USD/CAD Daily Forecast – Resistance At 1.3450 In Sight

USD/CAD Video 25.09.20.

Canadian Dollar Remains Under Pressure

USD/CAD is trying to develop upside momentum above the nearest resistance level at 1.3400 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the significant resistance level at 94.65 and continues its upside move. If the U.S. Dollar Index moves towards the 95 level, USD/CAD will get additional support.

WTI oil continues to trade near the $40 level but fails to provide any support to Canadian dollar.

Today, U.S. reported that Durable Goods Orders increased by 0.4% which was significantly lower than the analyst consensus of 1.5%. While this news is not inspiring, the U.S. dollar gained additional ground as traders increased their purchases of safe haven currencies.

At this point, the upside trend of the U.S. dollar looks strong, and the Canadian dollar will need some positive catalysts to have a chance to rebound against the American currency.

There are no notable reports scheduled to be released in Canada in the upcoming days so USD/CAD will remain in the hands of general market sentiment and data from U.S. If the flight from risk continues, the U.S. dollar will have a chance to gain more ground against the Canadian dollar.

Technical Analysis

usd cad september 25 2020

USD to CAD managed to get above the resistance at 1.3400 and is moving towards the next resistance level at 1.3450.

If the test of the resistance at 1.3450 is successful, USD to CAD will head towards the major resistance level at 1.3500. This level served as strong support for USD to CAD back in June – July so I’d expect a lot of interest at 1.3500.

In case USD to CAD manages to settle above 1.3500, it will move towards the next resistance at 1.3610.

On the support side, a move below 1.3400 will open the way to the test of the support level at 1.3330.

If USD to CAD gets below the support at 1.3330, it will gain additional downside momentum and head towards the next support level at the 50 EMA at 1.3265.

For a look at all of today’s economic events, check out our economic calendar.

Oil Little Changed Ahead Of The Weekend

Oil Video 25.09.20.

Oil Stays Near The $40 Level Despite Virus Worries And Strong U.S. Dollar

Oil continues to trade near the $40 level amid worsening situation with coronavirus in Europe and strong U.S. dollar.

Despite the above-mentioned negative catalysts, oil has not developed any significant downside momentum. The recent decrease in inventory levels together with the increase in gasoline demand provided significant support to oil which offsets the negative catalysts, at least for now.

In addition, traders do not believe that European governments will follow Israel’s example and impose second lockdowns. There is a broad consensus that Europe cannot afford to impose severe restrictions for the second time in a row so the market does not price in this scenario.

Interestingly, oil ignored the recent strength of the U.S. dollar. Typically, strong dollar is bearish for commodities but the market got so excited about the rebounding U.S. gasoline demand that oil managed to stay near the $40 level despite the dollar’s best week in many months.

Recent U.S. Economic Reports Show That Economy May Be Slowing Down

On Thursday, U.S. reported that Initial Jobless Claims increased from 866,000 to 870,000 while analysts expected that Initial Jobless Claims would drop to 840,000. This report may be the first sign that the easy part of the job market recovery is done, and the economy struggles to make another step forward.

Today, U.S. Durable Goods Orders report indicated that Durable Goods Orders increased by 0.4% month-over-month in August compared to analyst consensus of 1.2%.

Durable Goods Orders show producers’ desire to invest in business which may be slowing down after the initial strong rebound.

These reports are certainly uncomfortable for oil bulls. If U.S. lawmakers fail to reach consensus on the next coronavirus aid package, the economic rebound may slow down and put pressure on oil demand.

As I noted above, oil bulls are encouraged by the recent increase in U.S. gasoline demand. However, the recent upside trend in gasoline consumption may find itself under pressure if economic activity stalls.

In my opinion, the upcoming economic reports present some danger for oil bulls as oil may find it hard to stay near the $40 level if additional signs of a slowdown emerge.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Support At $22.30 Showed Its Strength

Silver Video 25.09.20.

Strong U.S. Dollar Continues To Put Pressure On Silver

Silver failed to continue yesterday’s rebound as the U.S. dollar gained ground against a broad basket of currencies and put pressure on precious metals.

The U.S. Dollar Index is currently trying to get to the test of the major resistance level at 94.65. If the U.S. Dollar Index moves above this level, it will gain more upside momentum which will be bearish for silver.

Meanwhile, gold continues its attempts to settle below $1850. Gold’s RSI is still in the moderate territory so there is more room to gain downside momentum if the U.S. dollar moves higher. If this happens, silver will find itself under increased pressure.

Gold/silver ratio has found support at 80.40 and managed to get above the 81 level. Yesterday, gold/silver ratio tested the 85 level but pulled back. If gold/silver ratio moves closer to 85, silver will test the recent lows at $21.65.

