EUR/USD Daily Forecast – U.S. Dollar Tries To Develop Additional Upside Momentum

EUR/USD Video 08.09.20.

U.S. Dollar Attempts To Gain More Ground Against The Euro

EUR/USD is trying to gain more downside momentum below the 20 EMA at 1.1840 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the 20 EMA at 93. The nearest resistance for the U.S. Dollar Index is located at 93.20. A move above this level will confirm that the U.S. Dollar Index has firmly settled above the key resistance at the 20 EMA. In this case, the U.S. Dollar Index will head towards 93.50 which would be bearish for EUR/USD.

Today, traders will have a chance to evaluate the third estimate of second-quarter GDP Growth Rate in Euro Area. Analysts expect that Euro Area GDP declined by 12.1% on a quarter-over-quarter basis.

In addition, EU will provide the final reading of the second-quarter Euro Area Employment Change report. Analysts project that the number of employed workers declined by 2.8% on a quarter-over-quarter basis.

Meanwhile, traders continue to focus on the upcoming European Central Bank Interest Rate Decision which is scheduled to be announced on Thursday. The key question is whether the ECB is ready to take a more dovish stance to stop the rise of the euro and provide additional stimulus to the European economy.

Technical Analysis

eur usd september 8 2020

EUR/USD has managed to get below the 20 EMA at 1.1840 but has so far failed to gain meaningful downside momentum. However, RSI is at moderate levels so there is plenty of room to gain more momentum in case the right catalysts emerge.

The next material support level for EUR/USD is located at 1.1765. If EUR/USD settles below this support level, it will head towards the next support at the 50 EMA at 1.1725. A move below the 50 EMA will present a major problem for EUR/USD bulls since EUR/USD did not form any material levels between 1.1500 and 1.1700 in 2020 so a downside move may be fast.

On the upside, the nearest resistance for EUR/USD is located at the 20 EMA at 1.1840. If EUR/USD manages to settle above this resistance level, it will head towards the next resistance at 1.1910.

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

GBP/USD Daily Forecast – British Pound Falls On Brexit Worries

GBP/USD Video 08.09.20.

British Pound Remains Under Pressure As Risks Of Hard Brexit Increase

GBP/USD is declining towards the nearest support at 1.3110 as fears of hard Brexit continue to put pressure on the British pound.

A Financial Times report suggested that the British government had plans to eliminate some parts of the Brexit Withdrawal Agreement, including parts related to Northern Ireland customs.

EU responded to the report and stated that it trusted the British government to implement the Withdrawal Agreement.

Previously, UK Prime Minister Boris Johnson set a deadline of October 15 to get the Brexit deal done. In case UK and EU fail to reach consensus by October 15, UK will leave EU without a deal.

Most analysts believe that this scenario will lead to material damage to UK economy which is trying to recover from the blow dealt by the coronavirus pandemic.

The risks of a no-deal Brexit increase day by day so traders reduce their long bets on the British pound, putting pressure on GBP/USD.

There are no important economic reports scheduled to be released today in the U.S. and UK so GBP/USD trading dynamics will mostly depend on Brexit-related news flow.

Technical Analysis

gbp usd september 8 2020

GBP/USD declined below the 20 EMA at 1.3205 and gained additional downside momentum.

The nearest support for GBP/USD is located at 1.3110. In case GBP/USD manages to settle below this level, it will head towards the next support level at the 50 EMA at 1.3045.

Most likely, the support at the 50 EMA level will be strong. If GBP/USD moves below the 50 EMA, it will gain additional downside momentum and head towards August lows at 1.2980.

On the upside, the previous support at the 20 EMA at 1.3205 will serve as the first resistance level for GBP/USD. In case GBP/USD manages to settle below the 20 EMA, it will move towards the next resistance level at 1.3270.

At this point, GBP/USD lost its previous upside momentum as it declined below the 20 EMA. If GBP/USD fails to return above the 20 EMA in the next few trading sessions, the risks of additional downside will increase.

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

USD/CAD Daily Forecast – U.S. Dollar Gains Some Ground On Labor Day

USD/CAD Video 07.09.20.

Weak Oil Puts Some Pressure On The Canadian Dollar

USD/CAD continues to trade below 1.3100 as the U.S. dollar is flat against a broad basket of currencies while WTI oil is trying to settle below the $39 level.

U.S. financial markets are closed in observance of Labor Day, and there are no important economic reports that will impact USD/CAD trading dynamics.

In this situation, traders will focus on the upcoming Bank of Canada Interest Rate Decision which is scheduled to be announced on Wednesday.

The interest rate is projected to stay intact at 0.25% but traders will keep a close eye on central bank’s comments.

The U.S. Fed put significant pressure on other central banks around the world when it announced its decision to adopt an average inflation target of 2%. This decision means that U.S. interest rates will stay low for years.

