Lukman’s Week Ahead: Market themes to watch out for – Webinar Dec 14

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at: • The key themes driving the financial markets • Technical and fundamental trading ideas on the MT4 platform • How to use the latest FXTM trading signals • Using fundamental analysis to increase your profit potential • What to monitor over the coming week

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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets. Read his full profile here.

Technical Outlook: Gold Tumbles to 4-Month Low

The primary culprits behind Gold’s sharp decline revolved around the better-than-expected U.S business activity data and rising optimism over the progress in a Covid-19 vaccine. Appetite towards the safe-haven asset took another hit amid the triggering of a formal transition process to President-elect Joe Biden. With Biden set to nominate former Federal Reserve Chair Janet Yellen to become the next Treasury secretary, this may boost the prospects for further fiscal and monetary stimulus given her reputation as a dove. Such a move has been welcomed by investors, further pressuring Gold which has weakened over 2% since the start of the week.

Now that Gold bears have awoken from hibernation and broken below the $1850 support level, the path of least resistance for the precious metal points south. Given how the MACD trades to the downside and the death cross technical formation – (where the 50-day simple moving average crosses below the 100-day simple moving average) is in play, bears are currently in the driving seat. Sustained weakness below the $1850 support may open the doors towards $1815 level and the psychological $1800 level above the 200-day simple moving average.

Zooming out to the weekly timeframe, a solid close below the $1850 could signal the start of a bearish trend. Prices are already trading below the 20 SMA while the MACD is displaying early signs of crossing to the downside. Should bears keep prices below $1850 this week, previous support could transform into a dynamic resistance that encourages a decline towards $1800 and $1760.

For those who are focusing on the shorter timeframes, there are some interesting developments on the hourly charts. An intraday rebound towards the $1840 level could be on the cards. Should this level prove to be reliable resistance, prices may decline back towards the $1820 level. If the risk-on mood further dampens appetite for the safe-haven asset, prices may break below $1820 with the psychological $1800 a key point of interest.

Back to the fundamentals

While the positive vaccine news is set to impact Gold in the near term, the medium to longer term outlook may be influenced by lower interest rates and possible rise in inflation. Given how the Federal Reserve is expected to leave interest rates unchanged until at least 2023, the central bank could expand its QE program to support the US economy. Such may weaken the Dollar – essentially providing support to Gold.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: GBPUSD Recovery Extends Beyond 1.3250

Buying sentiment towards Sterling received a solid boost on Tuesday following reports that the U.K and European Union could find a middle ground on future trading and security relationship as early as next week. Earlier today we covered the fundamentals behind such a key development, now our focus turns to the technicals and potential trading setups on the GBPUSD and other Pound crosses.

GBPUSD eyes 1.3300

The GBPUSD is bullish on the daily timeframe. There have been consistently higher highs and higher lows while the MACD trades to the upside. Pound bulls are eyeing the 1.3300 resistance level. A breakout above this point could open the path towards 1.3400.

On the weekly charts, bulls remain in control above the 1.3100 higher low. A solid weekly close above 1.3300 may trigger a move towards 1.3482.

It has been more than two years since the GBPUSD traded above the 1.3500 level. The upside momentum may notch up a gear if 1.3500 is conquered on the monthly timeframe. A solid close above this point may trigger a move towards levels not seen since April 2018 above 1.4300.

EURGBP pressured below 0.9000

An appreciating Pound is likely to keep the EURGBP below the 0.9000 resistance level. An intraday breakdown below 0.8950 could signal a decline towards 0.8900 and 0.8870. This bearish setup becomes invalidated if prices rebound above the 0.9000 lower high.

GBPJPY balances above 137.90

The title says it all. Prices remain trapped around the 137.90 regions. However, lagging indicators such as the MACD and 20 simple moving average pointing to further upside. Should 137.90 become the new higher low, the GBPJPY could rebound towards 139.00 and beyond. Alternatively, weakness under 137.90 is likely to trigger a selloff towards 136.50.