The recent U.S. economic reports including Initial Jobless Claims and Durable Goods Orders were disappointing which increased pressure on silver. Industrial demand is a very important part of the total demand for silver so silver is sensitive to the general state of the economy.

Technical Analysis

silver september 25 2020

Silver faced resistance at $23.30 and pulled back closer to the support at $22.30. However, the support at $22.30 showed its strength, and silver rebounded closer to the resistance level at $22.90.

If silver manages to settle above $22.90, it will head towards the next resistance level at $23.30. This level has just been tested, and silver will likely need additional upside catalysts to continue its rebound above $23.30.

In case silver gets above the resistance at $23.30, it will move towards the 50 EMA at $24.90 although it may face additional resistance at lower levels along the way.

On the support side, silver needs to settle below the support at $22.30 to gain more downside momentum. In this scenario, silver will quickly get to the test of the next support level at the recent lows at $21.65.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Lower As Durable Goods Orders Increase Less Than Expected

Coronavirus Aid Package Negotiations Are Set To Restart Again

U.S. Republicans and Democrats look ready to restart negotiations on the new coronavirus aid package. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi signaled that both sides were ready to discuss new proposals.

The U.S. economy clearly needs more stimulus to support consumer activity. However, traders are skeptical that a consensus can be reached, and S&P 500 futures are losing ground in premarket trading.

Previously, Republicans signaled that they were ready to vote for an aid package worth $1.3 trillion while Democrats proposed a package worth $2.2 trillion. There is a huge gap between the positions of two sides, and any deal will require big compromises from both parties.

WTI Oil Fails To Gain Upside Momentum Ahead Of The Weekend

Oil managed to stay close to the $40 level despite the recent market sell-off as declining inventories provided support to prices. At the same time, energy-related stocks had a terrible week, and S&P Energy Sector lost 8.5% in the first four days of this week.

The current market sentiment towards energy-related stocks is negative, and it looks like oil must go higher to provide some support to the beaten shares.

However, oil is under pressure due to problems with coronavirus in various parts of the world, and it remains to be seen whether traders will be willing to increase their bets on oil above the $40 level.

Durable Goods Orders Increase By 0.4%

U.S. has just provided Durable Goods Orders report for August which indicated that Durable Goods Orders increased by 0.4% month-over-month. The analyst consensus called for growth of 1.5%.

Excluding Transportation, Durable Goods Orders grew by 0.4% compared to analyst consensus of 1.2%.

Together with yesterday’s Initial Jobless Claims report, Durable Goods Orders report painted a picture of an economy that is slowing down after the initial rebound.

The key question is whether traders will bet that disappointing economic reports will push Republicans and Democrats to reach consensus on the new aid bill. If this happens, stocks may have material upside from current levels.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – Resistance At 105.45 Stays Strong

USD/JPY Video 25.09.20.

Yen Remains Mostly Flat Against The U.S. Dollar Ahead Of The Weekend

USD/JPY is currently trying to settle above the nearest resistance level at the 20 EMA at 105.45.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has pulled back from recent highs and attempts to settle below 94.30.

If the U.S. Dollar Index gains additional downside momentum, USD/JPY may find itself under pressure.

Yesterday’s U.S. Initial Jobless Claims report indicated that the recovery of the job market has stalled and provided additional support to safe haven assets. Today, the U.S. will release Durable Goods Orders report for August which will provide additional information about the pace of the economic recovery.

In addition to economic news, traders will also focus on the potential negotiations between Democrats and Republicans about the new coronavirus aid package.

Democrats are currently trying to craft a new $2.2 trillion aid package. Previously, Republicans indicated that they were ready to negotiate a coronavirus aid bill worth $1.3 trillion. The two sides remain far apart but a sudden breakthrough may have a material impact on USD/JPY.

Technical Analysis

usd jpy september 25 2020

USD/JPY continues its attempts to get above the nearest resistance level at the 20 EMA at 105.45 but this level remains a strong obstacle on the way up. Despite the strength of the recent upside move, RSI remains in the moderate territory so there is enough room to gain more upside momentum in case the right catalysts emerge.

If USD/JPY manages to settle above the 20 EMA, it will head towards the next resistance level at the 50 EMA at 105.85. A move above the resistance at the 50 EMA will open the way to the test of the next resistance level at 106.30.

On the support side, the nearest material support level for USD/JPY is located at 104.90 although USD/JPY has also received some support near 105.20.

If USD/JPY moves below 104.90, it will gain more downside momentum and head towards the next support level at 104.70. A move below 104.70 will push USD/JPY closer to the next support area at 104.00 – 104.20.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Resistance At 1.1695 In Sight

EUR/USD Video 25.09.20.

