DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 100.95
Supporting reasons: Identified as a pullback support, suggesting a strong area where the price might find buying interest.

1st support: 100.54
Supporting reasons: Marked by a multi-swing low support, indicating a significant level where previous declines have halted.

1st resistance: 102.15
Supporting reasons: Noted as a pullback resistance, supported by a 61.80% Fibonacci Retracement, indicating a potential area where the price might encounter selling pressure.

EUR/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 1.1150
Supporting reasons: Identified as a pullback resistance, reinforced by the 50% Fibonacci Retracement, indicating a potential area where the price might face selling pressure.

1st support: 1.1047
Supporting reasons: Marked as pullback support, supported by the 38.20% Fibonacci Retracement, suggesting a significant level where the price may find buying interest.

1st resistance: 1.1194
Supporting reasons: Noted as a multi-swing high resistance, indicating a historical point where previous rallies have encountered resistance.

EUR/JPY:

Potential Direction: Neutral
Overall momentum of the chart: Neutral

Price could potentially fluctuate between the 1st resistance and 1st support level.

1st support: 159.37
Supporting reasons: Identified as an overlap support, aligned with the 38.20% Fibonacci Retracement, indicating a potential area where price could find support during a decline.

1st resistance: 164.05
Supporting reasons: Marked as an overlap resistance, suggesting a level where the price might face resistance if it attempts to rise.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 0.8417
Supporting reasons: Identified as an overlap support, indicating a potential area where the price might find support and reverse to the upside.

1st support: 0.8384
Supporting reasons: Marked as pullback support, suggesting a level where the price could stabilize during a downturn.

1st resistance: 0.8457
Supporting reasons: Identified as pullback resistance, indicating a potential area where upward movement might encounter selling pressure.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 1.3217
Supporting reasons: Identified as a pullback resistance, suggesting a potential area where the price might encounter selling pressure.

1st support: 1.313
Supporting reasons: Marked as pullback support, reinforced by the 23.60% Fibonacci Retracement, indicating a level where the price may find buying interest.

1st resistance: 1.3267
Supporting reasons: Noted as a swing high resistance, indicating a historical point where previous rallies have faced resistance.

GBP/JPY:

Potential Direction: Neutral
Overall momentum of the chart: Neutral

Price could potentially fluctuate between the 1st resistance and 1st support levels.

1st support: 189.33
Supporting reasons: Identified as an overlap support level, which could act as a stabilizing point for the price during a decline.

1st resistance: 193.26
Supporting reasons: Marked as swing high resistance, suggesting a potential area where the price might face selling pressure or reversal if it moves upward.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards 1st support.

Pivot: 0.8443
Supporting reasons: Identified as an overlap resistance, indicating a level where the price might encounter selling pressure.

1st support: 0.8343
Supporting reasons: Supported by the 127.20% Fibonacci Extension, suggesting a potential area where the price may find buying interest after a decline.

1st resistance: 0.8533
Supporting reasons: Another overlap resistance, indicating a historical level where the price might struggle to rise above, reinforcing the bearish outlook.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation towards 1st resistance.

Pivot: 143.45
Supporting reasons: Supported by multi-swing low support and the 78.60% Fibonacci Retracement, indicating a strong area where buyers might step in.

1st support: 141.73
Supporting reasons: Identified as a swing low support, suggesting a key level where previous declines have stabilized.

1st resistance: 149.30
Supporting reasons: Marked by multi-swing high resistance, highlighting a significant level where upward movement may face selling pressure.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall lower towards the 1st support.

Pivot: 1.3486
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. The presence of the bearish Ichimoku Cloud and the descending trendline add further significance to this resistance zone.

1st support: 1.3370
Supporting reasons: Identified as a pullback support that aligns with a 161.8% Fibonacci extension, indicating a potential area where price could find strong support.

1st resistance: 1.3561
Supporting reasons: Identified as a pullback resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of the bearish Ichimoku Cloud adds further significance to the strength of this resistance zone.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 0.6798
Supporting reasons: Identified as a pullback resistance, indicating a significant area where selling pressures could intensify.

1st support: 0.6754
Supporting reasons: Identified as an overlap support, suggesting a potential area where price has recently found support. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st resistance: 0.6859
Supporting reasons: Identified as a swing-high resistance that aligns close to a 78.6% Fibonacci projection, indicating a significant area that could halt further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6295
Supporting reasons: Identified as a pullback resistance that aligns with a 78.6% Fibonacci projection, indicating a significant area where selling pressures could intensify.

