Ford Motors to Invest C$1.95 Billion in Canada Operations Under Unifor Union Deal

Ford Motors, an American multinational automaker, will invest 1.95 billion Canadian dollars in its Oakville and Windsor plants in Canada, Unifor union National President Jerry Dias said.

Unifor National President, Jerry Dias said: “I’m very pleased to announce that on behalf of the more than 6,000 members who work at Ford Motor Company, we have negotiated $1.95 billion of investments to retool the Oakville complex to build five models of electric vehicles and bring a new product to the engine plant in Windsor.”

“Today is an historic day. We are not only talking about solidifying the footprint of the auto industry in the short-term but for the long term. I think it’s fair to say that as an organization we hit a home run,” said Dias.

Dias added that up until today, of the $300 billion announced globally in EV investments as the auto industry transforms from combustible engines to battery-electric vehicles, not one nickel had been allocated Canada. But with today’s announcement, that changes.

Ford shares closed 1.31% lower at $6.78 on Tuesday; the stock is down about 30% so far this year.

Ford stock forecast

Eleven analysts forecast the average price in 12 months at $7.46 with a high forecast of $8.00 and a low forecast of $4.90. The average price target represents a 10.03% increase from the last price of $6.78. From those 11 equity analysts, three rated “Buy”, seven rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley target price is $8 with a high of $12 under a bull scenario and $4 under the worst-case scenario. Evercore ISI raised the price target to $8 from $5; Citigroup upped their stock price objective to $7.5 from $5.5 and Ford Motor had its target price raised by Credit Suisse Group to $8 from $7. The brokerage currently has a neutral rating on the auto manufacturer’s stock.

A number of other equities research analysts have also recently issued reports on the stock. Barclays upped their price objective to $7 from $4 and gave the company an equal weight rating. Royal Bank of Canada dropped their price target to $5 from $6.50 and set a sector to perform rating.

It is good to hold now as 50-day Moving Average and 100-200-day MACD Oscillator signals a selling opportunity.

Analyst views

“We raise our 2020 Ford EPS forecast to ($0.90) vs. our prior forecast of ($1.30), while for 2021 and 2022 our EPS rises to positive $0.75 and $1.25 vs. our prior forecast of $0.30 and $0.80 respectively. On our revised price target of $8, Ford trades at just over 10x our 2021E EPS. Currently, the stock trades at just over 9x our revised 2021 EPS forecast,” Adam Jonas, equity analyst at Morgan Stanley noted in June.

“We raise our 3Q N. American Ford volume forecast to negative 12% Y/Y vs. down 15% previously. Our 4Q volume is revised to down 3% vs. down 5% previously. This slight upward adjustment reflects stronger than expected US SAAR, a rebound in used vehicle prices, and more supportive auto credit vs. our prior forecasts,” he added.

Upside and Downside Risks

Upside: 1) More detail around restructuring actions. 2) Positive share gains in pickups, Ford’s strongest segment. 3) Decomplexification actions. 4) Launch execution. 5) Further announcements around EVs or AVs- highlighted by Morgan Stanley.

Downside: 1) US SAAR resiliency (2020 base case 14.0MM). 2) Further COVID-19 impacts. 3) The F-150 pickup truck loses market share. 4) Slowdown in key oil-dependent end markets. 5) Launch / Warranty issues continue to remain a problem.

Price of Gold Fundamental Daily Forecast – Fed Speakers, PMI Data Possible Sources of Volatility

Gold futures hit their lowest level since August 12 on Wednesday as the U.S. Dollar strengthened on concerns about rising COVID-19 cases in Europe, while doubts continued to linger over further stimulus from the U.S. Federal Reserve. Meanwhile, the U.S. Dollar Index is pressing its highest level since July 24, bolstered by Tuesday’s upbeat U.S. home sales data and worries about a second wave of coronavirus infections in Europe.

At 09:43 GMT, December Comex gold is trading $1891.30, down $16.30 or -0.85%.

Gold also fell for a third session on Wednesday on remarks from a key Federal Reserve official on the state of the economy and the possibility of an interest rate hike.

Existing Home Sales Jump to 14-Year High, as Prices Set Another Record

After a record-setting July, the housing market still shows no signs of cooling off. Sales of existing homes rose 2.4% to a seasonally adjusted annualized rate of 6 million units, according to the National Association of Realtors. Sales were 10.5% higher compared with August 2019. This is the highest sales pace since December 2006, before the Great Recession.

Sales were hampered only by the lack of supply. There were 1.49 million homes for sale at the end of August, down 18.6% annually to a 3.0-month supply. The number of homes for sale were last this robust, in 2006, was more than double the current supply.

That tight supply pushed the median price of an existing home sold in August to a record high of $310,600. That is up 11.4% annually. In the third quarter of this year the housing wealth will have increased by $1.5 trillion from the second quarter.

Fed’s Evans See Risks of ‘Recessionary Dynamics’ Without More Fiscal Stimulus

It is important that Congress pass more spending to help the economy during the pandemic or there is a risk the economy sinks in a downward spiral, Chicago Fed President Charles Evans warned Tuesday.

“Every week and every month we go without renewing additional fiscal support…we risk a longer period of slower growth if not recessionary dynamics,” Evans said during a discussion sponsored by OMFIF, an international forum for economic policy.

Evans said he was surprised to see how strong the economy has rebounded from the lockdown in April and May. The economy is back about 90% even though the toll of deaths has been “horrific,” Evans said. Manufacturing has “come way back” led by the auto sector, he said.

