US stocks wavered on Monday after House Democrats unveiled their tax proposals and as some Wall Street analysts predicted that stocks will retreat in the fourth quarter. The Dow Jones rose by more than 100 points while the S&P 500 and Nasdaq 100 indices tilted lower. In a report, Democrats said that they intend to raise corporate taxes from 21% to 26.5%. They also plan to boost capital gains taxes and increase taxes for the wealthy. They plan to use the additional tax collections to fund a $3.5 trillion anti-poverty plan. Still, the new plan will need to pass both the House and the Senate, where they hold majorities. At the same time, analysts at key banks like Deutsche Bank, Morgan Stanley, and Bank of America believes that stocks are due for a correction.

The British pound wavered against key currencies as traders waited for the upcoming UK employment numbers. The data, which will come in the morning session is expected to show that the country’s unemployment rate declined from 4.7% to 4.6% as the country reopened. The country’s labour market has been relatively stable than in other countries because of the furlough program that has more than 1.3 million members. However, this situation will likely change as the government moves to wind down the program. The pound is also wavering ahead of the key inflation numbers scheduled for Tuesday morning. Also, investors are reacting to the recent tax increase by Boris Johnson.

The US dollar index held steady in the overnight session as investors wait for the key American inflation data. The data, which will come out later today, is expected to show that the country’s headline inflation declined from 5.4% in July to 5.3% in August. Similarly, the core CPI is expected to fall to 4.2%. The data will come a few days after the US published relatively strong PPI data. With commodity prices and wages rising, there is a likelihood that prices will remain high for a while. Other key data scheduled for today are the IEA monthly report, Swedish CPI, and Canada’s manufacturing sales.

XAU/USD

The XAUUSD pair is trading at 1,790 ahead of the latest American inflation data. This price is significantly lower than this month’s high of 1,833. On the four-hour chart, the price is slightly below the 23.6% Fibonacci retracement level. It has also formed a bearish flag and head and shoulders patterns. Therefore, the pair will likely break out lower as bears target the 38.2% retracement level at 1,777.

XAUUSD

EUR/USD

The EURUSD pair rose to 1.1800, which was slightly above Monday’s low of 1.1770. On the four-hour chart, the price is below the Parabolic SAR and is below the 25-day moving average. The Relative Strength Index (RSI) has formed a bearish divergence pattern. It has also formed a small head and shoulders pattern. Therefore, the pair will likely maintain a bearish trend as bears target the key level at 1.1700.

EURUSD

EUR/GBP

The EURGBP pair wavered during the overnight session ahead of the latest UK jobs data. The pair is trading at 0.8532, which is slightly above last week’s low of 0.8510. On the four-hour chart, the pair moved to the 50% Fibonacci retracement level. It also moved below the 25-day and 50-day moving averages. It has also formed a bearish flag pattern. Therefore, the pair will likely break out lower this week.

EURGBP

General Risk Warning for FX & CFD Trading. FX & CFDs are leveraged products. Trading in FX & CFDs related to foreign exchange, commodities, financial indices and other underlying variables, carry a high level of risk and can result in the loss of all of your investment. As such, FX & CFDs may not be appropriate for all investors. You should not invest money that you cannot afford to lose. Before deciding to trade, you should become aware of all the risks associated with FX & CFD trading, and seek advice from an independent and suitably licensed financial advisor. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to FX or CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD holds above 1.1700 but the upside is limited

The EUR/USD pair flirted with 1.1750 but was unable to retain its modest intraday gains. Now trading in the 1.1720 price zone, bears retain control ahead of the US central bank monetary policy decision.

EUR/USD News

GBP/USD: Pressure mounts ahead of central banks’ announcements

The Fed and the BoE will make announcements this week. UK public inflation expectations are up for this year and the upcoming ones. GBP/USD is technically bearish in the near term, poised to retest August monthly low.

GBP/USD News

Gold: Further advances depend on the Fed

A better market mood put pressure on the American currency. The US Federal Reserve will announce its monetary policy decision on Wednesday. Gold advanced for a second day in a row, but additional gains are in doubt.

Gold News

Shiba Inu bulls can't hold SHIB from dropping to $0.000006

Shiba Inu price has fallen -28% over the past four trading sessions. Bears remain in control as bulls fail to complete a breakout above $0.000008. Bulls must hold $0.000007 to prevent a drop towards $0.000006.

Read more

Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot

No taper now, but when? That is the main question for the Fed in its all-important September meeting. The bank buys $120B worth of bonds every month and it is set to reduce the pace at some point – the first step toward raising interest rates. 

Read more

Majors

Cryptocurrencies

Signatures