The upbeat German business confidence assisted in a Euro rebound against the dollar away from its month’s low. The business climate index rose for the first time in seven months to 104.7. It gives some hope to the Eurozone against other weak data. The Euro Dollar was around 1.2440 this morning – still weak considering the slump of last Friday. Traders can keep their bearish view on Euro as long as it remains below the lower boundary of the flag pattern.
We can also see some trading opportunities in the Euro crosses. EURJPY for instance, left an evening star in the daily chart on last Friday and a doji in the weekly chart. Considering the Dollar Yen has been close to the 120 level and the Euro is expected to be under pressure from ECB’s further easing, the Euro Yen may fall in the mid-term.
Traders maintain their doubts for the next move of gold price as gold closed as a harami in the daily chart. Some hedge funds added their wagers on a bullishness after China joined Japan and Eurozone in the team of monetary easing. However, other participants are still keeping their bearish bets as the Fed is heading to rate hike and demands from China and India are weak compared with last year. The Harami pattern may imply that the rebound is over.
Most Asian stock markets closed higher after the China rate cut. The Shanghai Composite surged 1.85% to a 3-year high of 2533. The ASX 200 also advanced 1.08% to 5362. In the European stock markets, the UK FTSE was down 0.31%, the German DAX rose 0.54% and the French CAC Index gained 0.49%. The US market kept climbing. The S&P 500 gained 0.29% to 2069. The Dow rose 0.05% to 17818, and the Nasdaq Composite Index rose 0.88% to 4754.
On the data front, BOJ Governor Kuroda will speak at 12:00 AEDST. Canada Retail Sales and US Prelim GDP will be released at 0:30 AEDST.
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EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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