U.S. Dollar Was The Worst Performed Currency of the Day; Gold and USD/JPY Profit Locked

The greenback was the worst performed currency of the day on Tuesday following the downbeat data released. The single currency remained under pressure as Eurozone remained weak economic growth. Sterling traders are looking forward today for numerous significant indicators scheduled to be released later today. Bank of Canada will have its policy meeting today; no changes are expected to the current monetary policy. Japan's economic growth will be the main factor that will determine the domestic currency for the day.

U.S. Dollar: The Worst Performed Currency of the Day
The U.S. dollar dropped yesterday against all the majors, following the disappointing news came out that fades rate hike expectations. The ISM non‐manufacturing fell to the lowest level since February 2010. The activity, new orders, and employment slowed down plunging the index at 51.40 far below August's figure of 55.5. The IBD/TIPP economic optimism revealed decreased sentiment in the economy for September dropping the odds for September rate hike.

Euro Under Pressure on Weak GDP Growth
The single currency remained under pressure in Tuesday's session, on the back of the weak economic growth in Eurozone. The 19 countries using the euro expanded 0.3% compared with the last quarter and 1.6% compared with the same period last year. The ECB will publish its latest GDP and inflation forecasts on Thursday.

EUR/USD – Technical Outlook
The EUR/USD pair has been looking strong over yesterday's session after a weak move in the previous days. An aggressive rally to the upside created on Tuesday which started from the 1.1140 support level. The common currency surged 1% and challenged a fresh one‐month high at 1.1260 resistance level. Also, the price surpassed above the three SMAs on the daily chart which it was a strong resistance for the bulls.

On the same chart, technical indicators entered the positive territory, endorsing the bullish thought. Going to a lower timeframe, the price is now moving well above the three SMAs, whilst the technical indicators are in the process to create overbought readings. The MACD oscillator is moving with strong momentum above both, its trigger and zero lines whilst the RSI indicator is approaching the 70 level. Our suggestion is a further upside potential move if there is a successful break above the 1.1260 strong barrier. Then the price will expose until the significant zone 1.1340 – 1.1365.

Sterling Traders Await Important Releases Today
The sterling will be volatile today, especially compared with the last two days. The manufacturing and industrial production figures for August will be released and many market participants are concerned that after Brexit decision both sectors slowed down. Moreover, the inflation report hearings will be published as well as the NIESR GDP estimate for the three months to August. All the indicators are determinable for BoE future plans and add pieces to economists' picture to gauge Brexit consequences.

GBP/USD – Technical Outlook
The GBP/USD pair surged to the highest level in two months, plunging more than 1% over yesterday's session. The currency pair surpassed the strong psychological level at 1.3400 which hold since June 15 and reached the 1.3450 resistance level. Since June the pair was moving in a trading range and a break in either direction would affect the continuation of the trend.

From the technical point of view, the penetration of the trading range will probably expose the price until the 1.3480 price or moreover until the next resistance level at 1.3830. On the 4‐hour chart, technical indicators are biased higher while the RSI indicator is sloping upwards near the 70 level. The MACD oscillator is following a positive path and is currently moving above its trigger line.

USD/JPY – Technical Outlook
The USD/JPY pair plummeted down to 101.20 price level after aggressive sell‐off which started from the rebound on the descending trend line which coincides with the 104.30 resistance level, on September 2. The pair dropped below the suggested entry level that we recommended on September 5 and reached the second target at 101.50. Currently, the currency has been developing below the 101.70 price level, and dropped more than 2% the last three days, recording the fourth negative day in a row.

The technical structure remains more bearish tone after the penetration of the latter level and that is moving below the 50‐daily SMA. On the 4‐hour chart, the pair is moving below the three SMAs which are sloping downwards. Technical indicators dropped below its mid‐levels and have corrected extreme oversold readings. The initial targets will be at 101.00 psychological level or until the resistance level at 100.60.

USD/CAD – Technical Outlook
The USD/CAD pair plunged more than 2% the last five days and now is recording the third red daily candle in a row. The commodity currency is moving in a channel since May 24 and the price is retesting the ascending line which is near the 1.2830 support level. Therefore, a break to the downside would open the way towards the 1.2760 barrier. On the other hand, the pair will probably have a pullback on the uptrend line and the price will retest the 1.2950 resistance level.

Technically, the technical indicators are following a negative path. On the daily chart, the MACD oscillator entered the negative territory and had a bearish crossover with its trigger line. Also, the Relative Strength Index (RSI) fell below the 50 level with strong momentum. On a lower timeframe, technical indicators are following the oversold area after the aggressive sell‐off of the price.

Gold – Technical Outlook
The yellow metal rose more than 2% over the last two days and created a new two‐week high. The XAU/USD pair is recording the sixth consecutive green day and penetrated the daily descending trend line to the upside. Additionally, during yesterday's session the precious metal exposed to the $1,352 resistance level and surpassed above our suggested target for the bulls at $1,341.

From the technical point of view, on the 4‐hour chart, the technical indicators are moving with very strong momentum above their overbought level. The MACD oscillator is moving well above from its zero and trigger lines while the RSI indicator is flat but above the 70 level. The three SMAs are sloping upwards and they are moving below the price. Even more, a break above the $1,352 barrier will open the doors for the $1,358 and the $1,367 resistance levels.

What to watch today
Early in the morning, the industrial production in Germany will be released. In the U.K., industrial production for July is estimated to have slowed 0.2% mom, from an increase of 0.1% mom in the previous month, while the nation's manufacturing production for the same month, is forecast to fall to 0.5% mom versus a slip of 0.3% mom in June. The U.K. Inflation Report Hearings at 09:00 GMT might bring additional volatility on the markets. The U.K. NIESR GDP for the three months to August is also coming out later in the day.

A while later, the U.S. JOLTS job openings for July will be released as well as Fed's Beige book. Later on, in Canada, we have the Bank of Canada interest rate decision. The market expects the central bank to keep the benchmark interest rate unchanged at 0.5%. In the evening, the U.S. Federal Reserve will publish its latest Beige Book. Moreover, the Q2 GDP of Japan will be released and is expected to remain flat as the quarter before. Overnight, Australia will announce data on July's trade balance which is expected to reveal a narrower deficit of AU$‐2.800B from AU$‐3.195B before.