Daily Forecast

The dollar got a boost and gold took a hit on Tuesday after Chicago Fed President said, “I would like to raise rates as soon as anybody,” Evans said. For me, that’s going to be when the economy is very very strong and real interest rates are rising,” he said. “Monetary policy in some sense would follow the economy up,” he said.

“We could start raising rates before we start averaging 2%, we need to discuss that, he added.

Evans’ comments caught gold traders off-guard and that could lead to even more bearishness if other Fed speakers reiterate his concerns. Traders will be listening for clues from FOMC Members Loretta Mester and Randal Quarles as well as Fed Chair Powell on their take of the economy and whether further quantitative easing may not provide an additional lift to the U.S. economy.

We could also see a volatile reaction to the downside if the Flash U.S. Manufacturing PMI report comes in over the 53.1 previous reading.

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.

GBP/USD New Lows are Smiling to Sellers

There are 2 POC zones where we could see new wave of selling. The first POC 1.2760-90 is additionally supported by the order block (red line). In the case of a deeper retracement up watch for 1.2820-60. Reversal patterns in the zone could also show sellers and we should see a further drop towards 1.2780, 1.2685 and 1.2650. Below 1.2650, 1.2579 is the target. Selling the rallies continues.

PMI Day for Europe, UK & United States

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

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

All eyes on the Euro PMI

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

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

What does this mean for the EURUSD?

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

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

Will pending PMI compound to Pounds woes?

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

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

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

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

Dollar Index breaks above key resistance

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

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

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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.

USD/JPY Forex Technical Analysis – Nearest Upside Target is 105.526; First Downside Target is 104.601

The Dollar/Yen is trading higher on Wednesday, supported by positive U.S. economic data and concerns about a second wave of coronavirus infections in Europe and Britain. Safe-haven buying is likely to continue to grind higher in the short-term as the coronavirus rattles sentiment in Europe, but uncertainty about this year’s U.S. presidential election means the Forex pair could be prone to more volatile price swings.

At 06:40 GMT, the USD/JPY is trading 105.126, up 0.173 or +0.16%.

On Tuesday, the greenback was bolstered by data showing U.S. home sales surged to their highest level in nearly 14 years in August, but comments from a prominent Federal Reserve official sent mixed signals.

The U.S. economy risks a longer, slower recovery and “recessionary dynamics” if Congress fails to pass an additional fiscal stimulus package, Chicago Federal Reserve President Charles Evans said.

Evans also shook up the financial markets when he said it is possible for the Fed to raise interest rates before inflation starts to average 2%.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher with the formation of the closing price reversal bottom on Monday and its subsequent confirmation yesterday.

The confirmation of the closing price reversal bottom doesn’t change the main trend to up, but it could lead to a 2 to 3 rally or a 50% to 61.8% correction of the last sell-off.

A trade through 104.002 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a trade through 107.049.

The minor trend is also down. The minor trend will change to up on a trade through the last minor top at 106.550.

The short-term range is 107.049 to 104.002. Its retracement zone at 105.526 to 105.885 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this retracement zone.

Daily Swing Chart Technical Forecast

The current short-covering rally is being driven by the headlines and the closing price reversal bottom chart pattern.

Bullish Scenario

If the upside momentum continues then look for the short-covering rally to possibly extend into the short-term retracement zone at 105.526 to 105.885. Since the main trend is down, look for short-sellers to return on the initial test of this area.

Bearish Scenario

The inability to follow-through to the upside after the earlier gains could be a sign of new selling pressure, or that the short-covering is ending.

The new minor range is 104.002 to 105.199. If there is a correction, then its 50% level at 104.601 will become the first downside target. If this fails then look for a retest of the main bottom at 104.002.

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

Nike Swooshes Higher After Digital Sales Soar

NIKE, Inc. (NKE) shares soared 13% in extended-hours trading Tuesday after the athletic footwear and apparel giant reported a surge in quarterly online sales and remained upbeat about growing demand throughout the upcoming holiday season.

The company posted fiscal Q1 adjusted earnings of 95 cents per share, almost double the Street’s forecast of 48 cents a share. Meanwhile, revenue of $10.59 billion came in comfortably ahead of the $9.15 billion figure analysts had expected. Furthermore, the company also lifted its fiscal full-year outlook. It now expects sales to register in the high single digits to low double digits from the previous year.

Through Tuesday’s close, Nike stock has a $182 billion market cap, yields 0.86%, and trades 16% higher on the year. Over the past three months, the shares sport a 17.69% gain as of Sept. 23, 2020. From a valuation standpoint, the stock looks pricey. It trades at about 47 times projected earnings – 67% above its five-year average multiple of 28.34 times.

Digital Sales Spike

Nike’s Q1 digital sales, which account for roughly 30% of its total quarterly revenue, jumped 82% from a year earlier and 75% from the previous quarter as more shoppers purchased gear online during the pandemic. “We know that digital is the new normal. The consumer today is digitally grounded and simply will not revert back,” CEO John Donahoe told investors during the conference call. In recent years, the company has invested heavily in its website and mobile apps as more consumers move away from department stores and shopping malls.

Wall Street View

Bank of America expects Nike to continue benefiting from consumers’ shift to more solitary leisure activities. “We believe COVID-19 is accelerating the consumer spending shift away from traditional entertainment (e.g. amusement parks, movie theaters, & tourist attractions) and international travel to solitary leisure activities (bicycling, golf, marine, hiking, camping),” the investment bank said in a note cited by Investor’s Business Daily.