GBPAUD playing the range

The pound remains in a wide range against the Australian Dollar with support at 1.8000 and resistance at 1.8400. An intraday breakout above 1.8250 could trigger an incline towards 1.8400. If 1.8250 proves to be reliable resistance, prices have scope to decline back towards 1.8000.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Dollar Licks Wounds Ahead of US Retail Sales

Growing concerns over the transfer of power to President-elect Joe Biden and surging coronavirus cases in not only Europe but the United States compounded to the growing caution – offering the Dollar Index (DXY) some additional support.

One can’t help but feel that the Greenback may be waiting for a fresh directional catalyst to make its next big move up or down. The DXY has been trading with the same range on the daily timeframe since July 2020!

Before we sink our teeth into the technicals, there are a couple of fundamental themes that will most likely influence the Dollar’s valuation for the rest of 2020.

s the race for a coronavirus vaccine builds momentum, markets are becoming increasingly optimistic over a sense of normality returning across the globe. Should a COVID-19 vaccine become widely distributed and revive not only global trade but economic growth, the Dollar could tumble amid the risk-on mood. However, it is far too early for any celebrations.

On the data front, the US retail sales data will be published this afternoon with investors looking for fresh clues on whether the Federal Reserve will make a move in December. In October, retail sales are forecast to rise by 0.5% on a monthly basis, compared to the 1.9% witnessed in September. Over the past few months, US retail sales have been quite volatile thanks to the coronavirus menace. However, a disappointing figure will most likely weigh on sentiment and boost expectations over the Fed taking action sooner than later.

It must be kept in mind that US infections are sky rocketing while Congress remains entangled in an ongoing stalemate over a fresh round of US stimulus. Despite the bright spots of economic data, the United States is certainly not out of the woods yet. Given how the Fed is expected to leave interest rates unchanged until at least 2023, the central bank my simply buy more bonds through its QE program.

Back to the technicals

Believe its or not, the Dollar Index (DXY) still remains in a wide range on the monthly timeframe with support at 91.80 and resistance at 94.80. The last time prices traded outside these regions was back in June 2020. If bulls are able to conquer the 94.80 resistance level, the Dollar Index could challenge 98.00 and beyond. However, a breakdown below 91.80 is seen opening the doors back towards 88.80.

Nothing new here on the weekly timeframe. Prices are respecting a bearish channel; however strong support can be found around 92.00. Lagging indicators such as the 20 Simple Moving Average and MACD point to the downside. However, a daily close above 94.00 may trigger a move towards 94.80 and 95.00.

On the daily charts, the Dollar Index is trading below 92.70 as of writing. Sustained weakness below this level may open the doors back towards 92.00 and 91.80. If bulls regain enough confidence to push back above 92.70, prices may venture towards 93.30 and 94.00, respectively.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: Time for a Dollar Rebound?

After an explosion of vaccine optimism propelled global stocks to record highs earlier in the week, questions were later raised over how the drug will be produced and delivered which essentially dragged investors back to reality. Persistent concerns around the U.S fiscal stimulus and possible delay in the transition of power to President-elect Joe Biden dampened the market mood while surging coronavirus cases in Europe and the United States rubbed salt into the wound. With uncertainty still the name of the game and the core themes weighing on global sentiment firmly intact, king Dollar could make a comeback.

Talking technicals, the Dollar Index (DXY) remains in a wide range on the monthly timeframe with support at 92.00 and resistance at 95.00. The last time prices traded outside these regions was back in June 2020. Over the past few weeks, it has felt like the Dollar has been waiting for a fresh directional catalyst to breakout of the current range. If bulls are able to conquer the 95.00 resistance level, the Dollar Index could challenge 98.00 and beyond. However, a breakdown below 92.00 is seen opening the doors back towards 90.00.

