AUD/USD Forex Technical Analysis – Weakens Under .7350, Strengthens Over .7379

The Australian Dollar is under pressure for a third session on Wednesday after a wave of global risk aversion and a surge in U.S. Treasury yields boosted its U.S. counterpart.

Traders are still responding to Tuesday’s decision by the Reserve Bank of Australia (RBA) to stick with plans to trim its bond buying to A$4 billion a week, but also extend that out to February as a nod to coronavirus uncertainties.

At 08:52 GMT, the AUD/USD is trading .7362, down 0.0026 or -0.35%.

While the RBA Board conceded that the economic recovery from current Delta lockdowns would likely be drawn out, it also predicted a very strong pick up over all of 2022.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7478 will signal a resumption of the uptrend. A move through .7222 will change the main trend to down.

Early Wednesday, the AUD/USD is trading on the weak side of a long-term retracement zone at .7379 to .7499, making it resistance. This zone stopped the rally on September 3 at .7478.

The minor range is .7222 to .7478. Its retracement zone at .7350 to .7320 is the first downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

The short-term range is .7106 to .7478. Its retracement zone at .7292 to .7248 is the primary downside target and the last potential support before the .7222 main bottom.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Wednesday is likely to be determined by trader reaction to .7379.

Bearish Scenario

A sustained move under .7379 will indicate the presence of sellers. The first downside target is .7350, followed by .7320.

If .7320 fails then look for the selling to possibly extend into .7292 to .7248 over the near-term.

Since the main trend is up, the selling is likely to be labored with possible support at a number of retracement levels from .7350 to .7248.

Bullish Scenario

A sustained move over .7379 will signal the presence of buyers. If this move creates enough upside momentum then look for the move to possibly extend into a minor pivot at .7414. Counter-trend sellers could come in on a test of this level. Taking it out could drive the AUD/USD into .7478.

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

Monetary Policy Puts the Loonie in the Spotlight, with the BoC in Action

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. The Japanese Yen was in action this morning.

For the Japanese Yen

2nd estimate GDP numbers for the 2nd quarter were in focus this morning.

Quarter-on-quarter, the economy grew by 0.5%, which was up from a prelim 0.3%. In the 1st quarter, the economy had contracted by 0.90%.

Year-on-year, the economy expanded by 1.90%, which was up from a prelim 1.3%. In the 1st quarter, the economy had contracted by 3.7%, year-on-year.

The Japanese Yen moved from ¥110.310 to ¥110.280 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.01% to ¥110.290 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was up by 0.14% to $0.7396, with the Kiwi Dollar up by 0.13% to $0.7108.

The Day Ahead

For the EUR

It’s a quiet day ahead on the economic data front.  French non-farm payrolls for the 2nd quarter are due out ahead of the European open.

Barring dire numbers, however, we don’t expect the numbers to influence as the markets look ahead to the ECB policy decision on Thursday.

At the time of writing, the EUR was up by 0.06% to $1.1847.

For the Pound

It’s another quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats will likely leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was down by 0.01% to $1.3784.

Across the Pond

It’s a relatively quiet day ahead on the economic data front. JOLT’s job openings for July are due out later today.

Following the disappointing NFP numbers for August, expect any weak numbers to further test Dollar support.

At the time of writing, the U.S Dollar Spot Index was down by 0.01% to 92.504.

For the Loonie

It’s a big day ahead for the Loonie.

While Ivey PMI figures for August will draw interest, the Bank of Canada monetary policy decision will be key late in the day.

The markets will be looking for the BoC’s outlook on growth, following the disappointing GDP numbers for Q2. Expect any hawkish chatter to give the Loonie a material boost on the day, with the markets expecting some dovish guidance.

At the time of writing, the Loonie was up by 0.11% to C$1.2633 against the U.S Dollar.

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

September 8th 2021: GBP/USD Bid Between $1.3774 and $1.3787; Possibly Eyes Space North of $1.38

Charts: Trading View

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

South of ascending support-turned resistance, taken from the low $1.1641, June’s 3.0 percent loss persuaded EUR/USD to retest support from $1.1857-1.1352. A bullish revival shines light on 2021 peaks at $1.2349.

Month to date, September trades 0.3 percent higher.

Based on trend studies, a primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Further adding to this, price penetrated major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Against a basket of six foreign currencies, the US dollar index remained on the winning side of the table on Tuesday amid rising US Treasury yields. The DXY climbing 0.3 percent into the European close weighed on EUR/USD, extending its retracement from late July tops at $1.1909ish.

Quasimodo support calls for attention around $1.1688 in the event sellers remain in the driving seat. Though buyers regaining consciousness could witness resistance between $1.2033 and $1.1994 eventually make an entrance.

Interestingly, the relative strength index (RSI) recently stabilised within striking distance of resistance at 64.93, which elbows support at 53.19 back in view.

H4 timeframe:

$1.1907 resistance has proven a tenacious ceiling since late June. Chart studies indicate a run above $1.1907 could still be in the offing, as buy-stops above $1.1907 may be enough to fuel offers at $1.1955-1.1933, creating a short-term bearish phase.

Nevertheless, prior to the above coming to fruition, if at all, drawing in buyers from support at $1,1785-1.1823 is a possible scenario.

H1 timeframe:

Latest developments out of the H1 reveal the currency pair slipped below the 100-period simple moving average at $1.1865, a move shining the technical spotlight on a decision point at $1.1812-1.1824. While the aforesaid zone lacks freshness, it invites Fibonacci confluence between $1.1817 and $1.1831.

In addition to the decision point and Fibonacci influence, the relative strength index (RSI) is likely to record oversold conditions.

Observed levels:

The combination of monthly support from $1.1857-1.1352 and H4 support at $1,1785-1.1823 seats the H1 decision point at $1.1812-1.1824 and associated Fibonacci ratios in a strong light if tested today.

Any upside attempts from the H1 base is likely to INITIALLY zero in on the 100-period simple moving average at $1.1865.

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Month to date, September is higher by 1.1 percent, trimming a portion of the recent three-month decline.

Long-term areas to be mindful of are support at $0.6305-0.6872 and supply coming in at $0.8303-0.8082, along with trendline support-turned resistance, taken from the low $1.4776.

Trend studies (despite the trendline resistance [drawn from the high $1.0582] breach in July 2020) show the primary downtrend (since mid-2011) is in play until breaking $0.8135 (January high 2018).

Daily timeframe:

Following the breach of 4th August high at $0.7427, and despite an early pop higher in response to the RBA’s policy announcements, Tuesday delivered a bearish outside reversal.

The broad-based USD bid aided recent declines, unlocking the possibility of a continuation lower back to the 1.618% Fib projection at $0.7114.

Addressing resistance between $0.7665 and $0.7590 is still an option provided buyers make a stand. $0.7665-0.7590 consists of a 61.8% Fib retracement at $0.7665, a Quasimodo support-turned resistance at $0.7621, the 200-day simple moving average at $0.7605 and another 61.8% Fib retracement at $0.7590.

Focus on the relative strength index (RSI) remains on trendline resistance, taken from the high 80.12. Also of note is overbought space, in particular resistance at 80.19.

H4 timeframe:

In light of Tuesday’s downside, AUD/USD gnawed through a decision point at $0.7393-0.7410 and the channel support, taken from the low $0.7107.

Withdrawing lower positions the currency pair in a short-term bearish space. $0.7393-0.7410 serving as resistance tempts a potential move to support at 0.7339 which happens to join hands with a 38.2% Fib retracement.

H1 timeframe:

A closer reading of price action on the H1 scale places price action south of $0.74 as we look to wrap up Tuesday’s session.

The demand at $0.7356-0.7368 is a zone worthy of interest in the event sellers maintain a bearish position sub $0.74, with a break lower directing focus towards $0.73.

The relative strength index (RSI) shook hands with support at 27.02, situated within oversold territory.

Observed levels:

Short-term action reveals a possible bearish theme emerging beneath $0.74, aided by the $0.7393-0.7410 H4 decision point and the daily timeframe’s bearish outside reversal.

Reasonable downside objectives fall in at the H1 timeframe’s demand from $0.7356-0.7368, followed by $0.73.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since April retested descending resistance-turned support, etched from the high ¥118.66, price action has maintained moderate support. Pursuing higher levels could eventually strive for long-term supply at ¥126.10-122.66.

Month to date, September trades 0.3 percent in the green.

Daily timeframe:

Demand for the Japanese yen waned Tuesday as US Treasury yields rallied. Continued interest to the upside on USD/JPY throws light on resistance at ¥111.88-111.20.

Technical support remains evident around the 61.8% Fib retracement at ¥109.07. More engaging, nonetheless, is the harmonic Gartley pattern’s potential reversal zone between ¥107.50 and ¥108.41, reinforced by supply-turned demand at ¥107.58-106.85.

When it comes to trend, USD/JPY has been higher in 2021.

The relative strength index (RSI) shows the value attempting to exit the upper edge of its range between 40.94 and 54.43, an area forming since early July. This—coupled with the indicator pushing above the 50.00 centreline—informs traders momentum to the upside is gaining traction: average gains exceed average losses.