In case other central banks do not adopt similar measures, their currencies may continue to gain ground against the U.S. dollar which will be a problem for their export-oriented industries.

USD/CAD has already declined from 1.4667 in mid-March to 1.2994 at the beginning of September, and additional strength of the Canadian dollar may put pressure on the fragile recovery of Canada’s economy. However, it remains to be seen whether Bank of Canada has much room for maneuver.

Technical Analysis

usd cad september 7 2020

USD to CAD made an attempt to settle above 1.3100 but did not manage to gain sufficient upside momentum. The nearest resistance level for USD to CAD is still located at 1.3135.

The 20 EMA is located very close to this level so the resistance at 1.3135 is set to be a very serious obstacle on the way up for USD to CAD.

In case USD to CAD manages to settle above this resistance level, it will head towards the next major resistance at 1.3235.

On the support side, the nearest support level is located at 1.3050. If USD to CAD gets below this level, it will gain more downside momentum and head towards the test of the recent lows at 1.3000.

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

Oil Loses Ground As Saudi Arabia Cuts Prices For Customers

Oil Video 07.09.20.

Saudi Arabia Cuts Prices For Buyers In Asia And U.S.

Oil remains under significant pressure as Saudi Arabia cut its October official selling prices for customers in Asia and U.S.

Asia, home to China and India, was seen as a rare bright spot for oil demand during the current crisis. Saudi Arabia’s move highlights the vulnerability of demand recovery in this region.

While it’s too early to talk about another slowdown in demand, it looks like Asian customers were not ready to take too much oil at current prices so Saudi Arabia had to offer a discount in order to defend its market share in the key region.

In recent days, oil found itself under pressure due to fears about the pace of oil demand recovery so Saudi Arabia’s move intensified the recent negative trend.

In addition, the Labor Day marks the end of the driving season in the U.S., so future declines in inventory levels will be harder to achive.

The Number Of U.S. Rigs Drilling For Oil Increases By 1 To 181

The most recent Baker Hughes report has indicated that the number of U.S. drilling rigs increased by 2 to 256. The number of U.S. rigs drilling for oil also grew by 1 to 181.

In the previous week, the number of U.S. rigs drilling for oil decreased from 183 to 180. Thus, the number of oil rigs started to rebound after the recent pullback.

It remains to be seen whether the number of U.S. oil rigs will stay above 180 in the light of recent oil price action.

WTI oil remained mostly above the $40 level in July and August so U.S. oil producers had the time to adjust their plans with this new price level in mind.

Currently, oil is trying to settle below the $40 level. If oil’s visit to sub-$40 territory is not followed by a quick rebound, oil will have decent chances to gain more downside momentum and get below the $39 level.

While U.S. oil producers are notorious for their quick reaction to market changes, I do not expect immediate changes caused by the recent market sell-off. Previous sell-offs in July and August were followed by quick rebounds so the U.S. oil industry will likely choose to wait for additional clarity regarding oil’s near-term trend.

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

Silver Price Daily Forecast – Silver Stays Near The 20 EMA

Silver Video 07.09.20.

Silver Is Little Changed On Labor Day Holiday In U.S.

Silver continues to trade near the 20 EMA at $26.70 as the U.S. dollar remains mostly flat against a broad basket of currencies.

U.S. Dollar Index is once again trying to settle above the key 93 level. Today, the U.S. financial markets are closed due to Labor Day holiday, so trading dynamics of the American currency may be muted.

However, if the U.S. Dollar Index manages to gain upside momentum above the 93 level, silver may find itself under significant pressure.

Meanwhile, gold remains below the 20 EMA at $1945. In the recent trading sessions, the 20 EMA served as a significant resistance level for gold. In case gold fails to get above the 20 EMA in the upcoming trading sessions, it will likely gain more downside momentum which will be bearish for silver.

Gold/silver ratio continues to trade in a range between 71 and 73. Gold/silver ratio has been in this range since mid-August and made a single attempt to move out of the range when it tested the support at 69.50. If gold/silver ratio continues its previous downside trend, silver will have good chances to test the nearest resistance level at $27.75.

Technical Analysis

silver september 7 2020

Silver is currently trying to find support near the key 20 EMA level. In case silver manages to stay above the 20 EMA, it will gain more upside momentum and head towards the test of the next resistance level at $27.75.

Silver’s RSI is in the moderate territory so there is plenty of room to gain more momentum in case the right catalysts emerge.

If silver moves above the resistance at $27.75, it will head towards the next resistance at $28.50.

On the support side, a move below the 20 EMA will be very problematic for silver bulls at it will indicate that silver lost its upside momentum. The next support level for silver is located at $26.20.

If silver manages to settle below the support at $26.20, it will gain more downside momentum and decline towards the next support level at $24.95.

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

S&P 500 Needs Support From Tech Stocks To Stay Above 3400

Tech Stocks Will Likely Decide The Direction Of S&P 500 In The Upcoming Trading Sessions

The sell-off in tech stocks was stopped on Friday, and S&P 500 managed to return back above the 3400 level.

