Technical Analysis Today

[Zerologic]

The current EURUSD price at 1.08525 is moving close to the middle band line which often acts as a consolidation zone line. Bollinger bands at the daily timeframe here are drawing an ascending channel but the bands are starting to bend.

The 100 MA and 50 MA draw flat channels indicating a sideways trend in the long term.

The TDI indicator's VB high points to level 67 and VB Low points to level 35, a difference of 32 which is the EURUSD volatility value in the daily timeframe.

The Market Baseline is pointing at a value of 51, the bullish weight is slightly greater than the bearish.

RSI Price Line points to the value 53 which draws a downward line indicating a downtrend.

The Trading Signal Line shows a value of 60, down from the previous value of 64 on July 22.

 

[Zerologic]

USDJPY extends further losses amid hawkish sentiment surrounding BOJ's policy stance ahead of next week's meeting.

Japan Manufacturing PMI fell to 49.2 in July from 50.0. On the other hand, the Services PMI jumped to 53.9 from the previous 49.4 providing support for JPY strengthening.

Meanwhile, the US manufacturing PMI also contracted by 49.5 from the previous 51.6, missing expectations of 51.7. However, on the other hand, the services PMI rose to 56.0 from the previous 55.3, slightly higher than expectations of 51.7.

Although Japanese and American economic data are somewhat similar, it seems that the difference in higher Japanese services PMI data contributed to the JPY's strength.

Despite these reasons, the anticipated BOJ rate hike at next week's policy meeting prompted short-sellers to exit their positions and support the JPY.

Meanwhile, the USD is challenged by the possibility of the Fed lowering interest rates in September. CME Group's FedWatch Tool data shows an increase in the probability value of 93.6% of the Fed's interest rate cut by 25 basis points at the September meeting.

Currently, investors are focused on the release of US GDP news and jobless claims, which may have an impact on financial markets including the USDJPY pair. US GDP is expected to rise 2.0% from the previous 1.9%, while jobless claims are expected to fall 237k from the previous 243k.

 

[Zerologic]

USDCAD extended its gains reaching a high of 1.38478 before rebounding near 1.38224. USDCAD's bullish sentiment started in mid-July and is still showing a strong rally to date.

Yesterday the Bank of Canada lowered interest rates by 25 basis points to 4.50%, in line with analyst forecasts of 4.50% from the previous 4.75%. Further rate cuts are possible according to Commerzbank FX strategists.

According to Commerzbank FX strategist Michael Pfister, the CAD will still be under pressure until the end of the year, as a cut in interest rates will only provide a pause in profits in the real economic sector.

On the other hand, the strong US GDP is another reason that pressures the CAD to weaken further. In the GDP Advanced report, US economic data grew at a high speed of 2.8%, double the previous release of 1.4%. Previously, economists had predicted GDP growth of 2.0%. On the other hand, US Jobless Claims data also fell by 235k from the previous 245k, further supporting the strengthening of the USD, previously economists estimated Unemployment Claims at 237k.

Today investors will focus on US Personal Consumption Expenditures (PCE) or CPI data, which is the Fed's most preferred tool in considering interest rate policy. Data for June showed a PCE value of 0.1% in line with economists' expectations.

Economists expect the PCE to rise 0.2% from the previous 0.1%, if the actual data is bigger than expected which usually has a positive impact on the USD.

 

[Zerologic]

The forex market is starting to become active today. The price of gold at market opening was seen rising, marked by a bullish candlestick on the M15 timeframe since market opening. A long candlestick with almost no shadow reflects the increase in gold prices with quite high volatility.

The price of gold on Friday last week tried to rebound after previously falling to the lowest level of 2352, the gold rebound succeeded in bringing it to the price level of 2402.

Core PCE Index data on Friday showed an actual value of 0.2%, in line with analysts' forecasts of 0.2% from the previous revision of only 0.1%. The core PCE Price Index, which excludes fluctuating food and energy prices, rose 2.6% in the same period, matching May's gain but above market expectations of 2.5%.