1st support: 0.6192
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement, suggesting a potential area where price could find support. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st resistance: 0.6357
Supporting reasons: Identified as a swing-high resistance, indicating a significant area that could halt further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 40,875.50

Supporting reasons: Identified as a pullback support, suggesting a potential area where buying interests could pick up to resume the uptrend. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st Support: 40,602.31

Supporting Reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, suggesting an area where price has found support recently. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st Resistance: 41,393.74

Supporting Reasons: Identified as a pullback resistance that aligns close to the all-time high, indicating a significant area that could halt further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 18,593.70

Supporting reasons: Identified as an overlap support, suggesting a potential area where buying interests could pick up to resume the uptrend. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st Support: 18,345.60

Supporting Reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where price could find support. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st Resistance: 18,894.40

Supporting Reasons: Identified as a swing-high resistance that aligns close to the all-time high and a 127.2% Fibonacci extension, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 5,496.71

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, suggesting a potential area where buying interests could pick up to resume the uptrend. The presence of the bullish Ichimoku Cloud adds further significance to the strength of this support zone.

1st support: 5,402.66

Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement , suggesting a potential area where price could find support.

1st resistance: 5,669.89

Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% Fibonacci extension, suggesting a critical area that could halt further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 57,039.06

Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound. 

1st support: 54,743.19

Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement indicating a significant area where price has found support in the past.

1st resistance: 61,687.65

Supporting reasons: Identified as an overlap resistance, indicating a potential barrier that could halt further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 2,436.20

Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st Support: 2,289.04

Supporting Reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where price could find support.

1st Resistance: 2,792.34

Supporting Reasons: Identified as a pullback resistance, indicating a historical barrier where that could halt further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish

Overall Momentum of the Chart: Bearish

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 75.33

Supporting Reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, suggesting a potential area where buying interests could pick up to stage a rebound.

1st Support: 73.88

Supporting Reasons: Identified as a pullback support that aligns with 78.6% Fibonacci retracement, indicating a potential area where price could find support.

1st Resistance: 78.50

Supporting Reasons: Identified as a pullback resistance, indicating a potential barrier that could halt further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards 1st support.

Pivot: 2529.88
Supporting reasons: Identified as a multi-swing high resistance, indicating a key level where price has previously reversed or encountered significant selling pressure.

1st support: 2473.30
Supporting reasons: Marked as pullback support, suggesting a crucial area where price might find support after a decline.

1st resistance: 2551.41
Supporting reasons: Supported by the 161.80% Fibonacci Extension, indicating a strong resistance level where the price may struggle to break through

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The post Thursday 29th August 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 29 August 2024

What happened in the U.S. session?

The EIA crude oil Inventories decreased less than originally anticipated as only 0.8M barrels of crude were removed from storage versus the estimate of a 2.7M-decline as oil prices retreated for the second day in a row. However, the losses were limited due to the ongoing supply concerns in the Middle East, particularly in Libya with several oilfields halting output as a dispute continues between rival government factions over control of the central bank and oil revenue. WTI oil fell over 1.3% overnight as it dipped under $75.50 – this benchmark was trading around $75.20 per barrel at the onset of the Asian trading hours.

Federal Reserve Governor Christopher Waller speech at the Global Fintech Festival in Mumbai, India, focused on digital payments in fintech and had no material impact on the direction of the dollar while Federal Reserve Bank of Atlanta President Raphael Bostic was more explicit as he stated that it may be “time to move” on interest rate cuts at the Stanford Black Alumni Association in Atlanta. However, President Bostic said he wanted to see confirmation from the upcoming monthly jobs and inflation report ahead of September’s FOMC meeting before committing to any rate cuts. The dollar index (DXY) was hovering around 100.55 before the start of the U.S. trading hours before rising steadily to touch an overnight high of 101.17.

What does it mean for the Asia Session?

As Asian markets digest the above news, crude oil prices are expected to remain under pressure while the demand for the greenback is expected to gain further traction, albeit at a slower pace. Prices for spot gold remain above $2,500/oz so far and should continue to grind higher as the day progresses.

