the latter for the sec...
BOE’s Tenreyro: Evidence on negative rates is ‘encouraging’
Forex

BOE’s Tenreyro: Evidence on negative rates is ‘encouraging’

The Bank of England’s (BOE) study of the impact of negative interest rates to support the economy from the coronavirus pandemic-induced downturn revealed ‘encouraging’ evidence, said policymaker Silvana Tenreyro in a Sunday Telegraph interview published late Saturday. Key quotes “The evidence has been encouraging,” adding that cuts in interest rates below zero had been almost fully reflected in reductions in interest rates charged to borrowers. “Banks adapted well – their profitability increased with negative rates largely because impairments and loss provisions have decreased with the boost to activity and the increase in asset prices.” “Flare-ups, like we’re seeing, may potentially lead to more localized lockdowns and will keep interrupting that V (-shaped recovery). Another factor...
Gold Price Analysis: Downside more compelling for XAU/USD in the NFP week ahead – Confluence Detector
Forex

Gold Price Analysis: Downside more compelling for XAU/USD in the NFP week ahead – Confluence Detector

Gold (XAU/USD) shed about 4.5% in the past week, delivering a weekly closing below the August month low of $1863. The yellow metal booked the first weekly loss in three, with the risks skewed to the downside in the US Non-Farm Payrolls (NFP) week ahead. The persistent haven demand for the US dollar, in the wake of fiscal stimulus wrangling and coronavirus resurgence in key economies, continues to exert the downward pressure on the metal. Further, central banks’ skepticism on providing additional monetary stimulus also undermines the sentiment around gold. How is gold positioned technically, with all eyes on the critical US NFP release? Gold: Key resistances and supports Gold failed to hold onto the critical $1862 barrier on a daily closing basis. Therefore, the Technical Confluences In...
Fitch affirms UK at ‘AA-‘; Outlook negative
Forex

Fitch affirms UK at ‘AA-‘; Outlook negative

Late Friday, the US-based Fitch Ratings affirmed the UK’s sovereign credit rating at 'AA-' with maintaining a negative Outlook. Key takeaways “The Negative Outlook reflects the impact the coronavirus pandemic is having on the UK economy and the resulting material deterioration in the public finances, with Fitch forecasting the fiscal deficit to materially widen this year and government debt set to increase to well over 120% of GDP over the next few years. “ “The COVID-19 pandemic and the containment measures imposed to limit its spread have hit UK economic activity hard.”  “Changes in UK-EU trading arrangements are likely to curtail the pace of recovery as the Brexit transition period ends on 1 January 2021.”  Related reads Credit: FX Street
USD/JPY Price Analysis: The pair looks to be heading right back into the middle of the range
Forex

USD/JPY Price Analysis: The pair looks to be heading right back into the middle of the range

USD/JPY trades 0.18% higher on Friday and 1% higher on the week. There was a strong rejection of 104.00 to the downside. USD/JPY daily chart USD/JPY does not seem to like trading below 104.00 as there seems to be a quick recovery as soon as the level is pierced. The key level on the chart is the area marked in orange at 106.00. This level seems like a magnet for price and if the bulls manage to break the level it could be significant in the future.  There are also two trendlines to look out for on the chart. The first is marked in blue and the market is currently testing the zone. The black trendline is the stronger one as it has had more touches.  The indicators are back to mid-range as the price has pulled back. The MACD signal lines are still bearish, howeve...
Fed’s George: Bank strains could still materialize
Forex

Fed’s George: Bank strains could still materialize

The Federal Reserve's monetary policy and changing capital rules may hasten the ongoing consolidation in the banking industry, Kansas City Federal Reserve Bank President Esther George said on Friday, as reported by Reuters. In her prepared remarks for delivery to the Independent Bankers of Colorado, George warned that bank strains could still materialize and noted that community banks need to be vigilant given stress in their core markets, particularly commercial real estate. Market reaction These comments don't seem to be having a significant impact on market sentiment. As of writing, the S&P 500 Index was up 0.4% on the day at 3,260. Credit: FX Street