It is the same story on the weekly timeframe. Prices are respecting a bearish channel; however strong support can be found around 92.00. Lagging indicators such as the 20 Simple Moving Average and MACD point to the downside. However, a daily close above 94.00 may trigger a move towards 94.80 and 95.00.

Before we knuckle down on the daily time, it must be kept in mind that there a wide selection of fundamentals themes influencing the Dollar. On Thursday, all eyes will be on the latest US inflation and jobless claims data which should provide fresh insight into the health of the largest economy in the world. Tomorrow’s U.S. inflation numbers expect to see a 0.1% increase to 1.8% in the core number, which excludes food and fuel while CPI is expected to dip to 1.3% this from 1.4%.

Focusing back on the technicals, the Dollar Index is trading above 92.70 as of writing. A solid close above the 93.40 level could pave a way towards 94.00 and 94.65. If 92.70 proves to be unreliable support, the DXY may slip back towards the 92.00 support.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market Themes to Watch Out For – Webinar Oct 26

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at: • The key themes driving the financial markets • Technical and fundamental trading ideas on the MT4 platform • How to use the latest FXTM trading signals • Using fundamental analysis to increase your profit potential • What to monitor over the coming week

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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets. Read his full profile here.

Earnings Preview: Tesla in Focus

Such mouth-watering gains have made it the best performer on the Nasdaq in 2020 and golden child of the automaker industry.

This is incredible stuff, especially when considering how the coronavirus pandemic has severely punished the majority of stocks across the globe. Although the phenomenal rally witnessed over the past few months make Tesla one of the star performers in 2020, the upside has lost momentum recently with shares on their longest losing streak since mid-March. Stocks tumbles as much as 2.4% on Tuesday, bringing losses to losses to as much as 8.3% over the past four days – the biggest fall over such a period since September 25.

All eyes will be on Tesla’s latest earnings report which is scheduled to be released after US markets close on Wednesday. Wall Street is expecting earnings of $0.56 a share, up from the $0.37 seen in the same period last year. Revenue is pegged at $8.26bn, a hefty 31% increase on last year’s $6.3bn. If the company is able to dish out an upside surprise, this could inject Tesla bulls with enough inspiration to elevate prices back to all-time highs.

Digger deeper, Tesla already offered an appetizer over what to expect for its earning after revealing that it produced 139,000 cars during the third quarter of 2020. This was over 50% more than Q2 thanks to a jump in demand for the Model 3 and new Model Y. While such a performance would be a welcome development for stocks, investors are more concerned whether Tesla will be able to deliver 500,000 vehicles this year.

The million dollar question is whether Tesla can deliver 500,000 cars in 2020. 318,777 cars have already been created during the first three quarters of 2020. This means that Tesla needs to sell at least 181,223 cars during the final quarter of 2020 to achieve this ambitious target. Whatever the outcome of the pending earnings report, it will certainly have an impact on Tesla stocks.

Talking technicals, prices have been under pressure on the past few weeks after investors reversed from Tesla stocks following Elon’s Musk’s flat Battery Day. A sense of anticipation is mounting ahead of the earnings report. Will Tesla bulls be instilled with enough inspiration to send prices back towards $500 or will a disappointing report bring bears back into the picture? Time will tell.


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: Are Dollar Bulls Back in Town?

Dollar bulls were injected with a fresh dosage of inspiration yesterday after the IMF warned that COVID-19 would cause “lasting damage” to the global economy. Appetite towards the Greenback was sweetened further by dimming hopes for more fiscal stimulus before the U.S election after House Speaker Nancy Pelosi a $1.8 trillion relief proposal from the White House. With rising coronavirus cases across the globe draining investor confidence and fostering a sense of unease, king Dollar could make a return in Q4.

What are the technicals saying?

