Technical Analysis Today

[Zerologic]

EURCHF plummeted after a retest near MA 50.

EURCHF yesterday drew a long body bearish candlestick with almost no shadow. The price fell from a high of 0.95657 to a low of 0.94842 and back to near the middle band line.

The SnB rate is currently 1.25% while the ECB rate is 4.25%. Traders sometimes use high interest rate differences to carry out trade strategies.

CHF is a safe-haven currency because Switzerland has political stability and low inflation and this was proven when the global instability of the 2008 financial crisis occurred, investors switched to CHF and pushed its value higher.

Factors influencing the EURCHF value include ECB and SNB monetary policy, GDP, Employment change, industrial production, CPI, etc.

Other pairs that are positively correlated with EURCHF include CADCHF and USDCHF. Meanwhile, pairs with negative correlations such as CHFJPY, and CHFSGD.

 

[Zerologic]

GBPUSD extends its winning streak this week.

Yesterday GBPUSD drew a bullish candlestick continuing the previous bullish trend. Price formed a high of 1.31186, a low of 1.30101, and closed at 1.30830.

The market seems increasingly confident that the Fed will cut interest rates in September. Data from the FedWatch tool now shows 64% believe the Fed will cut interest rates by 25 bps and 36% believe the Fed will cut interest rates by 50 bps.

At the FOMC in July, Fed officials decided to keep the benchmark interest rate stable, with a tendency for some officials to start easing.

The main source for investors looking for clues about a rate cut is Fed Chair Jerome Powell's statement at the Jackson Hole Symposium on Thursday-Saturday which predated Powell's statement on Friday.

On the other hand, market expectations for a reduction in BoE interest rates have also increased. The UK Consumer Price Index (CPI) report for July showed core inflation slowed by 3.3% from the forecast of 3.4%.

Today investors focus on news that may have a high impact on currencies, Flash Manufacturing PMI and Flash Services PMI UK and US.

UK Manufacturing PMI is forecast at 52.1, the same as the previous release, and services PMI is forecast at 52.8 from the prior release of 52.5.

US Manufacturing PMI is forecast at 49.5 from the previous release of 49.6 and services PMI is forecast at 54.0 from the prior release of 55.0. Meanwhile, US unemployment claims are predicted to increase by 232k from the prior release of 227k.

 

[Zerologic]

Gold prices fell in the middle of the Jackson Hole Symposium

Gold price yesterday recorded a decline at a low of $2470 from a high of $2514 by drawing a bearish candlestick with a shadow at the bottom of the candle. The decline in gold prices answered the previous candlestick's indecision.

US Manufacturing PMI data released yesterday showed the actual value of 48.0 lower than the forecast of 49.5. However, the US Services manufacturing PMI showed actual data of 55.2, higher than the forecast of 54.0. The actual data is also higher than the previous data release of 55.0. The same US unemployment claims were expected to be 232k higher than the previous data release of 228k.

Weak US data signals an imminent US interest rate cut and continues to support Gold in general. The Fed is expected to cut interest rates in September. According to the CME group's FedWatch tool, expectations for a 25 bps rate cut rose 75%, while a 50 bps cut was 25%. A higher cut rate might support gold as a non-yielding asset.

Today investors may will wait for Jerome Powell's speech as head of the central bank which controls short-term interest rates and monetary policy to see the statement as hawkish or dovish.

 

[Zerologic]

NZDUSD managed to pass the high on June drawing a new high at 0.62359.

NZDUSD price fluctuations appear to have started a bullish sentiment journey since the beginning of the first week of August. NZDUSD's bullish sentiment appears unstoppable despite weaker New Zealand economic data. New Zealand retail sales showed actual data -1.2% lower than expected -1.0%, even much lower than the previous revision of 0.4%.

It seems that New Zealand's weak economic data was offset by Powell's dovish speech. In his Jackson Hole speech, Powell stated that the size and timing of interest rate cuts would depend on data, adopting a stance like the European Central Bank (ECB). He added that he believes inflation is on a sustainable path to return to 2% and inflation risks have reduced.

According to CME Group's FedWatch tool, 63.5% of investors believe the Fed will cut interest rates by 0.25%, and 36.5% believe it will cut by 0.50%.

The RBNZ interest rate is now 5.25%, this central bank has cut the previous interest rate to 5.50%, thus further suppressing the performance of the NZDUSD, which is also called KIWI by traders.

Today's economic calendar schedule does not show any high-impact news data, but some that may be of concern is US Durable Goods Orders data.

 

[Zerologic]

EURUSD corrected after surging last week.