Today, the U.S. stock market is closed for the Labor Day holiday. Tomorrow, the direction of tech stocks will be in focus once again due to their major impact on the direction of the whole S&P 500.

The key question is whether the market will once again find itself under pressure as valuation of leading tech stocks looks generous even after the recent sell-off.

The last trading session highlighted the fact that there is plenty of money on the sidelines which is ready to be deployed once stock prices fall significantly over a short period of time.

In this light, it looks like S&P 500 will resume its upside trend in case it manages to stay above the 3400 level in the next few trading sessions.

The Sell-Off In The Oil Market Continues

WTI oil declined below the $40 level and continues to lose ground amid worries about the strength of oil demand.

While the recent economic data has been mostly encouraging and the U.S. Unemployment Rate declined to 8.4%, traders worry that continued problems on the coronavirus front will put pressure on the speed of oil demand recovery.

At this point, there are clear signs of the second virus wave in major European countries while India and several Latin American countries struggle to contain the first wave.

In this environment, oil traders have to price in the risks of additional virus containment measures which inevitably hurt the demand for oil. In case oil stays below the $40 level, oil-related equities will continue their downside trend and put pressure on S&P 500.

Pivotal Moment For The U.S. Dollar

The U.S. dollar lost a lot of ground against a broad basket of currencies since mid-March, and this move provided material support to dollar-denominated stocks and commodities.

Recently, the U.S. Fed stated that it would adopt an average inflation target of 2%, which will lead to years of low interest rates. Theoretically, this is a very bearish development for the U.S. dollar.

However, the American currency is currently trying to rebound, and the U.S. Dollar Index is attempting to get above the key resistance level at 93. Traders bet that other central banks will follow Fed’s steps.

If this happens, U.S. dollar will gain material upside momentum which can hurt stocks and commodities. On the other hand, the continuation of the downside trend will provide additional support to U.S. stock market.

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

USD/JPY Daily Forecast – Another Attempt To Settle Above The 50 EMA

USD/JPY Video 07.09.20.

U.S. Dollar Fails To Gain More Upside Momentum

USD/JPY made an attempt to settle above the nearest resistance level at the 50 EMA at 106.30 but failed to gain sufficient upside momentum.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, failed to get above the key 93 level but stays just below this resistance level.

A move above the 20 EMA at 93 will signal that the U.S. Dollar Index is ready to start a new upside trend which would be bullish for USD/JPY.

Tomorrow, Japan will publish the final estimate of its second-quarter GDP Growth Rate. On a quarter-over-quarter basis, GDP is expected to shrink by 8.1%. On an annualized basis, GDP is projected to suffer losses of as much as 28.6%.

There are no important economic releases scheduled to be published in the U.S. in the next few days so USD/JPY trading dynamics will heavily depend on general market sentiment.

Traders will also watch the developments in the U.S. government bond market. On Friday, 10-year U.S. government bond yields jumped by almost 13% to 0.721% while 30-year U.S. government bond yields increased to 1.471%. Higher bond yields may ultimately provide more support to the American currency.

Technical Analysis

 

usd jpy september 7 2020

USD/JPY continues to trade in a range between the 20 EMA at 106.10 and the 50 EMA at 106.30. The range is getting tighter day by day so USD/JPY will soon break out of this range.

In case USD/JPY manages to settle above the 50 EMA at 106.30, it will head towards the material resistance level at 107.00. The resistance at 107.00 is set to be a very strong level for USD/JPY so it will need significant upside catalysts to move above this level.

On the support side, a move below the 20 EMA at 106.10 will open the way to the test of the next important support level at 105.30.

From a big picture point of view, USD/JPY has been trading in a wide range between the support at 105.30 and the resistance at 107.00 since early August, and it will need material catalysts to get out of this range.

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

EUR/USD Daily Forecast – U.S. Dollar Tries To Gain More Ground Against Euro

EUR/USD Video 07.09.20.

Traders Await ECB Interest Rate Decision On Thursday

EUR/USD continues its attempts to settle below the 20 EMA at 1.1840 as the U.S. dollar remains flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle above the key 93 level. In case this attempt is successful, U.S. Dollar Index will gain more upside momentum which will be bullish for EUR/USD.

This week, EUR/USD traders will be focused on European Central Bank Interest Rate Decision which is scheduled to be announced on Thursday. The key question is whether ECB is ready to deliver additional stimulus in order to push inflation higher and stop the rise of the euro.

Analysts wonder if ECB is ready to follow the U.S. Fed’s steps and announce that it plans to target an average inflation of 2%. Euro Area inflation has recently slipped into the negative zone, increasing risks of deflation.

However, it remains to be seen whether ECB can do anything about this as its options are limited. At the same time, failure to promise more easing will likely lead to another increase in the value of the euro which would be a negative development for the European economy.

