DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 102.14
Supporting reasons: Pullback support, aligned with the 61.80% Fibonacci Retracement and 127.20% Fibonacci Extension, indicating Fibonacci confluence where price might face selling pressure.

1st support: 100.91Supporting reasons: An overlap support, suggesting a potential level where price might find buying interest to prevent further declines.

1st resistance: 102.93
Supporting reasons: Pullback resistance, indicating a level where price may encounter resistance during a potential upward move.

EUR/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 1.1021
Supporting reasons: An overlap support, suggesting a key level where price might find support and bounce back.

1st support: 1.0943
Supporting reasons: An overlap support, aligned with the 61.80% Fibonacci Retracement and 161.80% Fibonacci Extension, indicating Fibonacci confluence where price might find strong support.

1st resistance: 1.1103
Supporting reasons: Pullback resistance, indicating a potential level where price may face selling pressure during an upward move.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 157.55
Supporting reasons: Pullback resistance, indicating a key level where price might face selling pressure.

1st support: 155.24
Supporting reasons: Swing low support, aligned with the 61.80% Fibonacci Projection, suggesting a potential level where price may find support and prevent further declines.

1st resistance: 160.26
Supporting reasons: Pullback resistance, indicating a level where price might encounter resistance during an upward move.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.8453
Supporting reasons: Identified as pullback support, reinforced by the 23.6% Fibonacci Retracement, indicating a potential area where the price might stall before continuing downward.

1st support: 0.8409
Supporting reasons: Marked as a multi swing low support, suggesting a significant area where previous declines have found a buying interest.

1st resistance: 0.8485

Supporting reasons: Recognized as pullback resistance, supported by the 38.2% Fibonacci Retracement, indicating a potential level where the price may face selling pressure if it retraces upward.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 1.30236

Supporting reasons: Pullback support, aligned with the 38.20% Fibonacci Retracement, suggesting a key level where price may find buying interest.

1st support: 1.2942
Supporting reasons: Pullback support, indicating a potential level where price might prevent further declines.

1st resistance: 1.3102
Supporting reasons: an overlap resistance, suggesting a key level where price may face selling pressure during an upward move.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish
Price could potentially make a bearish continuation towards 1st support.

Pivot: 187.95

Supporting reasons: an overlap resistance, aligned with the 23.60% Fibonacci Retracement, indicating a key level where price might face selling pressure.

1st support: 183.11
Supporting reasons: swing low support, indicating a potential level where price might find buying interest to prevent further declines.

1st resistance: 189.77

Supporting reasons: An overlap resistance, aligned with the 50% Fibonacci Retracement, suggesting a potential area where price may face resistance during an upward move.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 0.8392
Supporting reasons: Multi-swing low support, suggesting a key level where price might bounce back.

1st support: 0.8304
Supporting reasons: Aligned with the 61.80% Fibonacci Projection and 161.80% Fibonacci Extension, indicating Fibonacci confluence where price might find support.

1st resistance: 0.8549
Supporting reasons: An overlap resistance, aligned with the 38.20% Fibonacci Retracement, suggesting a key level where price may face selling pressure during an upward move.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 143.66
Supporting reasons: An overlap resistance, indicating a level where price might face resistance and potentially reverse.

1st support: 140.65
Supporting reasons: Aligned with the 161.80% Fibonacci Extension, suggesting a potential level where price might find strong support.

1st resistance: 145.46
Supporting reasons: An overlap resistance, indicating a potential level where price may encounter resistance during an upward move.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 1.3616
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, suggesting a potential area where selling pressures could intensify.

1st support: 1.3493
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found support recently.

1st resistance: 1.3699
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

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: 0.6640
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 0.6582
Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a key level where price has found support in the past.

1st resistance: 0.6752
Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

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: 0.6124
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 0.6077
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where price has found support in the past.

1st resistance: 0.6234
Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

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: 40,202.56
Supporting reasons: Identified as a swing-low support, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 39,944.51
Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 41,056.42

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of a descending trendline and the bearish Ichimoku Cloud add further significance to the strength of this resistance zone.

DE40 (DAX):

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: 18,099.55
Supporting reasons: Identified as a multi-swing-low support, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 17,801.10
Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 18,546.80
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of a descending trendline and the bearish Ichimoku Cloud add further significance to the strength of this resistance zone.

US500 (S&P 500): 

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: 5,385.30
Supporting reasons: Identified as a swing-low support that aligns close to a 50% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 5,302.90
Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement, indicating a key level where price has found support in the past.