All Eyes On U.S. Durable Goods Orders Report

EUR/USD is mostly flat ahead of the weekend as the U.S. dollar is little changed against a broad basket of currencies.

The U.S. Dollar Index has settled near 94.30 after an unsuccessful attempt to get to the test of the significant resistance level at 94.65.

This week was very successful for the American currency so some pullback is possible. That said, RSI of the U.S. Dollar Index has not reached the overbought territory so there is more room to gain upside momentum in case the right catalysts emerge.

Today, traders will focus on U.S. Durable Goods Orders report. Analysts expect that Durable Goods Orders grew by 1.5% month-over-month in August after growth of 11.2% in July. Excluding transportation, Durable Goods Orders are projected to grow by 1.2%.

Any weakness in Durable Goods Orders will likely be interpreted as a sign of a slowdown in the U.S. economy. In recent days, the U.S. dollar received support on worries about the pace of the economic recovery, so weak Durable Goods Orders may provide some support to the American currency in case traders continue to use it as a safe have asset of last resort.

Technical Analysis

eur usd september 25 2020

EUR/USD is currently trading in a range between support at 1.1630 and resistance at 1.1695.

If EUR/USD manages to settle below the support at 1.1630, it will gain additional downside momentum and head towards the next support level at 1.1600. A move below the support at 1.1600 will open the way to the test of the next support level at 1.1540. The moves between these support levels may be fast since these levels served as minor obstacles on the way up back in July.

On the upside, EUR/USD will have to get back above the resistance at 1.1695 to continue its rebound from the support at 1.1630. If this happens, EUR/USD will head towards the significant resistance level at the 50 EMA at 1.1745.

In case EUR/USD moves above the 50 EMA, it will gain more upside momentum and get to the test of the next resistance level at the 20 EMA at 1.1780.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Attempt To Settle Above Resistance At 1.2750

GBP/USD Video 25.09.20.

British Pound Tries To Continue Its Rebound

GBP/USD is currently trying to settle above the nearest resistance level 1.2750 as the U.S. dollar is flat against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made an attempt to get to the test of the significant resistance level at 94.65. However, the U.S. Dollar Index failed to settle above 94.50 and pulled back closer to 94.30.

If the U.S. Dollar Index continues its pullback, GBP/USD will have a good chance to develop additional upside momentum above 1.2750.

According to reports, U.S. Democrats prepare to offer a revised $2.2 trillion coronavirus aid package but it remains to be seen whether they will be ready to achieve any consensus with Republicans.

Yesterday’s Initial Jobless Claims report indicated that 870,000 Americans filed for unemployment benefits in a week. The number of Initial Jobless Claims is still very high, and the economy clearly needs another stimulus package.

Theoretically, the latest economic data should push Republicans and Democrats to continue negotiations. However, it looks like traders do not believe that Republicans and Democrats will be able to make a deal before the election in November so news about the potential new package have little impact on the markets.

Technical Analysis

gbp usd september 25 2020

GBP/USD is testing the nearest resistance level at 1.2750. If this test is successful, GBP/USD will head towards the next resistance at 1.2780.

This resistance level has already been tested two times and proved its strength. If GBP/USD manages to settle above 1.2780, it will gain additional upside momentum and head towards the next significant resistance level at 1.2880.

A move above the resistance at 1.2880 will open the way to the test of the next resistance level at the 20 EMA at 1.2910.

On the support side, the nearest significant support level for GBP/USD is located at 1.2650. In recent trading sessions, GBP/USD tried to get to the test of this level but found some support at 1.2675.

In case GBP/USD moves below the support at 1.2650, it will gain significant downside momentum and head towards the next support level at 1.2550.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Test Of Resistance At 1.3400

USD/CAD Video 24.09.20.

Canadian Dollar Remains Under Significant Pressure

USD/CAD is trying to settle above the resistance at 1.3400 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index is trying to settle above 94.50. If this attempt is successful, the U.S. Dollar Index will get to the test of the significant resistance level at 94.65. A move above this level will push the U.S. Dollar Index towards 95.00 which will be bullish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims increased to 870,000, suggesting that the progress on the job front has stalled. Continuing Jobless Claims declined to 12.58 million.

At this point, it looks like traders are ready to buy the U.S. dollar on any bad news so the disappointing U.S. employment reports did not put any pressure on the American currency.

Meanwhile, the continued strength of WTI oil fails to provide any support to the Canadian dollar as traders are too focused on the potential second wave of the virus and the slowdown of the world economy.

Technical Analysis

usd cad september 24 2020

USD to CAD gained strong upside momentum and is currently trying to settle above the nearest resistance level at 1.3400. Despite the strength of the recent upside move, RSI has not entered into the overbought territory, and there is still plenty of room to gain additional upside momentum.

