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United States Pending Home Sales (MoM) above expectations (3.2%) in August: Actual (8.8%)

76044   September 30, 2020 22:02   FXStreet   Market News  

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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

USD/CAD in search of a firm direction, flat-lined below 1.3400 mark

76043   September 30, 2020 22:02   FXStreet   Market News  

• USD/CAD seesawed between tepid gains/minor losses through the North American session.
• A pickup in oil prices underpinned the loonie and partly offset a broad-based USD strength.
• Stronger macro data from the US and Canada held investors from placing any aggressive bets.

The USD/CAD pair refreshed daily lows during the early North American session, albeit lacked any strong follow-through and quickly recovered around 25 pips thereafter.

The pair struggled to capitalize on its early uptick and witnessed a modest intraday pullback from the top end of a one-week-old trading range, around the 1.3420 region. However, a combination of factors extended some support and helped limit any deeper losses for the USD/CAD pair.

The US dollar was back in demand on Wednesday in reaction to a chaotic end of the US presidential debate and maintained its bid tone following the release of upbeat US macro data. The US ADP report showed that private-sector employers added 749K new jobs in September.

Adding to this, the final version of the US GDP print was revised higher to show that the economy contracted by 31.4% during the second quarter of 2020 as against 31.7% estimated. Separately, Chicago PMI beat expectations by a big margin and surged to 62.4 for September.

Meanwhile, the monthly Canadian GDP report showed that the economy recorded a growth of 3% in July, lower than the previous month’s 6.5% rise. This, coupled with a modest uptick in crude oil prices, extended some support to the commodity-linked loonie and exerted some pressure.

Stronger economic data from both the US and Canada held investors from placing any aggressive bets. This coupled with the fact that the USD/CAD pair has been oscillating in a range over the past one-week or so further warrant some caution before positioning for the near-term trajectory.

Technical levels to watch

United States Chicago Purchasing Managers’ Index registered at 62.4 above expectations (52) in September

76042   September 30, 2020 22:02   FXStreet   Market News  

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

WTI clinches daily highs near $39.50 ahead of EIA

76041   September 30, 2020 21:51   FXStreet   Market News  

• Prices of the WTI move higher to the mid-$39.00s.
• Crude oil demand remains under pressure on pandemic fears.
• US EIA’s weekly report on crude oil supplies comes up next.

Prices of the barrel of the American benchmark for the sweet light crude oil are partially fading Tuesday’s pullback and manage to regain the $39.50 region ahead of key supply data.

WTI looks to data, pandemic

Prices of the West Texas Intermediate regain upside traction following Tuesday’s sharp pullback to multi-day lows in the $38.40 region per barrel.

The positive price action in crude oil prices appear bolstered after better-than-expected results from the US docket, where both Q2 GDP figures and the ADP gauge came in above expectations.

The better mood in crude oil came despite the resumption of the buying bias in the greenback and the persistence of the risk aversion.

Indeed, and despite the uptick, traders remain worried amidst the unabated advance of the coronavirus pandemic and its impact on the growth outlook and ultimately on the demand for crude oil.

Late on Tuesday, the API reported an 831K drop in US crude oil inventories during the week ended on September 25. Coming up next, the EIA will publish its official report on crude oil supplies.

WTI significant levels

At the moment the barrel of WTI is up 0.62% at $39.37 and faces the next hurdle at $41.46 (weekly high Sep.18) seconded by $43.75 (monthly high Aug.26) and finally $48.64 (monthly high Mar.3). On the other hand, a breach of $38.44 (weekly low Sep.29) would aim for $36.15 (monthly low Sep.8) and then $31.16 (low May 28).

US Treasury Sec. Mnuchin: Hopeful a stimulus deal can be reached

76040   September 30, 2020 21:51   FXStreet   Market News  

While speaking at a conference organized by CNBC, US Treasury Secretary Steven Mnuchin said on Wednesday that he is hopeful that a coronavirus aid deal can be reached between Democrats and the White House, as reported by Reuters.

Additional takeaways

“Will continue talks on coronavirus stimulus with House Speaker Pelosi, I think they can reach a reasonable compromise.”