According to the FedWatch tool, the probability of a target rate hike at the July 31 Fed Meeting is 95.9%. The Fed's interest rate cut could push gold to become a safe-haven asset because it does not provide returns.

On the other hand, Chinese data from the People's Bank of China (PBoC) cut its benchmark interest rate from 3.45% to 3.35% and lowered the five-year loan interest rate from 3.95% to 3.85%. China's economic data is considered important because this country is the largest importer of gold in the world.

Today, it is expected normal market will move naturally because there is no important news on the economic calendar. However, it is important to always update the market because many factors drive the market.

 

[Zerologic]

EURUSD slide extends nearly three weeks of decline. EURUSD price hit a low of 1.08023 ahead of Eurozone inflation data and Fed policy.

Looking at price history backward, the decline in EURUSD started July 17 and there is still potential to extend the decline.

This month the Fed predicted to hold interest rates unchanged, a cut is expected at the end of this year around September.

The Federal Funds Rate will be released Thursday, predicted to be unchanged in the range of 5.25%-5.50%. Therefore, investors will focus on Fed Chair Jerome Powell's monetary policy statement and press conference to get fresh clues on rate cuts.

Today's important economic data in the European zone, German CPI is forecast to rise 0.3% from the previous revision of 0.1%. French flash GDP is forecast unchanged at 0.2% as per previous revision data.

Meanwhile, in today's US economic data, CB Consumer Confidence is expected to fall by 99.7 from the previous revision of 100.4. Meanwhile, new job openings are predicted to fall by 8.02 M from the previous revision of 8.14 M.

 

[Zerologic]

Gold and Silver surged ahead of the Fed funds rate.

Gold prices jumped yesterday from a low of 2376 to a high of 2412, this drew a long-body bullish candlestick with a small shadow at the bottom of the candle. On the other hand, Silver rose from a low of 27,621 to a high of 28,406, drawing a long-body bull candle with a small shadow at the bottom of the candle.

US economic data released yesterday showed CB consumer confidence greater than expected at 100.3 from a forecast of 99.7 with previously revised data of 97.8. Meanwhile, new job openings were 8.18M, greater than the expected 8.02M with revised previous data of 8.23 M. Even though this data supports the strengthening of gold, it seems that the market will see the Fed's potential in the future.

In this week's trading, several high-impact news that are of concern to traders include the Fed funds rate, ADP Non-Farm Employment Change, inflation data, and NFP.

In terms of geopolitical risks, the Israeli government has emphasized that it wants to retaliate against Hezbollah for the rocket attack that killed 12 people at the weekend, but they wants to avoid a regional war in the Middle East. This has eased market concerns.

Today the ADP Non-Farm Employment Change data will be released which is predicted to fall by 147k from the previous data revision of 150k. This data measures changes in the number of people employed in the previous month, excluding agricultural and government industries.

Next, the FED will release monetary policy, which is predicted to keep interest rates unchanged at 5.50%.

The CME Group's Fed Watch tool forecasts a 95% chance that the Fed will hold interest rates on Wednesday and a 100% chance that rate cuts will begin in September.

 

[Zerologic]

Gold soared amid US economic data.

Yesterday gold prices extended their gains amid mixed US economic data. The price of gold rises drawing a body bull's candle with a slight shadow on the top and bottom of the candle. The bullish candlestick formed a low of 2403 and a high of 2450.

Data released yesterday, ADP Non-Farm Employment Change, showed that the actual data was 122k, smaller than the forecast of 147k with the previous revision being 155k. There is a difference between the actual data and the forecast of 25k, which shows an unfavorable value for the USD. ADP (Automatic Data Processing, Inc.) is economic data that measures the estimated change in the number of workers in the previous month, excluding the agricultural and government industries.