If USD to CAD manages to settle above 1.3400, it will head towards the next resistance level at 1.3450. This level has been tested at the end of July and proved its strength.

In case USD to CAD moves above the resistance at 1.3450, it will head towards the major resistance level at 1.3500.

On the support side, the nearest support for USD to CAD is located at 1.3330. A move below this level will open the way to the test of the next support level at 1.3290.

If USD to CAD gets below the support at 1.3290, it will likely gain additional downside momentum and head towards the test of the resistance at the 50 EMA at 1.3260.

For a look at all of today’s economic events, check out our economic calendar.

Oil Stays Strong As Traders Cheer The Recent Rebound Of Gasoline Demand

Oil Video 24.09.20.

Gasoline Demand Rebounds, Providing Support To Oil Prices

WTI oil continues to trade near the $40 level despite the ongoing sell-off in the world markets.

There are several reasons for this strength. First, the recent EIA Weekly Petroleum Status Report indicated that crude inventories decreased by 1.6 million barrels while gasoline inventories fell by 4 million barrels.

Second, EIA reported that gasoline demand continued to increase. In the week ending September 4, 2020, gasoline demand was 8.39 million barrels per day (bpd). Next week, it increased to 8.48 million bpd. The latest data for the week ending September 18, 2020 indicated that gasoline demand increased to 8.52 million bpd.

Previously, traders feared that the continued problems on the coronavirus front and the end of the driving season will put material pressure on gasoline demand.

The recent reports indicate that gasoline demand is showing some strength. It is still well below 9.35 million bpd, a level reached a year ago, but the current trend is positive.

At this point, the optimism about the rebound of gasoline demand was sufficient enough to offset worries about the second wave of the virus in Europe and the negative impact of the stronger U.S. dollar.

However, it remains to be seen whether this optimism will be long-lived as the U.S. domestic oil production will soon recover from the hits dealt by storms and hurricanes so inventories may start to increase again.

California Decided To Ban Gasoline Cars By 2035

The sale of gasoline cars will end in California by 2035 to combat pollution and deal with the climate change. The average age of the car on the U.S. road is almost 12 years so gasoline cars will certainly not disappear in California anytime soon even if the state bans their sale in 2035.

That said, the currents trends are somewhat worrisome for the oil market in the long term as most developed countries are discussing a ban on gasoline cars sometime in the future.

While there’ll be no immediate consequences for the supply/demand balance even if all countries in the world signed a pledge to ban the sale of gasoline cars in 2035, the constant talk about the ban may ultimately impact investors’ desire to invest in oil and oil-related securities.

However, this is the oil market, and the situation can change very fast. If the world oil companies continue to underinvest in new projects, the world may ultimately face a shortage of oil which will lead to much higher prices.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Attempt To Settle Below $22.00

Silver Video 24.09.20.

Silver Continues To Lose Ground Amid Strong U.S. Dollar And Fears About The Pace Of Economic Recovery

Silver made an attempt to settle below the $22 level as the U.S. Dollar Index moved closer to the nearest resistance level at 94.65.

The U.S. dollar got an additional boost after the release of disappointing U.S. employment reports. Initial Jobless Claims increased to 870,000 while Continuing Jobless Claims fell to 12.58 million. Both reports were worse than the analyst consensus and provided support to the American currency which has recently regained its status of a safe haven asset of last resort.

Strong U.S. dollar is a bearish catalyst for silver and other precious metals so the continuation of the dollar’s upside move will likely push silver to lower levels.

Gold is also under pressure. Currently, gold is testing the $1850 level. The nearest significant support for gold is located at $1815. If gold moves towards this level, silver will find itself under increased pressure.

Meanwhile, gold/silver ratio continues its major upside move. Just a few days ago, gold/silver ratio was firmly settled in the range between 71 and 73. Currently, it is trying to get above 84. Gold/silver ratio’s RSI has entered into the overbought territory so chances of a pullback are increasing. If gold/silver ratio moves towards 80, silver will have an opportunity to gain some upside momentum.

Technical Analysis

silver september 24 2020

Silver managed to settle below the nearest support level at $22.30 and continues its downside move. Currently, it is trying to settle below $22.00. If this attempt is successful, silver will head towards the next support at the recent lows at $21.65.

If silver gets below the support at $21.65, it will develop additional downside momentum and head lower. There are no material levels between $22.30 and $20.00 so silver may get to $20.00 quickly in case the right catalysts emerge.

At the same time, RSI has moved into the oversold territory, suggesting that a rebound may be around the corner.