EURUSD yesterday had difficulty extending its rising, stalling at the price range of 1.12000. Yesterday's price drew a bearish candlestick half the body of the previous candlestick indicating a possible retracement.

Speculation of the Fed cutting interest rates in September is getting stronger because Powell's dovish speech last Friday assured the public that it will cut interest rates because of indicators that convinced the 2% inflation target can be achieved. However, investors this week are waiting for US core PCE inflation data and Eurozone CPI for August.

Apart from the Fed possibly cutting interest rates in September, the European Central Bank (ECB) is also predicted to cut interest rates again at its September meeting. For further guidance on interest rate policy, investors will focus on inflation data from Germany and the European zone.

Another factor that investors are paying attention to is the US core Personal Consumption Expenditure (PCE) Price Index for July, which will be published on Friday.

Today's economic news that may get the attention of traders is US Consumer Confidence which surveyed 3,000 households which asked respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation.

 

[Zerologic]

EURCHF extends decline below the middle band line.

For two consecutive weeks, we have seen EURCHF decline more dominantly than increase. Day by day, lower lows are formed.

A pair often called Euro-Swiss, the Euro is the official currency of 19 European countries from the 28 members of the European Union. Meanwhile, the Swiss Franc is a reserve currency which is one of the safe-haven currencies.

The Swiss Franc exchange rate is influenced by many factors, especially the monetary policy of the European Central Bank and Swiss National Bank which controls the money supply in the market. Apart from interest rates, other factors that influence the Swiss Franc exchange rate are the trade balance, inflation data, gold, oil, and coal are also important factors for the Swiss Franc.

With high price volatility in up-and-down trends, this pair is often used for swing trading even though it is less popular for scalping.

As a safe-haven currency, the Swiss Franc can move thousands of pips when the SNB intervenes in the currency. However, this event rarely occurred after 2015.

Today's news is the focus of EURCHF traders on German and Spanish inflation data, which may affect the conversion of the Euro currency and its implications for EURCHF.

 

[Zerologic]

AUDUSD is consolidating near the resistance zone

Yesterday the AUDUSD price drew a bearish candlestick with rather long shadows on the top and bottom of the candle, within three days the price moved in the range of 0.67612 to 0.68125. Although the current price is higher than the previous high in July, the consolidation movement indicates a fading uptrend.

Australian CPI data released yesterday showed actual data of 3.5%, higher than the forecast of 3.4%, but lower than the previous revision of 3.8%. Market speculation regarding this inflation data predicts that the RBA will keep the Official Cash Rate (OCR) interest rate unchanged at 4.35%. On the other hand, the Fed is predicted to cut interest rates in September, which could have an impact on the AUD

On the other hand, Australian construction data showed 0.1% lower than the expected 0.8% but higher than the previous revision of -2.0%.

Investors will probably wait more for US PCE data which will be released on Friday which is expected to be 0.2% the same as the previous revision. However, today several important news releases that need to be concerned are US GDP data and Unemployment Claims. Prelim GDP is forecast at 2.8%, the same as the previous revision, while Unemployment Claims is forecast at 232k, the same as the previous revision.

 

[Zerologic]

Gold moves in the range of $2470-$2531 waiting for the Fed's interest rate policy

Gold prices move more in ranges after reaching an all-time high of $2531.41 on August 20. Gold price movements move up and down in market ranges.

Yesterday the price drew a bullish candlestick from a bearish one from a low of $2493 and a high of $2528.

Investors may still wait for the Fed's monetary policy cut in interest rates predicted in September. According to FedWatch from the CME group, there is a 67% chance that the Fed will cut interest rates by 0.25% and a 33% chance that the Fed will cut interest rates by 0.50%.

Yesterday's rise in gold prices may have been driven more by Chinese demand after data from the World Gold Council (WGC) on Tuesday showed China's net gold imports rose 17% in July.

US GDP data rose 3.0% higher than the forecast of 2.8% with the previous revision of 2.8%. On the other hand, Unemployment Claims 231k was somewhat smaller than the forecast of 232k with the previous revision of 233k. In theory, this is good for USD strengthening.

Today investors will focus on Personal Consumption Expenditures (PCE) data, which is the Fed's most preferred inflation data, which is forecast at 0.2% from the previous revision of 0.2%.

 

[Zerologic]

EURUSD plunged last week, is September a continuation or reversal?

Last weekend the EURUSD price drew a bearish candlestick extending the previous decline and reaching the middle band line.

If we go to the weekly TF, the price area is now at the low of the previous candlestick, which is a possible support zone.

in the previous week USD seems to have managed to gain some composure as US economic data is supportive and investors continue to assess the prospect of lower interest rates in September amid a strong economy.