Sentiment elsewhere on Wall Street also remains bullish. The stock receives 23 ‘Buy’ ratings, 3 ‘Overweight’ ratings, 4 ‘Hold’ ratings, and 1 ‘Underweight’ rating. Analysts have an average 12-month price target on the stock at $126.07 – nearly 8% above yesterday’s $116.87 close.

Technical Outlook and Trading Tactics

Nike shares have continued trending higher after breaking above multiyear resistance in mid-August. Moreover, aftermarket data indicates the stock will open above $132 Wednesday, taking its price to an all-time high (ATH).

Given the recent runup into the company’s quarterly earnings, don’t be surprised to see profit-taking over the mid- to short-term as traders take some money off the table. Instead of chasing the price, look for a retracement entry back to $105, where previous resistance now acts as support.

GBP/USD Daily Forecast – Support At 1.2650 In Sight

GBP/USD Video 23.09.20.

British Pound Continues To Lose Ground

GBP/USD continues to trend down as the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the 50 EMA at 93.85 and is trying to gain additional upside momentum above the 94 level. The next material resistance level for the U.S. Dollar Index is located at 94.65. If the U.S. Dollar Index moves towards this level, GBP/USD will find itself under additional pressure.

The British pound continues to suffer from coronavirus-related uncertainty in the UK. Yesterday, UK Prime Minister Boris Johnson encouraged people to work from home and ordered bars and restaurants to close early.

The market fears that these moves were just the first steps on the way to a real lockdown so traders continued to sell the pound.

Today, the UK will provide flash readings of Manufacturing PMI and Services PMI reports for September. Manufacturing PMI is projected to decrease from 55.2 in August to 54.1 in September while Services PMI is expected to decline from 58.8 to 56.

If the UK PMI numbers are weaker than expected, GBP/USD may fall closer to the next significant support level at 1.2650.

Technical Analysis

gbp usd september 23 2020

GBP/USD gained significant downside momentum and managed to settle below the support level at 1.2750. Currently, GBP/USD is heading towards the next material support at 1.2650.

If GBP/USD gets below the support at 1.2650, it will move towards the next support at 1.2550. A move below 1.2650 will be a very important development for GBP/USD as it will signal that GBP/USD may be ready to get back to its previous trading range between 1.2250 and 1.2650.

On the upside, the previous support at 1.2750 will likely serve as the first important resistance level for GBP/USD. A move above this level will open the way to the test of the next material resistance level at 1.2880. If GBP/USD gets above 1.2880, it will head towards the 50 EMA at 1.2940.

I’d note that GBP/USD has mostly ignored weaker levels in recent trading sessions so traders should focus on strong levels that have proved their strength.

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

NZD/USD Forex Technical Analysis – Weakens Under .6589; Possible Short-Covering Rally Over .6607

The New Zealand Dollar is being pressured on Wednesday by a stronger U.S. Dollar and a dovish Reserve Bank of New Zealand (RBNZ) that left the door open for more interest rate cuts.

Early in the session, the RBNZ held its official cash rate at a record low and hinted at further easing while warning the economy may need support for a long time as the world grapples with the coronavirus pandemic.

At 06:00 GMT, the NZD/USD is trading .6613, down 0.0021 or 0.31%.

The RBNZ also retained its large scale asset purchase (LSAP) program at NZ$100 billion ($66.1 billion).

It added that further stimulus may be needed and that it was prepared to use additional tools like a cheap funding facility for banks, negative rates, and purchases of foreign assets.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trade through .6601 earlier in the session changed the main trend to down. The main trend will change to up on a move through .6798. This is highly unlikely, but there is room for a counter-trend 50% to 61.8% retracement especially if the Forex pair closes higher today.

The main range is .6381 to .6798. Its retracement zone at .6589 to .6540 is the primary downside target. Trader reaction to this zone could determine the longer-term direction of the NZD/USD.

The short-term range is .6489 to .6798. The NZD/USD is currently straddling its retracement zone at .6607 to .6644. Trader reaction to this zone could determine the direction of the Forex pair on Wednesday.

The minor range is .6798 to .6599. If momentum shifts to the upside, we could see a near-term rally into its retracement zone at .6699 to .6722.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at .6607.

Bearish Scenario

A sustained move under .6607 will indicate the presence of sellers. This could trigger a quick break into the intraday low at .6599, followed by the main 50% level at .6589.

Watch for a technical bounce on the first test of .6589, but if it fails then look for a possible acceleration to the downside with the main Fibonacci level at .6540 the next likely target.

Bullish Scenario

A sustained move over .6607 will signal the presence of buyers. This could trigger a short-covering rally into the short-term 50% level at .6644. Since the main trend is down, sellers could return on a test of this level. Overcoming it, however, could trigger an acceleration to the upside.

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

Siemens Reversal Patterns Appear but Support & Uptrend Indicate Buys

The company Siemens (SIEG) is in a strong uptrend like many other stocks. But the price action in August was calm and sideways. Reversal chart patterns also started to appear. What is the next expected price swing based on the price patterns?

Price Charts and Technical Analysis

Siemens daily chart

Siemens is starting a bearish retracement according to our Elliott Wave indicator (red candle). This occurred after price action showed chart patterns such as a rising wedge (purple trend lines) and a head and shoulders pattern (dark red boxes). But the long-term trend remains very bullish due to the gap between price and the 21 ema zone versus the long-term moving averages (144,233,610 emas). And also the momentum on the weekly chart has recently been confirmed (green diamond in purple box). Price is expected to retrace deeper but not much before support stops price from falling. The main support levels are at the 23.6% Fibonacci retracement level and the previous top (dark green box). Or at the confluence of long-term MAs and the 38.2% Fib (blue box). This would confirm the usual retracement level for a wave 4 (purple).