Meanwhile, the Employment Cost Index data shows that the actual data is 0.9% smaller than the expected 1.0% from the previous data revision of 1.2%. This economic data is considered important because It is a leading indicator of consumer inflation - when companies pay more for labor, the higher costs are usually passed on to consumers.

In other economic data, Chicago PMI showed actual data of 45.2, slightly greater than the expected 44.8 with the previous data revision of 47.4.

Pending Home Sales data shows actual data of 4.8% greater than expected 1.4% with previous data revision of -1.9%. This data measures changes in the number of contract homes that will be sold but are still waiting for the transaction to close.

Meanwhile, the Fed still left interest rates unchanged at 5.50%, even though Powell said he would cut interest rates once this year, predicted in September. According to the FedWatch tool from CME, the probability of the Fed cutting interest rates in September rose to 90.5%.

Today investors are still waiting for other inflation data, Unemployment Claims, and Manufacturing PMI.

 

[Zerologic]

AUDUSD continues to fall amid the Fed's decision to keep interest rates unchanged at 5.50%.

AUDUSD draws a long body bearish candlestick with small shadows on the top and bottom of the candle. Price formed a high of 0.65595 and a low of 0.64883.

Yesterday's US economic data saw the Fed keep interest rates unchanged at 5.50%, although the Fed may cut interest rates at the end of the year.

While unemployment claims increased by 249k from the previous 235k, analysts expected 136k, much less than expected meaning less good for USD.

Manufacturing PMI data was mixed, Final Manufacturing PMI 49.6 was slightly higher than the previous 49.5, still indicating contraction. ISM Manufacturing PMI 46.8 was lower than the previous 48.5, less supportive of USD strengthening>

ISM Manufacturing PMI showed 52.9 slightly higher than the previous 52.1, there was an increase in prices paid on goods and services.

The decline in AUDUSD was also influenced by the PBoC's recent rate cut weakening the Chinese yuan, which harmed the Australian dollar due to Australia's economic relations with China

The RBA is also expected to maintain interest rates at 4.35% at its upcoming meeting as recently published inflation figures in Australia have reduced the likelihood of further tightening.

Today investors will focus on NFP data which is forecast at 176k with previous data revised to 206k. The Unemployment rate data is predicted to be 4.1% from the previous revision of 4.1% too.

 

[Zerologic]

USDCHF extends losses due to increased demand for safe-haven currencies.

Last week, USDCHF drew a long body bearish candlestick indicating a sharp decline extending the previous decline. USDHF has tended to move downwards since May, reflecting increased demand for the Swiss Frank currency, which is one of the safe-haven currencies.

On D1 last week at market close, USDCHF formed a bearish long-body candle reflecting strong bearishness.

USD/CHF continued its losing streak after the release of Swiss Consumer Price Index data on Friday which showed an increase of 1.3% in line with expectations for consistency in July.

CPI data also matched expectations, falling -0.2% from the previous 0.0%.

On the other hand, US economic data which weakened the USD also encouraged strengthening the Franc Swiss. The NFP data was 114k which was much smaller than the expected 176k with the previous revision of 179k. Meanwhile, the Unemployment Rate data was 4.3%, up from the expected 4.1% from the previous revision of 4.1%.

Today the market is focusing on ISM Services PMI data which is expected to rise to 51.4 from the previous revision of 48.8.

 

[Zerologic]

Profit-taking brought gold down to $2364.

After the previous day, gold drew an indecision candle where the price formed a small body bearish candlestick with long shadows on the top and bottom of the candle. However, yesterday the price of gold fell sharply from a high of $2458 to a low of $2364.

However, this profit-taking action met resistance from buyers so the price drew a long body bearish candlestick and a long shadow at the bottom of the candle.

Yesterday US economic data, ISM Services PMI showed a value of 51.4 somewhat higher than the expected 51.1 with the previous data revision of 48.8. This economic data is one of the drivers for the USD to strengthen.