US economic data released last week, annual Gross Domestic Product (GDP) growth for the second quarter was 3%, higher than the previous forecast of 2.8%. Unemployment Claims and Personal Consumption Expenditure/PCE are in line with market expectations.

This week investors will focus on several important news, JOLTS Job Openings data, ADP Non-Farm Employment Change, Unemployment Claims, and Non-Farm Employment Change which are high-impact news.

However, in today's economic calendar schedule, some economic news should be concerning including PMI manufacturing data for several European countries such as German, French, and Spanish.

 

[Zerologic]

EURGBP is consolidating near the support zone

EURGBP price volatility looks high referring to the Bollinger band indicator, the wide spacing of the upper and lower bands indicates high market volatility.

The EURGBP price wave is quite interesting, since August the price has started to move up from the low range of 0.84125, to reach the high level of 0.86185. The highest price was formed at 0.86238 on August 8.

Then the price gradually decreased back to a low point at the price of 0.83984 on August 30. Earlier this week the EURGBP consolidation movement drew a bullish candlestick with a shadow on the top candle.

Going to the W1 time frame, this zone is a support zone based on previous price history which may be an important level for possible trend reversal or continuation.

From a fundamental perspective, the ECB is predicted to reduce its main lending interest rate next month due to lower inflation as expected. Meanwhile, the BOE predicts a slower policy easing cycle. . The BoE is expected to cut interest rates once again this year.

See today's economic calendar schedule, traders will probably focus on US ISM manufacturing PMI data which is forecast at 47.5 from the previous revision of 46.8. However, whether this news release will have an impact on EURGBP is not yet clear.

 

[Zerologic]

Gold bounces at low $2423, downside potential still exists

Yesterday the gold price drew a bearish candlestick with a long shadow at the bottom of the candle. The price has crossed the middle band line from the upside and bounced to around $2492 near the middle band line. The middle band line is often a consolidation zone of price deviations.

Yesterday's release of ISM Manufacturing PMI data showed that the actual data was 47.2, slightly lower than the expected 47.5, but higher than the previous revision of 46.8. Meanwhile, ISM Manufacturing Prices showed actual data of 54.0, higher than expected 52.1 and the previous revision of 52.9.

Market players still seem to be hoping for new clues about what the Fed will do this month, even though news that the Fed will cut interest rates has been circulating for a long time.

According to the FedWtach Tool from CME Group, forecasts for interest rate cuts are between 5%-5.25% at 62.0% and 4.75%-5% cuts at 38%.

Today's important data that will be released and may be of concern to investors is US jobs data, Job Openings and Labor Turnover Survey (JOLTS), which is predicted to fall by 8.09M from the previous revision of 8.18M.

On the other hand, investors will wait for US NFP data which will be released on Friday which is expected to provide a clear picture of what the Fed will do.

 

[Zerologic]

USDCHF weakened after JOLTS data, there is an aura of bearish continuation

USDCHF yesterday drew a bearish candlestick with a small shadow on the top candle. This forms the lower low of the previous candle below the middle band line.

The US dollar seems to be facing challenges because US government bond yields are declining amid the increasing possibility of a Fed interest rate cut.

Yesterday's JOLTS data showed an actual value of 7.67M lower than the expected 8.09M, and also lower than the previous data revision of 7.91 M. The market response to lower US jobs data caused the USD to weaken.

On the other hand, Swiss inflation slowed to 1.1% in August from 1.3% in the previous month, below expectations of 1.2%. In April and May, the rate of price increase rose to 1.4% but then started to fall again, falling 0.2% in the last three months. Further slowdown may provide opportunities for monetary policy easing.

The market will still be waiting for other important US NFP data which will be released on Friday and may provide an idea of the potential for a Fed interest rate cut this month.

Today investors will focus on ADP Non-Farm Employment Change data which is expected to rise to 144k from the previous 122k. Meanwhile, Unemployment Claims are expected to be the same as the previous 231k.

 

[Zerologic]

GBPUSD has the potential to continue the bullish trend

Yesterday GBPUSD drew an almost shadowless bullish candlestick with a medium candlestick body. GBPUSD's rise continued the previous day of the week after GBPUSD fell from resistance 1.32653 to a low of 1.30869 in a week.

Yesterday's ADP Non-Farm Employment Change data showed the actual data of 99k was much lower than the expected 144k, even lower than the previous revision of 111k. This data raises concerns that the US could be heading into a recession.

The ADP report is usually used to estimate market expectations for the NFP report that will be released today, but this has a weak track record of accuracy.

