Dow, Gold and EURUSD Await Direction from Trade Wars and Recession Fears

Monetary process was a pivotal thesis of a past week with a Fed following in a ECB’s footsteps with a rate cut and other unusually dovish authorities hold solid in QE and disastrous rates. There is a run of high turn executive landowner speeches in a week ahead, though wavers in US-China trade family and a solid call of expansion fear headlines will contest for a attention.

US Dollar May Rise if US GDP Data, Trade War Risks Spook Markets

The US Dollar might locate a breakwater bid if US GDP information beats forecasts and cools Fed rate cut bets opposite a backdrop of frail US-China trade talks.

Euro May Keep Falling on Dovish ECB, Soft Data and Sour Sentiment

The Euro might continue to tumble as internal information bolsters dovish tongue from ECB President Draghi while US-China trade talks and Brexit risk clap broader sentiment.

Gold Price Outlook: Monthly Range on Radar Ahead of More Fed Rhetoric

Fresh comments from a slew of Federal Reserve officials might change a price of gold as there appears to be a flourishing gainsay during a executive bank.

Australian Dollar Struggling But Underpinned By More Robust Risk Appetite

The Australian Dollar took knocks final week from several directions, both unfamiliar and domestic. This week might be improved for a bulls, if usually a little.

Sterling (GBP) Price Forecast: Supreme Court Ruling May Stem Latest Rally

The UK Supreme Court will order subsequent week if PM Boris Johnson’s prorogation of Parliament was authorised or not. A disastrous statute would stop a latest Sterling convene in a tracks.

Dow Jones, DAX 30, FTSE 100 Forecasts for a Week

The Dow Jones and DAX 30 have their particular rate decisions behind them and could grasp for instruction amid trade fight headlines while a FTSE 100 will wade by continued Brexit uncertainty.

Dow, Gold and EURUSD Await Direction from Trade Wars and Recession Fears

Chart Legend:

Oil = Black

DXY = Green

XAUUSD = Gold

Yen May Reverse Versus US Dollar, US-China Trade Deal Optimism Dims

Asia Pacific Market Open Talking Points

  • US-China trade understanding certainty faded towards a finish of Friday
  • Japanese Yen soared during a responsibility of Australian, NZ Dollars
  • USD/JPY is increasingly during risk to reversing near-term gains

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Risk Trends Sour as US-China Trade Deal Hopes Fade

A souring in marketplace mood on Friday took a fee on a pro-risk Australian and New Zealand Dollars. It also didn’t assistance AUD/USD that October RBA rate cut bets firmed progressing in a session. Meanwhile, a anti-risk Japanese Yen and similarly-behaving Swiss Franc outperformed their vital counterparts. This was as Wall Street incited red, withdrawal a SP 500 down about 0.5 percent during marketplace close.

The source of excitability in financial markets stemmed from a Chinese commission group canceling trips to US farms in Montana and Nebraska, planning on returning to a mainland sooner-than-expected. This was in response to explanation from US President Donald Trump, who about an hour progressing pronounced that he was not peaceful to accept a prejudiced trade understanding with China.

As a reminder, a US pushed behind about $250b in additional tariff threats opposite China by dual weeks towards a center of October. This is as trade talks restarted during a finish of final week forward of a highly-anticipated assembly to start in a center of subsequent month. The markets took a signs of augmenting tensions between a dual nations as shortening a contingency that a countries could come to an agreement of some sort.

Monday’s Asia Pacific Trading Session

With that in mind, risk trends could mellow during a commencement of a new week that would advantage a Japanese Yen during a responsibility of a sentiment-linked counterparts, a AUD and NZD. The Australian Dollar competence see some sensitivity on Sep rough CBA Manufacturing PMI with markets focusing on rising certainty that a Reserve Bank of Australia could cut subsequent month.

Aside from that, a mercantile calendar is sincerely light diving into Monday’s Asia Pacific trade session. That should place a concentration for currencies on risk trends, generally if informal bourses follow Wall Street lower. Sentiment-linked crude oil prices competence be spared however. After marketplace tighten Friday, Trump authorized a deployment of some-more infantry to a Middle East amid Iranian attacks on Saudi Arabian appetite facilities.

Japanese Yen Technical Analysis

The Japanese Yen competence be aiming to launch an extended liberation opposite a US Dollar after holding out near-term rising support from August. This is as forward insurgency from May tamed USD/JPY’s arise during 108.48 – blue line on a draft below. That placed a banking span targeting a psychological separator between 106.78 – 107.21. If that is taken out, we competence see an acceleration in losses.