1st resistance: 5,534.10
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of a descending trendline and the bearish Ichimoku Cloud add further significance to the strength of this resistance zone.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 58,128.56
Supporting reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement, suggesting a potential level where selling pressures could intensify. The presence of the bearish Ichimoku Cloud adds further significance to the strength of this resistance zone.

1st support: 53,477.38
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 60,782.67
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,390.43
Supporting reasons:Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 2,204.57
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 2,536.45
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise towards the pivot and potentially make a bearish reversal off this level to drop towards the 1st support.

Pivot: 68.13
Supporting reasons:  Identified as a pullback resistance, suggesting a potential level where selling pressures could intensify. The presence of the bearish channel and the bearish Ichimoku Cloud add further significance to the strength of this downtrend.

1st support: 66.04
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 70.62
Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area that could halt any 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: 2526.68
Supporting reasons: Multi-swing high resistance, suggesting a key level where price might face selling pressure.

1st support: 2486.64
Supporting reasons: Swing low support, indicating a level where price might find buying interest to prevent further declines.

1st resistance: 2540.67
Supporting reasons: Aligned with the 127.20% Fibonacci Extension, suggesting a potential level where price may encounter resistance during an upward move.

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The post Wednesday 11th September 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

• US politics – Taylor Swift says she will be voting for Harris
• US Vice President Harris’ campaign is pushing for a second debate with Trump
• Bank of Japan Nakagawa says ready to raise rates if inflation on track – recap
• Half way through the debate and US Treasuries are rallying. EUR higher also
• USD/JPY has dropped under 142.00 on BOJ Nakagawa comments
• BOJ’s Nakagawa speaks on one-sided yen falls
• RBA Assistant Governor Hunter Q&A – more
• PBOC sets USD/ CNY mid-rate at 7.1182 (vs. estimate at 7.1198)
• Presidential Debate begins: Harris and Trump in Philadelphia
• RBA’s Hunter speaking in Q&A now – turning point ahead for Australian economy
• Honda to reduce staff at China plants. And suspend production at 3 China plants for 2 week
• RBA’s Hunter says the Australian labour market is still tight relative to full employment
• China deflation showing signs of worsening spiral, calls for for immediate policy action
• ICYMI – Saudi Aramco cut its Arab Light crude oil price to Asia, Europe and the US
• Japan – Reuters Tankan report for September: Manufacturing sentiment hits a 7 month low
• Here’s what 14 investment bank analysts are forecasting for US CPI headline and core rates
• ICYMI – OPEC has cut its forecasts for global oil demand … again
• Fitch says the coming Federal Reserve easing cycle will be mild and slow
• MUFG expect a higher US dollar if CPI shows an unexpected rise
• Goldman Sachs says US stock market may decline by year-end, but no bear market
• ICYMI – Bank of Japan officials see little need to raise the benchmark rate at Sep meeting
• Oil – private survey of inventory shows a headline crude oil draw vs. build expected
• Forexlive Americas FX news wrap: Oil settles at the lowest since 2021
• US stocks close mixed on the day. Broader indices higher led by the Nasdaq index.
• Trade ideas thread – Wednesday, 11 September, insightful charts, technical analysis, ideas

Bank
of Japan policy board member Junko Nakagawa spoke during the session
here today (coinciding with the Harris-Trump debate … more on that,
briefly, to come). Nakagawa repeated what we have heard from Governor
Ueda and other Bank officials that the degree of monetary
accommodation will be adjusted, depending on price, economic and
financial conditions:

• real
  interest rates remain deeply negative, accommodative monetary
  conditions maintained
• BOJ
  likely to adjust degree of monetary easing if economy, prices move in
  line with its projection

Following
her comments, USD/JPY briefly dropped to around 141.50 and an eight
month high for JPY. After
a rebound towards 142.00 USD/JPY has slid again, and as I post its
testing to new lows under 141.50.

Speaking
of central banks, we also had a speech and added comments from Sarah
Hunter, Assistant Governor (Economic) at the Reserve Bank of
Australia. Hunter dropped no hints of any imminent RBA rate cut.

The
Harris vs. Trump debate was a key political focus. These debates
rarely shed much light on policy positions, and this was little
different. There was some discussion of economic policy, but it was
light on and didn’t add to what we already know. Other issues
dominated. US yields dribbled lower and EUR/USD higher, indicating
that Harris was likely perceived by markets as the ‘winner’. Betting markets
seemed to come down narrowly on Harris’ side also, this screenshot
via Bloomberg on ‘PredictIt’ odds:

As
for celebrity endorsements, Taylor Swift posted on IG after the
debate that she would be voting for Harris. I don’t think was much
of a surprise.