“Stock market strength is an indicator of Trump’s economic plan.”

“If we can’t get a stimulus deal done before the election, will come back and try to negotiate a deal after the election.”

“We should know if the administration and Democrats have an overall understanding on coronavirus aid by Thursday.”

Market reaction

The S&P 500 Index opened modestly higher on Wednesday and was last seen gaining 0.4% on the day at 3,348.

Brazil Nominal Budget Balance came in at -121.88B, below expectations (-98.3B) in August

76039   September 30, 2020 21:45   FXStreet   Market News  

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Brazil Primary Budget Surplus came in at -87.59B, above expectations (-95.3B) in August

76038   September 30, 2020 21:45   FXStreet   Market News  

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Gold Price Analysis: XAU/USD rallies back to $1900 mark, lacks follow-through

76037   September 30, 2020 21:35   FXStreet   Market News  

• Gold reversed an intraday dip to 100-hour EMA, around the $1882-81 region.
• Mixed oscillators on hourly/daily charts warrant some caution for bullish traders.
• Any further move up might be seen as a selling opportunity amid stronger USD.

Gold attracted some dip-buying near 100-hour EMA and rallied back closer to the top end of its daily trading range during the early North American session. Bulls might now be looking to build on the momentum further beyond the key $1900 barrier.

The mentioned level marks a previous strong horizontal support breakpoint, which if cleared decisively might trigger some aggressive short-covering move. The XAU/USD might then accelerate the recovery momentum further towards the $1925 resistance zone.

Bullish technical indicators on hourly charts reinforce the constructive outlook. However, oscillators on the daily chart are yet to confirm the bullish bias and warrant some caution before positioning aggressively for any further appreciating move.

Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly amid some renewed US dollar buying interest, which tends to undermine demand for the dollar-denominated commodity.

On the flip side, a sustained break below the $1882-80 region (100-hour EMA) will set the stage for an extension of the recent downward trajectory. Bearish traders might drag the commodity back towards challenging 100-day SMA support, around the $1849-48 region.

Gold 1-hourly chart

Technical levels to watch

AUD/USD edges higher to 0.7150 area after US data

76036   September 30, 2020 21:33   FXStreet   Market News  

• AUD/USD is posting modest gains near mid-0.7100s on Wednesday.
• US Dollar Index is staying above 94.00 in early American session.
• Data from US showed economy contracted by 31.4% in Q2.

The AUD/USD pair rose to 0.7150 in the early trading hours of the American session but seems to be having a difficult time preserving its bullish moment. As of writing, the pair was up 0.13% on the day at 0.7137.

DXY edges lower after US data

The data from the US showed on Wednesday that the real Gross Domestic Product (GDP) in the second quarter contracted by 31.4% on a yearly basis. This reading came in slightly better than the market expectation of -31.7%. Additionally, the ADP Employment Change for September arrived at +749K and surpassed analysts’ estimate of 650K.

The S&P 500 futures pared early gains after this data to reflect a positive shift in market sentiment. The US Dollar Index, on the other hand, erased a portion of its daily gains and was last seen gaining 0.17% on the day at 94.04.

ISM Chicago’s Purchasing Managers’ Index and Pending Home Sales data will be released later in the session. If these figures coming stronger than expected, Wall Street’s main indexes could gain traction and put additional weight on the greenback in the second half of the day.

On Thursday, the AiG Performance of Manufacturing Index and the Commonwealth Bank Manufacturing PMI data will be featured in the Australian economic docket. 

Technical levels to consider

US Dollar Index remains firm above the 94.00 mark

76035   September 30, 2020 21:33   FXStreet   Market News  

• DXY navigates withing a side-line theme above 94.00.
• US ADP report showed the private sector added 749K jobs.
• US Q2 GDP contracted 31.4%, a tad less than estimated.

The greenback, when gauged by the US Dollar Index (DXY), keeps the bid tone unchanged above the 94.00 yardstick following US data results.

US Dollar Index stays bid, looks to Payrolls

The index keeps the buying interest well and sound on Wednesday and manages well to keep business above 94.00 the figure following key releases in US calendar.

