• BOJ Deputy Gov Himino: BOJ’s monetary policy has to take into account numerous factors.
• BOJ Deputy Gov Himino: Our task is to closely monitor market developments for the time being.
• BOJ Deputy Gov Himino: Not having in mind specific levels, range for neutral interest rates.
• BOJ Deputy Gov Himino: Financial conditions are accommodative right now.
• BOJ Deputy Gov Himino: Believe main scenario remains that US economy will make soft landing.
• BOJ Deputy Gov Himino: Don’t have any specific timeframe in mind when asked how long BOJ would need to monitor market to judge it has stabilized.
• BOJ Deputy Gov Himino: Our imminent task is to closely monitor financial market developments with high sense of urgency.
• BOJ Deputy Gov Himino: Will adjust degree of monetary easing if outlook of economy, prices is likely to be achieved.
• BOJ Deputy Gov Himino: Likelihood of economy, price outlook being achieved would be affected by various factors including market developments

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

IC Markets Europe Fundamental Forecast | 28 August 2024

What happened in the Asia session?

Although Australia’s monthly CPI indicator moderated lower for the second consecutive month, it was slightly higher than the forecast of 3.4%. July’s reading eased from 3.8% down to 3.5% YoY with the recent price gains attributed to categories such as food and non-alcoholic beverages; alcohol and tobacco; and healthcare. The Aussie was hovering around 0.6780 prior to this news release but it swiftly jumped to break above the threshold of 0.6800 to hit a high of 0.6813 – this currency pair should continue to climb higher as the day progresses.

What does it mean for the Europe & US sessions?

The API stockpiles registered a larger-than-anticipated drawdown as 3.4M barrels of crude were removed from storage versus the forecast of a 3.0M-decline. Despite the higher drawdown – which typically signals higher demand in the U.S. – oil tumbled slightly over 2% after three consecutive trading days of strong advances. Crude premium due to the ongoing geo-political risks in the Middle East retreated as WTI oil reversed from $78 to slide as low as $76.16 per barrel overnight – this benchmark was trading around $76.50 per barrel as Asian markets came online. Should the EIA inventories also experience a higher drawdown, it could function as a near-term bullish catalyst for crude oil later today.

The Dollar Index (DXY)

Key news events today

FOMC Member Waller Speaks (5:15 am GMT)

FOMC Member Bostic Speaks (10:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Governor Christopher Waller will be speaking at the Global Fintech Festival in Mumbai, India. Although his speech will be focused on digital payments in fintech, he could be asked questions on the outlook for future monetary policy action especially with the next FOMC meeting coming up in three weeks.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic will be participating in a moderated discussion about the economy at the Stanford Black Alumni Association in Atlanta where audience questions are expected. The dollar could face higher volatility during these respective events.

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

Weak Bullish

Gold (XAU)

Key news events today

FOMC Member Waller Speaks (5:15 am GMT)

FOMC Member Bostic Speaks (10:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Governor Christopher Waller will be speaking at the Global Fintech Festival in Mumbai, India. Although his speech will be focused on digital payments in fintech, he could be asked questions on the outlook for future monetary policy action especially with the next FOMC meeting coming up in three weeks.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic will be participating in a moderated discussion about the economy at the Stanford Black Alumni Association in Atlanta where audience questions are expected. The dollar could face higher volatility during these respective events, which would potentially drive the direction for gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

Monthly CPI Indicator (1:30 am GMT)

What can we expect from AUD today?

Although Australia’s monthly CPI indicator moderated lower for the second consecutive month, it was slightly higher than the forecast of 3.4%. July’s reading eased from 3.8% down to 3.5% YoY with the recent price gains attributed to categories such as food and non-alcoholic beverages; alcohol and tobacco; and healthcare. The Aussie was hovering around 0.6780 prior to this news release but it swiftly jumped to break above the threshold of 0.6800 to hit a high of 0.6813 – this currency pair should continue to climb higher as the day progresses.

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 rose to an overnight high of 0.6254 as demand for the greenback waned. This currency pair was trading around 0.6240 at the beginning of the Asia session – 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?

Weaker demand for the dollar drove USD/JPY under the 144-level overnight. This currency pair slipped as low as 144.68 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 Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro climbed to an overnight high of 1.1190 as the dollar weakened. This currency pair pulled back slightly to trade around 1.1170 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.1100

Resistance: 1.1245

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

No major news events.