This article was written by Eamonn Sheridan at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 11 September 2024

What happened in the U.S. session?

The respective speeches by Federal Reserve Governors Michael Barr and Michelle Bowman did not focus on topics such as monetary policy, inflation or the labour market and both talks were pretty much non-events. The dollar index (DXY) remained elevated as it hit an overnight high of 101.76 with demand for the greenback looking intact since last Friday.

Moving over to commodities, spot prices for gold stabilized around $2,500/oz before edging higher to rise above the $2,515-mark while overhead pressures for crude oil continued to build as September’s OPEC monthly report highlighted weaker global demand in 2024 in its latest forecast. The report stated that global demand would rise by 2.03M barrels per day (bpd) in 2024, down from last month’s forecast of a 2.11M bpd increase. WTI oil dived under the $66 per barrel yesterday before retracing slightly higher by the end of this session.

What does it mean for the Asia Session?

As oil traders digest the latest OPEC report, WTI oil was sliding towards the $65.50-mark once again and is inching closer to the lows of $63.65 per barrel last seen in May of 2023. Although the API stockpiles declined for the third consecutive week to signal higher demand in the U.S., it could not prevent oil prices from tumbling lower with the oil bears firmly in control.

The Dollar Index (DXY)

Key news events today

CPI (12:30 pm GMT)

What can we expect from DXY today?

Inflationary pressures for the American consumer have dissipated quite steadily in recent months and this downward trend is likely to continue for the month of August as headline CPI is expected to moderate lower from 2.9% YoY in July to 2.6% YoY. Another month of cooler prices will cement the Federal Reserve’s first interest rate cut on 18th September and will likely create strong headwinds 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

Weak Bearish

Gold (XAU)

Key news events today

CPI (12:30 pm GMT)

What can we expect from Gold today?

Inflationary pressures for the American consumer have dissipated quite steadily in recent months and this downward trend is likely to continue for the month of August as headline CPI is expected to moderate lower from 2.9% YoY in July to 2.6% YoY. Another month of cooler prices will cement the Federal Reserve’s first interest rate cut on 18th September and will likely create strong headwinds for the dollar which could provide a boost for gold later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie stayed under the 0.6650-level overnight as demand for the greenback remained strong. This currency pair was trading around 0.6645 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6630

Resistance: 0.6700

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 6th August, 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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Higher demand for the greenback kept the Kiwi under 0.6150 overnight. This currency pair was trading around 0.6140 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.6120

Resistance: 0.6235

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 Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen appreciated yesterday as USD/JPY reversed from a high of 143.71 before tumbling under 142.50. Demand continues to remain strong putting downward pressure on USD/JPY. This currency pair was trading around 142.20 as Asian markets came online – these are the support and resistance levels for today.

Support: 141.60

Resistance: 143.70

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

Medium Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Overnight demand for the greenback drove the Euro down towards the 1.1000 threshold but it found a floor around 1.1020 and consolidated around this region by the end of the U.S. session. This currency pair was rising towards 1.1050 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.1020

Resistance: 1.1125

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 Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand safe-haven currencies picked up yesterday as the franc also strengthened alongside the yen. This increase in the franc caused USD/CHF to reverse from just under 0.8500 to dive as low as 0.8456. This currency pair remains under pressure and was sliding towards the 0.8400 threshold at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8390

Resistance: 0.8520

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

GDP (6:00 am GMT)

What can we expect from GBP today?

After stalling in June, the U.K.’s economy is anticipated to grow 0.2% MoM in July. GDP output has been pretty steady in 2024 so far while PMI activity has also expanded over the last few months. Should the latest GDP result print to the upside, the Pound could receive a boost before the start of the European trading hours.

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 Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Plummeting crude oil prices have significantly removed demand for the Loonie causing USD/CAD to surge past the 1.3600-threshold overnight. This currency pair hit a high of 1.3616 before pulling back slightly to trade around 1.3600 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.3490

Resistance: 1.3650

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points for the third consecutive meeting to 4.25% while continuing its policy of balance sheet normalization on 4th September.
• Canada’s economy grew 2.1% in the second quarter of 2024, led by government spending and business investment.
• This second quarter GDP growth was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July.
• As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2.5% and the share of components of the consumer price index growing above 3% is roughly at its historical norm.
• High shelter price inflation is still the biggest contributor to total inflation but is starting to slow while inflation also remains elevated in some other services.
• The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity.
• The Governing Council is carefully assessing these opposing forces on inflation and monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook.
• The Bank remains resolute in its commitment to restoring price stability for Canadians.
• Next meeting is on 23 October 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

OPEC’s monthly report for September highlighted weaker global demand in 2024 in its latest forecast, stating that demand would rise by 2.03M barrels per day (bpd), down from last month’s forecast of a 2.11M bpd increase. WTI oil dived under the $66 per barrel yesterday as oil traders digest the latest OPEC report and this benchmark was sliding towards the $65.50-mark once again, inching closer to the lows of $63.65 per barrel last seen in May of 2023. 