Technical Analysis

eur usd september 7 2020

EUR/USD is trying to gain more downside momentum as some traders are ready to place their bets on more easing from ECB ahead of its Interest Rate Decision on Thursday.

In case EUR/USD is able to settle below the 20 EMA at 1.1840, it will head towards the test of the next material support level at 1.1765. A move below this level will open the way to the test of the next significant support level at the 50 EMA at 1.1720.

On the upside, EUR/USD needs to get back above the 20 EMA to continue its upside move. In this scenario, EUR/USD will head towards the test of the next resistance level at 1.1910.

If EUR/USD manages to get above the resistance at 1.1910, it will gain more upside momentum and move towards the next resistance level at 1.1965.

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

GBP/USD Daily Forecast – Fears Of No-Deal Brexit Put Pressure On British Pound

GBP/USD Video 07.09.20.

U.S. Dollar Gains More Ground Against British Pound

GBP/USD  is trying to settle below the 20 EMA at 1.3220 amid risks of a no-deal Brexit.

On Monday, UK Prime Minister Boris Johnson is expected to say that Britain has set a firm deadline of October 15 to reach a deal with the EU. If UK and EU fail to reach consensus, they should “accept that and move on”.

In this case, UK’s trade relations with the EU will be similar to Australia’s. The current UK leadership believes that it’s an acceptable scenario but the markets are worried about a potential hit to the UK economy which is trying to rebound after the huge blow dealt by the coronavirus pandemic.

In addition to Brexit problems, UK has just reported its biggest daily increase in the number of new coronavirus cases since May. While the disease is mostly spreading among younger people and the number of hospitalizations remains low, this development increases risks of new virus containment measures.

Meanwhile, the U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues its attempts to settle above the key 93 level.

If the U.S. Dollar Index moves above the 93 level, it will likely gain more upside momentum which would be bearish for GBP/USD.

Technical Analysis

gbp usd september 7 2020

GBP/USD gained significant downside momentum and is trying to settle below the 20 EMA at 1.3220. The next support level for GBP/USD is located at the recent lows at 1.3175.

If GBP/USD moves below this level, it will head towards the next material support level at 1.3110.

On the upside, the previous support level at 1.3270 will likely serve as the nearest resistance for GBP/USD. Recently, GBP/USD made an attempt to stabilize near this level but did not manage to find enough support. I’d expect strong interest from traders in case GBP/USD gets back to 1.3270.

If GBP/USD manages to settle above 1.3270, it will gain upside momentum and head towards the next resistance level at 1.3425. No material levels were formed between 1.3270 and 1.3425 so this move may be fast.

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

USD/CAD Daily Forecast – U.S. Dollar Fails To Continue Its Rebound

USD/CAD Video 04.09.20.

Canadian Dollar Rebounds After Yesterday’s Sell-Off

USD/CAD is pulling back after yesterday’s upside move despite weak oil and broad U.S. dollar strength.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues its rebound and is trying to settle above the 93 level.

U.S. Unemployment Rate declined from 10.2% in July to 8.4% in August and served as a bullish catalyst for the American currency. The U.S. Non Farm Payrolls report was also encouraging as it showed that the American economy added 1.37 million jobs in August.

Meanwhile, Canada provided Employment Change and Unemployment Rate data for August. The Employment Change report indicated that the Canadian economy added 248,800 jobs compared to analyst consensus of 275,000.

Unemployment Rate declined from 10.9% to 10.2% while analysts expected Unemployment Rate of 10.1%.

WTI oil is currently testing the $40 level which is a bearish development for commodity-related currencies like the Canadian dollar. However, USD/CAD did not show much sensitivity to oil in recent trading sessions and continues to ignore the developments on the oil price front.

Technical Analysis

usd cad september 4 2020

USD to CAD failed to settle above the nearest resistance level at 1.3135 and declined closer to 1.3100. Yesterday, I wrote that USD to CAD may get some support at 1.3080, and today’s trading session confirmed that USD to CAD attracts some buyer interest at this level.

If USD to CAD settles below 1.3080, it will head towards the next support level at 1.3050. A move below 1.3050 will likely lead to increased downside momentum and push USD to CAD towards the recent lows at 1.3000.

On the upside, USD to CAD needs to get above the nearest resistance at 1.3135 to have a chance to continue its rebound. If this happens, USD to CAD will have to deal with the next resistance at the 20 EMA at 1.3160.

A move above the 20 EMA will signal that USD to CAD is ready to gain more upside momentum. In this scenario, USD to CAD will head towards the next material resistance level at 1.3235.

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

Oil Tries To Settle Below The $40 Level

Oil Video 04.09.20.

Strong U.S. Dollar Puts Significant Pressure On Oil Prices

Today, oil was trying to rebound as traders initiated long bets after the two-day sell-off. Unfortunately for oil bulls, this rebound was stopped by the strength of the U.S. dollar, which put pressure on commodities.