H4 timeframe:

As you can see, supply at ¥110.56-110.29 re-entered the fray on Tuesday, leaving Quasimodo support at ¥109.48 unchallenged.

Air space north of ¥110.56-110.29 unmasks additional supply coming in from ¥110.99-110.80.

H1 timeframe:

According to the H1 scale, we’re closing in on resistance at ¥110.32, a level sharing a connection with the relative strength index (RSI) joining resistance at 78.38.

Although ¥110.32 resides within the lower edge of H4 supply mentioned above at ¥110.56-110.29, technicians will note Quasimodo resistance at ¥110.48 as the next upside target if buyers take on ¥110.32.

Observed levels:

H1 resistance at ¥110.32, the H1 RSI resistance at 78.38 and H4 supply at ¥110.56-110.29 highlights confluence to be mindful of.

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since February, GBP/USD has echoed an indecisive environment below $1.4377: April high 2018. This follows December’s (2020) trendline resistance breach, taken from the high $2.1161, a descending barrier possibly serving as support if retested.

Month to date, September trades 0.2 percent higher.

Primary trend structure has faced lower since early 2008, unbroken (as of current price) until $1.4377 gives way.

Daily timeframe:

Analysis largely unchanged from previous writing.

Aside from fluctuating around the 200-day simple moving average at $1.3812, areas to be cognisant of are resistance at $1.4003 and Quasimodo support at $1.3609.

With reference to trend on this chart, the pair has been somewhat rangebound since late February.

Momentum to the upside is slowing, according to the relative strength index (RSI). The value turned off 56.14 and is now attempting to explore water below the 50.00 centreline.

H4 timeframe:

On the back of a USD bid, GBP/USD drilled into the $1.3766-1.3799 decision point on Tuesday, a downside objective underlined in Tuesday’s technical briefing. Despite uninspiring bullish action thus far, this is an area buyers may put in an appearance heading into London today. Failure to hold, however, could bring in $1.3732 support.

H1 timeframe:

For those who read Tuesday’s technical briefing you might recall the following (italics):

$1.38 has ‘whipsaw’ written all over it. Potentially heavy bids, therefore, might be attracted to the area marked in yellow between $1.3774 and $1.3787 in order to welcome sell-stops beneath $1.38.

As evident from the chart, $1.38 did indeed welcome a whipsaw on Tuesday and bids were present between $1.3774 and $1.3787. Yet, the inability to reclaim position above $1.38 (which has the 100-period simple moving average to target at $1.3822 if price trades higher) is concerning and may see the unit dip into support at $1.3737-1.3774.

Supporting a recovery attempt is the relative strength index (RSI), dipping its toe in oversold waters and exiting the range.

Observed levels:

The H4 timeframe working with the $1.3766-1.3799 decision point, and H1 bids filled south of $1.38 between $1.3774 and $1.3787, could bring about a short-term bullish scene, targeting at least the 100-period simple moving average at $1.3822.

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Dollar Gains as U.S. Yields Rise Before ECB Meeting

Cryptocurrencies, including Bitcoin, also dropped sharply in volatile trading as several trading platforms said they experienced performance issues.

On Friday, the greenback tumbled to its lowest levels since early August after a surprisingly soft U.S. payrolls report prompted analysts to raise bets the Federal Reserve will not unwind its stimulus plans in coming months.

But the dollar has gained in the past two sessions. The greenback rose 0.33% on Tuesday to 92.42, after touching its lowest since Aug. 4 on Friday.

“It does appear that after the sell-off the dollar has maybe established a short-term base at least,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

“The Federal Reserve we think is still likely to move toward tapering by the end of this year, the U.S. economy is likely to perform relatively strongly, so our view is minor dollar dips, minor dollar weakness is probably a buying opportunity,” he said.

Data on Friday showed speculators’ net long bets on the U.S. currency grew in the latest week, with the value of the net long dollar position at $10.98 billion for the week ended Aug. 31, the largest long position since March 2020.

The dollar also benefited from rising U.S. Treasury yields with the U.S. government selling new debt this week, including $58 billion in three-year notes, $38 billion in 10-year notes and $24 billion in 30-year bonds. [US/]

The yield increase “has helped the dollar index to recoup its post-NFP (non-farm payrolls) losses and then some,” Brown Brothers Harriman strategists said in a note.

U.S. 10-year yields, which were around 1.299% before Friday’s data release, stand now at 1.373%.

The euro was last at $1.1844, below Friday’s one-month peak of $1.1909.

The ECB is seen debating a cut in stimulus at its meeting on Thursday, with analysts expecting purchases under the ECB’s Pandemic Emergency Purchase Programme (PEPP) falling possibly as low as 60 billion euros a month from the current 80 billion.

The Australian dollar weakened after the Reserve Bank of Australia stuck with plans to taper its bond buying but said it would extend the timeline as the economy struggles with coronavirus lockdowns.

The pound also dropped after the British government set out a plan to raise taxes.

Cryptocurrencies plunged sharply on Tuesday with bitcoin dropping as much as 19% on the day and ether falling 23%, before paring losses.

Several crypto trading platforms said they experienced performance issues on Tuesday, though it was not clear if these were a contributor to, or a result of, the volatility.

The drop also came as El Salvador on Tuesday became the first country to adopt bitcoin as legal tender.

Bitcoin was last down 10% on the day at $47,153 and ether was down 12% at $3,460.

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

(Additional reporting by Saikat Chatterjee in London, editing by Mark Heinrich and David Gregorio)

World Equities Under Pressure as Economic Worries Mount

Key U.S. equity benchmarks were down and the MSCI world equity index retreated from a record hit overnight, following seven consecutive days of gains to all-time highs. Earlier in the session, hopes of extra stimulus in Japan and strong China trade data had boosted Asia shares.

The Dow Jones Industrial Average fell 209.2 points, or 0.59%, to 35,159.89 and the S&P 500 lost 9.96 points, or 0.22 percent, to 4,525.47 by 2:22 p.m. ET (18:22 GMT). The Nasdaq Composite bucked the trend, adding 0.18% to 15,391.26.

“The combination of exorbitant expectations, nosebleed valuations and slowing macro environment make the go-forward reward/risk outlook less attractive,” said Jeffrey Carbone, managing director at Cornerstone Wealth in Huntersville, North Carolina.

European stocks retraced ahead of an ECB policy meeting on Thursday. The STOXX 600 benchmark fell 0.5% but were not far from last month’s lifetime peak hit.

Data on Friday showed the U.S. economy created 235,000 jobs in August, the fewest in seven months as hiring in the leisure and hospitality sectors stalled, reducing expectations that the Fed will opt for an early tapering of its monthly bond purchases.

The market took the surprisingly soft U.S. payrolls report on Friday “in stride, with the assumption that the COVID-19 Delta variant had an impact on economic activity in August,” Arthur Hogan, chief market strategist at brokerage National Holdings in New York, said in a market note.

Speeches by a number of U.S. policymakers later this week will be closely watched for any indication about how the weak jobs report has impacted the Fed’s plans on tapering its bond purchases and keeping its expansive policy for the near-term.

The recent equity rally started after Fed Chair Jerome Powell’s dovish speech at the Jackson Hole Symposium in August.

“Given that before Jackson Hole many FOMC members had come out in favor of tapering on a tight timetable, we’ll see if they confirm, or align with Powell’s more moderate message,” said Giuseppe Sersale, fund manager at Anthilia.

U.S. government bond yields rose on Tuesday, continuing the climb seen on Friday in the wake of the jobs report and ahead of a fairly busy week of Treasury auctions.

Japanese shares rallied further on hopes the ruling Liberal Democratic Party will offer additional economic stimulus and easily win an upcoming general election after Prime Minister Yoshihide Suga said he would quit.

Tokyo’s Nikkei crossed the 30,000 mark for the first time since April, also helped by an announcement on its reshuffle, and the broader Topix index climbed 1.1% to a 31-year high.

Anthilia’s Sersale said investors had a defensive positioning on Japanese stocks that led to a short squeeze.

“I was positive on Tokyo (stocks) and remain so, but perhaps at this point it is better to look for a less overbought entry point,” he said.

Mainland Chinese shares extended gains, with the Shanghai Composite rising 1.5% to its highest since February, helped by Chinese trade data showing both exports and imports grew much more quickly than expected in August.

“The mood is improving on hopes the government will take measures to support the economy and that the monetary environment will be kept accommodative,” said Wang Shenshen, senior strategist at Mizuho Securities.

A rout in bonds and shares of China Evergrande Group deepened on Tuesday after new credit downgrades on the country’s No. 2 developer.

The euro retreated 0.16% at $1.1849, while Europe’s broad FTSEurofirst 300 index dropped 0.46% to 1,821.56.

The ECB is seen debating a cut in stimulus, with analysts expecting purchases under its Pandemic Emergency Purchase Programme (PEPP) falling, possibly as low as 60 billion euros a month from the current 80 billion euros.

Germany’s 10-year yield hit its highest since mid-July.