Well, the Dollar Index (DXY) is under pressure on the monthly timeframe. It is still nursing deep wounds inflicted during Q3 as vaccine optimism and stimulus hopes turbocharged risk sentiment. There is something about the 94.00 resistance which has acted a dynamic level over the past few years. A solid monthly close above this point could open a path back towards 97.50 in the medium term. Alternatively, if 94.00 proves to be reliable resistance, then prices may slip back towards 92.00.

Weekly timeframe paints similar picture

Prices remain in a downtrend on the weekly charts as there have been consistently lower lows and lower highs. Prices are trading below the 20 Simple Moving Average while the MACD trades to the downside. If Dollar bulls are unable to break above the 94.80 lower high, the next key point of interest may be found around 92.00. Although technicals are in favour of bears, the fundamentals could throw the Dollar a much-needed lifeline.

A quick peek into the fundamentals

Speaking of fundamentals, US inflation rose in September at the slowest pace in four months, signalling little threat of rising inflation as the US economy heals. Consumer prices 0.2% from the prior month after 0.4% gain in August. So much for the Feds policy shift to let inflation rip higher….

Investors will direct their attention towards the latest unemployment claims data on Thursday and retail sales report on Friday. After increasing by a tepid 0.6% month-over-month in August, retail sales are forecast to rise by 0.7% in September.

Back to the technicals

It’s all about the 94.00 resistance level on the daily charts. Bulls need to secure a solid daily close above this point to encourage a move towards 94.65 and 96.00. Prices are trading below the 20 and 50 SMA but the MACD trades to the upside. If the risk-off mood drags on amid fading stimulus hopes, election jitters and rising coronavirus cases, king Dollar may defy technicals by exploding higher.

Commodity spotlight – Gold

Just can’t help but feel that it has been the same old story with Gold.

Prices remain rangebound despite the stimulus developments and rising coronavirus cases across the globe. If the Dollar continues to weaken on dimming stimulus hopes, this could drag Gold prices lower despite the risk-off mood. Looking at the technical picture, the metal is down almost 2% this week with a breakout/down setup in play. If $1890 proves to be unreliable support, prices could decline back towards $1858 and $1845. Alternatively, an intraday breakout above $1935 could open the doors towards $1965.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market themes to Watch Out for – Webinar Oct 12

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at: • The key themes driving the financial markets • Technical and fundamental trading ideas on the MT4 platform • How to use the latest FXTM trading signals • Using fundamental analysis to increase your profit potential • What to monitor over the coming week

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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets. Read his full profile here.

Markets Reflect Confusion From Trump’s Tweet Storm

Many on Wall Street were left bemused when Trump called for an end to negotiations on additional stimulus until after the election. Why would the White House make such an unexpected move away from an economic boost, especially when factoring how the US economy remains fragile following a recession earlier this year? But later in the evening, Trump sowed more confusion by agreeing with Powell’s assessment that there would be low risk to “overdoing” stimulus. The real icing on the pudding was the fact that Trump later backtracked from completely scrapping negotiations, urging lawmakers to extend US$25 billion in new payroll assistance to US passenger airlines and a separate program for small business.

Asian shares were mixed this morning despite an overnight decline on Wall Street that saw the S&P 500 close 1.40% lower. The mood is likely to remain cautious with investors adopting a guarded approach as markets evaluate the likelihood over a fourth stimulus package before the November 3 presidential election.

Time for EURUSD to drop?

Over the past few days, it has been the same old story with the EURUSD. Prices have traded within a wide range with support around 1.16770 and resistance just below 1.18250.

Price action suggests that the EURUSD could be waiting for a fresh directional catalyst to break out or down from the current range. Looking at the indicators, prices are trading below the 50 Simple Moving Average while the MACD has crossed to the downside. Sustained weakness below 1.17500 could open the doors towards 1.16770 and 1.16000, respectively. Alternatively, a breakout above the 1.18250 level could trigger a move towards 1.19650.

GBPUSD capped below 1.3000

As the clock dangerously ticks closer to Boris Johnsons October 15th Brexit deadline, fears are mounting over the United Kingdom leaving the European Union with no deal by the end of 2020.