In fact, the dollar trades within a consolidative mood despite the ADP report showed the US private sector created nearly 750K jobs during September, surpassing initial estimates. In the same line, final Q2 GDP figures noted the economy contracted at an annualized 31.4% during April-June period, slightly above expectations.

In the meantime, markets remain biased towards the risk-off trade and continue to underpin the so far positive performance of the buck.

Later in the session, August’s Pending Home Sales are due along with the Chicago PMI and the EIA’S weekly report on crude oil inventories.

What to look for around USD

The index started the week on a weak note, although it manages well to keep the trade just above the 94.00 yardstick for the time being. It seems the dollar met an important hurdle at the 94.70 region, where coincide a 6-month resistance line. Occasional bullish attempts in DXY are (still) seen as temporary, however, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections and over further monetary/fiscal stimulus.

US Dollar Index relevant levels

At the moment, the index is advancing 0.18% at 94.04 and a break above 94.74 (monthly high Sep.25) would open the door to 95.36 (100-day SMA) and finally 96.03 (50% Fibo of the 2017-2018 drop). On the other hand, the next support is located at 93.51 (55-day SMA) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop).

EUR/JPY meets support near 123.60 after data

76034   September 30, 2020 21:33   FXStreet   Market News  

• EUR/JPY drops and rebounds from the 123.60 region.
• The better mood in the dollar weighs on the cross on Wednesday.
• US ADP, GDP surprised to the upside in the calendar.

The resumption of the risk aversion is lending support to the demand for the greenback and weighs on EUR/JPY, which has so far met contention in the 123.60 area on Wednesday.

EUR/JPY is now focused on upcoming data

EUR/JPY is fading part of the recent 2-day advance to the 124.20 region, area coincident with a resistance line off the June 22 low at 119.31.

The improved sentiment around the buck comes in tandem with the resumption of the risk-off trade among investors on the back of the unremitting advance of the second wave of the COVID-19 pandemic.

In addition, the recent presidential debate between President Donald Trump and his Democrat adversary Joe Biden seems to have casted more questions than answers and it appears to have been also collaborating with the demand for the dollar.

Earlier in the session, ECB’s Christine Lagarde once again showed concerns over the low inflation levels in the region, while Board member Madis Müller talked down the level of the exchange rate.

In the docket, German Retail Sales and the labour market surprised to the upside, while Italian consumer prices are expected to contract more than expected in September.

In the US, the ADP employment report came in at 749K in for the month of September and the final print of the Q2 GDP showed the economy contracted slightly less than forecasted. Additional data include Pending Home Sales, the Chicago PMI and the EIA’s report on crude oil stockpiles.

EUR/JPY relevant levels

At the moment the cross is losing 0.18% at 123.79 and a move below 122.37 (monthly low Sep.28) would open the door to 120.91 (200-day SMA) and finally 119.31 (monthly low Jun.22). On the flip side, the next up barrier is located at 124.60 (55-day SMA) followed by 126.46 (weekly high Sep.10) and then 127.07 (2020 high Sep.1).

EUR/USD: Deteriorated market mood leads to dollar gains

76033   September 30, 2020 21:33   FXStreet   Market News  

A dismal market mood has helped the greenback throughout the first half of the day. The EUR/USD pair retreated from the 1.1754 daily high to trade around the 1.1700 level ahead of US data and following the release of German macroeconomic figures, FXStreet’s Chief Analyst Valeria Bednarik reports. 

Key quotes

“Retail Sales in Germany were up by 3.1% in the month, better than anticipated, while the unemployment rate improved to 6.3% in September. The US released the ADP survey, which showed that the private sector added 749K new jobs in September, beating the market’s expectations of 650K. The country also published the final reading of Q2 GDP, which resulted in -31.4% slightly better than the previous estimate of -31.7%. US figures had a limited impact on the pair, although equities ticked higher with the news.”

“The 4-hour chart shows that the pair is losing its bearish strength, but also that selling interest is limited. A bullish 20 SMA now converges with the 23.6% retracement of the latest daily decline in the 1.1670 price zone, while a bearish 100 SMA reinforces the 61.8% retracement at 1.1770. Technical indicators eased from their highs, but remain well into positive levels.”