The Australian dollar briefly rose after the central bank went ahead with its planned tapering of bond purchases, but quickly gave up those gains after the bank reiterated its need to see sustainably higher inflation to raise interest rates.

The Aussie fell 0.6%, off its 1-1/2-month high set on Friday.

The U.S. dollar rose 0.3% against a basket of other major currencies, pressuring gold prices. Spot bullion prices were down 1.4%. U.S. gold futures settled 1.9% lower at $1,798.5 an ounce.

Elsewhere in commodities, oil prices slid on concerns over weak demand in the United States and Asia. Saudi Arabia’s sharp cuts to crude contract prices for Asia had earlier revived demand concerns.

Brent crude futures fell 1.02% to $71.46 per barrel, while U.S. crude futures declined 1.75% to $68.08.

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

(Reporting by Chris Prentice in Washington, Danilo Masoni in Milan and Hideyuki Sano in Tokyo; Editing by Jane Merriman, Dan Grebler and Alex Richardson)

AUD/USD Price Forecast – Australian Dollar Tests 50 Day EMA

The Australian dollar initially tried to rally during the trading session on Tuesday but found the 200 day EMA to be far too much to get above, as we sold off towards the 0.74 handle. The Reserve Bank of Australia has kept its monetary policy going forward. Some people had suggested that perhaps the RBA would extend his tapering, but as it has chosen not to, that takes one of the main reasons on the Australian dollar off the table.

AUD/USD Video 08.09.21

Nonetheless, there is a significant amount of support underneath, so I would not be a seller until we get below the 0.73 handle. If we break down below that level, then it is very likely that we could go lower, perhaps reaching towards the 0.71 handle. Ultimately, the 0.75 level above being broken could send this market much higher, perhaps reaching towards the 0.80 level over the longer term.

Keep in mind that the Australian dollar is highly levered to China and of course the commodity market. It should be noted that there are signs of defaults in the corporate bond markets on the mainland, which certainly will not do much good for the Chinese economy. If we start to see that pick up steam, the Australian dollar will get sold off as it is the closest thing to a free-floating currency that you can trade when it comes to China. Ultimately, if we see some type of major shift in market sentiment, this will probably be one of the most interesting places to play. Ultimately, I think that the market will give us clarity by the end of the week, so be very cautious with your trading position size, and only add as the trade shows itself.

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

AUD/USD and NZD/USD Fundamental Daily Forecast – RBA Should Delay Tapering Due to COVID-Related Risks

The Australian and New Zealand Dollars are edging higher on Tuesday as traders await key monetary policy decisions by the Reserve Bank of Australia (RBA) at 04:30 GMT.

Analysts remain divided on whether the RBA will call time on its stimulus plans.

National Australia Bank (NAB) predicts the central bank will reduce asset purchases again, “although the optics of tapering amid protracted lockdowns means it is likely to be a close decision,” NAB analyst Tapas Strickland wrote in a report.

At 04:00 GMT, the AUD/USD is trading .7440, up 0.0003 or +0.04% and the NZD/USD is at .7136, up 0.0001 or +0.01%.

RBA to Stick with Tapering Plans, or Maybe Not

According to Reuters, analysts are split on whether the RBA will delay tapering plans at its September policy meeting as a faster roll out of coronavirus vaccines offsets a harder-than-expected economic blow from lockdowns.

Some 36 of 37 analysts polled by Reuters expect the cash rate to stay at 0.1%, where it has been since a cut last November. This is no surprise given the RBA still argues a hike is unlikely until 2024 when it hopes wage growth and inflation will have finally picked up to desired levels.

More uncertain is whether it will delay a taper of its A$5 billion in weekly bond buying, part of a package of stimulus measures enacted last year as the economy was emerging from a pandemic-driven recession.

The bank surprised in August by sticking with plans to cut its bond buying to A$4 billion a week starting this month. Since then, the spread of the Delta variant has shut more cities and is set to cause a vicious contraction this quarter.

Yet of the 25 analysts that responded, 15 said the bank would not delay the taper and only 10 that it would.

Fewer wanted to comment on whether the RBA should delay, but of those that answered five said they should pause and 10 that they should go ahead and taper.

Daily Forecast

Look for the RBA to leave the cash rate at 0.1%. I also believe it will delay tapering plans as the economy struggles with the fallout of lockdowns in various states.

If the RBA sticks to its plans to taper bond purchases, the Aussie could temporarily jump higher.

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

AUD/USD and NZD/USD Fundamental Weekly Forecast – Supported by Weak US Jobs Data, COVID Recovery Hopes

The Australian and New Zealand Dollars closed higher last week as signs of progress in both countries to reign in the pandemic raised hopes their economies were closer to reopening.

Last week, the Aussie advanced to its highest level since August 4, while the Kiwi tested a more than two-month high.

Australian Dollar Recap

Aussie Dollar sentiment improved as Australia’s Prime Minister Scott Morrison said economic reopening might be brought forward after securing a deal to double the stock of Pfizer doses, helping boost an already-ramped up vaccination rate.

At the current pace, around 80% of the adult population could be vaccinated by November, which would put the economy back on track by end of this year after a deep contraction was certain for the September quarter.

But with major cities still shut down, the markets are quite divided over whether the Reserve Bank of Australia (RBA) would stick with its decision to continue to pare back stimulus at Tuesday’s policy meeting, a Reuters poll showed.

Yields on Australia’s 10-year paper were up by 3 basis points this week as forecast-beating June quarter growth figures on Wednesday made it seem more possible that RBA would continue to taper.

New Zealand Dollar Recap

In New Zealand’s most populated city of Auckland, new daily COVID-19 cases fell to 27 from 49 the previous day, fueling hopes that it could be out of the strict lockdown soon like other cities where curbs were eased earlier this week.

The Pacific country’s control of the pandemic has polished its economic outlook and provided more room to the local central bank to hike rates at the October 6 meeting, which is likely to keep the Kiwi afloat.

Aussie, Kiwi Supported by Disappointing US Jobs Report

The biggest support for the Australian and New Zealand Dollars last week was the U.S. labor market report that showed the economy created the fewest jobs in seven months in August.

Data on Friday showed U.S. Non-Farm Payrolls increased by 235,000 jobs last month, the smallest gain since January, as hiring in the leisure and hospitality sector stalled amid a resurgence of COVID-19 infections, though other details of the report were fairly strong.

The unemployment rate fell to a 17-month low of 5.2% and July job growth was revised sharply higher. Wages increased a solid 0.6% and fewer people were experiencing long spells of unemployment.

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

Economic Data Puts the EUR back into Focus, with the RBA and the Aussie also in the Spotlight

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Pound and the Japanese Yen were in action in the early hours, with economic data from China in focus. Later this morning, the RBA will deliver its September policy decision amidst rising COVID-19 cases in the country

For the Japanese Yen

Household spending fell by 0.70% in July, month-on-month, following a 3.2% slide in June. Economists had forecast a 1.1% increase. Year-on-year, household spending was up 0.70% versus a forecasted 0.10% increase. In June, household spending had been down by 5.10%, year-on-year.

According to the Statistic Bureau,

  • Spending on transportation & communication surged by 14.2%.
  • There were also increases in spending on food (+1.9%), clothing & footwear (+2.7%), and culture & recreation (+1.7%).
  • Spending on education and on furniture & household utensils slid by 9.9% and by 8.4% respectively, however.
  • There were also declines in spending on medical care (-7.0%), fuel, light, & water charges (-5.9%), and housing (-1.7%).

The Japanese Yen moved from ¥109.835 to ¥109.827 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.08% to ¥109.770 against the U.S Dollar.

From China

Trade data was in focus this morning.

In August, China’s USD trade surplus widened from US$56.59bn to US$58.35bn. Economists had forecast a narrowing to US$51.05bn.

  • Imports increased by 33.1%, year-on-year, versus a forecasted 26.8%. In July, imports had been up by 28.1% year-on-year.
  • Exports were up by 25.6%, year-on-year, versus a forecasted 17.1%. In June, exports had been up 19.3% year-on-year.

The Aussie Dollar moved from $0.74484 to $0.74441 upon release of the figures. At the time of writing, the Aussie Dollar was flat at $0.7439.

Elsewhere

The Kiwi Dollar was up by 0.01% to $0.7137.

The Day Ahead

For the EUR

It’s a busy day ahead on the economic data front.  German industrial production figures are due out along with 2nd quarter GDP numbers for the Eurozone.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence.

At the time of writing, the EUR was up by 0.08% to $1.1880.

For the Pound

It’s a quiet day ahead on the economic calendar. Housing sector numbers for August are due out that will likely have a muted impact on the Pound.

Earlier in the day, BRC Retail Sales Monitor increased by 1.5%, year-on-year, in August. In July, the Monitor had been up by 4.7%.

At the time of writing, the Pound was up by 0.09% to $1.3850.

Across the Pond

There are no stats due out of the U.S to provide the markets with direction following the Labor Day holiday.

At the time of writing, the U.S Dollar Spot Index was up by 0.09% to 92.118.