USD/JPY Daily Chart

Yen May Reverse Versus US Dollar, US-China Trade Deal Optimism Dims

Chart Created Using TradingView

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— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

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AUDUSD Rate Outlook Mired by Lower Highs and Lows Ahead of RBA Speech

Australian Dollar Talking Points

AUDUSD gapped aloft during a start of a week notwithstanding loss hopes of a US-China trade deal, yet new cost movement warns of a serve decrease in a sell rate as it carves a array of reduce highs and lows.

AUDUSD Rate Outlook Mired by Lower Highs and Lows Ahead of RBA Speech

AUDUSD gives behind a miscarry from a monthly-low (0.6688) even yet a Federal Reserve delivers back-to-back rate cuts in September, and stream marketplace conditions might continue to drag on a sell rate as a weakening opinion for tellurian enlargement puts vigour on a Reserve Bank of Australia (RBA) to serve isolate a Australian economy.

Image of RBA seductiveness rates

It seems as yet a RBA will keep a stream process during a subsequent assembly on Oct 1 as officials from China, Australia’s largest trade partner, try to spike out a trade understanding with a Trump administration, yet a executive bank might continue to validate a dovish brazen superintendence for financial process as officials keep their oath to “ease financial process serve if needed.”

In turn, Governor Philip Lowe may ready Australian households and businesses for reduce seductiveness rates as a executive bank conduct is scheduled to broach a debate after this week, and hints of a some-more accommodative position might drag on AUDUSD amid a flourishing gainsay within a Federal Open Market Committee (FOMC).

With that said, a miscarry from a monthly-low (0.6688) might continue to uncover over a entrance days, with a sell rate during risk of a serve decrease as it carves a array of reduce highs and lows.

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AUD/USD Rate Daily Chart

Image of audusd daily chart

Source: Trading View

  • Keep in mind, a AUDUSD miscarry following a banking marketplace flash-crash has been capped by a 200-Day SMA (0.7002), with a sell rate imprinting another unsuccessful try to break/close above a relocating normal in July.
  • With that said, the broader opinion for AUDUSD stays slanted to a downsideas both cost and a Relative Strength Index (RSI) continue to lane a bearish formations from late final year.
  • More recently, a miscarry from a September-low (0.6688) appears to sputtered forward of a 0.6910 (38.2% expansion) region, with a sell rate during risk of exhibiting a some-more bearish function as it carves a array of reduce highs and lows.
  • As a result, a pierce next a 0.6800 (61.8% expansion) hoop brings a Fibonacci overlie around 0.6720 (78.6% expansion) to 0.6730 (100% expansion) on a radar, with a mangle of a 2019-low (0.6677) lifting a risk for a pierce towards 0.6620 (100% expansion).

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US Dollar ASEAN Outlook Bullish, Trade Deal Hopes Fade, PHP during Risk

ASEAN Fundamental Outlook

  • US Dollar remained in determined converging mode opposite ASEAN FX
  • Drop in US-China trade understanding hopes to fuel USD gains on breakwater demand
  • Philippine Peso also eyeing executive bank rate decision, SGD to CPI data

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US Dollar and ASEAN FX Weekly Recap

At initial glance, a US Dollar seemed to outperform opposite a vital counterparts when regulating an equally-weighted index this past week. But a existence is that from a technical standpoint, a Greenback is still in a determined consolidative mode given a finish of July. Its miss of joining also widespread into opposite some of a ASEAN and Southeast-Asia fiat counterparts.

A integrate of critical exclusions this past week were a Singapore Dollar and Indonesian Rupiah – see draft below. The former tends to closely snippet a Greenback. The IDR saw many of a decrease during a front-half of a week, when an conflict on Saudi Arabian appetite infrastructure caused an oil startle that triggered risk aversion. The commodity has given partially subsided as markets incited to a Fed and US-China trade talks.

The US executive bank delivered a second seductiveness rate cut, gripping a doorway open to “extensive cuts” should they be needed. Meanwhile, a Bank of Indonesia delivered a third rebate in benchmark lending rates this year. But a Rupiah was left unvaried as a executive bank reiterated efforts to ensure their currency. Prior to Friday’s close, ASEAN currencies suffered as Chinese commission teams canceled trips to US farms.