On the other hand, Unemployment Claims fell 227k from the expected 231k with the previous revision of 232k. This data supports the currency and reduces recession fears.

Meanwhile, PMI services data was 51.5 compared to the expected 51.3 and the previous revision of 51.4, this shows an expansion above 5.0.

On the other hand, predictions of the FED cutting interest rates have increased. According to the FedWatch tool from CME Group, the forecast for the Fed cutting interest rates by 0.25% is 59.0% and the forecast for cutting 0.50% is up 41.0%.

Today's NFP is expected to rise to 164k from the previous revision of 114k. Differences in actual data that are too large can affect USD volatility.

 

[Zerologic]

Does USDJPY has the potential to extend its decline?

Last week the price of USDJPY tended to draw a downtrend pattern since September 2 sequentially the price drew bearish candlesticks with lower lows.

At the weekend, before the release of NFP data, the USDJPY rose to 143,884, but the lower-than-expected NFP data caused the USDJPY price to continue its decline at a low of 141,723 before rebounding to 142,296. NFP data showed 142k lower than the expected 164k though higher than the previous revision of 89k. On the other hand, the US Unemployment Rate met expectations at 4.2% from the previous revision of 4.3%.

UUSDJPY is a pair often linked with carry trade strategies because Japan's low interest rates allow investors to borrow money at low interest rates to invest in currencies with high interest rates.

The forecast that the FED will cut interest rates is still the focus of traders, according to the CME group's FedWatch tool, the forecast for the Fed to cut interest rates by 25 bps increased by 71%, while the forecast for a 50 bps cut fell by 29%. The Fed is expected to cut interest rates on September 18.

Today, some news that may be of concern is Japanese GDP data which is expected to be 0.8%.

 

[Zerologic]

Gold prices rose on Monday, still within a range

Gold prices fell at the end of last week due to mixed US economic data. Gold prices rose to a high of $2,528, but failed to extend the increase after the NFP and Unemployment rate data were released. Gold prices plunged to a low of $2484 on the same day and closed at $2496.

Friday's NFP data showed the US added fewer jobs than expected in August. The data indicates that the labor market is weakening overall and therefore, there is a greater chance for the Fed to make a larger 0.50% interest rate cut rather than the standard 0.25% in September.

Seeing these expectations should be good for gold as a non-yielding asset when interest rate expectations are lower. However, gold failed to continue its increase due to mixed other data. The Unemployment Rate, fell to 4.2% from 4.3% as expected, and wage growth increased 0.4% on the month, beating the 0.3% forecast.

The mixed US economic data caused gold prices to fall below $2500 before rebounding again. In general, gold prices are still moving within the market range of around $2500.

Meanwhile, data from the PBoC shows no increase in bank gold reserves. As is known, China is the world's largest gold importer apart from Türkiye and India.

Investors may still be waiting for the Fed to cut interest rates this month, expected September 18. According to the CME Group's FedWatch tool, the target probability of a 0.25% cut is 70% and the probability of a 0.50% cut is 30%.

 

[Zerologic]

EURGBP turbulence to low 0.84256, Claimant Count Change lower than forecast

EURGBP fell yesterday drawing a bearish candle with a long shadow on the top candle. Price formed a high of 0.84470 and a low of 0.84226.

There is a gap in today's candlestick change where the open price at 0.84186 is lower than the previous closing price.

Yesterday the Claimant Count Change data which measures people claiming unemployment showed the actual data at 23.7k, much lower than the expected 95.5k and the previous revision of 102.3k.

The actual data which is lower than the forecast is theoretically good for the GBP currency, and it seems that the stable German Final GDP data is not able to encourage the strengthening of the Euro.

Today, there is news related to the GBP currency that is expected to trigger volatility. The main focus is on GDP with a forecast of 0.2% higher than the previous data revision of 0.0%.

Apart from GDP news, there are also Construction output, goods trade balance, index of services, industrial production, and manufacturing production.

 

[Zerologic]

Silver prices are up but still within a range

In yesterday's trading session, Silver rose drawing a bull candle with a long body with on top and bottom candle wicks. This precious metal is often positively correlated with gold, but sometimes the two have anomalous differences. Some traders take advantage of this correlation to hedge.

In this week's trading, the Silver price tried to rise after two weeks of a downward trend, three Silver lines drew bulls candles below the middle band line but were still in the price range of 27,600 - 29,100. The countries that import the most silver are the US, Canada, Hong Kong, the UK, and Türkiye. Paying attention to these countries' economic development could be useful.