For the Loonie

There are also no stats due out of Canada following the Labor Day holiday. The lack of stats will leave the Loonie in the hands of market risk sentiment and crude oil prices, with China’s trade data likely to set the tone.

At the time of writing, the Loonie was up by 0.06% to C$1.2526 against the U.S Dollar.

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

AUD/USD Forex Technical Analysis – Trader Reaction to .7437 Sets the Tone Ahead of RBA Policy Decision

The Australian Dollar is edging higher early Tuesday shortly before a Reserve Bank of Australia (RBA) monetary policy decision, due to be released at 04:30 GMT.

Most analysts polled by Reuters expect the RBA to leave the cash rate at 0.1%, but are split on whether the central bank will delay tapering plans as the economy struggles with the fallout of lockdowns in various states.

If the RBA sticks to its plans to taper bond purchases, the Aussie could temporarily jump higher. This will especially hold true since it looks as if the U.S. Federal Reserve will not announce plans for tapering at its September 21-22 policy meeting due to the disappointing headline number in last week’s Non-Farm Payrolls report.

At 01:46 GMT, the AUD/USD is trading .7454, up 0.0017 or +0.23%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7478 will signal a resumption of the uptrend. A move through the July 13 main top at .7503 will reaffirm the uptrend.

The main trend will change to down on a trade through .7222. This is highly unlikely but due to the prolonged move up in terms of price and time, traders should watch for a closing price reversal top chart pattern.

On the upside, the nearest resistance is a long-term 50% level at .7499 and the main top at .7503.

On the downside, the nearest support is the long-term Fibonacci level at .7379.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Tuesday is likely to be determined by trader reaction to .7437.

Bullish Scenario

A sustained move over .7437 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .7478, followed by the resistance cluster at .7499 – .7503.

The main top at .7503 is a potential trigger point for an acceleration to the upside with the July 6 main top at .7599 the next likely upside target.

Bearish Scenario

A sustained move under .7437 will signal the presence of sellers. The first downside target is .7379. Buyers could come in on the first test of this level. If it fails, we could see a near-term direction into .7292 to .7248.

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

September 7th 2021: AUD/USD Eyeing Possible Test of H4 Decision Point at $0.7393-0.7410

Charts: Trading View

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

South of ascending support-turned resistance, taken from the low $1.1641, June’s 3.0 percent loss persuaded EUR/USD to retest support from $1.1857-1.1352. A bullish revival shines light on 2021 peaks at $1.2349.

Month to date, September trades 0.5 percent higher.

Based on trend studies, a primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Further adding to this, price penetrated major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Analysis largely unchanged from previous writing.

Monday observed the greenback trim losses sustained on Friday, following disappointing headline US non-farm payrolls. Ultimately, though, markets welcomed a narrow range as a result of US banks closing in observance of Labour Day.

Buyers and sellers, as you can see, remain squaring off around late July tops at $1.1909ish. Cementing a close north of the latter seats resistance between $1.2033 and $1.1994 in the firing range, organised by way of a 61.8% Fib, the 200-day simple moving average and Quasimodo support-turned resistance. What’s interesting here is a break of $1.1909 highs likely trips buy-stops, perhaps generating enough upside oomph to fill $1.2033-1.1994 offers.

With regards to long-term trend, 2021 has been directionless, despite healthy gains in 2020.

As for momentum, the relative strength index (RSI) is on the verge of crossing swords with trendline resistance just ahead of overbought territory. Also of note is resistance plotted at 80.39. This shows momentum is perhaps gearing up to level off.

H4 timeframe:

Analysis unchanged from previous writing.

$1.1907 resistance, a level holding back buyers since late June, called for attention Friday, with Monday touching $1.1856. The interesting feature, however, is the stops above $1.1907, and the zone of resistance at $1.1955-1.1933. Also seen is Quasimodo resistance at $1.1956.

Buy-stops above $1.1907 may be enough to fuel offers at $1.1955-1.1933, creating a short-term bearish phase back to at least $1.1907.

H1 timeframe:

Monday shook hands with a minor Fibonacci cluster, made up of a 100% Fib projection at $1.1860 and a 61.8% Fib retracement at $1.1863. Buyers established a tentative defence off the noted floor amid London hours and remains supportive ahead of the closing bell.

Pursuing higher levels shifts focus back to $1.19, a psychological barrier aligned with a 100% Fib projection at $1.1904, a longer-term 38.2% Fib retracement at $1.1896 (taken from the $1.2266 May 25th high) as well as a 1.618% Fib expansion at $1.1913.

From the standpoint of the relative strength index (RSI), the indicator grasped the lower limits of its two-week range between 40.00 and 50.00 in recent movement. It is common to watch the 40.00-50.00 region serve as a temporary oversold threshold during rising markets. And this is what we’re seeing here.

Observed levels:

Seeing H1 defending the $1.1860ish zone—reinforced by a H1 RSI oversold signal and monthly support from $1.1857-1.1352—puts forth a bullish vibe, targeting north of $1.19 to H4 resistance at $1.1955-1.1933.

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Month to date, September is higher by 1.6 percent, consequently trimming a portion of the recent three-month decline.

Long-term areas to be mindful of are support at $0.6305-0.6872 and supply coming in at $0.8303-0.8082, along with trendline support-turned resistance, taken from the low $1.4776.

Trend studies (despite the trendline resistance [drawn from the high $1.0582] breach in July 2020) show the primary downtrend (since mid-2011) is in play until breaking $0.8135 (January high 2018).

Daily timeframe:

Analysis unchanged from previous writing.

AUD/USD bulls strengthening their grip and overthrowing Quasimodo resistance at $0.7414 emphasises a bullish setting.

Addressing resistance between $0.7665 and $0.7590, therefore, is possible, an area made up of a 61.8% Fib retracement at $0.7665, a Quasimodo support-turned resistance at $0.7621, the 200-day simple moving average at $0.7605 and another 61.8% Fib retracement at $0.7590.

Interestingly, in conjunction with the resistance breach, the relative strength index (RSI) climbed above trend line resistance, taken from the high 80.12. This places overbought space in range, in particular resistance at 80.19.

H4 timeframe:

Analysis unchanged from previous writing.

Short-term volatility thinned Monday thanks to US banks shutting for Labour Day. In light of the muted start to the week, the technical background remains unaltered.

Under the influence of channel resistance, drawn from the high $0.7271, Friday concluded a touch off best levels. Earlier, however, commanded a bullish presence and formed a clear-cut decision point at $0.7393-0.7410 to drive through daily Quasimodo resistance mentioned above at $0.7414 (now a serving support).

Dip-buyers are likely to show interest in $0.7393-0.7410 should a test form, aided by channel support, taken from the low $0.7107, and neighbouring daily support at $0.7414. A realistic upside objective resides at $0.7494: a Quasimodo resistance joined by a 1.618% Fib projection at $0.7497.

H1 timeframe:

The decision point underlined in Monday’s technical briefing at $0.7429-0.7438 had its limits challenged yesterday, possibly concerning longs at this base.

Below the area is $0.74, which shares chart space with the 100-period simple moving average at $0.7392. North of the decision point, nonetheless, draws attention to Quasimodo resistance at $0.7472 and the $0.75 region.

The relative strength index (RSI) is seen crawling along the lower edge of its range between overbought and the 50.00ish level. The 40.00-50.00 area acting as oversold is common during lengthy moves higher. Therefore, it’s worth keeping a close eye on this area.

Observed levels:

In light of the lacklustre performance Monday, the observed levels remain unchanged.

From the bigger picture, observing daily price manoeuvre north of Quasimodo resistance at $0.7414 communicates a bullish vibe towards resistance between $0.7665 and $0.7590.

With this in mind, the H4 decision point at $0.7393-0.7410 offers a primary area of support. Not only joined closely by daily support at $0.7414, the H4 zone also works closely with H4 channel support.

Chart studies, therefore, suggest the H1 decision point at $0.7429-0.7438 echoes a precarious tone. This places $0.74 in the line of fire as a possible support, joined by the noted H4 supports underlined above.

Ultimately, any bullish scenario may take aim at $0.75ish, based on the H4 technical picture.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since April retested descending resistance-turned support, etched from the high ¥118.66, price action has maintained moderate support. Pursuing higher levels could eventually strive for long-term supply at ¥126.10-122.66.

Month to date, September trades 0.1 percent in the red.

Daily timeframe:

Analysis unchanged from previous writing.

Technical support is evident around the 61.8% Fib retracement at ¥109.07. More engaging, nonetheless, is the harmonic Gartley pattern’s potential reversal zone between ¥107.50 and ¥108.41, reinforced by supply-turned demand at ¥107.58-106.85.

When it comes to trend, USD/JPY has been higher in 2021.

From the relative strength index (RSI), a range has been in process between 40.94 and 54.43 since early July. This tells traders that upside momentum is weak: average losses exceed average gains.

H4 timeframe:

Analysis unchanged from previous writing.

Last week witnessed the unit cross swords with supply at ¥110.56-110.29 and subsequently explore lower levels.

