Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from Hamburg and welcome to our latest Daily FX Report. A ship bringing about 1,800 migrants and refugees from an eastern Greek island to the port of Piraeus arrived on Tuesday night, the Greek coastguard said. Greece has seen a spike in the number of refugees and migrants arriving on the islands by rubber dinghies via nearby Turkey this summer, with aid agencies estimating about 2,000 crossing over daily last month. After a hiatus of a few days last week, Greek authorities on Saturday resumed carrying the refugees - mostly from Syria, Iraq and Afghanistan - to the mainland by ship from the islands of Kos, Lesbos, Samos, Symi and Agathonissi. Many then carry on their journeys across mainland Europe.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspective
Activity in China's manufacturing sector contracted at its fastest pace in three years in August, according to official data, reinforcing fears of a sharper slowdown in the world's second-largest economy despite a flurry of government support measures. The Chinese government's PMI fell to 49.7 in August from the previous month's reading of 50.0. Japanese data went against the trend, with manufacturing growth the strongest in seven months, reinforcing expectations the economy will rebound from a second-quarter contraction. Adding to the nervousness, International Monetary Fund head Christine Lagarde said global economic growth was now likely to be weaker than had been expected just a few months ago. The S&P 500 is now 10 percent lower than its May record high, with the prospect of slowing global growth and an impending U.S. interest rate hike curtailing a robust bull run that saw the index gain over 200 percent from the depths of the financial crisis in 2009. Tuesday's was the S&P's worst drop since Aug. 24, when it slumped 3.94 percent after three days of increasingly volatile losses. Oil prices plummeted on Tuesday, settling 8 percent lower, as weak Chinese data extended a roller-coaster run that knocked oil to its lowest in 6-1/2 years last week before frenzied short-covering fueled a 25 percent three-session surge. The past few weeks have been among the most volatile in the modern oil market's three-decade history, with prices plunging early last week as worries about China's economic strength sent shivers through risk markets, only to bounce back fiercely as bearish traders rushed to cash in short positions.
Daily Technical Analysis
XAU/USD (Weekly)
Looking long-term, Gold has experienced a high volatility and the price moved to a low at around $1139. Since August 2014 it was moving in a range between $1303 and $1158. Recently the price sharply declined and just the support level around 1089.59 could stop the fall. The CCI is showing that the the metal is moving under the Center line upward as a signal for a possible recovery. The price touched once the highest Fibonacci resistance level (61.8).
Support & Resistance (Weekly)
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Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
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Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.