Yesterday the US core CPI data was higher than expected, the actual data was 0.3% from the expected 0.2%, while the CPI month-to-month and CPI year to year were relatively the same as expected, cooler than the previous year.

Silver price fluctuations were high in response to the CPI release, rising from a low of 28,059 to a high of 28,714. The market seems to be still waiting for the Fed to cut interest rates at the September 17-18 meeting. Whether the Fed cuts interest rates by 25 bps or 50 bps is debated. According to the Fedwatch tool from the CME Group, the forecast for the Fed to cut interest rates by 50 bps falls to 15% while the forecast for a 25 bps cut rises to 85%.

Today investors will focus on US PPI data and unemployment claims. Core PPI is expected to be 0.2% from the previous revision of 0.0% and unemployment claims are expected to be the same 227k as the previous revision.

 

[Zerologic]

Gold set a new record high after releasing PPI data and jobless claims.

After moving in a trading range for several weeks, gold prices finally broke out, and a new all-time high printed yesterday. Price draws a bullish long body candlestick with almost no shadow. Price drew a high of $2559 with a low of $2510.

According to the U.S. Bureau of Labor Statistics, The Producer Price Index for final demand increased 0.2 percent in August. Prices for final demand services increased 0.4 percent, and the index for final demand goods was unchanged. Prices for final demand advanced 1.7 percent for the 12 months ending in August.

Meanwhile, Unemployment Claims data showed an increase of 230k, higher than the expected 227k, with a revision of the previous data of 228k. This lower value does not support strengthening the US Dollar because the number of unemployed people is an important signal of overall economic health due to consumer spending is highly correlated with labor-market conditions.

On the other hand, China's second quarter gold reserves according to tradingeconomics were 2.28K tons, the same number as the first quarter of 2024 but higher than the fourth quarter of 2023. In the Chinese market, gold is showing a rise.

Meanwhile, according to the FedWatch tool from the CME Group, the forecast for the Fed cutting interest rates by 25 bps is down by 72% and a cut by 50 bps is up by 28%. The Fed is expected to cut interest rates on September 18.

 

[Zerologic]

CHFJPY extended its decline at the end of the week by drawing a long body bearish candlestick with almost no shadow. Price drew a high of 166.655 and a low of 165.565 at the FXOpen chart. This extends the bearish sentiment of the CHFJPY pair since September 3 with its up and down wave fluctuations.

CHFJPY price broke the lower band on September 6, an indication that market volatility is starting to increase. In 52-week trading, the CHFJPY price range is in the range of 159.98 - 180.06. This pair is one of the popular cross pairs and may be quite interesting considering its high volatility. However, as a cross-currency pair traders may consider the spread fee.

The current SNB interest rate is 1.50% which was released in June from the previous 1.50%, the SNB's highest interest rate is 1.75% since 2023 and has been cut twice from 1.50% to 1.25%. This month traders will wait for the SNB and BOJ interest rate policies which may affect currency values.

The BOJ interest rate is now at 0.25%, the highest since the negative interest rate policy ended. The BOJ exited negative interest rates in April 2024 with an interest rate of 0.10% which then rose to 0.25% in July, and this month traders will wait for the BOJ's policy on interest rates.

Economic news that may be of concern to CHFJPY pair traders today is Swiss PPI data which is expected to rise 0.1% from the previous data revision of 0.1%. Meanwhile, the Bank Holiday in Japan is the Respect for the Aged Day. This may affect JPY currency transactions. Apart from banks in Japan, bank holidays are also held in China to commemorate the Mid-Autumn festival.

 

[Zerologic]

EUR/USD rose across the middle band on hopes of the Fed lowering interest rates

EUR/USD price on Monday continued its rise after ending consolidation near the middle band line. Bank holidays in Japan and China don't seem to have much influence on the EURUSD market and the volatility market remains high.

EUR/USD price rose forming a long-body bullish candlestick with almost no shadow reflecting significant gains with little selling pressure.

The Fed, according to the economic calendar schedule Forexfactory, will announce its interest rate policy on September 19 which is expected to fall to 5.25% from the previous 5.50%.

Meanwhile, according to the Fedwatch tool from the CME group, the potential for the Fed to cut interest rates by 50 bps has increased by 67%, while the potential for a 25 bps cut has fallen to 33%. This change was caused by US economic data last week which strengthened hopes that the Fed might surprise the market with a 50 bps cut.

Today the important economic data that investors are focusing on is US retail sales. Core retail sales are expected to fall 0.2% from the previous revised 0.4%, and retail sales are expected to be -0.2% from the previous 1.0% to be released by the US Census.