Lukman Otunuga
ForexTime (FXTM)
Global Market
Dollar vulnerability remains the main theme which resonates within the global currency markets. The continuous diminishing expectations of a US rate hike in 2015 combined with the lack of clarity offered by the September meeting minutes has exposed the USD to more losses. Anxious market participants add additional pressure on the Dollar for which sentiment already remains bearish, and this can be reflected in the Dollar Index. The index remains technically bearish and any additional USD weakness derived from any soft economic data releases from the States this week may invite an opportunity for prices to decline to the next relevant support at 94.00.
Commodity markets experienced an appreciation in Monday’s European session on the back of Dollar weakness. Gold printed heavy gains trading to new daily highs of 1166.57 whilst WTI clipped to the $50 level. Investor anxiety inherited from the lack of direction on the US rate hike complimented with a risk-off trading environment has translated into an increased appetite for Gold. Additional risks associated with soft economic data releases from Asia may act as a catalyst which should send this yellow metal to the next relevant resistance at 1170.0 before the end of the trading week.
Asian equity markets wasted no time on Monday, with most concluding in green territory. The increased expectations that central banks may support growth by easing policy further may have temporarily mitigated the heavy risks concerning the development within the global economy. With these risks temporarily subdued, this has translated to some positive sentiment towards Asian equities in which as of writing the Shanghai Composite Index concluded +3.28% higher. Escalating expectations that further monetary policy from China may be impending should result in more upside momentum within the Shanghai Composite. This positive sentiment experienced within the Asian equities may ripple into the European and American equity markets this week.
The economic calendar today is fairly light but due to USD sensitivity the speeches from the FOMC members in the American session may promote some volatility later today. Market participants will be looking for any additional clarity or direction offered on the topic of a US rate hike.
Dollar Index
The Dollar Index is technically bearish on the daily timeframe. Prices are trading below the 20 Daily SMA and the MACD has crossed to the downside. As long as prices can keep below the 96.50 resistance, there may be a decline to the next relevant support at 94.00.
EURUSD
The EURUSD is technically bullish on the daily timeframe. Prices are trading above the 20 daily SMA and the MACD has crossed to the upside. Dollar weakness may provide the fuel to send prices to the next relevant resistance at 1.1430. A breakout above this level may open a path to 1.1620.
GBPUSD
The GBPUSD experienced an aggressive move to the upside based on USD weakness. Prices have traded above the daily 20 SMA but the MACD still trades to the downside. Prices currently reside around the 1.5350 which has been previous support in the past. A breakout above this new resistance may open a path to 1.5450.
USDJPY
The USDJPY has existed in a tight range for an extended period of time. As long as prices can keep below the 121.70 resistance, this pair remains bearish. A breakout or down within this dynamic wedge may be the first signal.
AUDUSD
The AUDUSD is technically bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. The next relevant resistance is based at 0.7450.
Disclaimer:This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 ahead of US data
EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold manages to hold above $2,300
Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.