Upside momentum, as demonstrated through the three blue arrows, has been diminishing since mid-August, which alerted traders to a possible bearish theme from the aforementioned supply.

Continued interest to the downside faces Quasimodo support at ¥109.48, with a break uncovering two Quasimodo support levels at ¥108.88 and ¥108.83.

H1 timeframe:

Despite Monday’s thin trading conditions, the currency pair extended recovery gains north of a mild Fibonacci cluster around ¥109.62ish (61.8% and 78.6%).

The decision point at ¥109.97-109.90, which connects with the 100-period simple moving average at $109.96 and is situated just south of $110, also made an entrance. There was very little on the charts suggesting a whipsaw above $110, hence the decision point standing firm.

Voyaging beneath the noted Fibonacci cluster underlines the ¥109 figure as a possible downside objective.

As for the relative strength index (RSI), we are testing the mettle of the 50.00 centreline, following a recent move out of oversold.

Observed levels:

From a shorter-term perspective, H4 Quasimodo support at ¥109.48 is unlikely to provide much of a floor if tested. A more realistic downside target is two Quasimodo support levels at ¥108.88 and ¥108.83, as they align closely with the daily timeframe’s 61.8% Fib retracement at ¥109.07.

As a result of the above, the H1 may welcome a bearish theme, with sellers possibly looking to take action south of the decision point at ¥109.97-109.90 for a potential break through the Fibonacci cluster between ¥109.58 and ¥109.63, targeting ¥109ish.

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since February, GBP/USD has echoed an indecisive environment below $1.4377: April high 2018. This follows December’s (2020) trendline resistance breach, taken from the high $2.1161, a descending barrier possibly serving as support if retested.

Month to date, September trades 0.6 percent higher.

Primary trend structure has faced lower since early 2008, unbroken (as of current price) until $1.4377 gives way.

Daily timeframe:

Analysis unchanged from previous writing.

The key technical move on the daily chart to be mindful of is the recent price cross above the 200-day simple moving average at $1.3808, a move some technicians label as bullish. This follows August 23rd recovery from Quasimodo support at $1.3609.

Overhead, resistance resides at $1.4003.

With reference to trend on this chart, the pair has been somewhat rangebound since late February.

Upside momentum is gaining traction, according to the relative strength index (RSI) crossing above the 50.00 centreline. This shows average gains exceed average losses.

H4 timeframe:

Analysis unchanged from previous writing.

$1.3939-1.3887 resistance made an appearance heading into the close Friday.

The $1.3766-1.3799 decision point is now in range as a possible downside objective, a base underpinning the 200-day simple moving average on the daily at $1.3808.

H1 timeframe:

Analysis unchanged from previous writing.

Situated a handful of pips beneath $1.39, Quasimodo resistance put in an appearance at $1.3890 a few hours ahead of the close on Friday. With that, a bout of profit taking emerged, and, with Monday’s modest decline, highlights a possible retest of $1.38.

$1.38 has ‘whipsaw’ written all over it. Potentially heavy bids, therefore, might be attracted to the area marked in yellow between $1.3774 and $1.3787 in order to welcome sell-stops beneath $1.38.

From the relative strength index (RSI), we are now below the 50.00 centreline, meaning average losses exceed average gains. The break of 50.00 helps confirm short-term bearish intent.

Observed levels:

Outlook unchanged from previous writing.

The daily timeframe making its way above the 200-day simple moving average at $1.3808 is considered a bullish signal among many technical traders, and could encourage buying.

The H4 decision point at $1.3766-1.3799 is well placed to receive sellers. In addition to this, the H1 timeframe’s $1.38 base is positioned nearby, which is calling for a whipsaw to the H1 area marked in yellow between $1.3774 and $1.3787.

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AUD/USD Price Forecast – Australian Dollar Pulls Back After Massive Run Higher

The Australian dollar has pulled back just a bit during the course of the trading session on Monday, in what would have been a relatively quiet session anyway as the United States and Canada were both away for the holiday. At this point, the market looks as if it probably will go dropping towards the 0.74 level, or perhaps even the 50 day EMA in order to find support. As long as it does, then it is likely we will see a turnaround to reach towards the 200 day EMA, and then by extension the 0.75 handle.

AUD/USD Video 07.09.21

However, if we were to break down below the 0.73 level on some type of snapback, this is a market that could fall apart just as quickly as it did previously. That is a bit of a stretch at this point though, because the Australian GDP really get this pair flying again, as it was much stronger than anticipated. This is especially interesting, due to the fact that the Australian economy has been locked down for quite some time due to the overreach of the government versus the virus. All things been equal, this also is a reflection of the Chinese economy, which also looks as if it is struggling.

As long as that is the case, I think there is a little bit of a weight around the neck of the Aussie, despite the fact that we have seen such an explosive move to the upside. The fact that we have rallied probably has just as much to do with US dollar weakness than anything else. I believe that the market breaking above the 0.75 level would then kick off a longer-term “buy-and-hold” type of situation.

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

U.S. Dollar At Crossroads Ahead Of Fed Interest Rate Decision On September 22

Traders Wait For Fed’s Key Meeting

The dynamics of the U.S. dollar will be in focus in the upcoming weeks as traders try to guess when the Fed will announce the reduction of its asset purchase program which will have a significant impact on many markets.

Back at the beginning of this year, many analysts were bearish on the U.S. dollar. They believed that huge support from the Fed together with stimulus from the U.S. government would push the American currency towards multi-year lows.

However, the reality was different, and the U.S. dollar gained ground against a broad basket of currencies this year. There are several reasons for this move.

First, coronavirus pandemic was not stopped, which provided more support to safe-haven assets like U.S. dollar.

Second, other currencies have also experienced problems. Euro suffered from low inflation and low interest rates in the eurozone. Pound failed to gain upside momentum as UK had problems with containing the pandemic despite a successful mass vaccination program. Australian dollar fell victim of strict lockdowns.

In recent weeks, the focus shifted to the potential reduction of Fed’s asset purchase program. Hawkish comments from several Fed officials pushed the U.S. dollar to yearly highs, but dovish words from Fed Chair Jerome Powell and disappointing job market data (ADP Employment Change and Non Farm Payrolls reports missed analyst estimates) put material pressure on the American currency.

In the upcoming weeks, the market will remain focused on the outlook for Fed’s policy. Recent job market data provides Fed with an opportunity to delay tapering for a few months in order to take a closer look at the dynamics of the labor market. In addition, coronavirus remains a significant issue.

However, the Fed must also keep an eye on inflation. The most recent inflation report indicated that inflation rate was 5.4% year-over-year in July, in line with June numbers. Some analysts have started to speculate that inflation has peaked while Powell reiterated his view that inflation was temporary. However, prices may continue to move up due to various challenges in the global supply chain (like the chip shortage) and labor shortages in some industries.

Foreign exchange market traders will have a chance to take a look at inflation data for August on September 14, while the Fed will announce its Interest Rate Decision on September 22. Thus, the Fed will have the latest inflation data on hand when it will be choosing whether to start tapering or wait for a few months.

A potential rapid reduction of Fed’s asset purchase program may provide additional support to U.S. dollar. While Fed officials have different views on whether Fed should begin tapering in the upcoming months, it looks that everyone agrees that tapering should be done in a fast manner.

Judging by the recent market action, some traders are willing to bet that Fed will start to reduce its asset purchase program soon despite Powell’s dovish comments and disappointing job market reports.

Technical Analysis

us dollar index september 6 2021

The weekly chart for the U.S. Dollar Index shows that it has recently made an attempt to settle above the marjor resistance level near 93.40 but lost momentum and pulled back towards the 20 EMA near 92.10.

The U.S. Dollar Index has also received support near the 20 EMA on the weekly chart during the previous pullback, so it’s an important moment for U.S. dollar bulls. In case the U.S. Dollar Index fails to settle below the 20 EMA, it will have a good chance to get to another test of the resistance near 93.40.

A move above this level will open the way to the test of the next material resistance level at 94.30. There are no significant levels between 93.40 and 94.30 on the weekly chart, and this move may be fast.

On the support side, a move below the 20 EMA on the weekly chart will push the U.S. Dollar Index towards the next support at 91.50.

us dollar index daily september 6 2021

Switching to the daily chart, we can see that there are many resistance levels between 92.10 and 93.40, so the road towards recent highs will not be easy. In the near term, the U.S. Dollar Index needs to settle back above the 50 EMA at 92.40 and then deal with the next resistance level which is located at the 20 EMA at 92.60.

On the support side, the nearest support level is located at 91.90. A move below this support level will push the U.S. Dollar Index towards the support at 91.50. It remains to be seen whether the U.S. Dollar Index will be able to find more support levels between 91.50 and 91.90, and it looks that it will have a good chance to gain downside momentum in case it manages to settle below 91.90.

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

Dollar Shakes Off Jobs Report Blues in Big Central Bank Week

The dollar index, which measures the currency against six rivals, edged 0.1% higher to 92.23, after dipping to 91.941 for the first time since Aug. 4 on Friday, when a closely watched U.S. labour report showed the world’s largest economy created the fewest jobs in seven months in August.