Gold should take support from widespread geopolitical risks in the Middle East, where attacks on Israel are now besieged on several fronts by Iran, Yemen, and Lebanon. Reportedly, Israel's ally, America, asked Jordan for permission to use its airspace to prevent attacks by Israel's enemies.

However, the gold price phenomenon is quite interesting, because there are other factors that investors consider.

China, which is the largest importer of gold, is also experiencing a vulnerable phase due to poor domestic demand. Caixin Manufacturing PMI surprisingly contracted in July to 49.8.

Meanwhile, slowing US economic growth has also triggered market changes. The July Nonfarm Payrolls (NFP) report showed that labor demand slowed significantly. The Unemployment Rate jumped to 4.3% versus expectations and the previous release of 4.1%.

However, according to the Fedwatch tool, there is a decline in confidence that the Fed will cut interest rates. This tool estimates the Fed rate in bps 475-500 at the level of 73.5% while the estimate of 500-525 is only 26.5%. The Fed will probably cut interest rates in September, which is predicted to be a reduction of 50 bps.

 

[Zerologic]

AUDUSD gets little RBA interest rate support.

Yesterday AUDUSD drew a bullish candlestick with rather long shadows on the top and bottom candle indicating the market is fluctuating. Price formed a high of 0.065412 and a low of 0.64717, open at 0.64955 and close at 0.65191.

Previously, AUDUSD price volatility showed the price falling at the low on August 5 at 0.63485 and drawing a Pin bar pattern indicating that in a bearish market, there was buyer pressure trying to take over the market direction.

At its meeting yesterday, the RBA still maintained interest rates at 4.35% for the seventh time today. The market seems not to respond much to the RBA interest rate as expected. Australia's still high inflation is the reason RBA Governor Bullock maintains high interest rates.

The RBA projections that inflation will not fall within the target range of 1-3% in the second quarter and forecasts an increase to 3.8%. The potentially restrictive RBA may support AUDUSD in the long term compared to the Fed which may cut interest rates at the end of the year and is expected in September.

Furthermore, the RBA Governor saw a decline in shares due to a weak reaction to the US employment report on Friday and fears of a recession in the US. The Australian dollar staggered, falling up to 2.4%, and tried to recover on Tuesday.

Today there is no high-impact news in the economic calendar, but investors may focus on RBA Assistant Governor (Economic) Sarah Hunter to see potential hawkishness or dovishness. New Zealand's high-impact news on employment and unemployment data may have an impact on NZD despite its slight correlation with the Australian dollar.

 

[Zerologic]

NZDUSD gains amid supportive New Zealand job data economic news.

NZDUSD price extended its increase yesterday drawing a long-body bullish candlestick with a rather long shadow on the top candle. The price reached a new high of 0.60245 on the support of New Zealand jobs data.

Yesterday, the release of Employment Change data showed a value of 0.4%, higher than expected -0.2% with the previous data revision of -0.3%. This change in the number of workers provides an indication of an increase in job creation, which is a leading economic indicator that reflects the majority of the entire economy.

On the other hand, the data released for the Unemployment Rate was 4.6% compared to the expected 4.7% with a revision of the previous data of 4.4%. Even though it is down compared to previous data, it is higher than analyst predictions. The number of unemployed is an important signal of overall economic health that correlates with consumer spending, although it is a lagging economic indicator.

These two economic indicators include high-impact news and yesterday NZDUSD formed a low of 0.50458 and a high of 0.60245 closing at a bullish candle at 0.59923. NZDUSD had fallen on August 5 at a low of 0.58493 but the whipsaw brought the price up to a close by drawing a bearish candlestick with a long wick small body. After that, prices tend to extend their increase.

Today the economic data that investors may pay attention to is Inflation Expectations, the previous data showed 2.33%. The Reserve Bank of New Zealand expects that the inflation target in the future will materialize into real inflation, so this could be related to interest rate policy.

