A day before, the U.S. stocks ended in the red as China's latest quarterly economic growth was reported as 6% on the year, the lowest level since 1992. The Dow Jones Industrial Average fell 255 points (-1.0%) to 26770, the S&P 500 lost 11 points (-0.4%) to 2986, and the Nasdaq Composite was down 67 points (-0.8%) to 8089.
The Conference Board U.S. Leading Index fell 0.1% on month in September (+0.0% expected, - 0.2% in August).
European stocks came under pressure, with the Stoxx Europe 600 declining 0.3%. Germany's DAX slipped 0.2%, France's CAC fell 0.7%, and the U.K.'s FTSE 100 was down 0.4%.
USD/JPY - Sideways Channel In Play
The USD/JPY closed at 108.378 after placing a high of 108.719 and a low of 108.375. The overall trend for USD/JPY remained Bearish that day. At 4:30 GMT, the National Core Consumer Price Index (CPI) from Japan remained flat at 0.3%. At 19:00 GMT, the Conference Board (CB) Leading Index from the United States for September came in as unfavorable -0.1% against positive expectations of 0.1% and weighed US Dollar and caused a downward movement in USD/JPY.
The demand for safe assets could be weighed by Brexit uncertainty next week. Due to a lack of economic data from both sides, Japan & the United States, the pair would continue to move on US-China trade talks & Brexit news.
Liu He, Chinese Vice Premier, said on Saturday that both sides have made substantial progress in the field of a trade deal and have laid an essential foundation for the signing of the phased agreement. He further said that stopping the escalation of a trade war would not only benefit China and the United States but the world as well.
Donald Trump said that in his opinion, a trade deal would be signed between US & China by November 16-17 when the Asia-Pacific Economic Corporation meeting would take place in Chile.
As for the Brexit is concerned, PM Boris Johnson faced opposition in Parliament voting against its Proposed Brexit Deal, and an amendment for extension was passed with majority votes. Boris wrote a letter of extension and sent it to European Union without his signatures followed by another signed letter of statement that he was against expansion and want Brexit on said deadline.
The uncertainty raised among investors for Brexit deals as the EU's decision to whether permit extension or not would decide the future of the UK leaving Europe.
The uncertainty has raised the risk factor in the market, and USD/JPY would likely move in an upward trend at the starting day of the week. But with Brexit being a sensitive topic, anything could happen, so traders keep your fingers crossed.
USD/JPY - Daily Technical Levels
USD/JPY - Daily Trade Sentiment
The USD/JPY extends trading near108.400 support level. The Japanese yen has formed a sideways channel, which is keeping the USD/JPY supported.
The 50 periods exponential moving average is also encouraging the pair around 108.400 level, proposing chances of a bullish inclination in the pair. In opposition, the MACD is showing bearish sentiment.
On the upper side, resistance lingers at 108.800, and the breach of this level can prolong the bullish trend until 109.20 today.
AUD/USD –Bullish Trend Line Breakout
AUD/USD was closed at 0.68540 after placing a high of 0.68564 and a low of 0.68210. The overall trend for AUD/USD remained Bullish that day. Aussie gained on Friday after the Reserve Bank of Australia's Governor, Philip Lowe, gave a statement that it was "quite Probable" that economic growth return to 3%, and there would be no need for further rate cuts.
The possibility for another cut in interest rates of RBA by 25 basis points in November, decreased, and demand for Australian Dollar increased in the market. Which ultimately gave a Bullish trend to AUD/USD.
AUD/USD moved to its highest place since 18 September on Friday. The upward trend was boosted due to weak economic data from the United States. Another factor involved in the Bullish trend was the increased uncertainty over US-china trade relations & Brexit.
AUD/USD - Technical Levels
AUD/USD - Daily Trade Sentiment
The AUD/USD was facing substantial resistance at 0.6800, which was also working as a psychological trading level. The odds of a U.S. China trade deal are driving sharp bullish trends in the Aussie.
The Aussie has formed a "three white soldiers" candlestick pattern, which is keeping the AUD/USD bullish. Technically, the support prevails at 0.6850, while the resistance is likely to be found around 0.6900 area.
USD/CAD - Descending Triangle Breakout
The USD/CAD was closed at 1.31244 after placing a high of 1.31454 and a low of 1.31188. The overall trend for USD/CAD remained Bearish that day. The positive impact of recovering Crude Oil prices on Friday on commodity related-Loonie gave strength to Canadian Dollar and move USD/CAD in the opposite direction.
On Friday, the disappointing macroeconomic release from the United States about its Leading Index of Corporate Board made US Dollar weak and added in the downward direction of USD/CAD.
The pair, however, showed a little drop as compared to Thursday's drop of prices, but it managed to drop to its lowest level since 31st July.
Chinese weak GDP data that day also gave hints that the US-China trade war would end soon, and both countries will now take the matter seriously and would also try to avoid further tariffs because weak economic data indicates that both countries have reached to alarming phase and time for an end to Trade War has arrived.
On Monday, there are Federal Elections in Canada, and from the American side, the tentative Federal Budget Balance will be released.
USD/CAD - Technical Levels
USD/CAD - Daily Trade Sentiment
The USD/CAD traded in line with our outlook for another day. The USD/CAD was facing strong support at 1.3130 area, and now this level has been violated. On the lower side, the next target is likely to be 1.3080.
The RSI and MACD are suggesting bearish bias as both of the indicators are staying below 50 and50, respectively.
The bearish engulfing on the 4-hour chart is suggesting chances of further sell-of until 1.3080 level today.
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