The 4 hour chart (see below) seems to be indicating a pullback via an ABC wave pattern (purple). Price is moving below the 21 ema zone so if price retests that same zone, it could turn into resistance. And price could bounce and aim for the Fibonacci targets and Wizz levels. Only a break, pullback, and bounce above the 21 ema zone would indicate an immediate uptrend without a deeper bearish pullback. Earnings date is November 5, 2020.

Siemens 4 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

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

 

 

USD/JPY Fundamental Daily Forecast – Hawkish Comments From Fed’s Evans Spook Dollar Bears

The Dollar/Yen is trending higher for a third session this week as virus fears and worries about U.S. stimulus continue to underpin the greenback. The Japanese currency has been among the best performing majors this month as jitters in the global equity markets drove safe-haven demand, however, this week is a little different as investors have opted to move into the safe-haven U.S. Dollar for protection.

At 04:16 GMT, the USD/JPY is trading 105.072, up 0.118 or +0.11%.

Some traders aren’t sure why the Dollar/Yen is stronger this week, but when in doubt, they fall back to oversold technical conditions. Others are saying the rebound in the Forex pair is normal.

“It’s not uncommon with sudden Yen move that it’s driven by domestic asset managers coming in to buy foreign assets at the lows, and buying dollars to pay for them,” said Stuart Oakley, a London-based executive at Nomura.

Still others are staying that Japanese investors took advantage of the Japanese bank holiday and the thin volume that goes along with it to buy cheap dollars.

Dollar Boosted by Hawkish Fed Comments; Higher Demand for Risky Assets

The U.S. Dollar is also being supported by hawkish remarks from a Federal Reserve speaker after Chicago Federal Reserve President Charles Evans mentioned the prospect of raising interest rates. This came as a surprise to investors because the narrative from central bank policymakers since March has been we’re not going to raise rates at any point in the foreseeable future.

“I would like to raise rates as soon as anybody,” Evans said. For me, that’s going to be when the economy is very very strong and real rates are rising,” he said. “Monetary policy in some sense would follow the economy up,” he said.

“We could start raising rates before we start averaging 2%, we need to discuss that,” he added.

Japan Economic News

Japan’s factory activity extended declines in September largely due to a sharper fall in output, as the world’s third-largest economy struggles to stage a robust recovery from the coronavirus pandemic.

The au Jibun Bank Flash Manufacturing Purchasing Managers’ Index (PMI) was largely unchanged at 47.3 in September compared with a final 47.2 in the previous month.

Output contracted at a faster pace for the first time in four months, weighing on the headline index, which remained below the 50.0 threshold that separates contraction from expansion for a 17th month.

“New order inflows continued to fall in September, reflecting subdued demand,” said Bernard Aw, principal economist at IHS Markit, which compiles the survey.

“That said, the picture of the economy remained much improved when compared to the height of the pandemic during the second quarter.”

Daily Forecast

The USD/JPY popped to a one week high on Wednesday, as traders continued to react to the hawkish tone of the comments from Chicago Federal Reserve President Charles Evans. He mentioned pausing QE and rates rising before the inflation target is reached. That was enough to spook U.S. Dollar bears. Furthermore, for longer-term traders, it signals a stronger U.S. Dollar once we put the COVID-19 pandemic behind us.

We could have a volatile session on Wednesday if Evans decides to walk back his comments. Traders will also get the opportunity to react to comments from Fed speakers including Loretta Mester and Randal Quarles. Fed Chair Powell also testifies before Congress for a third session.

The major reports are the Flash Manufacturing PMI and the Flash Services PMI.

The Flash Manufacturing PMI report is expected to come in at 52.5, down slightly from the previously reported 53.1. Flash Services PMI is forecast at 54.5, down slightly from the previously reported 55.0.

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

AUD/USD and NZD/USD Fundamental Daily Forecast – RBNZ May Be Preparing to Move on Negative OCR

The New Zealand Dollar is trading lower but clawing back some of its earlier losses after the Reserve Bank of New Zealand (RBNZ) held its official cash rate at 0.25% in a widely expected decision on Wednesday, as data suggested the economic hit from the corona virus was less severe than initially feared.

Economists in a Reuters poll had unanimously expected the RBNZ to hold rates. The bank also retained its large scale asset purchase (LSAP) programme at as much as NZ$100 billion ($66.32 billion).

At 03:15 GMT, the NZD/USD is trading .6615, down 0.0018 or -0.28%. The low of the session is .6599.

Policymakers also warned monetary policy may need to provide significant economic support for a long time as the world grapples with the coronavirus pandemic.

Although the initial response to the RBNZ announcements was to the upside, traders should not be fooled. This move is likely being fueled by profit-taking since the news has probably been baked into the market since the NZD/USD hit a multi-year high at .6798 on September 18.

Furthermore, the RBNZ may have struck a dovish note when it said further stimulus may be needed and it was prepared to use additional tools like a Funding for Lending Programme (FLP), a negative OCR, and purchases of foreign assets.

“Members agreed that monetary policy will need to provide significant economic support for a long time to come to meet the inflation and employment remit, and promote financial stability,” RBNZ policymakers said in a post-meeting statement.

This was the fourth time the RBNZ has held rates this year, after stunning markets with a 75 basis points cut in an emergency meeting in March as COVID-19 broke out across New Zealand.

Recent Economic Data that Policymakers Considered in the Decision Process

New Zealand fell into its deepest economic recession on record in the second quarter, data showed last week.