What can we expect from CHF today?

As demand for the greenback dissipated, USD/CHF reversed off yesterday’s high at 0.8484 to fall sharply. This currency pair was trading 0.8400 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8400

Resistance: 0.8480

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 Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable hit an overnight high of 1.3266 on the back of a weak dollar. This currency pair pulled back slightly to trade around 1.3250 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.3185

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 grows stronger with each passing day pushing USD/CAD lower. This currency pair broke under 1.3450 by the end of the U.S. session and was trading 1.3440 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

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

The API stockpiles registered a larger-than-anticipated drawdown as 3.4M barrels of crude were removed from storage versus the forecast of a 3.0M-decline. Despite the higher drawdown – which typically signals higher demand in the U.S. – oil tumbled slightly over 2% after three consecutive trading days of strong advances. Crude premium due to the ongoing geo-political risks in the Middle East retreated as WTI oil reversed from $78 to slide as low as $76.16 per barrel overnight – this benchmark was trading around $76.50 per barrel as Asian markets came online. Should the EIA inventories also experience a higher drawdown, it could function as a near-term bullish catalyst for crude oil later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 28 August 2024 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 28/08/2024 first appeared on IC Markets | Official Blog.

Sentiment trades fairly mixed across major asset classes as we head towards the cash open.

That isn’t really surprising in a week like this where everyone is hesitant to put on risk while they wait for next week’s jobs data to get more clarity on the pace of Fed cuts.

FX: In FX the AUD is leading the pack to the upside (but the strength isn’t something I really agree with after this morning’s CPI), while the JPY is the laggard after comments from BoJ’s Himino which shared the same cautious views about ‘unstable’ markets and how that might impact policy.

Equity futures: China is having a bad day with the CN50 and Hang Seng both down by a decent margin, and even though EMEA and US equity futures are all trading in the green, the moves are marginal. The ES has basically not gone anywhere since the 20th.

Bonds: In fixed income, we’ve seen upside for 2-year treasuries (downside for yields) following a decent 2-year note auction last night, which calmed some nerves about issuance below 4.0%.

Commodities: Trading in the red across the board (apart from Natgas which as usual has a mind of its own). Quite surprising to see oil push lower after a -3.4M private inventory draw overnight, and makes me less excited about today’s EIA data release.

All in all, the holding pattern trading continues as markets await more news on the US labour market.

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

Yesterday we highlighted some of the important data to keep on the radar for the US Consumer Confidence print.

Even though the headline confidence number printed a solid beat of 103.3 (above the market’s max estimates), the USD still pushed lower. Part of the reason what the data under the hood which continued to show a cooling of the US labour market.

1. Jobs hard to find continued to push higher to 16.4 from the prior of 16.0. Overlaying this with the Unemployment Rate it shows why this one matters in the current context.

2. Ratio between jobs plentiful and jobs not so plentiful fell from -15.8 to -18.0, showing further cooling.

2. Ratio between present situation and future expectations. Like I mentioned yesterday, this has in past cycles been a very good warning signal for a slowdown, but it’s important to recognize that this current cycle has been like no other we’ve seen before so pinch of salt.

So, even though the headline confidence number was solid, the picture under the hood wasn’t so pretty, and shows a further cooling in the labour market.

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

The Aussie is leading the majors on the upside this morning following the latest release of monthly CPI data.

Even though the headline printed slightly higher at 3.5 than market’s expectations of 3.4, the bigger story wasn’t on the headline side but on the core measures.

Trimmed CPI YY decelerated to 3.8 from the prior of 4.1, while CPI ex volatile items and travel fell to 3.7 from 4.0.

Yes, CPI is still way too high, but what today’s data is showing us is that disinflation is underway.

Looking at the data the reaction in the AUD seems a bit out of place, and I wouldn’t be surprised to see the strength fade.

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

DXY (US Dollar Index):

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: 100.54
Supporting reasons: Identified as multi-swing low support, indicating a significant level where the price has historically found support.

1st support: 100.29
Supporting reasons: Identified with a 161.80% Fibonacci Extension, suggesting a level where the price might find support during a decline.

1st resistance: 100.92
Supporting reasons: Marked as an overlap resistance, indicating a potential level where the price might face resistance during an upward move.

EUR/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 1.1194
Supporting reasons: Identified as multi-swing high resistance, indicating a level where the price has historically faced selling pressure.