The U.S. Dollar Index has managed to get above the 20 EMA at the 93 level, a sign that the American currency has good chances to start a new upside trend.

This may be a pivotal moment for dollar-denominated commodities as the U.S. dollar weakness in July and August played a very important role in commodities markets’ upside.

Oil’s problems are not limited to the strength of the U.S. dollar as S&P 500 is experiencing a very strong sell-off for the second day in a row, putting pressure on demand for riskier assets.

A combination of strong dollar and falling stocks has the potential to push WTI oil prices below the $40 level. At the same time, it remains to be seen whether oil will be able to develop additional downside momentum or it will soon get support from bargain hunters.

Demand Concerns Are Another Factor In Play

On Thursday, we discussed the slowdown in U.S. gasoline demand which served as a negative catalyst for oil prices.

However, demand concerns are not limited to gasoline demand. There are signs of the second virus wave in Europe, and EU countries start introducing virus containment measures.

While nobody talks about a real lockdown, such measures will increase consumer anxiety and ultimately put pressure on the speed of the economic recovery, hurting the demand for oil.

It is widely believed that a full return to normal life is impossible without mass vaccination. The World Health Organization’s view on the speed of vaccine deployment is not inspiring.

WHO expects that mass vaccinations will not happen before mid-2021, which means that travel demand will likely stay suppressed until the second half of next year.

This is a worrisome scenario for oil since some OPEC+ countries want to put more production to the market.

Iraq has reportedly wanted to get an exemption from the OPEC+ deal in the first quarter of 2021. The countries’ officials denied the report although it was based on the interview of Iraq’s Oil Minister Abdul Jabbar. Russia stated that OPEC+ should be ready to adjust the deal as demand for oil recovers.

As the time goes by, OPEC+ will have increasing problems with ensuring the full compliance with the original deal, which is an additional longer-term risk for oil prices.

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

Silver Price Daily Forecast – Silver Stays Below $27.00

Silver Video 04.09.20.

Silver Trades Near The Key 20 EMA Level

Silver is trying to settle below the 20 EMA at $26.70 as the U.S. Dollar Index is making another attempt to get above the 93 level.

The U.S. Dollar Index was boosted by strong U.S. employment reports. Non Farm Payrolls report indicated that 1.37 million jobs were created in August while Unemployment Rate declined from 10.2% in July to 8.4% in August.

In case the U.S. Dollar Index manages to settle above the 93 level, it will gain more upside momentum which would be bearish for silver.

Gold continues to trade below the 20 EMA at $1945 and has decent chances to develop more downside momentum. The nearest material support for gold is located at the 50 EMA at $1900. If gold moves towards this level, silver will find itself under increased pressure.

Meanwhile, gold/silver ratio is located close to the 72 level after an unsuccessful attempt to get above the 20 EMA at 73.25. A move above the 20 EMA would be bearish for silver.

Currently, silver is at risk of developing downside momentum as the U.S. Dollar Index tries to settle above the key resistance level while gold continues to trade below the 20 EMA.

Technical Analysis

 

silver september 4 2020

Silver continues to trade near the key 20 EMA level at $26.70. In case silver manages to settle below this level, it will gain downside momentum and head towards the next support level at $26.20.

Silver’s RSI is in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge. A move below the support at $26.20 will allow silver to get closer to the next support level at $24.95.

On the upside, silver needs to stay above the 20 EMA to have a chance to test the nearest resistance level at $27.75. If silver moves above $27.75, it will head towards the next resistance at $28.50.

From a big picture point of view, silver’s upside trend is still intact, but its near-term upside momentum is under question and depends on its ability to stay above the 20 EMA at $26.70. Most likely, dynamics of the U.S. dollar will play a key role for silver in the upcoming trading sessions.

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

U.S. Stocks Set To Open Higher As Unemployment Rate Declines To 8.4%

Economy Added 1.37 Million Jobs In August

U.S. has just released Non Farm Payrolls and Unemployment Rate reports for August.

The Non Farm Payrolls report showed that 1.37 million jobs were created in August, mostly in line with the analyst consensus of 1.4 million.

Meanwhile, Unemployment Rate declined from 10.2% to 8.4%. Unemployment Rate was much better than the analysts’ forecast of 9.8%.

Yesterday, Initial Jobless Claims report showed that 881,000 Americans filed for unemployment benefits in a week while Continuing Jobless Claims declined to 13.25 million.

In total, the recent employment data painted a picture of the continued recovery of the job market.

S&P 500 futures are gaining ground in premarket trading session, boosted by the better-than-expected Unemployment Rate report.

Tech Stocks In Focus

On Thursday, high-flying tech stocks led the market sell-off. Tesla shares lost 9% of value in one day while Apple stock declined by 8%. Amazon, Microsoft, Alphabet also suffered significant losses.