The RBNZ also said the ongoing virus-led activity restrictions – most notably in Auckland – had also continued to dampen economic activity, and business and consumer confidence.

Finally, the bank said it expects a rise in unemployment and an increase in firm closures, as weak economic conditions continue and as government spending measures like wage subsidies.

Daily Forecast

The early price action suggests the dovish RBNZ was already priced into the currency, so we wouldn’t be surprised by a technical bounce. A move like this would likely attract new short-sellers since central bank policymakers continued to set the stage for negative rates in Wednesday’s policy statement. Activity in the futures markets shows traders are anticipating a move to negative rates early next year.

Additional selling pressure could come from a stronger U.S. dollar, which is gaining strength on worries about a surge in COVID-19 cases and it negative impact on the global economic recovery.

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

AUD/USD Forex Technical Analysis – Decision Time for Aussie Bulls on Test of .7123 to .7055

The Australian Dollar is under pressure early Wednesday, falling to its lowest level since August 12, after the Reserve Bank of Australia (RBA) said it is assessing policy options. The news is being perceived as dovish.

According to Deputy Governor Guy Debelle, the RBA is assessing various monetary policy options including currency market intervention and negative rates to meet its inflation and employment goals.

At 02:11 GMT, the AUD/USD is trading .7135, down 0.0033 or -0.47%.

On Tuesday, Debelle said the board was assessing other policy options “given the outlook for inflation and employment is not consistent” with the Bank’s objectives over the period ahead.

One option is buying government bonds with maturities beyond three years. A second potential tool is foreign exchange intervention and a third option would be to lower the cash rate without taking it into negative territory. The final option was negative rates, though Debelle said the empirical evidence on its success was mixed.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend changed to down on Monday when sellers took out the previous main bottom at .7192. A trade through .7345 will change the main trend to up.

The main range is .6833 to .7414. Its retracement zone at .7123 to .7055 is the next downside target. Trader reaction to this zone could determine the longer-term direction of the AUD/USD. Watch for a possible technical bounce on the first test of this area.

Short-Term Outlook

The early price action on Wednesday suggests the direction of the AUD/USD the rest of the session is likely to be determined by trader reaction to the main 50% level at .7123.

Bearish Scenario

A sustained move under .7123 will indicate the presence of sellers. This could trigger a further break into the August 12 main bottom at .7109. Taking out this level could trigger an even further decline into a Fibonacci level at .7055.

Bullish Scenario

Holding above .7123 will signal the return of buyers. If this move is able to create enough upside momentum then we could see a 50% to 61.8% retracement of the break from the .7345 main top.

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

Crude Oil Price Update – Could Form Trading Range Inside Pair of 50% Levels at $39.57 and $40.72

U.S. West Texas Intermediate crude oil futures finished slightly higher on Tuesday ahead of tomorrow’s weekly U.S. inventory figures, rebounding modestly from the previous day’s steep break that was driven by a surge in overseas coronavirus infections. The market was helped by a private industry report that showed a large gasoline draw despite an unexpected crude inventory build.

On Tuesday, December WTI crude oil settled at $40.09, up $0.24 or 0.60%.

Late Tuesday, the American Petroleum Institute (API) reported a build in crude oil inventories of 691,000 barrels for the week-ending September 18. Analysts were looking for an inventory draw of 2.256-million barrels.

The API also reported a draw in gasoline inventories of 7.735 million barrels of gasoline for the week-ending September 11 – compared to last week’s 3.762-million-barrel build. Analysts had expected a much smaller 614,000-barrel draw for the week.

Distillate inventories were down by 2.104 million barrels for the week, compared to last week’s 1.123-million-barrel draw, while Cushing inventory rose by 298,000 barrels.

Daily December WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending a little higher. A trade through $37.11 will signal a resumption of the downtrend. The main trend will change to up when buyers take out $44.33.

The minor trend is also down. A trade through $42.02 will change the minor trend to up. This move will confirm the shift in momentum to up.

The short-term range is $44.33 to $37.11. Its retracement zone at $40.72 to $41.57 is potential resistance.

The minor range is $37.11 to $42.02. Its retracement zone at $39.57 to $38.99 is support. It stopped the selling at $39.21 on Monday.

Short-Term Outlook

Holding between the two retracement zones will produce a rangebound trade. On the upside, the trigger point for an acceleration is the Fibonacci level at $41.57. Taking out the Fibonacci level at $38.99 could trigger an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with the next major target the September 9 main bottom at $37.11.

Why is a rangebound trade possible? Because some traders believe renewed lockdown restrictions in Europe will have only a limited impact on fuel demand, which could prevent a pronounced selloff in oil markets. Additionally, with major oil-producing nations still restricting supply, the market has been locked in a range for most of the summer. This time, it is likely to be at lower prices.

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

Litecoin, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – September 23rd, 2020

Litecoin

Litecoin rallied by 3.15% on Tuesday. Partially reversing an 8.43% slump from Monday, Litecoin ended the day at $44.51.

It was a mixed start to the day. Litecoin fell to an early morning intraday low $42.77 before making a move.

Steering well clear of the first major support level at $40.62, Litecoin rallied to a late intraday high $44.82.

Falling short of the first major resistance level at $46.66, Litecoin eased back to wrap up the day at sub-$45 levels.

At the time of writing, Litecoin was up by 0.04% to $44.53 A mixed start to the day saw Litecoin fall to an early morning low $44.42 before rising to a high $44.71.

Litecoin left the major support and resistance levels untested early on.