1st support: 1.1101
Supporting reasons: Marked as multi-swing low support and aligned with the 38.20% Fibonacci Retracement, suggesting a level where the price might find support.

1st resistance: 1.1251
Supporting reasons: Identified as swing high resistance, indicating a level where the price might encounter resistance during an upward move.

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: Bullish

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

Pivot: 1.3254
Supporting reasons: Identified as swing high resistance, which could act as a significant barrier to further upward movement, reinforced by the 161.80% Fibonacci Retracement level.

1st support: 1.3135
Supporting reasons: Marked as pullback support, indicating an area where the price might find stability after a decline.

1st resistance: 1.3430
Supporting reasons: Identified as pullback resistance, where the price could encounter selling pressure if it moves higher.

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
Factors contributing to the momentum: Price is below the bearish Ichimoku cloud

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

Pivot: 0.8443
Supporting reasons: Identified as pullback resistance, indicating a potential area where selling pressure may resume.

1st support: 0.8343
Supporting reasons: Supported by the 127.20% Fibonacci Extension, suggesting a significant area where the price could find support during a decline.

1st resistance: 0.8533
Supporting reasons: An overlap resistance, which could act as a barrier if the price attempts to move upward.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 143.71
Supporting reasons: Identified as an overlap support level with a 78.60% Fibonacci Retracement, suggesting it as a strong area for the price to bounce upward.

1st support: 141.75
Supporting reasons: Swing low support, indicating a significant area where the price has found support in previous declines.

1st resistance: 146.93
Supporting reasons: Multi-swing high resistance, combined with a 61.80% Fibonacci Retracement, marking a strong area where the price could face selling pressure.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 1.3458
Supporting reasons: Previously identified as a pullback support which now has been broken due to the strong bearish momentum.

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, 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: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.6798
Supporting reasons: Previously identified as a swing-high resistance which now has been broken due to the strong bullish momentum.

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: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 0.6233
Supporting reasons: Previously identified as a pullback resistance which now has been broken due to the strong bullish momentum.

1st support: 0.6162
Supporting reasons: Identified as a pullback support, 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: 0.6295
Supporting reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci projection, indicating a significant area that could halt further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

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

Pivot: 41,156.81

Supporting reasons: Identified as a pullback resistance, suggesting a potential area where buying interests could pick up to resume the uptrend.

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: 42,014.15

Supporting Reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a significant area that could halt further upward movement. 

DE40 (DAX):

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 pull back towards the 1st support.

Pivot: 18,760.10

Supporting reasons: Identified as a swing-high resistance, suggesting a potential area where selling pressures could intensify.

1st Support: 18,534.60

Supporting Reasons: Identified as an overlap support, 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, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

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 pull back towards the 1st support.

Pivot: 5,669.89

Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% Fibonacci extension, suggesting a potential area where selling pressures could intensify.

1st support: 5,561.63

Supporting reasons: Identified as an overlap support, 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: 5,860.51

Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, suggesting a critical area that could halt further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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: Bearish

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

Pivot: 2,289.04

Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st Support: 2,044.47

Supporting Reasons: Identified as a swing-low support, indicating a potential area where price could find support.

1st Resistance: 2,523.64

Supporting Reasons: Identified as an overlap 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 could fall towards the pivot and potentially make a bullish bounce off this level to 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 reaction off pivot and drop to 1st support.

Pivot: 2529.88
Supporting reasons: Identified as a multi-swing high resistance level, suggesting a strong area where the price might face selling pressure.

1st support: 2473.30
Supporting reasons: Pullback support, indicating a significant area where the price could find support during a decline.

1st resistance: 2547.88
Supporting reasons: Marked by a 127.20% Fibonacci Extension, indicating a potential area where the price might encounter resistance.

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The post Wednesday 28th August 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 28 August 2024

What happened in the U.S. session?

The Conference Board released its consumer confidence survey for the month of August where sentiment rose from 101.9 in July to 103.3 in August as overall confidence edged higher but consumers indicated growing concerns surrounding the labour market. Along with deteriorating manufacturing activity as indicated by the Richmond Manufacturing Index, the dollar index (DXY) reversed from its overnight high 100.90 to fall towards 100.50 by the end of this session.

What does it mean for the Asia Session?

Australia’s monthly CPI indicator is expected to ease to 3.4% YoY in July, down from 3.8% in the previous month. This would mark the second successive month of cooling after this index hit 4.0% YoY in May. Should inflationary pressures dissipate more than originally anticipated, it could cause the Aussie to face some headwinds this morning.