These concerns are reflected in the British Pound, which weakened against every single G10 currency yesterday. Looking at the GBPUSD, prices are coming under increasing pressure on the daily charts with 1.3000 proving to be a tough resistance level. A solid close below 1.2900 may encourage a decline towards 1.2750 and 1.2650, respectively.

If bulls are able to secure a close above 1.3000, the GBPUSD could jump towards 1.3100.

Commodity spotlight – WTI Oil

It is no surprise Oil prices turned volatile on Tuesday evening after U.S President Donald Trump dished out confusing and contradicting tweets revolving around the fourth stimulus package. The commodity is edging higher this morning as some stability returns to markets. When looking at Oil, it is the same oil story as rising coronavirus cases across the globe fan fears around slowing world growth and pace of demand recovery. Fresh signs of the global economy struggling to bounce back in Q4 or delay in a coronavirus vaccine are likely to threaten Oil prices over the next few months.

Looking at the technical picture, WTI remains in a range on the weekly charts. Support can be found around $36.85 while resistance at $43.50. Prices are likely to remain in this change until a new catalyst is brought into the picture. This could come in the form of the EIA report scheduled for release on Wednesday afternoon.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market Themes to Watch Out For – Webinar Sep 28

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at: • The key themes driving the financial markets • Technical and fundamental trading ideas on the MT4 platform • How to use the latest FXTM trading signals • Using fundamental analysis to increase your profit potential • What to monitor over the coming week

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  • Click ‘Join Now’ on your chosen Webinar
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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets. Read his full profile here.

PMI Day for Europe, UK & United States

The PMI is a leading indicator of economic health which essentially surveys purchasing managers at businesses that make up a given sector. Digging deeper, the headline PMI is a number from 0 to 100. Anything above 50 represents an expansion when compared with the previous month while under 50 represents a contraction.

It is worth keeping in mind that the direction of the PMI tends to precede changes in the trend of estimates such as gross domestic product and employment. If the PMI is painting an unpleasant picture, this could be an early warning sign for the economy and currency. Alternatively, a positive print has the potential to boost sentiment and raise confidence over the economic outlook.

All eyes on the Euro PMI

European investors will be keeping a very close eye on the latest eurozone purchasing manager’s index (PMI) data for September.

It will be released at 9 am London time and could offer some insight into the health of the region’s services and manufacturing industries in the face of Brexit related uncertainty and second wave of COVID-19 cases. Manufacturing PMI is expected to jump 51.9 in September from the 51.7 in the previous month while services PMI are projected to remain unchanged at 50.5.

What does this mean for the EURUSD?

The Euro has been punished by a resurgent Dollar this week with prices slipping to a two-month low under 1.1675.

A positive set of PMI figures from Europe could inject Euro bulls with enough inspiration to fight back, potentially pushing prices back towards 1.1750. However, if the data fails to meet expectations, the EURUSD could end up sinking to a fresh two month low around 1.1600.

Will pending PMI compound to Pounds woes?

Sterling has woken up on the wrong side of the bed today, weakening against the Dollar and most G10 currencies thanks to Brexit related drama and rising coronavirus cases. Fears over a second lockdown crippling the UK economy remain rife, and this continues to be seen in not only the Pound’s valuation but FTSE100.

The Pounds outlook this week may be influenced by the pending manufacturing and services PMI data due to be released this morning.

Manufacturing activity is projected to slip to 54.1 compared to the 55.2 in the previous month while services are forecast to decline to 56 from the 58.8 in August. A figure that fails to meet expectations is likely to compound to the Pound’s woes and provide permission for anxious investors to drag the currency lower.

Looking at the technicals, the GBPUSD is approaching 1.2650. A breakdown below this level could open the doors towards 1.2500.

Dollar Index breaks above key resistance

It took a four-letter word to push the Dollar Index higher, will the pending IHS Markit’s ‘flash’ Purchasing Managers’ Indices for US manufacturing and services in September support the upside?