LTC/USD 23/09/20 Hourly Chart

For the day ahead

Litecoin would need to avoid a fall through the $44.03 pivot to support a run at the first major resistance level at $45.30.

Support from the broader market would be needed, however, for Litecoin to break out from Tuesday’s high $44.82.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

Failure to avoid a fall through the $44.03 pivot level would bring the first major support level at $43.25 into play.

Barring an extended sell-off on the day, however, Litecoin should steer clear of sub-$42 levels. The second major support level sits at $41.98.

Looking at the Technical Indicators

First Major Support Level: $43.25

First Major Resistance Level: $44.03

23.6% FIB Retracement Level: $45.30

38.2% FIB Retracement Level: $71

62% FIB Retracement Level: $100

Stellar’s Lumen

Stellar’s Lumen rose by 2.47% on Tuesday. Partially reversing Monday’s 8.98% tumble, Stellar’s Lumen ended the day at $0.071742.

It was also a mixed start to the day. Stellar’s Lumen fell to an early morning intraday low $0.069497 before making a move.

Steering clear of the first major support level at $0.06681, Stellar’s Lumen rose to a late morning intraday high $0.072250

Falling short of the first major resistance level at $0.07524, Stellar’s Lumen fell back to sub-$0.070 levels.

Finding late support, however, Stellar’s Lumen moved back through to $0.072 levels before easing back.

At the time of writing, Stellar’s Lumen was down by 0.58% to $0.071328. A bearish start to the day saw Stellar’s Lumen fall from an early morning high $0.071748 to a low $0.071321.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 23/09/20 Hourly Chart

For the day ahead

Stellar’s Lumen would need to avoid a fall through the $0.07116 pivot to support a run at the first major resistance level at $0.07283.

Support from the broader market would be needed, however, for Stellar’s Lumen to break out from Tuesday’s high $0.07225.

Barring a broad-based crypto rally, the first major resistance level would likely cap any upside on the day.

Failure to avoid a fall through the $0.07116 pivot level would bring the first major support level at $0.07008 into play.

Barring an extended crypto sell-off, however, Stellar’s Lumen should steer clear of the second major support level at $0.06841.

Looking at the Technical Indicators

First Major Support Level: $0.07008

First Major Resistance Level: $0.07283

23.6% FIB Retracement Level: $0.09280

38% FIB Retracement Level: $0.1333

62% FIB Retracement Level: $0.1989

Tron’s TRX

Tron’s TRX rose by 0.27% on Tuesday. Following Monday’s 7.76% slide, Tron’s TRX ended the day at $0.025072.

In the early hours, Tron’s TRX rose to an early morning intraday high $0.025584 before hitting reverse.

Falling short of the first major resistance level at $0.02682, Tron’s TRX slipped to a midday intraday low $0.024494.

Steering clear of the first major support level at $0.02373, Tron’s TRX revisited $0.0253 levels before easing back.

At the time of writing, Tron’s TRX was up by 0.20% to $0.025121. A bullish start to the day saw Tron’s TRX rise from an early morning low $0.02495 to a high $0.02529.

Tron’s TRX left the major support and resistance levels untested early on.

TRX/USD 23/09/20 Hourly Chart

For the Day Ahead

Tron’s TRX would need to avoid a fall through the $0.02505 pivot level to support a run at the first major resistance level at $0.02561.

Support from the broader market would be needed, however, for Tron’s TRX to break out from $0.02530 levels.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

Failure to avoid a fall through the $0.02505 pivot level would bring the first major support level at $0.02452 into play.

Barring another extended crypto sell-off, however, Tron’s TRX should steer clear of sub-$0.024 levels. The second major support level sits at $0.02396.

Looking at the Technical Indicators

First Major Support Level: $0.02452

First Major Resistance Level: $0.02561

23.6% FIB Retracement Level: $0.0291

38.2% FIB Retracement Level: $0.0428

62% FIB Retracement Level: $0.0648

Please let us know what you think in the comments below

Thanks, Bob

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – September 23rd, 2020

EOS

EOS rose by 2.79% on Tuesday. Partially reversing a 6.31% slide from Monday, EOS ended the day at $2.5746.

It was a mixed start to the day. EOS fell to an early morning intraday low $2.4859 before making a move.

Steering clear of the first major support level at $2.4264, EOS rose to a late intraday high $2.5915.

Falling short of the first major resistance level at $2.6361, however, EOS slipped back to end the day at $2.57 levels.

At the time of writing, EOS was down by 0.10% to $2.5721. A mixed start to the day saw EOS dip to an early morning low $2.5686 before rising to a high $2.5771

EOS left the major support and resistance levels untested early on.

EOS/USD 23/09/20 Hourly Chart

For the day ahead

EOS would need to avoid a fall through the $2.5507 pivot level to support a run at the first major resistance level at $2.6154.

Support from the broader market would be needed, however, for EOS to break out from Tuesday’s high $2.5915.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

Failure to avoid a fall through the pivot level at $2.5507 would bring the first major support level at $2.5098 into play.

Barring an extended sell-off, however, EOS should steer of sub-$2.50 levels. The second major support level sits at $2.4451.

Looking at the Technical Indicators

First Major Support Level: $2.5098

Pivot Level: $2.5507

First Major resistance Level: $2.6154

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Ethereum

Ethereum rose by 1.15% on Tuesday. Partially reversing Monday’s 8.33% tumble, Ethereum ended the day at $344.26.

A mixed start to the day saw Ethereum rise to an early morning high $346.74 before hitting reverse.

Falling well short of the major resistance levels, Ethereum fell to a late morning intraday low $335.57.