The Dollar Index (DXY)

Key news events today

FOMC Member Waller Speaks (5:15 am GMT)

FOMC Member Bostic Speaks (10:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Governor Christopher Waller will be speaking at the Global Fintech Festival in Mumbai, India. Although his speech will be focused on digital payments in fintech, he could be asked questions on the outlook for future monetary policy action especially with the next FOMC meeting coming up in three weeks.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic will be participating in a moderated discussion about the economy at the Stanford Black Alumni Association in Atlanta where audience questions are expected. The dollar could face higher volatility during these respective events.

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

Weak Bullish

Gold (XAU)

Key news events today

FOMC Member Waller Speaks (5:15 am GMT)

FOMC Member Bostic Speaks (10:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Governor Christopher Waller will be speaking at the Global Fintech Festival in Mumbai, India. Although his speech will be focused on digital payments in fintech, he could be asked questions on the outlook for future monetary policy action especially with the next FOMC meeting coming up in three weeks.

Meanwhile, Federal Reserve Bank of Atlanta President Raphael Bostic will be participating in a moderated discussion about the economy at the Stanford Black Alumni Association in Atlanta where audience questions are expected. The dollar could face higher volatility during these respective events, which would potentially drive the direction for gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

Monthly CPI Indicator (1:30 am GMT)

What can we expect from AUD today?

Australia’s monthly CPI indicator is expected to ease to 3.4% YoY in July, down from 3.8% in the previous month. This would mark the second successive month of cooling after this index hit 4.0% YoY in May. Should inflationary pressures dissipate more than originally anticipated, it could cause the Aussie to face some headwinds this morning.

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 rose to an overnight high of 0.6254 as demand for the greenback waned. This currency pair was trading around 0.6240 at the beginning of the Asia session – 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?

Weaker demand for the dollar drove USD/JPY under the 144-level overnight. This currency pair slipped as low as 144.68 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 Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro climbed to an overnight high of 1.1190 as the dollar weakened. This currency pair pulled back slightly to trade around 1.1170 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.1100

Resistance: 1.1245

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

No major news events.

What can we expect from CHF today?

As demand for the greenback dissipated, USD/CHF reversed off yesterday’s high at 0.8484 to fall sharply. This currency pair was trading 0.8400 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8400

Resistance: 0.8480

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 Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable hit an overnight high of 1.3266 on the back of a weak dollar. This currency pair pulled back slightly to trade around 1.3250 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.3185

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 grows stronger with each passing day pushing USD/CAD lower. This currency pair broke under 1.3450 by the end of the U.S. session and was trading 1.3440 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

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

The API stockpiles registered a larger-than-anticipated drawdown as 3.4M barrels of crude were removed from storage versus the forecast of a 3.0M-decline. Despite the higher drawdown – which typically signals higher demand in the U.S. – oil tumbled slightly over 2% after three consecutive trading days of strong advances. Crude premium due to the ongoing geo-political risks in the Middle East retreated as WTI oil reversed from $78 to slide as low as $76.16 per barrel overnight – this benchmark was trading around $76.50 per barrel as Asian markets came online. Should the EIA inventories also experience a higher drawdown, it could function as a near-term bullish catalyst for crude oil later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 28 August 2024 first appeared on IC Markets | Official Blog.

• Nick Timiraos: You know that -818K revision to NFP? Goldman says it should’ve been -300K
• Australia’s treasurer Chalmers: Inflation data a promising result
• BOJ Deputy Gov. Himino: The financial and capital markets remain unstable.
• Australia construction work done for Q2 0.1% versus 0.7% expected
• Australia weighted CPI YoY 3.5% versus 3.4% expected
• PBOC sets USDCNY midpoint at 7.1216 vs exp 7.1210
• Australia CPI is ahead. What technical levels are key through the release?
• The selling and trending in the USDCAD continues. What next?
• More from Israel:Thousands of soldiers from special units were mobilized for operations.
• USDCHF stretches lower and toward 2024 low
• What technical levels are in play for the EURUSD, USDJPY and GBPUSD for August 28
• Israeli launches a large scale operation against militants in the northern West Bank
• Bitcoin is a dipping below the $61,000 level and works quickly toward $60,000
• Oil – private survey of inventory shows a headline crude oil drawdown of -3.4M barrels
• Forexlive Americas FX news wrap: US dollar falls after strong two-year Treasury auction
• Dow closes at another record level. S&P and Nasdaq rise modestly after falling on Monday
• The very simple case for buying gold

The early Asian Pacific session has seen the AUD emerge as the strongest of the major currencies while the JPY is the weakest.