The previous support at $22.30 will likely serve as the first resistance level for silver. A move above this level will open the way to the test of the next resistance at $22.90, which is followed by the resistance at $23.30.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Lower As Initial Jobless Claims Unexpectedly Increase

Stocks Look Ready To Continue Yesterday’s Downside Move

S&P 500 futures are losing ground in premarket trading as traders are worried about the future pace of the economic recovery.

Leading tech stocks are also under pressure in the premarket trading session. Tesla is set to continue yesterday’s sell-off as it is already down by more than 3%.

Today, France and Germany reported that business sentiment improved for the fifth month in a row but this news did not provide any material help to global markets as traders remained focused on the second wave of coronavirus.

Initial Jobless Claims Increase To 870,000

U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims increased from 866,000 (revised from 860,000) to 870,000 while analysts expected that Initial Jobless Claims would decline to 840,000.

Continuing Jobless Claims declined from 12.75 million (revised from 12.63 million) to 12.58 million compared to analyst consensus of 12.3 million.

The employment reports were materially worse than expected and put additional pressure on S&P 500 futures.

U.S. Dollar Strength Indicates That Investors Are Seriously Worried About The Pace Of Recovery

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, managed to rebound from a low of 91.75 that was reached at the beginning of September to 94.50.

This rebound happened despite the Fed’s pledge to keep the rates at the bottom until the end of 2023. The strength of the current rebound indicates that investors are seriously worried about the perspectives of the world economic recovery.

The Volatility Index, VIX, has also rebounded from lows reached in August. VIX is often called a fear index since it rises when traders are worried about economic perspectives.

U.S. dollar upside has already put significant pressure on commodities. Silver and gold have suffered a sell-off while copper declined from recent highs. Only WTI oil managed to stay near the $40 level thanks to the support from the hurricane season.

If the U.S. dollar continues its upside move, commodities will remain under pressure, and commodity-related stocks will likely decline to lower levels.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – U.S. Dollar Tries To Gain More Upside Momentum

USD/JPY Video 24.09.20.

U.S. Dollar Attempts To Continue Its Rebound

USD/JPY is currently trying to settle above the 20 EMA at 105.40 as the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index made an attempt to get to the test of the significant resistance level at 94.65 but faced resistance at 94.50 and pulled back. If the U.S. Dollar Index moves above 94.65, USD/JPY will continue its rebound.

Today, traders will focus on U.S. Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are projected to decline from 860,000 to 840,000 while Continuing Jobless Claims are expected to fall from 12.63 million to 12.3 million.

At this point, analysts expect to see little progress on the job front. If the reports are worse than expected, the U.S. dollar may start to lose ground against the yen.

Currently, fears of the second wave of lockdowns in Europe and poor economic progress in Japan led to a rebound of USD/JPY. However, it remains to be seen whether the current rebound will be sustainable as the yen continues to serve as a safe haven currency and traders may start to sell USD/JPY on first signs that the U.S. economic recovery is not as robust as expected.

Technical Analysis

usd jpy september 24 2020

USD/JPY is currently trying to continue its rebound. To do this, USD/JPY must settle above the nearest resistance level at the 20 EMA at 105.40.

If USD/JPY manages to get above the 20 EMA, it will gain more upside momentum and head towards the next significant resistance level at the 50 EMA at 105.85.

In case USD/JPY moves above the 50 EMA, it will head towards the major resistance level at 106.30.

On the support side, the nearest support level for USD/JPY is located at 104.90. A move below this level will open the way to the test of the next support level at 104.70.

If USD/JPY manages to settle below the support at 104.70, it will gain additional downside momentum and move towards the recent lows in the 104.00 – 104.20 area.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Support At 1.1630 In Sight

EUR/USD Video 24.09.20.

Euro Continues To Lose Ground As Euro Area Services Segment Slips Back Into Contraction

EUR/USD is heading towards the nearest support level at 1.1630 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index has settled close to 94.50 and looks ready to test the significant resistance level at 94.65. If this test is successful, the U.S. Dollar Index will gain more upside momentum which will be bearish for EUR/USD.

Yesterday, traders had a chance to take a look at flash readings of Euro Area PMI reports. Manufacturing PMI increased from 51.7 in August to 53.7 in September while Services PMI declined from 50.5 to 47.6. Numbers below 50 show contraction so the recovery of the services segment has come to an end.

The market is worried that the economic situation in the eurozone will get worse due to the problems on the coronavirus front. All major European countries are discussing additional restrictions to stop the surge in the number of new cases.

For now, nationwide lockdowns are ruled out but the situation is developing quickly and disappointing virus data may put additional pressure on EUR/USD.

Technical Analysis

eur usd september 24 2020

EUR/USD gained strong downside momentum and continues to lose ground amid fears about the second wave of coronavirus in Europe.