Steering clear of the first major support level at $321.82, Ethereum rose to a late intraday high $346.84 before easing back.

Falling short of the first major resistance level at $367.58, Ethereum wrapped up the day at $344 levels.

At the time of writing, Ethereum was down by 0.22% to $343.51. A bearish start to the day saw Ethereum fall from an early morning high $344.63 to a low $343.45.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 23/09/20 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the $342.22 pivot to support a run at the first major resistance level at $348.88.

Support from the broader market would be needed, however, for Ethereum to break out from Tuesday’s high $346.84.

Barring an extended crypto rally, the first major resistance level and resistance at $350 would likely cap any upside.

Failure to avoid a fall through the $342.22 pivot would bring the first major support level at $337.61 into play.

Barring an extended sell-off, however, Ethereum should steer clear of sub-$330 levels. The second major support level at $330.95 should limit any downside.

Looking at the Technical Indicators

First Major Support Level: $337.61

Pivot Level: $342.22

First Major Resistance Level: $348.88

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP rose by 0.86% on Tuesday. Partially reversing a 6.39% slide from Monday, Ripple’s XRP ended the day at $0.23313.

It was also a mixed start to the day. Ripple’s XRP fell to an early morning intraday low $0.22950 before making a move.

Steering clear of the first major support level at $0.2241, Ripple’s XRP rose to a mid-morning high $0.23440.

Coming up short of the major resistance levels, Ripple’s XRP fell back to sub-$0.23 levels before finding support.

A late rally saw Ripple’s XRP strike a late intraday high $0.23442 before easing back to sub-$0.2340 levels.

In spite of the late rally, Ripple’s XRP fell well short of the first major resistance level at $0.2427 on the day.

At the time of writing, Ripple’s XRP was down by 0.06% to $0.23299. A bearish start to the day saw Ripple’s XRP fall to an early morning low $0.23284 before rising to a high $0.23299.

Ripple’s XRP left the major support and resistance levels untested early on.

XRP/USD 23/09/20 Hourly Chart

For the day ahead

Ripple’s XRP will need to avoid a fall through the $0.2324 pivot to support a run at the first major resistance level at $0.2352.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from Tuesday’s high $0.23442.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

Failure to avoid a fall through the $0.2324 pivot would bring the first major support level at $0.2303 into play.

Barring an extended crypto sell-off, Ripple’s XRP should steer clear of the second major support level at $0.2274.

Looking at the Technical Indicators

First Major Support Level: $0.2303

Pivot Level: $0.2324

First Major Resistance Level: $0.2352

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Please let us know what you think in the comments below.

Thanks, Bob

European Equities: Private Sector PMIs , Powell, and COVID-19 in Focus

Economic Calendar:

Wednesday, 23rd September

GfK German Consumer Climate (Oct)

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Thursday, 24th September

German IFO Business Climate Index (Sep)

The Majors

It was a mixed day for the European majors following Monday’s sell-off. The DAX30 and EuroStoxx600 rose by 0.41% and by 0.20% respectively, while the CAC40 fell by 0.40%.

There was little influence from a light economic calendar on the day. While bank stocks continued to struggle amidst the latest scandal, dip-buyers delivered support on the day.

A softer EUR added support to the DAX30 in particular as the Dollar bounce back continued.

The Stats

It was a quiet day on the Eurozone economic calendar. The Eurozone’s flash consumer confidence figure was in focus late in the European session.

According to the latest survey, the Eurozone’s Consumer Confidence Indicator rose from -14.7 to -13.9 in September. Economists had forecast a rise to -14.6.

While up on the month, the indicator continued to sit well below the long-run average -11.1.

From the U.S

It was a busier day. While existing home sales figures for August were in focus, FED Chair Powell’s testimony on Capitol Hill was the main event of the day.

FED Chair Powell provided few surprises in his first speech of the week, however. Powell cited the path forward would depend on keeping COVID-19 under control and government policy moves.

The Market Movers

For the DAX: It was a relatively bullish day for the auto sector on Tuesday. Continental and Daimler rose by 1.48% and by 0.86% respectively to lead the way. BMW and Volkswagen weren’t far behind, with gains of 0.41% and 0.75% respectively.

It was another day in the red for the banks, however. Deutsche Bank fell by 1.78% following Monday’s 7.64% tumble, with Commerzbank ending the day down by 0.07%.

From the CAC, it was also a bearish day for the banks. BNP Paribas and Credit Agricole ended the day down by 0.52% and by 0.57% respectively. Soc Gen saw a more modest 0.10% loss following Monday’s 7.66% slide.

For the banking sector, the latest scandal continued to pressure European bank stocks on the day.

It was a bullish day for the French auto sector, which bucked the trend on the day. Peugeot and Renault ended the day with gains of 3.63% and 2.66% respectively.

Air France-KLM slid by 4.35% following Monday’s 7.63% slump, with Airbus SE following Monday’s 6.57% slide with a 2.68% loss.

The spike in new COVID-19 cases and fears of a reintroduction of containment measures continued to weigh on travel stocks.

On the VIX Index

On Tuesday, the VIX fell by 3.31%. Partially reversing a 7.55% gain from Monday, the VIX ended the day at 26.86.

Support came from dip-buying, with little else to provide the majors with direction following Monday’s pullback.

FED Chair Powell’s delivery also provided nothing new for investors to fret about on the day.

The NASDAQ and S&P500 rose by 1.71% and by 1.05% respectively, with the Dow seeing a more modest 0.52% gain.

VIX 23/09/20 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats German consumer confidence figures that are due out ahead of the European open.