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US Dollar ASEAN Outlook Bullish, Trade Deal Hopes Fade, PHP during Risk

US-China Trade Deal Hopes Once Again Diminish

Once top-tier mercantile eventuality risk upheld final week, it was transparent how critical US-China trade talks were to financial markets. As mentioned earlier, once reports crossed a wires that Chinese officials canceled trips to farms in Montana and Nebraska, assertive risk hatred kicked in. The MSCI Emerging Market index covered a upside gap from a conflict of Friday’s eventuality as US supervision bond yields tumbled.

The actions from Chinese officials were in response to comments from US President Donald Trump, who mentioned that he would not accept a prejudiced deal, adding that finale a trade fight by 2020 is not his priority. Taking a demeanour during a subsequent draft below, prospects of a dual nations similar to an outcome has helped to expostulate collateral issuing behind into rising markets given late August.

Emerging Market Capital Flows Amid Trade Wars

His miss of seductiveness in wanting an halt understanding discontinued prospects of an agreement, that can be noticed by a greeting in financial markets on Friday. Talks between a dual nations restarted this past week forward of a high-level assembly approaching between a mercantile powerhouses in a center of October. This is because a US behind commanding additional $250b in tariffs on China by dual weeks to around a same time.

With trade wars still are a determined hazard to global mercantile health, this bodes ill for risk collateral and will approaching adversely impact currencies such as a Philippine Peso, Malaysian Ringgit, Singapore Dollar and Indian Rupee. Meanwhile, a highly-liquid US Dollar – still augmenting a prevalence as a world’s many widely-traded currency – is approaching to advantage opposite them.

ASEAN Economic Event Risk

Focusing on ASEAN informal mercantile eventuality risk in a week ahead, a top-tier object will be a Philippine executive bank seductiveness rate announcement. Much like a easing that we have seen from executive banks in a world, a BSP is approaching to continue a trend. The benchmark lending rate is widely approaching to be lowered from 4.25 percent to 4.00 on Thursday.

As such, a warn cause is diminished, with a executive bank administrator also hinting during further reductions in haven requirement ratios. This does meant however that a Philippine Peso will continue to remove a produce advantage (alongside MYR, IDR) that is a prolonged run hazard for a currency. Inflation information will also be eyed out of Singapore and Malaysia.

For timely updates on ASEAN and Southeast Asia currencies, make certain to follow me on Twitter here @ddubrovskyFX

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— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To hit Daniel, use a comments territory subsequent or @ddubrovskyFX on Twitter

Crude Oil Prices May Fall on ECB Commentary, US PMI Data

CRUDE OIL GOLD TALKING POINTS:

  • Crude oil prices pressured as US-China trade talks wobble
  • Gold prices corner higher, though HS commanding settlement still eyed
  • ECB President Draghi, US PMI information competence green risk appetite

Sign of difficulty in US-China trade talks spooked financial markets and cooled risk ardour Friday, promulgation cycle-sensitive crude oil prices reduce alongside stocks. Gold prices rose as a defensive mood weighed on bond yields, boosting a relations interest of non-interest-bearing assets.

Looking ahead, downbeat comments from ECB President Mario Draghi competence strengthen concerns about negligence tellurian growth. That competence be followed by better-than-expected US PMI data. News-flow from a world’s largest economy has tended to outperform relations to baseline forecasts recently.

Taken together, this competence accelerate investors’ certainty in a need for serve process accommodation even as it cools Fed easing prospects, amounting to a broadly risk-off tilt. Crude oil competence continue to humour opposite this backdrop. Gold competence not gain however if fears of aloft rates are a matter during work.

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GOLD TECHNICAL ANALYSIS

Gold prices competence be combining a bearish Head and Shoulders (HS) top. Confirming a setup on a daily tighten next 1480 would indicate a totalled aim nearby $1400/oz, with support in a 1437.70-52.95 remarkable along a way. An upswing by insurgency during 1523.05 aims for a weekly draft rhythm turn during 1563.00.

Gold cost draft - daily

Gold cost draft combined regulating TradingView

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices pulled behind from final week’s bomb convene to settle during resistance-turned-support in a 58.03-76 area. A daily tighten next that paves a approach to plea support running prices aloft from Aug lows, now during 54.71. Alternatively, a pierce behind above 60.84 puts April’s pitch high during 66.60 behind in focus.