But the weak jobs report did not spark a new wave of dollar selling on Monday as the greenback spent the Asian session pushing higher against its rivals, prompting some major currencies including the euro and the Australian dollar to move back to pre-Friday jobs report levels.

Benchmark 10-year U.S. Treasury yields firming to more than one-week highs also boosted the dollar. U.S. markets are shut for a holiday, contributing to lower volumes.

While analysts remain bearish on the outlook for the greenback with Citibank strategists expecting it to weaken in the coming months as the Fed postpones tapering plans to November, hedge funds have quietly ramped up bullish bets.

Latest data showed they have increased bets on the greenback versus the euro for a second consecutive week, boosting net bets to their highest since March 2020.

Most of the dollar’s gains was focused on the Australian dollar which weakened 0.17% to $0.7435 ahead of a central bank decision on Tuesday where analysts remain divided on whether the Reserve Bank of Australia will call time on its stimulus plans.

National Australia Bank predicts the central bank will reduce asset purchases again, “although the optics of tapering amid protracted lockdowns means it is likely to be a close decision,” NAB analyst Tapas Strickland wrote in a report.

The euro also failed to extend its gains on Monday after rising above the $1.19 levels for the first time since the end of July. It was trading 0.1% weaker at $1.1873 before an European Central Bank policy decision on Thursday.

Economists reckon it is still too early for the ECB to call time on emergency stimulus, but it could agree to slow the pace of its bond buys after euro area inflation surged to a 10-year high at 3% last week.

In cryptocurrencies, bitcoin was about flat at $51,785.60, after earlier touching $51,920, a level not seen since May 12. Smaller rival ether traded little changed at $3,942.77 after topping $4,000 last week for the first time since mid-May.

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

(Reporting by Saikat Chatterjee; Editing by Alexander Smith)

AUD/USD Forex Technical Analysis – Trapped Inside Long-Term Retracement Zone at .7499 to .7379 on Low Volume

The Australian Dollar is edging lower early Monday on lackluster trading. With the U.S. on a bank holiday, many of the major players have moved to the sidelines. Investors are also likely squaring positions ahead of Tuesday’s Reserve Bank (RBA) Rate Statement and cash rate decision.

At 02:43 GMT, the AUD/USD is trading .7434, down 0.0016 or -0.21%.

In economic news, the MI Inflation Gauge came in at 0.0%, down from 0.5%. ANZ Job Advertisements slipped in August as coronavirus lockdowns spread from Sydney to Melbourne and Canberra, though the drop was minor compared to the losses seen during the first stage of the pandemic last year.

Monday’s figures from Australia and New Zealand Banking Group showed total job ads fell 2.5% in August from July, when they fell 1.3%.

Despite the intraday weakness, the near-term outlook is bullish as investors pushed back expectations for when the Federal Reserve will begin tapering its massive stimulus.

Meanwhile, the RBA is expected to reduce asset purchases again at Tuesday’s monetary policy meeting.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7478 will signal a resumption of the uptrend. A move through .7222 will change the main trend to down. Monday’s early inside move suggests investor indecision and impending volatility.

The long-term range is formed by the November 2, 2020 main bottom at .6991 and the February 25 main top at .8007. The AUD/USD is currently trading inside its retracement zone at .7499 to .7379. This zone is controlling the longer-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD is likely to be determined by trader reaction to .7450.

Bullish Scenario

A sustained move over .7450 will indicate the presence of buyers. Taking out last week’s high at .7478 should trigger a rally into the resistance cluster at .7499 to .7503.

Bearish Scenario

A sustained move under .7450 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling pressure to possible extend into the major Fibonacci level at .7379.

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

Economic Data from Germany Puts the EUR in the Spotlight

Earlier in the Day:

It was a quiet start to the day on the economic calendar this morning. There were no major stats for the Asian markets to consider in the early hours. The lack of stats left the markets to respond to the U.S nonfarm payroll numbers from Friday.

The Majors

At the time of writing, the Japanese Yen was down by 0.02% to ¥109.730 against the U.S Dollar, with the Aussie Dollar down by 0.09% to $0.7453. The Kiwi Dollar was down by 0.04% to $0.7155.

The Day Ahead

For the EUR

It’s a relatively quiet start to the week on the economic data front.  German factory orders are due out along with German construction PMI figures.

Following some disappointing numbers out of China last week, weak factory orders would likely test EUR support upon release.

At the time of writing, the EUR was up by 0.02% to $1.1882.

For the Pound

It’s a relatively quiet day ahead on the economic calendar. Construction sector PMI numbers for August are due out later today.

We don’t expect too much influence from the numbers, however, leaving the Pound in the hands of market risk sentiment.

At the time of writing, the Pound was down by 0.05% to $1.3864.

Across the Pond

There are no stats due out of the U.S, with the markets closed for Labor day.

At the time of writing, the U.S Dollar Spot Index was flat at 92.116.

For the Loonie

There are no stats due out of Canada, with the Canadian markets closed for Labor Day. The lack of stats will leave the Loonie in the hands of market risk sentiment and crude oil prices.

At the time of writing, the Loonie was down by 0.03% to C$1.2528 against the U.S Dollar.

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

The Week Ahead – Monetary Policy Decisions Put the EUR, the Loonie, and the Aussie Dollar in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 38 stats in focus in the week ending 10th September. In the week prior, 80 stats had also been in focus.

For the Dollar:

It’s a quiet week ahead and a quiet start to the week, with the U.S markets closed for Labor Day on Monday.

On Tuesday, JOLT’s job openings will draw interest, with little else for the markets to consider.

The focus will then shift to the weekly jobless claim figures on Thursday.

Wholesale inflation numbers wrap things up at the end of the week.

In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035.

For the EUR:

It’s a relatively busy week on the economic data front.

The German economy will be back in the spotlight in the week ahead.

German factory orders and industrial production figures will be in focus on Monday and Tuesday.

On Thursday, German trade data will also draw plenty of attention.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence on Tuesday.

The main event of the week, however, will be the ECB monetary policy decision.

With the markets expecting the ECB to stand pat on policy, the focus will be on the ECB Press Conference. Will the ECB continue to see reflation as transitory?

For the week, the EUR rose by 0.72% to $1.1880.

For the Pound:

It’s a busier week ahead on the economic calendar.

BRC Retail sales figures will be in focus early in the week. With the markets looking to see how the UK economy is faring, the numbers should have more influence than usual.

A lack of stats mid-week will leave the Pound in the hands of market risk sentiment ahead of a busy Friday.

Industrial and manufacturing production and trade data due out on Friday will be the key stats of the week.

The Pound ended the week up by 0.78% to $1.3871.

For the Loonie:

It’s a quiet week ahead on the economic calendar.

Ivey PMI numbers will be in focus on Wednesday ahead of employment figures on Friday.

While the employment numbers will be key, the BoC policy decision on Wednesday will be the main event.

BoC forward guidance will be the key area of focus on the day.

The Loonie ended the week up 0.76% to C$1.2524 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no material stats to consider in the week.

While it’s a quiet week on the economic data front, the RBA is in action on Tuesday.

Have the latest lockdown measures left the RBA in a lengthier holding pattern on policy?

The Aussie Dollar ended the week up by 2.02% to $0.7460.

For the Kiwi Dollar:

It’s a quiet week ahead.

Electronic card retail sales figures on Friday will be the only key stat of the week.

From elsewhere, economic data from China will also influence, as will COVID-19 news updates.

The Kiwi Dollar ended the week up by 2.10% to $0.7158.

For the Japanese Yen:

Household spending will be in focus on Tuesday. On Wednesday, 2nd quarter GDP numbers will also draw interest. The markets will be looking for any revisions from the 1st estimates.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar.

Out of China

Trade data will have a material impact on market risk sentiment on Tuesday.

Private sector PMIs for July and August disappointed. Weak trade data will raise further question marks over the economic recovery.

With inflation still a hot topic, Inflation numbers on Thursday will also be key.

The Chinese Yuan ended the week up by 0.25% to CNY6.4560 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia will continue to be the main areas of interest for the markets. News updates from the Middle East, in particular, will need monitoring following recent events in Afghanistan.

Weekly Technical Market Insight: 6th – 10th September 2021

Charts: Trading View

US Dollar Index (Daily Timeframe):

The US dollar—measured by the US dollar index—extended losses last week, down 0.6 percent.

Back-to-back weekly declines, south of a Fibonacci cluster (resistance) between 94.07 and 93.90, pulled the benchmark to within reach of July 30th low at 91.78. A subsequent drop this week (taking out 91.78 stops) exposes the 200-day simple moving average at 91.33 (mean price), grouped together with substantial support at 90.64-91.40 and neighbouring demand at 90.32-90.70.

From a trend perspective, the buck has exhibited a modest bullish phase since the beginning of the year, following sizeable declines in 2020. After realising support at 89.34 (a level displaying historical significance since early 2009), the index eventually clocked fresh highs at 93.73 in late August this year. Of note, year-to-date movement is higher by 2.4 percent.