The Dollar Index (DXY)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

The preliminary result for second quarter GDP is expected to remain unchanged at 2.8% YoY, matching the advance estimate. Economic output looks set to rebound from 1.4% in the first quarter, signalling a ‘goldilocks’ economy. Meanwhile, unemployment claims have moderated lower over the past three weeks and the latest estimate points to further stabilization. Should we see claims continue to moderate lower while GDP output remains steady, this set of results could function as another tailwind for the dollar later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the eighth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals continue to move into better balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have moderated, and the unemployment rate has moved up but remains low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 17 to 18 September 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

GDP (12:30 pm GMT)

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

The preliminary result for second quarter GDP is expected to remain unchanged at 2.8% YoY, matching the advance estimate. Economic output looks set to rebound from 1.4% in the first quarter, signalling a ‘goldilocks’ economy. Meanwhile, unemployment claims have moderated lower over the past three weeks and the latest estimate points to further stabilization. Should we see claims continue to moderate lower while GDP output remains steady, this set of results could function as another tailwind for the dollar and potentially limit the gains for gold later today.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie pulled back towards 0.6765 overnight before rising towards the threshold of 0.6800. This currency pair was attempting to break above this threshold as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6750

Resistance: 0.6860

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the sixth consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it still remains above the midpoint of the 2 to 3% target range.
• The CPI rose by 3.9% over the year to the June quarter, demonstrating that inflation is proving persistent. In year-ended terms, underlying inflation has now been above the midpoint of the target for 11 consecutive quarters while quarterly underlying CPI inflation has fallen very little over the past year.
• The central forecasts set out in the latest SMP are for inflation to return to the target range of 2 to 3% in late 2025 and approach the midpoint in 2026. This represents a slightly slower return to target than forecast in May, based on estimates that the gap between aggregate demand and supply in the economy is larger than previously thought.
• Momentum in economic activity has been weak, as evidenced by slow growth in GDP, a rise in the unemployment rate and reports that many businesses are under pressure. In addition, there is a risk that household consumption picks up more slowly than expected, resulting in continued subdued output growth and a noticeable deterioration in the labour market.
• Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range while recent data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and will rely upon the incoming data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi hovered under 0.6250 for most of the U.S. session before rising strongly at the beginning of the Asia session. This currency pair was heading towards 0.6300 and looks certain to hit this barrier – these are the support and resistance levels for today.

Support: 0.6200

Resistance: 0.6300

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 25 basis points, bringing it down to 5.25% in August as inflation converges on target.
• The Committee is confident that inflation is returning to within its 1-3% target band as surveyed inflation expectations, firms’ pricing behaviour, headline inflation, and a variety of core inflation measures are moving consistent with low and stable inflation.
• Economic growth remains below trend and inflation is declining across advanced economies – imported inflation into New Zealand has declined to be more consistent with pre-pandemic levels.
• Services inflation remains elevated but is also expected to continue to decline, both at home and abroad, in line with increased spare economic capacity.
• Consumer price inflation in New Zealand is expected to remain near the target mid-point over the foreseeable future.
• A broad range of high-frequency indicators point to a material weakening in domestic economic activity in recent months – these include various survey measures of business activity, electronic card transactions, vehicle traffic, house sales, filled jobs, and job vacancies; these indicators collectively provide a consistent signal that the economy contracted in recent months.
• The pace of further easing will depend on the Committee’s confidence that pricing behaviour remains consistent with a low inflation environment, and that inflation expectations are anchored around the 2% target.
• Next meeting is on 9 October 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Slightly improved demand for the dollar nudged USD/JPY higher to briefly climb above the 145-level overnight. This currency pair then slipped to edge lower towards 144.20 as Asian markets came online – these are the support and resistance levels for today.

Support: 142.00

Resistance: 147.00

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a 7-2 majority vote, to set the following guideline for money market operations for the intermeeting period and decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25% while reducing its purchase amount of Japanese government bonds (JGB) by a unanimous vote.
  2. The Bank decided, by a unanimous vote, on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the CPI (all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• Meanwhile, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period, it is likely to be at a level that is generally consistent with the price stability target of 2%.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 20 September 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

Germany CPI (Tentative)

What can we expect from EUR today?

After rising 0.3% MoM in July, the preliminary CPI for Germany is expected to remain flat in August. Should we see prices decline and surprise markets to the downside, the Euro could face some headwinds and limit its recent gains.

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

SNB Chairman Jordan Speaks (4:00 pm GMT)

What can we expect from CHF today?

SNB Chairman Thomas Jordan is due to speak in Basel where he could provide some insights on the upcoming monetary policy meeting on 26th September. After making two consecutive rate cuts to lower their key policy rate from 1.75% in February down to 1.25% in June, traders will be looking for clues on a third possible rate cut by this central bank. The franc could come under pressure and potentially drive USD/CHF lower later today.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Overnight demand for the greenback pushed Cable lower to break under the 1.3200-level. This currency pair stabilized around 1.3170 before edging higher as Asian markets came online – these are the support and resistance levels for today.