The nearest support level for EUR/USD is located at 1.1630. If EUR/USD manages to settle below this level, it will head towards the next support level at 1.1600.

A move below the support at 1.1600 will open the way to the test of the next support level at 1.1540. I’d note that there are no major levels between 1.1500 and 1.1700 so the downside move may be fast if the right catalysts emerge.

On the upside, the first resistance level for EUR/USD is located at 1.1695. If EUR/USD manages to settle above this level, it will gain more upside momentum and head towards the next resistance level at the 50 EMA at 1.1750. A move above the 50 EMA will signal that EUR/USD failed to establish a downside trend.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – U.S. Dollar Remains Strong

GBP/USD Video 24.09.20.

British Pound Remains Under Pressure

GBP/USD continues its attempts to settle below 1.2700 as the U.S. dollar remains strong against a broad basket of currencies amid fears of the second wave of coronavirus.

The U.S. Dollar Index is currently trying to get to the test of the significant resistance level at 94.65. If the U.S. Dollar Index manages to move above this level, it will gain additional upside momentum which will be bearish for GBP/USD.

Yesterday, UK provided flash readings of Manufacturing PMI and Services PMI for September. Manufacturing PMI decreased from 55.2 in August to 54.3 in September while Services PMI fell from 58.8 to 55.1. Numbers above 50 show expansion so the recovery of the UK economy continued, although at a slower pace.

In the U.S., Manufacturing PMI increased from 53.1 to 53.5 while Services PMI declined from 55 to 54.6. The softness in the services segment is seen in all developed economies as continued problems on the coronavirus front hurt consumer sentiment.

Fears about the slowdown of the world economy provide support so safe haven assets and boost the U.S. dollar. In addition, it looks like the short trade in the U.S. dollar was very crowded, and the current rally is partially fueled by shorts who cover their positions.

Technical Analysis

gbp usd september 24 2020

GBP/USD is currently trying to get to the test of the nearest support level at 1.2650. Despite the recent downside move, RSI remains in the moderate territory and there is some room to gain more momentum.

A successful test of this support level will open the way to the test of the next support level at 1.2550. If GBP/USD manages to settle below 1.2550, it will head towards the next support level at 1.2485.

On the upside, the previous support at 1.2750 will serve as the first material resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will gain more upside momentum and head towards the minor resistance level at 1.2780.

A move above 1.2780 will open the way to the test of the next resistance level at 1.2880, although GBP/USD may also face resistance at 1.2815 along the way.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Resistance At 1.3400 In Sight

USD/CAD Video 23.09.20.

U.S. Dollar Gains More Upside Momentum

USD/CAD managed to get above the resistance level at 1.3330 and continues its upside move as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to move above the minor resistance level at 94.20. If this attempt is successful, U.S. Dollar Index will continue its upside move and head to the next resistance at 94.65 which will be bullish for USD/CAD.

Today, U.S. provided flash readings of Manufacturing PMI and Services PMI reports for September. Manufacturing PMI increased from 53.1 in August to 53.5 in September while analysts expected that it would stay flat at 53.1.

Services PMI decreased from 55 to 54.6 as the continued problems on the coronavirus front put some pressure on the services sector. However, the situation in the U.S. services segment is much better than in Europe. Euro Area Services PMI declined from 50.5 in August to 47.6 in July. Numbers below 50 show contraction.

Currently, the U.S. economy is showing relative strength compared to other developed economies,providing additional support to the U.S. dollar.

In this situation, higher oil prices failed to provide material support to Canadian dollar which remains under pressure against the U.S. dollar.

Technical Analysis

usd cad september 23 2020

USD to CAD gained additional upside momentum above the resistance at 1.3330 and is heading towards the next resistance level at 1.3400.

RSI is still in the moderate territory so USD to CAD has plenty of room to develop momentum if the U.S. Dollar Index continues its upside move.

In case USD to CAD manages to settle above the resistance at 1.3400, it will head towards the next resistance level at 1.3450.

On the support side, the previous resistance at 1.3330 will likely serve as the first support level for USD to CAD.

A move below this resistance level will open the way to the test of the next support at 1.3290. If USD to CAD gets below the support at 1.3290, it will move towards the 50 EMA at 1.3255.

A successful test of the 50 EMA level will open the way to the test of the 20 EMA level at 1.3210.

For a look at all of today’s economic events, check out our economic calendar.

Oil Gains Ground As Gasoline Inventories Decrease

Oil Video 23.09.20.

Crude Inventories Decline By 1.6 Million Barrels

EIA has just released its Weekly Petroleum Status Report which indicated that crude inventories decreased by 1.6 million barrels. Yesterday’s API Crude Oil Stock Change report showed an inventory increase of 0.7 million barrels.