Fundamentally, the Australia CPI did come out a little higher than expectations at 3.5% vs 3.4%, but the good news is it seems to be moving lower after peaking at 4.0% in May.. The low for the post-spike high cycle did reach 3.4% from December to February,.

The AUDUSD is up 0.13% which is not a heck of a lot, but is up 0.39% vs the JPY. The JPY got it’s catalyst from some wishy-washy comments from BOJ Himino.

Himino highlighted the ongoing instability in financial and capital markets, emphasizing the Bank of Japan’s need to monitor these developments with utmost vigilance. He mentioned that the BOJ will carefully assess how these market changes, both domestic and international, impact economic activity, prices, and the associated risks, as well as the level of confidence in their economic outlook.

He further commented The BOJ is prepared to adjust its monetary policy if it gains confidence that its outlook for economic activity and prices will be realized (a hike reference), but stressed the importance of conducting monetary policy appropriately to achieve the 2% inflation target in a sustainable and stable manner, while maintaining close communication with market participants and other stakeholders.

He noted the need to monitor recent market volatilities, such as weaker stocks and a stronger yen, and acknowledged the importance of refining the BOJ’s approach to estimating the neutral interest rate as a useful reference. However, he cautioned that estimating the neutral rate does not automatically indicate the correct policy path.

Looking ahead to fiscal years 2025 and 2026, Himino expects a balanced state where the inflation rate aligns with the price stability target and economic growth slightly exceeds the cruising speed. Finally, he also recognized that the recent appreciation of the yen may ease import costs and profit pressures on small and medium-sized firms, but it could also reduce yen-denominated profits for export industries and Japanese multinationals.

The market interpreted the wishy-washy comments to be more dovish, pushing the USDJPY and other crosses to the upside (lower JPY).

For the USDJPY, the 50% of the move up from the 2023 low comes in at 144.58. A move above that would have traders looking back toward the 100 hour MA at 144.899 (and moving lower). Recall from yesterday, that MA stalled the rally.

For the EURUSD today, the price has reversed some of the gains from yesterday and looks toward the rising 100-hour MA at 1.11549. Like the USDJPY, yesterday, the price stalled at the 100 hour MA and reversed higher.

The Japan’s Nikkei 225 is trading down -0.22%.

Spot gold is trading down -$10.64 or -0.43% at $2514 after closing at a new record high yesterday

Bitcoin is back below $60,000 after failing above the 100/200 day MA near $63,550 last week and Monday. On Tuesday, the price ran lower bottoming at $58.900 before bouncing modest.

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

It’s going to be another quiet day on the economic calendar side today.

EU Session:

There is very little to spark excitement during the EU session with French consumer confidence the main ‘highlight’ (if we can even call it that).

US Session:

On the US side, markets might be paying more attention to tonight’s 5-year treasury auction after yesterday’s 2-year auction performance. The other data point that might get more attention than usual is the EIA inventory data, following this week’s Libya developments. As always, it’s important to adjust forecasts for the EIA release in line with the private inventory data we saw overnight.

The other potential market movers to be aware of is potential Corporate month-end flows today, as well as Nvidia earnings scheduled after the close tonight.

Good luck out there.

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

Less than a week after the BLS revised the 2023 job gains by -818K, Goldman is now arguing that the number was probably closer to -300K instead.

The reason?

Goldman says businesses avoided reporting unauthorized immigrants to the unemployment insurance system, which pushed and reported employment in last week’s benchmark revisions.

It is all water under the bridge except for the politicians out there who may have a vested interest in the number.

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

Australia/s treasurer Chalmers is speaking after the CPI data and says:

• Inflation data a promising result
• However we are not complacent because we know that people are still under pressure

The AUDUSD moved higher after the reading came in higher than the expectations of 3.4% (was 3.5%), but the high price of 0.68124 could not extend to the 61.8% retracement of the move down from the 2023 high of 0.6818.

The price is currently trading at 0.6798 which was the high from last Friday and again on Monday. Will the buyers keep the momentum going, or will the break higher fail?

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