Support: 1.3180

Resistance: 1.3300

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to reduce its Official Bank Rate by 25 basis points to 5.00% on 1st August 2024.
• Five members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of two from the previous meeting while four members preferred to maintain the Bank Rate at 5.25%.
• Twelve-month CPI inflation was at the MPC’s 2% target in both May and June but it is expected to increase to around 2.75% in the second half of this year as declines in energy prices last year fall out of the annual comparison, revealing more clearly the prevailing persistence of domestic inflationary pressures. Private sector regular average weekly earnings growth has fallen to 5.6% in the three months to May, and services consumer price inflation has declined to 5.7% in June.
• GDP has picked up quite sharply so far this year, but underlying momentum appears weaker. GDP had grown by 0.7% in 2024 Q1, with that strength appearing to have continued into Q2. Growth in the first half of the year had been stronger than expected at the time of the May Report. 
• Business surveys had continued to point to underlying growth of around 0.3% per quarter, somewhat weaker than headline GDP growth. A margin of slack should emerge in the economy as GDP falls below potential and the labour market eases further.
• The Committee noted that it is now appropriate to reduce slightly the degree of policy restrictiveness but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 19 September 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Demand for the Loonie eased slightly as USD/CAD retraced higher overnight. This currency pair rose towards 1.3490 before pulling back to trade around 1.3460 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.3380

Resistance: 1.3490

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.50% while continuing its policy of balance sheet normalization.
• Canada’s economic growth likely picked up to about 1.5% through the first half of this year and is forecasted to increase in the second half of 2024 and through 2025.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026, reflecting stronger exports and a recovery in household spending and business investment as borrowing costs ease.
• CPI inflation moderated to 2.7% in June after increasing in May as broad inflationary pressures eased.
• The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm but shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.
• These preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025 and CPI inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.
• There are signs of slack in the labour market with the unemployment rate rising to 6.4%, as employment continues to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderation, but remains elevated.
• The Governing Council’s future monetary policy decisions will be guided by incoming information and assessment of their implications for the inflation outlook.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 4 September 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

The EIA crude oil Inventories decreased less than originally anticipated as only 0.8M barrels of crude were removed from storage versus the estimate of a 2.7M-decline as oil prices retreated for the second day in a row. However, the losses were limited due to the ongoing supply concerns in the Middle East, particularly in Libya with several oilfields halting output as a dispute continues between rival government factions over control of the central bank and oil revenue. WTI oil fell over 1.3% overnight as it dipped under $75.50 – this benchmark was trading around $75.20 per barrel at the onset of the Asian trading hours.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 29 August 2024 first appeared on IC Markets | Official Blog.

Today’s economic calendar is the busiest one of the week.

EU Session:

During the European session we’ll get the latest round of flash HICP data for Spain and Germany. With markets fairly optimistically priced about the ECB rate path (at least relative to that of the Fed), a big miss in the data might could offer a bit of headwind to the recent EUR optimism.

Also worth keeping in mind that we get the German statewide CPI releases a few hours ahead of the German total CPI data, which can sometimes see some volatility from the statewide releases depending on the deviations of course.

US Session:

During the US session the focus will be on 2nd estimate of US GDP for Q2, with the main event being the latest release of weekly claims data.

The market has been more sensitive to bad claims data (higher numbers) than it has to the recent good prints (lower numbers). I don’t suspect that part to have changed today, with arguably a great chance of increased volatility on a surprise pop higher compared to a push lower.

Anything close to or above the recent high of 250 could get money markets excited about increased prospects of a 50bp cut.

This article was written by Arno V Venter at www.forexlive.com.

US Stocks Fall Ahead of Nvidia Earnings – Nasdaq Down 1.1%

US stock markets experienced a downturn in trading yesterday as investors reduced their exposure ahead of the key Nvidia earnings report. The Dow dropped 0.39%, the S&P 500 fell 0.60%, but it was the Nasdaq that bore the brunt of the decline, losing 1.12% on the day. Nvidia’s earnings slightly exceeded average expectations, yet the stock still fell nearly 3.5% in after-hours trading. US Treasury yields steadied, with the 2-year yield increasing by 0.6 basis points to 3.871%, and the 10-year yield rising by 1.1 basis points to close at 3.844%. Meanwhile, the dollar strengthened across the board, gaining 0.5% on the index. Oil prices dropped again following a smaller-than-expected decline in US inventories, with Brent falling 1.13% to $78.65 and WTI down 1.34% to $74.52. Gold also declined, in line with the stronger dollar, losing 0.8% on the day to settle at $2,505 at the New York close.