According to EIA, gasoline inventories decreased by 4 million barrels while distillate fuel inventories decreased by 3.4 million barrels. The decline in gasoline inventories is the main factor that is providing support to the oil market right now.

U.S. domestic oil production decreased from 10.9 million barrels per day (bpd) to 10.7 million bpd as the hurricane season continued to put pressure on oil producers in the U.S. Gulf of Mexico.

However, this factor will soon lose its relevance, and U.S. domestic oil production will likely get back above the 11 million bpd level.

So far, oil managed to avoid another sell-off despite the strength of the U.S. dollar and fears about the second wave of coronavirus in Europe. However, oil traders will likely need to see a continued decrease in inventories to keep buying oil at current levels as virus-related demand risks are significant.

Russia’s Gazprom Neft Believes That Oil Demand Will Recover By The End Of 2021

In recent weeks, Russian energy officials and oil companies have been very active in providing verbal support to the oil market.

This time, the CEO of Russia’s oil company Gazprom Neft stated the global oil demand would get back to pre-pandemic levels by the end of 2021. He also noted that he believed that the second wave of lockdowns would be avoided.

Judging by the recent price action in the oil market, oil traders share this view. The current consensus is that most countries could not afford a second lockdown so they would not follow Israel’s example (Israel has recently entered into a three-week lockdown).

I’d note that the unusual amount of verbal support from the Russian side may be a sign of nervousness ahead of the flu season in the Western Hemisphere. At this point, it is hard to predict whether the world will get hit by a second wave of lockdowns or not, so oil traders will likely watch virus data on a daily basis to get a feel of where the situation is heading.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Test Of Support At $23.30

Silver Video 23.09.20.

Silver’s Sell-Off Continues

Silver is currently trying to settle below $23.50 as the U.S. dollar continues to gain ground against a broad basket of currencies while gold/silver ratio attempts to get above the 80 level.

The U.S. Dollar Index has settled above the 94 level and is trying to move above the minor resistance level at 94.20. If this attempt is successful, the U.S. Dollar Index will gain more upside momentum and head towards the significant resistance level at 94.65.

Strong U.S. dollar is bearish for silver as it makes it more expensive for buyers who have other currencies so the above-mentioned scenario will put more pressure on silver.

Meanwhile, gold has managed to get below $1900 and is heading lower. The nearest significant support level for gold is located at August lows at $1863. If gold moves towards this level, silver will also move lower.

Gold/silver ratio gained serious upside momentum and is trying to settle above the 80 level. The previous downside move in gold/silver ratio was fast so there are major gaps between levels. The nearest significant resistance for gold/silver ratio is located near the 84 level. A move towards this level will put additional pressure on silver.

Technical Analysis

silver september 23 2020

Silver is currently trying to move below the nearest support level at $23.30. If this attempt is successful, silver will head towards the next support level at $22.90.

A move below the support at $22.90 will open the way to the test of the next support level at $22.30, at the low of the highly volatile trading day on July 28, 2020.

I’d note that RSI is about to enter the oversold territory so the risks of a rebound are increasing. However, RSI is still far from extremely oversold territory, and there is enough room to gain more downside momentum in case the U.S. dollar moves higher against a broad basket of currencies.

On the upside, the nearest resistance for silver is located at $23.70. If silver manages to settle above this level, it will try to get to the test of the significant resistance level at the 50 EMA at $25.05, although it may also face resistance at lower levels along the way.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Stocks Set To Open Higher As Nike Smashes Earnings Estimates

Nike Easily Beats Earnings Estimates

S&P 500 futures are up in premarket trading as traders cheer great results from Nike which beat estimates on both earnings and revenue.

Nike reported revenue of $10.6 billion and GAAP earnings of $0.95 per share which were much higher than the analyst consensus which called for revenue of $9.15 billion and earnings of $0.48 per share.

Nike achieved strong growth in its online sales and managed to offset the negative impact of the coronavirus pandemic. Not surprisingly, Nike shares are gaining more than 10% in premarket trading and look ready to open at all-time highs.

Tesla Set To Open Lower As ‘Battery Day’ Failed To Live Up To High Expectations

Tesla shares are down by about 5% in premarket trading as investors were disappointed to hear that they will have to wait several years for new batteries.

In addition, Elon Musk did not offer any specific guidance on the cost and the driving range of the new batteries.

He stated that Tesla could produce a $25,000 car that would be ready to compete with comparable gasoline cars in three years, but investors clearly wanted him to be more specific.