Talking technicals, the Dollar Index is turning bullish on the daily timeframe. The solid daily close above 94.00 could encourage a move towards 94.65 and potentially 96.00. Should 94.00 prove to be reliable resistance, the DXY may decline back towards 92.70.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: Gold Waits for Fed Decision

Although the central bank is widely expected to leave interest rates unchanged, much of the focus will be directed towards the economic projections, Powell’s press conference and updated ‘dot plot’ forecast of interest rate moves. Given how this will be the first meeting after the Fed announced its new average inflation targeting (AIT) framework, there could be some volatility in the Dollar as investors sift for clarity during the meeting.

Back in June, policy members projected GDP to decline 6.5% in 2020 while unemployment was seen rising 9.3%. However, the current unemployment rate of 8.4% is already below the medium forecast – something that could allow the Fed to express some confidence over the US economy.

Let’s be honest, the US economy is certainly not out of the woods yet despite the improving unemployment rate.

Rising coronavirus cases in major states coupled with the congressional stalemate over a new fiscal package remain major threats to the country’s economic outlook. Markets expect the Fed to signal that interest rates will remain unchanged and close to zero through the end of 2023! But It will still be interesting to hear Jerome Powell’s thoughts on the latest developments, in addition to how high or how long the Fed will allow inflation to overshoot the 2% target.

What does this all mean for Gold?

Gold seems to be drawing strength from a softer Dollar this morning as anticipation mounts ahead of the Federal Reserve meeting.

Regardless of the choppiness witnessed over the past few weeks, the precious metal remains underpinned by low-to-negative government bond yields, rising COVID-19 cases in the United States and a tired Dollar.

Price action suggests that the precious metal is in search of a fresh directional catalyst to breakout of the current range. This may come in the form of the Fed meeting today.

After the Federal Reserve’s policy shift to let inflation rip, the big question on the mind of many investors is how will the central bank put this policy to action? Clarity on this could provide Gold a tailwind as the metal is seen as a hedge against inflation. Additionally, a dovish sound Fed could weaken the Dollar, further supporting Gold prices.

Looking at the technical picture, strong support can be found around $1910 and resistance around $1985. The solid daily close above the $1952 intraday resistance level may open the doors towards $1985. If $1952 proves to be unreliable support, prices may decline back towards $1910.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Dollar Slips as Market Mood Improves

It is starting to feel like any vaccine news is good news for investors and this euphoria continues to reflected across global stocks, currency and commodity markets! A major breakthrough in the fight against COVID-19 that produces a cure could inject global markets with a potent dosage of positivity while elevating investor confidence to a new level. Such a development could see the tired Dollar crumble across the board as market players rush to riskier assets at the expense of safe-havens.

The past few months have been rough for the Greenback. It has depreciated against every single G10 currency since the start of Q3.

Although the Dollar’s performance in September thus far has offered some hope to bulls, this could be a technical rebound before bears jump back into the driver’s seat in Q4.

Fundamentally, the Greenback remains pressured by rising coronavirus cases in the United States, repeated rate cuts from the Fed which have eroded differentials between the US and other developed economies and risk of inflation surpassing 2% next year. However, given the Dollar’s safe-haven status and title and world’s reserve currency, it will be interesting to how low the currency falls before a bottom is formed.

Looking at the charts, the Dollar Index is turning increasingly bearish on the monthly with a breakdown below 92.00 opening a path towards 88.60.

We see a similar theme on the weekly charts with prices respecting a bearish channel. The consistently lower lows and lows highs reconfirm the trend, while lagging indicators such as the MACD and moving averages reinforce the bearish setup.