The relative strength index (RSI), a popular momentum gauge, muscled through key support between 40.76 and 47.49 last week. This informs technicians average losses exceed average gains; momentum is, therefore, to the downside, unlocking the likelihood of oversold space making an entrance, in particular support at 21.36.

  • Technically speaking, a test of support at 90.64-91.40 emerging this week should not surprise. Tripping sell-stops south of July 30th low at 91.78 is likely to exacerbate any selling. Efforts to hold 90.64-91.40 may also fuse with an RSI oversold signal.

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

South of ascending support-turned resistance, taken from the low $1.1641, June’s 3.0 percent loss persuaded EUR/USD to retest support from $1.1857-1.1352. A bullish revival shines light on 2021 peaks at $1.2349.

Month to date, September trades 0.6 percent higher.

Based on trend studies, a primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Further adding to this, price penetrated major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Technically underpinned by Quasimodo support priced in from $1.1688, the currency pair—with the exception of one session—has shaped a series of daily gains since August 20th.

Friday, as you can see, touched gloves with late July tops at $1.1909ish, though closed considerably off the high. Cementing a close north of the latter this week seats resistance between $1.2033 and $1.1994, arranged by way of a 61.8% Fib, the 200-day simple moving average and a Quasimodo support-turned resistance. What’s interesting here is a break of $1.1909 highs likely trips buy-stops, fuelling $1.2033-1.1994 offers.

With regards to long-term trend, 2021 has been directionless, despite healthy gains in 2020.

As for momentum, the relative strength index (RSI) is on the verge of crossing swords with trendline resistance just ahead of overbought territory. Also of note is resistance plotted at 80.39. This shows momentum is perhaps gearing up to level off.

H4 timeframe:

$1.1907 resistance, a level holding back buyers since late June, called for attention Friday. The interesting feature, however, is the stops above this level, and clear zone of resistance at $1.1955-1.1933.

Buy-stops arranged above $1.1907 may be enough to fuel offers at $1.1955-1.1933, creating a short-term bearish phase back to at least $1.1907.

H1 timeframe:

Following Friday’s mammoth job’s miss, EUR/USD initially popped higher and challenged $1.19, which predictably served as resistance.

$1.19 is joined by a number of key technical levels, including a 100% Fib projection at $1.1904, a longer-term 38.2% Fib retracement at $1.1896 (taken from the $1.2266 May 25th high), a 1.618% Fib expansion at $1.1913, as well as channel resistance, extended from the high $1.1845.

Should sellers govern control early week, channel support, taken from the low $1.1735, is a key watch, an ascending base sharing chart space with a 100% Fib projection at $1.1860 and a 61.8% Fib retracement at $1.1863. South of here, demand—albeit not fresh—falls in at $1.1812-1.1824.

In terms of where we stand on the relative strength index (RSI), the indicator is establishing an oversold threshold between 40.00 and 50.00, which is common in rising markets. In effect, we’re now working with a range between the aforesaid values and overbought.

Observed levels:

Long term:

Recognising monthly flow testing support at $1.1857-1.1352, downside movement on the daily timeframe could be limited from late July tops at $1.1909.

Any upside attempts on the daily scale shines the technical spotlight on resistance between $1.2033 and 1.1994.

Short term:

Against the backdrop of longer-term action, the H1 chart, after defending $1.19 resistance, suggests a test of channel support at the $1.1860ish zone, which may align with a H1 RSI oversold signal around 40.00-50.00.

The above could send the unit higher from $1.1860, in line with the H4 technical projection: breaching $1.1907 resistance to tackle $1.1955-1.1933 offers.

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Month to date, September is higher by 1.9 percent, consequently trimming a portion of the recent three-month decline.

Long-term areas to be mindful of are support at $0.6305-0.6872 and supply coming in at $0.8303-0.8082, along with trendline support-turned resistance, taken from the low $1.4776.

Trend studies (despite the trendline resistance [drawn from the high $1.0582] breach in July 2020) show the primary downtrend (since mid-2011) is in play until breaking $0.8135 (January high 2018).

Daily timeframe:

AUD/USD bulls remained on the offensive last week, rising through Quasimodo resistance at $0.7414. Note should a $0.7414 retest emerge this week, and the barrier develops support, addressing resistance between $0.7665 and $0.7590 is possible (made up of a 61.8% Fib retracement at $0.7665, a Quasimodo support-turned resistance at $0.7621, the 200-day simple moving average at $0.7604 and another 61.8% Fib retracement at $0.7590).

Interestingly, the relative strength index (RSI) climbed above trend line resistance, taken from the high 80.12. This places overbought space in range.

H4 timeframe:

Under the influence of channel resistance, drawn from the high $0.7271, Friday concluded a touch off best levels. Earlier, however, commanded a bullish presence and formed a clear-cut decision point at $0.7393-0.7410 to drive through daily Quasimodo resistance at $0.7414 (now a serving support).

Dip-buyers are likely to show interest in $0.7393-0.7410 should a test form, aided by channel support, taken from the low $0.7107, and neighbouring daily support at $0.7414. A realistic upside objective resides at $0.7494: a Quasimodo resistance joined by a 1.618% Fib projection at $0.7497.

H1 timeframe:

Friday, on the back of a much lower-than-expected NFP print, welcomed upside, a move establishing a decision point at $0.7429-0.7438 that penetrated supply coming in from $0.7450-0.7436.

Quasimodo resistance at $0.7472 also made an entrance, which persuaded a $0.7429-0.7438 test.

With buyers and sellers likely to square off between $0.7472 and $0.7429-0.7438 early week, additional levels to be mindful of are $0.74 and $0.75.

The relative strength index (RSI), similar to EUR/USD, recently launched a consolidation between overbought and the 50.00ish range. This is common during lengthy moves higher. Consequently, it’s worth keeping a close eye on these barriers.

Observed levels:

Long term:

Observing daily price manoeuvre north of Quasimodo resistance at $0.7414 last week communicates a bullish vibe towards resistance between $0.7665 and $0.7590.

Short term:

With the bigger picture in mind, the H4 decision point at $0.7393-0.7410 offers a primary area of support this week. Not only joined closely by daily support at $0.7414, the H4 zone also works closely with H4 channel support.

Chart studies, therefore, suggest the H1 decision point at $0.7429-0.7438 echoes a precarious tone. This places $0.74 in the line of fire as a possible support this week, joined by the noted H4 supports underlined above.

Ultimately, though, any bullish scenario may take aim at $0.75ish, based on the H4 technical picture.

USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since April retested descending resistance-turned support, etched from the high ¥118.66, price action has maintained moderate support. Pursuing higher levels could eventually strive for long-term supply at ¥126.10-122.66.

Month to date, September trades 0.3 percent in the red.

Daily timeframe:

Weighed by NFP-induced USD softness, USD/JPY ended Friday marginally off session lows.

Technical support is evident around the 61.8% Fib retracement at ¥109.07. More engaging, nonetheless, is the harmonic Gartley pattern’s potential reversal zone between ¥107.50 and ¥108.41, reinforced by supply-turned demand at ¥107.58-106.85.

When it comes to trend, USD/JPY has been higher in 2021.

From the relative strength index (RSI), a range has been in process between 40.94 and 54.43 since early July. This tells traders that upside momentum is weak: average losses exceed average gains.

H4 timeframe:

Mid-week trading witnessed the unit cross swords with supply at ¥110.56-110.29 and subsequently explore lower levels.

Upside momentum, as demonstrated through the three blue arrows, has been diminishing since mid-August, which alerted traders to a possible bearish theme from the aforementioned supply. Continued interest to the downside this week faces Quasimodo support at ¥109.48, with a break uncovering two Quasimodo support levels at ¥108.88 and ¥108.83.

H1 timeframe:

Friday’s thinly bid market allowed short-term action to challenge an interesting Fibonacci cluster between ¥109.58 and ¥109.63.

On top of this, the relative strength index (RSI) registered an oversold signal, and price developed a reasonable decision point at ¥109.97-109.97, situated just south of $110 and the 100-period simple moving average at $109.97.

Voyaging beneath the noted Fib structure underlines the ¥109 figure as a possible downside objective.

Observed levels:

Long term:

Monthly price occupying area above descending resistance-turned support delivers a bullish tone, long term.

The 61.8% Fib retracement at ¥109.07 on the daily timeframe, therefore, could accommodate buyers this week, as may the harmonic Gartley pattern’s potential reversal zone between ¥107.50 and ¥108.41.

Short term:

From a shorter-term perspective, H4 Quasimodo support at ¥109.48 is unlikely to provide much of a floor if tested. A more realistic downside target is two Quasimodo support levels at ¥108.88 and ¥108.83, as they align closely with the daily timeframe’s 61.8% Fib retracement at ¥109.07.

As a result of the above, the week may welcome a bearish theme, with H1 sellers possibly looking to take action south of the Fibonacci cluster between ¥109.58 and ¥109.63, targeting ¥109ish.

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Since February, GBP/USD has echoed an indecisive environment below $1.4377: April high 2018. This follows December’s (2020) trendline resistance breach, taken from the high $2.1161, a descending barrier possibly serving as support if retested.