Crude oil cost draft - daily

Crude oil cost draft combined regulating TradingView

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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US Dollar May Rise vs. NOK, SEK Ahead of US GDP Data, Trade Wars

Trade Wars, Swedish Krona, Norwegian Krone, US GDP Data, US Dollar– TALKING POINTS

  • US Dollar might extend gains vs cycle-sensitive Swedish Krona, Norwegian Krone
  • Sino-US trade talks and US GDP information could place a reward on anti-risk resources
  • Ongoing Brexit tragedy will approaching clap Nordic FX and green view in Europe

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The US Dollar might locate a breakwater bid if altogether marketplace view sours amid ongoing US-China trade talks, heightening Brexit negotiations and US GDP data. The latter will be published during a finish of a week and could means a convene in a Greenback if it cools Fed rate cut bets after a many new FOMC meeting. Political risk via a week might assistance buoy USD if traders place a reward on reserve over returns.

Swedish Krona, Norwegian Krone Expected to be Most Volatile G10 Currencies Against USD

US Dollar May Rise vs. NOK, SEK Ahead of US GDP Data, Trade Wars

Note: Different tone use for British Pound is used to a) weigh non-Nordic associated sensitivity and b) prominence combined geopolitical risk reward to GBP forward of pivotal talks this week.

US-China Trade War: What’s Next?

Following a revisit of a Chinese trade attach� to Washington, a Office of a USTR published several papers surveying over 400 forms of products out of China that will be giveaway from tariffs. However, risk-positive news unsuccessful to broach a long-lasting boost to investors after Trump pronounced he would not accept a half-baked understanding and that finale a trade fight in 2020 was not a priority.

Officials are scheming for high-level talks in October, a same month Mr. Trump pushed behind a $250 billion tariff from Oct 1 to 15. While he did connote to an inter trade deal, markets might not wholly be put during palliate until a decisive agreement is reached. The mercantile dispute continues to stoke vital sensitivity opposite all item classes and is one of a primary reasons behind a OECD’s new downward rider of tellurian growth.

Brexit Risks Could Negatively Impact Swedish Economy

This week, a UK Supreme Court might confirm either Prime Minister Boris Johnson’s preference to postpone council was lawful. The statute could derail a PM’s Brexit devise if a courts find his movement is constitutionally illegitimate. The Oct 31 deadline is approaching, and MEPs continue to brawl forward of a pivotal assembly with EU officials between Oct 17-18, reduction than dual weeks until a UK’s time is up.

Riksbank policymakers have voiced augmenting regard and larger coercion about scheming for a no-deal Brexit as a Swedish export-driven economy continues to humour amid a tellurian slowdown. Deputy Riksbank Governor Per Jansson pronounced stagnation information has been “really bad” and cited slower expansion out of a Germany – Sweden’s largest trade partner – as a pivotal concern.

He also combined that there are “fundamental problems in a housing market”, citing high debt levels and housing prices that could poise a system-wide threat. Rising domicile indebtedness has been a regard among officials after roughly a decade of disastrous seductiveness rates. Borrowers naturally took on estimable sums of debt given a cost to steal collateral was so low though a prudency of their investment standards also fell.

Swedish Krona Remains Worst Performing G10 Currency This Year Amid Brexit, Trade Wars

US Dollar May Rise vs. NOK, SEK Ahead of US GDP Data, Trade Wars

US GDP, Personal Income Data May Cause US Dollar to Rally

On an annualized basis, quarter-on-quarter GDP is approaching to uncover a dual percent expansion rate, with forecasts that personal income grew by 4.7 percent. A higher-than-expected reading could cold Fed rate cut bets after a many new FOMC assembly and means a US Dollar to rally. Data in a US has been given to outperform relations to expectations, so it would not be startling to see these reports tumble in line with this trend.

USD/NOK Technical Analysis

USD/NOK continues to transport along a upward-sloping Mar 2018 support channel notwithstanding a new rate travel from a Norges Bank and rate cut from a Fed. The diligence behind a pair’s stand speaks to clever direct for a US Dollar in light of eroding fundamentals. Looking during a monthly chart, a span is during a top indicate in 17 years, and 24 percent aloft than during a arise of a 2008 financial crisis.

USDNOK – Monthly Chart

Chart display USDNOK

USD/NOK draft combined regulating TradingView

USD/SEK Technical Analysis

Much like USD/NOK, USD/SEK is trade during 17-year highs and is quietly climbing along a 20-month rising support channel. Year-to-date a span is adult over 10 percent, and a determined arise given Feb 2018 signals a clever underlying bullish bias. Looking ahead, traders with prolonged positions might wish to supplement bearing if a span shelter and re-test a widespread uptrend before resuming a ascension.

USD/SEK – Daily Chart

US Dollar May Rise vs. NOK, SEK Ahead of US GDP Data, Trade Wars

USD/NOK draft combined regulating TradingView

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— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

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