Zooming into the daily, support can be found around 92.20 while there is resistance at 94.00. A breakout/down setup could be in play with 93.00 acting as pivotal level. Weakness below 93.00 may trigger a drop towards 92.20. If 92.20 is breach, the next key level of interest will be found around 91.70.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Mid-Week Technical Outlook: Dollar Bulls Stage a Comeback

The former king of the currency markets is on a mission to reclaim dominance, appreciating across the board after a sell-off in stock markets prompted investors to rush towards safe-haven destinations. Dollar bulls seem to be deriving strength from not only concerns over a possible delay in the Covid-19 vaccine but the recent U.S jobs report showing a decline in the U.S unemployment rate and jump in U.S Treasury yields.

With the Dollar Index trading at levels not seen in four weeks around 93.60 and appreciating over 1.5% since the start of September, are bulls back in the game?

Looking at the technical picture, a rebound may be on the cards on the weekly timeframe following the solid move above 93.00. A weekly close beyond this point could suggest an incline towards 94.00 and 96.00 in the medium term. If 94.00 proves to be reliable resistance, the DXY may find itself sinking back towards 93.00 and 91.15.

On the daily timeframe, prices remain in a wide range with support at 92.20 and resistance around 94.00. A daily close above 94.00 could inject bulls with enough inspiration to target 94.65 which then opens the doors towards 93.00 and beyond.

The question on the mind of many investors is whether the Dollar is able to maintain this current burst of confidence and majesty across the FX space. Although the currency is still considered as a safe-haven currency and the worlds reserve currency, it has weakened against every single G10 currency this quarter.

Negative themes in the form of rising coronavirus cases in the United States and political uncertainty ahead of Novembers presidential election may limit the Dollar’s upside gains. Given the fundamental forces influencing the Dollar’s longer-term outlook, prices still have the potential to decline with a move below 92.00 on the monthly timeframe acting as an early signal.

Pound gets no love as Brexit drama intensifies

Earlier in the week, we discussed the possibility of the Pound extending losses on Brexit related uncertainty and rising fears around the United Kingdom leaving the EU with no deal by the end of 2020.

Since then, it looks like nobody wants anything to do with the Pound which has tumbled across the board.

Buying sentiment towards the currency hit rock bottom after the government renewed the prospect of a no-deal Brexit, with Boris Johnson insisting Britain would “prosper mightily” with or without a deal.

Looking at the technicals, prices are heavily bearish on the daily charts with the first level of interest at 1.2900. Weakness below this level may trigger a decline towards 1.2730.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Technical Outlook, Gold Wobbles as Dollar Fights Back

The precious metal has lost almost 2% since the start of the September and could extend losses in the short term if the Dollar fights for its thrown and “risk-on” remains the name of the game. However, when looking at the key themes influencing Gold, the medium to longer-term outlook points north despite the possible weakness in the near term.

Buying sentiment towards Gold could be dented by a sense of confidence over the world economy recovering quicker than expected, while renewed US-China trade hopes and optimism around a coronavirus vaccine may boost attraction towards riskier assets at the expense of safe-havens.

However, rising coronavirus cases in the United States, political uncertainty ahead of November’s presidential elections and Brexit drama among other negative themes may drain investor confidence, ultimately accelerating the flight to safety.

On top of this, low-to-negative government bond yields, unprecedented monetary stimulus and handsome fiscal packages should continue sweetening appetite for the precious metal for the rest of 2020. Although economic data from major economies have beat estimates, the overall shaky macroeconomic and geopolitical landscape may ensure the Gold remains a hotspot of safety.

Where prices conclude this week could be heavily influenced by the pending US jobs report on Friday. Markets are forecasting Non-farm payrolls rise 1.4 million in August, down from 1.763 million in July and the smallest gain since the recovery began in May. A figure above market estimates could drag Gold prices lower as the Dollar builds on gains.

Looking at the technical picture, prices remain in a wide range on the daily timeframe with support at $1910 and resistance around $1985. It looks like the precious metal is under pressure with $1910 acting as the first level of interest. A breakdown below this point could encourage a decline towards $1890. Should $1910 prove to be reliable support, prices could rebound back towards $1950, before potentially testing $1985.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market Themes to Watch Out For – Webinar Aug 31

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders.