Month to date, September trades 0.7 percent higher.

Primary trend structure has faced lower since early 2008, unbroken (as of current price) until $1.4377 gives way.

Daily timeframe:

The key technical move on the daily chart last week was price engulfing the 200-day simple moving average at $1.3808. This follows August 23rd recovery from Quasimodo support at $1.3609.

Overhead, resistance resides at $1.4003.

With reference to trend on this chart, the pair has been somewhat rangebound since late February.

Upside momentum is gaining traction, according to the relative strength index (RSI) crossing above the 50.00 centreline, a move that underlines average gains exceed average losses.

H4 timeframe:

We’re faced with a reasonably simple setting on the H4 scale early week.

$1.3939-1.3887 resistance made an appearance heading into the close Friday, following an earlier advance that was sponsored on the back of a huge NFP miss.

The $1.3766-1.3799 decision point is now in range as a possible downside objective, a base underpinning the 200-day simple moving average on the daily at $1.3808.

H1 timeframe:

Situated a handful of pips beneath $1.39, Quasimodo resistance put in an appearance at $1.3890 a few hours ahead of the close on Friday. With that, a bout of profit taking emerged, and highlights a possible retest of $1.38 early week.

$1.38 has ‘whipsaw’ written all over it. Potentially heavy bids, therefore, might be attracted to the area marked in yellow between $1.3774 and $1.3787 in order to welcome sell-stops beneath $1.38.

Additional observations out of the relative strength index (RSI) show the indicator chalked up bearish divergence and is now within striking distance of the 50.00 centreline. A break beneath the latter helps confirm bearish intent.

Observed levels:

Long term:

The daily timeframe making its way above the 200-day simple moving average at $1.3808 is considered a bullish signal among many technical traders, and could encourage a bullish scene this week.

Short term:

The H4 decision point at $1.3766-1.3799 is well placed to receive sellers. In addition to this, the H1 timeframe’s $1.38 base is positioned nearby, which is calling for a whipsaw to the H1 area marked in yellow between $1.3774 and $1.3787.

The combination of a bullish cue on the daily timeframe, along with H4 and H1 timeframes working in somewhat harmony at the moment, signals buyers may be drawn to the $1.38ish range this week.

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The Weekly Wrap – A Particularly Busy Economic Calendar Left the Greenback in the Red

The Stats

It was a particularly busy week on the economic calendar, in the week ending 3rd September.

A total of 80 stats were monitored, which was up from 49 stats in the week prior.

Of the 81 stats, 34 came in ahead forecasts, with 41 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 34 of the stats reflected an upward trend from previous figures. Of the remaining 46 stats, 41 reflected a deterioration from previous.

For the Greenback, FED monetary policy and economic data delivered Dollar weakness. In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035. In the previous week, the Dollar had fallen by 0.88% to 92.653.

Out of the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

Out of the UK

Economic data was on the lighter side once more. Finalized private sector PMIs for August disappointed in the week.

The all-important services PMI fell from 59.6 to 55.0, which was down from a prelim 55.5. Of less significance was a fall in the manufacturing PMI from 60.4 to 60.3, which was up from a prelim 60.1.

In the week, the Pound rose by 0.78% to end the week at $1.3871. In the week prior, the Pound had risen by 1.04% to $1.3764.

The FTSE100 ended the week down by 0.14%, partially reversing a 0.85% loss gain the previous week.

Out of the Eurozone

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

For the week, the EUR rose by 0.83% to $1.1795. In the week prior, the EUR had fallen by 0.84% to $1.1698.

The CAC40 rose by 0.12%, while the DAX30 and the EuroStoxx600 ended the week with losses of 0.45% and 0.09% respectively.

For the Loonie

GDP and trade data were the key stats of the week.

In the 2nd quarter, the Canadian economy contracted by 0.3%, quarter-on-quarter. The economy had expanded by 0.3% in the previous quarter.

On an annualized basis, the economy contracted by 1.1% after having expanded by 5.5% in the quarter prior.

Trade figures were also weak, with the trade surplus narrowing from C$2.56bn to C$0.78bn.

While the stats were disappointing, crude oil prices held relatively steady following the previous week’s rebound, to deliver support.

In the week ending 3rd September, the Loonie rose by 0.76% to C$1.2524. In the week prior, the Loonie had rallied by 1.57% to C$1.2620.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 2.02% to $0.7460, with the Kiwi Dollar ending the week up by 2.10% to $0.7158.

For the Aussie Dollar

Company gross operating profits were upbeat for the 2nd quarter, surging by 7.1%. In the previous quarter, profits had fallen by 0.3%.

Private sector credit rose by 0.7% off the back of a 0.9% increase in June.

Also positive were GDP numbers for the 2nd quarter. Year-on-year, the economy grew by 9.6% compared with 1.1% in the previous quarter. Quarter-on-quarter, the economy expanded by 0.7% after having expanded by 1.8% in the quarter prior.

Trade data on Thursday were upbeat, with the trade surplus widening from A$10.496bn to A$12.117bn.

Retail sales figures were negative, however. In July, retail sales fell by 2.7%, which was in line with prelim figures. Lockdown measures weighed, with sales having fallen by 1.8% in June.

For the Kiwi Dollar

It was a relatively quiet week, with business confidence in focus.

In August, the ANZ Business Confidence Index slid from -3.8 to -14.2. While negative for the Kiwi, the markets were in forgiving mood, however. Expectations of a rebound in confidence limited the damage.

For the Japanese Yen

It was a relatively busy week, with the numbers skewed to the positive.

Retail sales rose by 2.4% in July, which followed a more modest 0.1% increase in June.

Capital spending was also on the rise. In the 2nd quarter, capital spending rose by 5.3%, year-on-year, partially reversing a 7.8% slide from the previous quarter.

Industrial production fell by a relatively modest 1.5%, however, partially reversing a 6.5% jump from June.

Service sector PMI numbers also disappointed in August, falling from 47.4 to 42.9.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar. In the week prior, the Yen had fallen by 0.05% to ¥109.84.

Out of China

Private sector PMIs were key stats in the week and were skewed to the negative.

Both the NBS and the Markit Caixin figures disappointed.

According to the NBS, the manufacturing PMI fell from 50.4 to 50.1, with the non-manufacturing PMI falling from 53.3 to 47.5.

Of greater significance, however, was a fall in the Caixin Manufacturing PMI from 50.3 to 49.2.

According to the Markit Caixin survey, things were not much better for the services sector. The Caixin Services PMI slid from 54.9 to 46.7 in August.

In the week ending 3rd September, the Chinese Yuan rose by 0.25% to CNY6.4560. In the week prior, the Yuan had ended the week up by 0.45% to CNY6.4720.

The CSI300 and the Hang Seng ended the week up by 0.33% and by 1.94% respectively.

Dollar Softens for Fourth Straight Day After U.S. Payrolls Miss

Nonfarm payrolls increased by 235,000 in August, well short of the 728,000 forecast by economists in a Reuters poll, while the unemployment rate dipped to 5.2% from 5.4% in the prior month.

The dollar index dropped to a low of 91.941, its lowest level since Aug. 4, and was last down 0.231% at 92.014. The index is down about 0.7% on the week.

The dollar has been subdued on uncertainty over the path of Fed policy. Fed Chair Jerome Powell said last Friday that while tapering of its stimulus could begin this year if job growth continues, the central bank was in no hurry to do so.

Rising COVID-19 cases in recent weeks have brought on concerns the economic recovery could stall. The jobs data will likely keep the Fed on hold.

“It adds more concern or focus on the October number, because now we want to see if there is a trend,” said JB Mackenzie, managing director for futures and forex at TD Ameritrade in Chicago.

“(The Fed) is trying to telegraph that if the economy continues to heat up and they need to take action, they will, and that transparency is important to the markets and that is one of the main reasons you continue to see not a huge reaction to the downside here because the market feels as though they have been given that clear direction.”

Mackenzie said the 92 level was an important support level for the greenback after having bounced back from that level in early August.

Separately, data from the Institute for Supply Management showed activity in the services sector grew at a moderate pace in August, with signs that rising prices and supply constraints were beginning to ease.

The euro strengthened against the greenback following the report, touching a high of 1.1909 to match its best level since July 30.

The single currency has been supported by data earlier this week that showed regional inflation at a decade high and hawkish comments from European Central Bank officials ahead of a policy meeting on Sept. 9.

The euro was last up 0.15% to $1.1891.

The Japanese yen strengthened 0.29% versus the greenback to 109.62 per dollar, gaining ground after the jobs data, but showed little reaction to Prime Minister Yoshihide Suga’s decision to step down at the end of the month.

In cryptocurrencies, Bitcoin last rose 2.2% to $50,358.39 while ethereum last rose 4.48% to $3,956.04 after rising as high as $4,025 to top the $4,000 mark for the first time since May 15.

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

(Reporting by Chuck Mikolajczak; Editing by Emelia Sithole-Matarise and Steve Orlofsky)