 

[Zerologic]

Gold surged amid better US jobless claims data.

An interesting event happened with gold yesterday. After gradating since gold's sharp decline on August 5, gold prices are back to soar after successfully crossing $2400.

Gold price drew a long-body bullish candlestick with almost no shadow forming a high of $2427 and a low of $2378.

According to analysts, this precious metal soared because encouraging data from the United States (US) provided relief to financial markets, thereby weighing on demand for the US Dollar.

US jobless claims data showed actual data of 233k from the expected 241k with a revision of previous data of 250k. Decreasing unemployment claims indicates overall economic improvement.

With improving economic conditions enabling the inflation target to be achieved so that the public confidence index rises, the Fed will cut interest rates in September.

Meanwhile, geopolitical risks still support gold as a safe-haven asset.

Next, investors will focus on Fed officials who allow dovish or hawkish statements.

Today there is no important economic schedule related to USD, but there is news that may have a high impact on CAD regarding job data.

 

[Zerologic]

Gold prices are stable at market opening.

Gold price activity did not experience significant fluctuations on Monday, although it rose slightly, the movement was still within the previous price range of low volatility.

This can be seen on M15 where the flat BB line with narrow band spacing reflects the gold price space within the $2425 floor and $2434 ceiling.

The absence of a gap at market opening may also be due to the absence of a trigger for an increase in gold prices on Saturday and Sunday.

However, expectations of the Fed cutting interest rates may provide positive sentiment for gold. However, it seems that investors are divided in the conclusion that the Fed will reduce interest rates by 50 basis points and some conclude that the reduction will only be 25 basis points.

Data from the FedWatch tool probability interest rates will fall by 25 basis points to 85.1%, interest rates will fall by 50 basis points to 7.6% and interest rates will remain unchanged at 7.3%.

Today there is no high-impact news on the economic calendar schedule, normal price movements are predicted based on technical analysis.

 

[Zerologic]

Ahead of the CPI data, AUDUSD is stable near the 200 MA

AUDUSD drew a bullish candlestick with a small shadow on the top candle yesterday. The price formed a low of 0.65647 and a high of 0.66046 with a close price of 0.65850. The price moved slightly below the 200 MA, drawing a flat channel with a slight upward channel.

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser spoke at the Economic Society of Australia Business Lunch event in Brisbane on Monday with several quotes, predicting huge economic uncertainty, inflation remaining high due to weaker supply and a tight labor market, there the risk of unemployment increases more rapidly. Household consumption increases in line with real income.

The market reaction to the quote brought AUDUSD to trade up drawing a bull's candle.

Today investors are waiting for important news that might get a market response. The Australian Wage Price Index is forecast to rise 0.9% from the previous 0.8%. This economic indicator measures changes in the prices companies and governments pay for labor. Actual value greater than the forecast is usually good for a currency.

Next, investors focus on US inflation data, PPI, which is also an important economic indicator used by the Fed to consider changes in interest rates. Core PPI is predicted to fall 0.2% from the previous 0.4%. This data measures changes in prices of finished goods and services sold by producers, excluding food and energy.

 

[Zerologic]

NZDUSD bounces ahead of RBNZ's Official Cash Rate

An interesting phenomenon occurred in the NZDUSD pair. The price of this currency pair soars drawing a bull candlestick with a long body small shadow on the top of the candle. Yesterday the price formed a low of 0.60112 and a high of 0.60811 close at 0.60636.

The increase in NZDUSD prices reaching the MA 200 line which draws a flat channel indicates that the long-term trend tends to be neutral.

The surge in NZDUSD prices extended the previous increase after ending the consolidation stage near the middle band line.

Today the RBNZ will officially announce the cash rate. The policy interest rate is now 5.50%, the highest since 2008.

Nine of 23 Bloomberg analysts surveyed predicted the RBNZ would begin a rate cut cycle, while markets were pricing in a 60% chance of a 25 basis point cut. Meanwhile, the forecast by Forexfactory is expected to keep interest rates unchanged at 5.50%.