The sell-off did not have a clear catalyst and was likely caused by profit-taking after a huge rally. The leading tech stocks have a big impact on S&P 500 so today’s trading will depend on whether major tech stocks will be able to rebound.

At this point, Nasdaq 100 futures are pointing to a lower open. In case the correction in tech stocks continues, the broader S&P 500 will also find itself under material pressure.

WTI Oil Tries To Rebound After Two Bad Days

WTI oil is gaining ground as it tries to recover after the recent sell-off which was caused by traders’ concerns about the speed of demand recovery.

This is a welcome development for oil-related stocks which have mostly trended down since mid-August.

Right now, the main risk for oil is the continuation of the U.S. dollar rebound. The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has already made several attempts to get above the 93 level.

If the U.S. Dollar Index manages to get above this level, oil will likely fall towards the $40 level, putting significant pressure on oil-related equities.

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

USD/JPY Daily Forecast – Stuck In A Range Between 20 EMA and 50 EMA

USD/JPY Video 04.09.20.

Yen Stabilizes After Recent Weakness

USD/JPY remains in the range between the 20 EMA near 106.00 and the 50 EMA near 106.30 after a failed attempt to settle above the 50 EMA.

Yesterday, USD/JPY tried to get above the 50 EMA but did not manage to gain sufficient upside momentum as the U.S. Dollar Index failed to settle above its 20 EMA at the 93 level.

Today, the U.S. Dollar Index is flat but the situation may change quickly after the release of U.S. employment reports. The U.S. will provide Non Farm Payrolls and Unemployment Rate reports which are expected to show that the situation in the U.S. job market continues to improve.

The market will pay close attention to the pace of this improvement. In case the employment reports are disappointing, the U.S. dollar may find itself under increased pressure against a broad basket of currencies which would be bearish for USD/JPY.

While traders do not expect any major shifts in Japan’s economic policy after the health-related resignation of Japan’s Prime Minister Shinzo Abe, the uncertainty over his successor’s policies may put some pressure on the yen in the upcoming trading sessions.

Technical Analysis

usd jpy september 4 2020

USD/JPY is taking a pause before the next move as it stays in the range between the 20 EMA and the 50 EMA.

In case USD/JPY manages to settle above the 50 EMA, it will gain more upside momentum and head towards the next major resistance level at 107.00. Along the way, USD/JPY may also face some resistance at the high of the recent upside move at 106.55.

The resistance at 107.00 has been tested several times back in August, and USD/JPY will need significant catalysts to get above this strong level.

On the support side, a move below the 20 EMA will open the way to the test of the next support level at 105.30. This support level has been tested many times in August, and USD/JPY gained significant support each time it declined to this level.

In this light, USD/JPY will likely need additional U.S. dollar weakness to breach this level and start a new downside trend.

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

EUR/USD Daily Forecast – Another Attempt To Settle Below The 20 EMA

EUR/USD Video 04.09.20.

U.S. Dollar Tries To Gain More Upside Momentum

EUR/USD continues its attempts to settle below the 20 EMA at 1.1840 as the U.S. Dollar Index tries to break above its 20 EMA at the 93 level.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, did not manage to settle above the 93 level but looks ready to make another serious attempt to gain more upside momentum.

Yesterday, disappointing Euro Area Retail Sales data put additional pressure on the euro. However, the market is still worried about the prospect of multi-year low interest rate environment in the U.S., and the American currency is yet to prove that it is ready to start a new upside trend.

On Thursday, U.S. provided better-than-expected Initial Jobless Claims and Continuing Jobless Claims reports but dollar’s gains were limited as some traders wanted to see more employment data to evaluate the strength of the job market rebound.

Today, these traders will focus on U.S. Non Farm Payrolls and Unemployment Rate reports. The biggest focus will be on the Non Farm Payrolls report since it will show how many jobs were created in August. Analysts expect that Non Farm Payrolls report will show that the economy added 1.4 million jobs.

Technical Analysis

eur usd september 4 2020

EUR/USD is currently trading near the 20 EMA level at 1.1840. This is an important moment for EUR/USD since a move below the 20 EMA will signal that the recent upside momentum has come to an end.

Yesterday, EUR/USD moved below the 20 EMA but failed to gain enough downside momentum and rebounded back to the 20 EMA level.

In case EUR/USD gets back below the 20 EMA, it will head towards the recent lows at 1.1790. A move below 1.1790 will open the way to the test of the next support level at 1.1765.

On the upside, EUR/USD needs to stay above the 20 EMA to have a chance to gain more upside momentum and test the next resistance level at 1.1910. If EUR/USD manages to settle above 1.1910, it will head towards the resistance at 1.1965.

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

GBP/USD Daily Forecast – Stabilization After Sell-Off

GBP/USD Video 04.09.20.