Although the API stockpiles declined for the third consecutive week to signal higher demand in the U.S., it could not prevent oil prices from tumbling lower with the oil bears firmly in control. The EIA crude oil inventories are due for release later today but even a higher drawdown in these storage levels would probably not be sufficient to stabilize prices.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 11 September 2024 first appeared on IC Markets | Official Blog.

Taylor Swift IG post endorsing Harris ( the sign off is funny)

Apologies for all the politics folks. Hopefully we can ignore it now for a few more weeks at least

This article was written by Eamonn Sheridan at www.forexlive.com.

Based on betting markets Harris has won the debate. Screenshot via Bloomberg:

Harris wants to do it all again, unsurprisingly. In October.

This article was written by Eamonn Sheridan at www.forexlive.com.

Harris’ performance is being judged favourably my markets:

• US yields dripping lower
• EUR higher

Two caveats:

• we are only half way though
• others may have a different take

This article was written by Eamonn Sheridan at www.forexlive.com.

We’ve had basically zero of substance on economic policies.

There was some blather (from both) about tariffs introduced by Trump during his term, and not removed during the Biden admin.

But that was about it. No detail.

FX not doing much.

USD/JPY update:

This article was written by Eamonn Sheridan at www.forexlive.com.

Harris vs. Trump

Begins with Vice President Harris walking over to Trump (he does not walk over to her) and shakes his hand.

I’ll post anything interesting

This article was written by Eamonn Sheridan at www.forexlive.com.

Nikkei with the info:

• Honda Motor will reduce the number of employees at its joint venture with Chinese automaker Dongfeng Motor Group
• focusing in particular on workers at its three factories that produce gasoline-powered cars.

And, via Bloomberg:

• Honda will suspend production at 3 plants for 2 weeks
• Inventory adjustment

This article was written by Eamonn Sheridan at www.forexlive.com.

Chief China economist at Morgan Stanley, Robin Xing, says the country is definitely in deflation, probably going through the second stage of deflation.

• “Experience from Japan suggests that the longer deflation drags on, the more stimulus China will eventually need to break the debt-deflation challenge.”

Xing citing falling wages.

Earlier this week the CPI report came in well below estimates, while PPI remained defaltionary:

• ForexLive Asia-Pacific FX news wrap: China’s CPI slows, PPI plunges

A series of investment bank economists and analysts have called for China to splurge around USD1.4tln in the next two years on stimulus efforts.

Good luck with that. China’s stimulus efforts have so far been small and piece meal. Chinese authorities have repeatedly said there will be no more ‘flood like’ stimulus measures.

China prolonged property downturn has prompted households to cut back on spending and increase savings.

This article was written by Eamonn Sheridan at www.forexlive.com.

Posting this as a bit of a catch-up, it seems to have gotten lost somewhere.

Saudi Arabia’s state-run oil company Saudi Aramco cut prices to Asia, Europe and the US.

October pricing for Arab Light crude oil to Asia cut by 70cents / barrel

• Saudi Aramco also lowered the price of Arab Light to Northwest Europe (lowered around 80 cents)
• and to the United States (by 10 cents)

This article was written by Eamonn Sheridan at www.forexlive.com.

The monthly Reuters Tankan survey, a guide to the Bank of Japan’s quarterly tankan survey:

• September manufacturers sentiment +4, August was +10
• September non-manufacturers sentiment +23 vs +24 in August
• December manufacturers index seen at +3, non-manufacturers at +27

Sentiment at non-manufacturers fell for the third consecutive month to its lowest in a year

• Business confidence at big
  Japanese manufacturers sank to a seven-month low in September (February was -1)

Soft Chinese
demand was cited as a concern, as were global electric vehicle slowdown and raw material inflation.

Comment from the report:

• “Our clients’ investments were falling behind schedule since
  they haven’t recovered yet from the impact of the weak Chinese
  economy,” a machinery maker manager wrote in the survey.

‘Bout that light at the end of the tunnel ….

This article was written by Eamonn Sheridan at www.forexlive.com.