Inflation Data Moves into Market Focus

US inflation data now takes centre stage in investor focus over the next few trading sessions, as the market anticipates the first of three key updates from the US before the Federal Reserve makes its final rate decision next month. The PCE Price Index is due out on Friday, with a 0.2% month-on-month increase expected. Any significant deviation from this could alter expectations for a Fed rate cut. The other two major components of the rate cut decision will be revealed in the following weeks, with the Non-Farm Payrolls report due at the end of next week, followed by the CPI numbers the week after. The market currently favours a 25-basis point cut, but weaker data from these key updates could shift expectations towards a 50-basis point cut, which would likely impact yields and the dollar.

Traders Brace for More Moves Ahead of Inflation Numbers

It looks set to be another busy day for traders today, with key data releases scheduled ahead of tomorrow’s US PCE report. The Asian session today has little on the agenda, with markets expected to open on a weaker note after a lacklustre day on Wall Street. However, the next two sessions should see more activity. The European session will feature the release of key German Prelim CPI figures throughout the day, as individual states report their data, alongside the Spanish Flash CPI numbers. The US session also has several important tier 1 data releases, including the latest quarterly GDP data and the weekly unemployment claims figures. Pending Home Sales numbers are also expected later in the session, and Swiss National Bank Chair Thomas Jordan is set to speak in Basel.

The post General Market Analysis – 29/08/24 first appeared on IC Markets | Official Blog.

According to Nikkei, Apple orders over 10% more iPhones versus last year. The phones this year will be AI equipped, but not ready until later in the year.

Apple told suppliers to prepare for 88 – 90 million iPhones versus approximately 80 million.

According to sources, the expectations is for four new iPhones, two, or possibly three, new Apple Watches and perhaps AirPods fourth-generation. The product launch will take place on September 9 in time for the holiday buying season.

This article was written by Greg Michalowski at www.forexlive.com.

The PBOC set the USDCNY midpoint at 7.1299 vs expectations of 7.1297. The prior was 7.1216

This article was written by Greg Michalowski at www.forexlive.com.

• Prior quarter 1.0%
• Australia’s capital expenditures for Q2 -2.2% versus 1.0% estimate. That equaled the largest decline since a similar fall in Q3 2021.
• Building capital expenditures -3.8 versus -0.9% last quarter
• Plant/machinery capital expenditures -0.5% versus +3.3% last quarter

weaker than expected data

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 27.1
• Own activity 37.1 versus 16.3 last month. 7-year high
• Experienced own activity rose 1 point to -21, remaining weak.
• Confidence and activity expectations were high even before the Reserve Bank’s OCR cut.
• Pricing intentions increased 3 points to 41% of firms planning price hikes in the next three months.
• Planned price increase rose from 1.4% to 1.6%.
• Inflation expectations fell from 3.2% to 2.9%, the first sub-3% reading since July 2021.

The 50.7 is the highest since May 2014

This is a strong number

This article was written by Greg Michalowski at www.forexlive.com.

Australia’s S&P/ASX 200 and exit opening to -0.28% at 8048.50. Yesterday the index moved lower initially but then rebounded into the close closing little changed on the day.

This article was written by Greg Michalowski at www.forexlive.com.

Jensen Huang from Nvidia completed an interview on Bloomberg, but the price still remains lower. Shares are trading at $117.20 down $-8.41 or -6.70%.

Looking at other Magnificent 7 stocks, they are also lower in after-hours trading:

• meta-$-4.78 or -0.92%
• Apple $-0.55 or -0.24%
• Amazon $-1.51 or -0.88%
• alphabet $-1.15 or -0.71%.
• Microsoft $-2.47 or -0.60%
• Tesla $-2.47 or -0.60%

The QQQ ETF is trading down -$5.80 or -1.23%. The e-mini S&P is trading down -0.70%.

This article was written by Greg Michalowski at www.forexlive.com.

The earnings call with Nvidia’s Jensen Huang is coming to an end and has not provided any rebound in Nvidia shares in after-hours trading.

At the end of the call, shares of Nvidia are trading down $-7.85 or -6.30% at $117.79. The closing level was at $125.61. The high close for the week was $130 on Monday. The low from August reached down to $90.69 on August 5th.

The decline is dragging down other US stocks in after-hours trading. The e-mini S&P index is trading down -0.61%

This article was written by Greg Michalowski at www.forexlive.com.