Later in the morning, September’s prelim private sector PMIs are due out of France, Germany, and the Eurozone.

Following some disappointing numbers from August, there will be plenty of interest in today’s stats.

Any general downward trend in the PMIs and expect the majors to come under pressure. With new COVID-19 cases on the rise and the threat of lockdown measures lingering, COVID-19 chatter will also influence.

On the geopolitical risk front, there’s also Brexit and tensions between the U.S and China to monitor.

From the U.S, prelim private sector PMIs and Powell’s 2nd day of testimony on Capitol Hill will also influence late in the day.

The Futures

In the futures markets, at the time of writing, the Dow was up by 36 points.

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

AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Weakens as RBA Considers Various Policy Options

The Australian and New Zealand Dollar’s tumbled against the U.S. Dollar on Tuesday as investors sought safety for the second day in a row in the greenback while they eyed new restrictions aimed at curbing surging coronavirus cases in Europe, the latest U.S. – China tensions and Washington’s lack of progress on reaching a fiscal stimulus agreement.

On Tuesday, the AUD/USD settled at .7169, down 0.0055 or -0.77% and the NZD/USD finished at .6634, down 0.0035 or -0.52%.

The Australian Dollar fell to its lowest point against the greenback in almost a month after the Reserve Bank of Australia said it is assessing policy options including currency market intervention and negative rates.

Australia Central Bank Assessing Various Monetary Policy Options

Australia’s central bank is assessing various monetary policy options including currency market intervention and negative rates to meet its inflation and employment goals, Deputy Governor Guy Debelle said on Tuesday.

The Reserve Bank of Australia (RBA) had slashed interest rates to a record low 0.25% in an emergency meeting in mid-March to backstop the economy from the coronavirus crisis.

It also launched an “unlimited” government bond buying program and a cheap funding facility for banks. It has held rates since then, saying it would maintain its “highly accommodative settings” as long as required to support the flagging economy.

On Tuesday, Debelle said the board was assessing other policy options “given the outlook for inflation and employment is not consistent with the Bank’s objectives over the period ahead.”

One option being considered is buying government bonds with maturities beyond three years. The RBA is currently targeting three-year yields at 0.25%.

Foreign exchange intervention was another potential tool, though Debelle said it was not clear whether this would be effective given the Australian dollar was “aligned with fundamentals.”

A third option would be to lower the cash rate without taking it into negative territory. And the final option was negative rates, though Debelle said the empirical evidence on its success was mixed.

The RBA has previously said on multiple occasions that negative rates were “extraordinarily unlikely” in Australia and Debelle reaffirmed that stance.

Short-Term Outlook

With Debelle’s comments leaning toward the dovish side, the news is bearish for the Australian Dollar. Debelle’s remarks supported the RBA’s assessment that the recovery will be bumpy and uneven and very challenging to the labor market. So revealing these options seems to be the most prudent move at this time.

The AUD/USD should continue to struggle this week as interest rate futures are still almost fully pricing in a 15 basis point rate cut in October and the greenback is strengthening on safe-haven buying.

The Aussie meandered since hitting a two-year high at .7414 on September 1 as market pricing shifted rapidly in favor of a cut to the cash rate to 0.1% after its September policy meeting, but the recent price action suggests it may be setting up for an acceleration to the downside now that the trend has changed to down.

The big decision for investors will be following a test of the major retracement zone at .7123 to .7055.

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

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Strengthens Over 11199.75, Weakens Under 11094.75

December E-mini NASDAQ-100 Index futures are poised to close higher for the session on Tuesday after buyers confirmed yesterday’s closing price reversal bottom. The chart pattern doesn’t indicate a change in trend, but it could be signaling the start of a 2 to 3 day correction. The buying may actually be stronger than anticipated since the index has already reached its first upside objective.

At 20:54 GMT, December E-mini NASDAQ-100 Index futures are trading 11152.25, up 163.25 or +1.49%.

Tuesday’s rally is being led by tech-heavyweights such as Amazon.com, Apple, Microsoft Corp, Alphabet and Facebook Inc. Amazon led the way with a 2.2% jump after Bernstein upgraded its stock to “outperform”, saying the company will continue to receive a boost from premium subscribers and third-party merchants even beyond the pandemic.

Daily December E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum may be getting ready to shift to the upside following Monday’s closing price reversal bottom and Tuesday’s subsequent confirmation of the chart pattern.

A trade through 10656.50 will negate the closing price reversal bottom and signal a resumption of the downtrend. The main trend will change to up on a move through the last main top at 11539.00.

The main range is 9390.50 to 12444.75. Its retracement zone at 10917.50 to 10557.25 is support. This zone stopped the selling at 10656.50 on Monday.

The minor range is 11539.00 to 10656.50. Its retracement zone at 11094.75 to 11199.75 is currently being tested. Trader reaction to this zone could determine the direction of the index the rest of the week.

The short-term range is 12444.75 to 10656.50. Its retracement zone at 11550.75 to 11761.75 is the primary upside target and potential resistance area.

Short-Term Outlook

We’re going to be watching trader reaction to 11094.75 to 11199.75 the rest of the week for direction.

An upside bias could develop on a sustained move over 11199.75, and the downside bias could continue on a sustained move under 11094.75.

Taking out 11199.75 with enough buying volume could lead to a test of the resistance cluster at 11539.00 to 11550.75.

A move under 11094.75 could lead to another test of the major support zone at 10917.50 to 10557.25. The trigger point for an acceleration to the downside is the Fibonacci level at 10557.25.

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