Enjoy an expert look at:
• The key themes driving the financial markets
• Technical and fundamental trading ideas on the MT4 platform
• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

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FXTM Senior Research Analyst Lukman Otunuga holds a BSc degree in Economics from the University of Essex and an MSc in Finance from London School of Business and Finance. A keen follower of macroeconomic events with a strong professional background in finance, Lukman is well versed in the markets

Technical Outlook, Time for GBPUSD to Challenge 1.3200?

Investor sentiment towards the currency continues to turn increasingly positive, despite the UK officially entering a recession for the first time in 11 years. Although Brexit related uncertainty and drama remain recurrent themes, there seems to be some complacency in the markets and this continues to be reflected in the Pound’s valuation. With the risk of a hard Brexit growing by the day as negotiations stall, the longer-term outlook for the British Pound still points to further downside.

However, the short to medium-term outlook illustrates a more encouraging picture with bulls in the driving seat. It looks Sterling continues to derive strength from not only a broadly weaker Dollar but the Bank of England’s overly optimistic economic forecasts.

Pound bulls set sights on 1.3200

The GBPUSD remains firmly bullish on the weekly and daily timeframe with the currency pair trading around 1.3160 as of writing. Prices have jumped over 1000 pips since the start of May and have the potential to push higher once 1.3200 is conquered.

A solid weekly close above the 1.3200 resistance level could encourage a move towards 1.3400.

Taking a look at the daily timeframe, the GBPUSD remains in a wide 200 pip range with support at 1.3000 and resistance at 1.3200. A solid daily close above 1.3200 could trigger an incline towards 1.3300. Lagging indicators in the form of the 20 and 200 Simple Moving Averages and MACD marry the bullish setup.

Looking at the four-hourly timeframe, it’s the same story here. Prices are rangebound with minor resistance at 1.3170 and minor support at 1.3020. If prices are unable to push higher, a decline back towards the 1.3100 pivotal level could be on the cards before bull retry their luck in challenging 1.3200.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market Themes to Watch Out For – Webinar Aug 17

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders.

REGISTER FOR FREE

Enjoy an expert look at:

• The key themes driving the financial markets
• Technical and fundamental trading ideas on the MT4 platform
• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

UK Economy Nosedives Into Recession

Economic growth during the second quarter of 2020 was a horror show, plunging 20.4% after a 2.2% fall in the first three months of 2020. This was the worst GDP seen in western Europe and clearly illustrated the damaging impacts of coronavirus to the UK economy. To rub salt into the wound, it was only yesterday that data revealed an estimated one million jobs had already been erased during the coronavirus induced lockdown.

Surprisingly, the British Pound offered a fairly muted reaction despite the UK stumbling into the largest recession on record. The currency slightly gained against the Dollar and held its ground against other G10 currencies on Wednesday morning. It looks like the disappointing GDP report was already priced in with investors now evaluating how quickly the UK economy can bounce back. Expect the Pound to become highly sensitive to economic data over the next few weeks as investors access if a V-shaped bounce back could still be on the cards. After today, market players may start questioning whether looser monetary policy and handsome fiscal packages have the ability to revive the UK economy.

Looking at the technical picture, the GBPUSD remains in a wide range on the daily timeframe with support at 1.3000 and resistance at 1.3200. Prices are trading above 20 & 200 Simple Moving Average while the MACD trades to the upside. The trend is bullish but some fatigue looks to be kicking in with bears eyeing the 1.3000 support. It is worth keeping in mind that the GBPUSD has been stuck between these level’s for the past two weeks with bears constantly pressing against 1.3000.

A solid breakdown below 1.3000 could encourage a decline towards 1.2850. Alternatively, if this level proves to be a tough nut to crack, then a rebound towards 1.3130 could be on the cards.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.