British Pound Tries To Get More Support

GBP/USD remains under 1.3300 as the U.S. dollar is flat against a broad basket of currencies after yesterday’s attempts to gain more upside momentum.

U.S. Dollar Index tried to settle above the 20 EMA at 93 but this attempt was not successful. This is an important moment for the American currency. Most analysts remain skeptical about dollar’s ability to continue its rebound as the Fed is set to keep rates at the bottom for years which should put the American currency under significant pressure.

However, if U.S. Dollar Index manages to get above the 20 EMA, it will gain more upside momentum as dollar bears will rush to close their positions. This is a bearish scenario for GBP/USD.

Today, traders will focus on U.S. Non Farm Payrolls and Unemployment Rate reports. Traders expect Non Farm Payrolls of 1.4 million and Unemployment Rate of 9.8%. Better-than-expected employment reports may push the U.S. Dollar Index above the 20 EMA, putting pressure on GBP/USD.

In the UK, traders will digest the latest Construction PMI report. Construction PMI is expected to grow from 58.1 in July to 58.5 in August.

Technical Analysis

gbp usd september 4 2020

GBP/USD is trying to stabilize after the recent sell-off. The nearest support level for GBP/USD is located at 1.3270. Currently, GBP/USD is attempting to stay above this level.

In case this attempt is successful, GBP/USD will have a good chance to start a rebound. The recent moves of GBP/USD were very fast so no material levels were formed between the support at 1.3270 and the next resistance at 1.3425.

If GBP/USD manages to gain more upside momentum, and may quickly get back to the resistance at 1.3425. A move above this resistance level will open the way to the test of recent highs near 1.3485.

On the support side, a move below the nearest support at 1.3270 will push GBP/USD to the test of the 20 EMA level at 1.3215.

If GBP/USD manages to settle below the 20 EMA, it will gain more downside momentum and head towards the next significant support level at 1.3110.

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

USD/CAD Daily Forecast – Canadian Dollar Finds Itself Under Pressure

USD/CAD Video 03.09.20.

U.S. Dollar Gains More Ground Amid Weaker Oil And Stock Market Sell-Off

USD/CAD is trying to settle above the resistance at 1.3135 as the U.S. dollar continues its rebound against a broad basket of currencies while WTI oil remains under significant pressure.

U.S. Dollar Index made several attempts to settle above the 20 EMA at the 93 level but did not manage to gain sufficient upside momentum. However, U.S. Dollar Index maintains solid chances to continue the current rebound, especially if it gets additional support from a sell-off in the equity market.

Currently, S&P 500 looks ready to record its worst day in several months due to the sell-off in high-flying tech stocks. If this sell-off continues, safe haven assets like the U.S. dollar will get more support which would be bullish for USD/CAD.

Today, the U.S. provided encouraging employment reports. Initial Jobless Claims declined to 881,000 while Continuing Jobless Claims decreased to 13.25 million.

These better-than-expected reports may ultimately provide additional support to the American currency although some traders will prefer to see more data.

Tomorrow, the U.S. will provide Non Farm Payrolls and Unemployment Rate reports. Non Farm Payrolls report is expected to show a creation of 1.4 million jobs. Analysts expect that Unemployment Rate will decrease from 10.2% in July to 9.8% in August.

Technical Analysis

usd cad september 3 2020

USD to CAD gained significant upside momentum and attempts to settle above the nearest resistance level at 1.3135.

If this attempt is successful, USD to CAD will head towards the next resistance at the 20 EMA at 1.3165. A move above the 20 EMA will mark the end of the previous downside momentum so I’d expect a lot of interest at this level.

If USD to CAD manages to settle above the 20 EMA, it will gain more upside momentum and head towards the next material resistance level at 1.3235.

On the support side, the nearest support for USD to CAD is located at 1.3050, although it may also get some support near 1.3080.

If USD to CAD moves below the support at 1.3050, it will head towards the test of the next support level at the recent lows at 1.3000.

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

Oil Remains Under Pressure As Traders Are Worried About Gasoline Demand

Oil Video 03.09.20.

Slowdown In Gasoline Demand Puts Pressure On Oil Prices

Yesterday, EIA provided its Weekly Petroleum Status Report which indicated that U.S. crude inventories declined by 9.4 million barrels. However, oil traders preferred to focus on gasoline demand, which fell from 9.16 million barrels per day (bpd) to 8.79 million bpd.

While the decline in demand for gasoline could have been caused by Hurricane Laura, the main problem is that gasoline demand remains well below last year’s numbers.

A year ago, demand for gasoline was 9.73 million bpd. The latest four-week gasoline demand average is 8.87 million bpd. The pace of the gasoline demand recovery is slowing down which is a worrisome development at a time when the driving season is about to end.

I’d note that it’s too early to say whether gasoline demand recovery has stalled. Hurricane Laura has distorted the data so traders will have to wait a few weeks to see a clearer picture of what’s going on with gasoline demand.