Today, besides waiting for the RBNZ cash rate, investors are also waiting for US inflation data, CPI which is expected to rise 0.2% from the previous 0.1%.

 

[Zerologic]

AUDUSD is consolidating near MA 200

Yesterday, the AUDUSD price drew a long-body bearish candlestick with a shadow on the top candle.

AUDUSD price fell to the initial track near the MA 200 and middle band line which is the mean value of price deviation.

One of the reasons for the decline in AUDUSD prices was weaker commodity prices on Wednesday. Additionally, yesterday's US inflation data slightly supported the strengthening of the USD.

Meanwhile, the RBA maintained its benchmark interest rate at 4.35% due to its cautious stance not to rush into easing its policy. Core CPI is projected to reach the midpoint of the 2-3% range by the end of 2026.

RBA Governor Michele Bullock stated that an interest rate cut would not happen and he did not hesitate to raise interest rates if necessary to control inflation, reflecting a hawkish stance because inflation remains high.

Today investors are waiting for Australian Employment Change and Unemployment Rate data. Expected Employment Change of 20.2k is lower than the previous 50.2k and the Unemployment Rate is predicted to be the same as the previous data of 4.1%.

Apart from that, other important news is US retail sales and Unemployment Claims which are also of concern to investors.

 

[Zerologic]

EURCHF extends gains near 200 MA

Yesterday EURCHF rose drawing a long-body bullish candlestick with almost no shadow with a high of 0.95806 and a low of 0.95167 closing at 0.95726. The price breaks the middle band line rising slightly below the MA 200 and MA 50.

The 50 MA is drawing a slight descending channel trying to cross from the upside of the 200 MA which is drawing a flat channel.

Switzerland's CPI in July showed a 0.2% decrease compared to the previous month reaching 107.5 points with inflation +1.3% compared to the same month the previous year.

Currently, the SNB interest rate is 1.25% valid from 21 June 2024. The CHF currency is often considered one of the safe-haven currencies because of its long-term economic stability. Switzerland also has a long history of hard assets including gold reserves.

While the ECB rate is currently 4.25% effective from 12 June, the euro area annual inflation rate was 2.5% in June 2024, down from 2.6% in May.

EURCHF started an upward reversal on August 5 after a long downtrend wave.

 

[Zerologic]

Gold prices hit a new all-time high

Gold prices were unstoppable after breaking through the resistance zone in the Bollinger band range, thus forming a new all-time high at $2509.

Geopolitical risks and China's recovery could be the reason for the soaring gold prices in addition to waning fears of a US recession after better-than-expected US data.

According to the CME FedWatch tool, 75.5% expect the Fed's interest rate to fall by 25 bps, and 24.5% expect a 50 bps rate cut in September.

US economic data released last week has reduced fears of a recession. Higher-than-expected retail sales and lower jobless claims faded recession fears.

This week several important news will be released in the economic calendar schedule which may be of concern to the market, FOMC meeting minutes, and some other important economic data on August 22.

 

[Zerologic]

USDCAD extends declines earlier this week.

USDCAD yesterday drew a bearish candlestick continuing the previous decline. The price formed a long body bearish candlestick with a slight shadow on the top candle with a high price of 1.36840 and a low of 1.36327.

On the Weekly time frame, USDCAD declines for three consecutive weeks with the first week reflecting extreme declines.

The Bank Of Canada's interest rate is now at 4.50%, but market consensus expects the central bank to cut rates 25 bps from 4.50% to 4.25% at its September meeting.

Meanwhile, the market hopes that the Fed will cut interest rates at the end of the year, which is estimated in September the Fed will cut interest rates by 25 bps, from 4.50% to 4.25%.

Today investors are focused on Canadian inflation data, the Consumer Price Index which is forecast at 0.4% from previous data -0.1%.