Tesla shares are up more than 400% year-to-date so it was really hard to live up to such high expectations. That said, a continuation of correction in Tesla shares may put some pressure on investor mood in other high-flying tech stocks.

All Eyes On PMI Reports

Today, the U.S. will provide flash readings of Manufacturing PMI and Services PMI for September. Manufacturing PMI is expected to stay unchanged at 53.1 while Services PMI is projected to decline from 55 to 54.7.

PMI reports from other parts of the world indicated that the market should be ready for a negative surprise on the services side. In Euro Area, Services PMI declined from 50.5 in August to 47.6 in September.

Numbers below 50 show contraction so it is clear that Euro Area services segment is already suffering from the second wave of coronavirus. In the UK, Services PMI declined from 58.8 to 55.1.

If the U.S. Services PMI report is better than expected, stocks may get additional support. In the opposite case, the market may find itself under pressure due to worries about the sustainability of economic recovery.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Daily Forecast – Attempt To Settle Above 105.00

USD/JPY Video 23.09.20.

Japan’s Economy Remains Under Serious Pressure

USD/JPY is trying to continue its rebound as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the 94 level and tries to continue its upside move. If the U.S. Dollar Index moves higher, USD/JPY will have a good chance to settle above 105.00.

Today, Japan provided flash readings of Manufacturing PMI and Services PMI for September.  Manufacturing PMI increased from 47.2 in August to 47.3 in September while Services PMI grew from 45.0 to 45.6. Numbers below 50 show contraction.

PMI reports indicated that Japan’s economy remained under significant pressure due to the consequences of the coronavirus pandemic.

Meanwhile, Bank of Japan Governor Haruhiko Kurodo stated that he did not discuss the recent strength of the yen with the new Prime Minister Yoshihide Suga and added that currency rates should reflect fundamentals.

It remains to be seen whether Bank of Japan will find additional ways to support the economy as its options are limited. Most likely, USD/JPY will remain in the hands of general market sentiment, although continued weakness of Japan’s economic reports may ultimately push yen to lower levels.

Technical Analysis

usd jpy september 23 2020

USD/JPY has managed to get above the resistance at 104.90 and is trying to settle above 105.00. If this attempt is successful, USD/JPY will head towards the next resistance level at 105.30.

The 20 EMA is located at 105.40 so USD/JPY is set to face strong resistance in the 105.30 – 105.40 area. In case USD/JPY manages to settle above this resistance area, it will gain more upside momentum and head towards the next resistance at the 50 EMA at 105.85.

On the support side, the previous resistance at 104.90 will likely serve as the first support level for USD/JPY. A move below this level will open the way to the test of the material support level at 104.70.

If USD/JPY gets below the support at 104.70, it will move towards the next support level at 104.20.

At this point, USD/JPY is repeating action seen in late July when an unsuccessful test of the support at 104.20 led to a quick rebound. If USD/JPY manages to stay above 105.00, it will have a good chance to continue its current rebound.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Euro Remains Under Serious Pressure

EUR/USD Video 23.09.20.

U.S. Dollar Gets Support From Chicago Fed President’s Hawkish Comments

EUR/USD is currently trying to settle below 1.1700 as fears about the second wave of coronavirus in Europe continue to put pressure on the euro.

In addition, the U.S. dollar is supported by surprisingly hawkish comments from Chicago Fed President Charles Evans who stated that the Fed could start raising rates before average inflation gets to 2%.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, got an additional boost from these comments and is currently trying to settle above the 94 level.

It remains to be seen whether the market will start to price in the possibility of higher interest rates in the U.S. The pandemic is still a major problem, and there’ll likely be no opportunity to increase rates in the next two years.

Today, traders will have a chance to evaluate flash PMI numbers from Euro Area and U.S. Euro Area Manufacturing PMI is expected to increase from 51.7 in August to 51.9 in September while Euro Area Services PMI is projected to stay flat at 50.5.

In the U.S., Manufacturing PMI is forecasted to remain flat at 53.1 while Services PMI is expected to decline from 55 to 54.7.

Technical Analysis

eur usd september 23 2020

EUR/USD managed to get below the nearest support level at 1.1695 and tries to develop additional downside momentum.

The next support level for EUR/USD is located at 1.1630. If EUR/USD moves below this support level, it will head towards the next support at 1.1600.

On the upside, the previous support at 1.1715 will likely serve as the first resistance level for EUR/USD. A move above this level will open the way to the test of the next resistance at the 50 EMA at 1.1755.

At this point, EUR/USD looks ready to establish a new downside trend. To do this, EUR/USD must settle below the August low at 1.1695. There are no serious levels between 1.1500 and 1.1700 so the downside move may be fast in case the right catalysts emerge.

For a look at all of today’s economic events, check out our economic calendar.