Iraq States That It Does Not Want To Get An Exemption From OPEC+ Deal

Yesterday, we discussed Iraq’s decision to get an exemption from the OPEC+ deal in the first quarter of 2021. Today, Iraq refuted previous reports and stated that it had no such intention.

Interestingly, the original reports originated out of an interview of Iraq’s Oil Minister Ihsan Abdul Jabbar, so the situation looks rather strange.

Anyway, Iraq stated that it continued to target full compliance with the OPEC+ deal which is good for the oil market. Iraq also noted that it may have to ask for two more months to make additional production cuts that compensate for its previous overproduction.

Meanwhile, Russian Energy Minister Alexander Novak stated that Russia was ready to propose a reaction to the growing oil demand under the OPEC+ deal. Russia’s economy suffers from lower oil revenues so Russia is keen to increase its oil production faster than outlined in the original deal.

It remains to be seen whether Saudi Arabia will agree with such approach because the supply/demand balance remains fragile as the world continues its battle against the pandemic.

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

Silver Price Daily Forecast – Test Of The 20 EMA At $26.75

Silver Video 03.09.20.

Silver Remains Under Pressure

Silver tested the 20 EMA level at $26.75 as the U.S. dollar continued to rebound against a broad basket of currencies, putting pressure on precious metals.

Weak Euro Area Retail Sales report provided additional support to the American currency, and the U.S. Dollar Index made an attempt to settle above the 20 EMA at the 93 level.

This attempt was not successful but U.S. Dollar Index maintains decent chances to get above the 20 EMA. If this happens, it will gain additional upside momentum and put more pressure on silver and other precious metals.

Meanwhile, gold is trading below the 20 EMA at $1945 and has the potential to develop more downside momentum. In this case, silver will face more pressure and decline below the 20 EMA at $26.75.

Gold/silver ratio has rebounded from recent lows and returned back to the previous range between 71 and 73. Gold/silver ratio’s 20 EMA is located just above 73 so this level will likely serve as a strong resistance.

In case gold/silver ratio moves above the 20 EMA, it will gain more upside momentum which would be bearish for silver.

Technical Analysis

silver september 3 2020

Silver made an attempt to get below the 20 EMA at $26.75 but did not manage to gain more downside momentum. The support at the 20 EMA will likely be strong so silver will need additional catalysts to get below this level.

If silver is able to settle below the support at the 20 EMA, it will head towards the next support level at $26.20. A move below $26.20 will open the way to the test of the next support level at $24.95.

On the upside, the nearest resistance for silver is located at $27.75. Silver has recently tried to get above this level but failed to gain upside momentum.

If silver settles above the resistance at $27.75, it will head towards the next resistance level at $28.50.

U.S. dollar will continue to serve as a major catalyst for silver in the upcoming trading sessions. If the U.S. dollar continues its rebound, silver will likely settle below the 20 EMA and gain more downside momentum.

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

U.S. Stocks Set To Open Lower As Traders Take Some Profits After Rally

Initial Jobless Claims Decline To 881,000

U.S. has just released new Initial Jobless Claims and Continuing Jobless Claims reports.

Initial Jobless Claims report indicated that 881,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 950,000.

Continuing Jobless Claims report was also better than expected. Continuing Jobless Claims declined to 13.25 million compared to analyst consensus of 14 million.

Later today, traders will have a chance to evaluate the Services PMI report for August. Analysts expect that Services PMI will increase from 50 in July to 54.8 in August.

S&P 500 futures are currently losing ground in premarket trading but are trying to recover losses after the release of better-than-expected employment reports.

WTI Oil Declines Below $41

Oil continues to lose ground after the release of the latest EIA Weekly Petroleum Status report. While crude oil inventories have declined by 9.4 million barrels due to the negative impact of Hurricane Laura, traders are worried that demand for gasoline is showing signs of weakness.

The driving season in the U.S. is about to end, and it is unclear whether demand for gasoline will continue to rebound.

In addition, the U.S. dollar is gaining ground against a broad basket of currencies, putting pressure on commodities. Just a few days ago, the U.S. Dollar Index tested yearly lows at 91.75 while it is currently trying to settle above the 93 level.

The sell-off in the oil market will likely put pressure on oil-related stocks which have already lagged the broader market in recent weeks.

Euro Area Retail Sales Decline By 1.3% Month-Over-Month

The negative data from the Euro Area has put some pressure on the world markets today.

Euro Area Retail Sales  declined by 1.3% month-over-month in July while analysts expected growth of 1.5%. Retail Sales’ growth in June was revised from 5.7% to 5.3%. On a year-over-year basis, Retail Sales were up by 0.4% compared to analyst consensus which called for growth of 3.5%.

The weak data is caused by the continued problems on the coronavirus front in Europe and implementation of various virus containment measures which increase consumers’ anxiety.

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