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Canada: Still expecting decent economic growth in Q3 – NFB

165223   August 31, 2021 23:56   FXStreet   Market News  

Data released on Tuesday showed an unexpected contraction during the second quarter in GDP growth in Canada. According to National Bank of Canada analysts, growth should pick up during the third quarter to a decent rate supported by commodity prices and the easing of health measures. 

Key Quotes:

“The drop in Canada’s GDP in the second quarter came in as a surprise, as GDP by industry including the preliminary June estimate showed a 2.5% growth a month ago. This has been reduced to a flat print after significant revisions to prior months. This is the worst among the G-7 countries, an underperformance due to the health measures that have held back the economic recovery.”

“Canada’s nominal GDP is now 5.1% above its pre-recession peak, the best performance in the G7. The jump in resource prices contributed to this development, with the terms of trade at their highest level since 2008.”

“Despite the disappointing preliminary reading for July GDP, we continue to expect decent economic growth in Q3 as commodity prices hold up and the easing of health measures allows consumers to spend after months of forced frugality.”

“Growth could be affected by supply difficulties in the automotive sector that could last until the end of the year.”
 

European equity close: Soft finish but a positive month

165221   August 31, 2021 23:51   Forexlive Latest News   Market News  

Closing changes for the main European bourses:

On the month:

• FTSE 100 +1.1%
• German DAX +1.7%
• Italy MIB +2.5%
• French CAC +0.8%
• Spain IBEX +1.8%
• Stoxx 600 +1.9%

For reference, the S&P 500 was up 3.15% in the month while the euro was down 0.6%.

Here’s a monthly chart of the FTSE 100. It’s one of the few big European indexes that has failed to make it back to pre-pandemic levels (IBEX is another). It’s been consolidating now for four months; with covid seemingly under control in the UK and the reopening proceeding, I expect this will be one of the better performers through year end.

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GBP/USD erases all gains after hitting two-week highs above 1.3800

165220   August 31, 2021 23:51   FXStreet   Market News  

• US dollar spikes lower and then recovers into the London fix.
• GBP/USD remains unable to move away from the 1.3750 zone.

The GBP/USD spiked to 1.3807 during the American session, reaching the highest level in two weeks and then pulled back quickly, back to the 1.3750 zone. Cable remains unable to move away from the 1.3750 area.

The moves in GBP/USD were driven by the US dollar that is moving sideways, on a volatile session. The greenback benefit from higher US yields over the last hours. The 10-year rose back above 1.30%.

Market participants await Friday’s NFP. Economic data from the US on Tuesday, showed the Conference Board’s Consumer Confidence declined to 113.8 in August from 125.1, below the market consensus of 124.  The Chicago PMI fell to 66.8 in August from 73.4, also below expectations. On Wednesday, PMIs and the US ADP employment report are due.

Short-term outlook

The GBP/USD pair continues to move sideways around the 1.3750 level that is working as an equilibrium level. Another daily close here would be the third in a row, and the fourth out of the last five days.

A daily close above 1.3785 (20-day simple moving average) would be a positive development for the pound, while under 1.3690, the bearish pressure should intensify.

The bias still points to the downside in GBP/USD. The current bearish perspective in the short term could be negated with a firm rally above 1.3800.

Technical levels

XLM Price Prediction: Stellar buyers are ready for the opportunity to profit

165218   August 31, 2021 23:49   FXStreet   Market News  

• Stellar is on a downward trending slope. 
• A break lower could bring 7% losses. 
• Buyers have a good entry point lined up and will keep their powder dry.

Stellar (XLM) is in a classic bearish trend, with the red descending trend line acting as the backbone for the trade short sellers are in. The XLM price descent comes after hitting the high on August 16 at around $0.41. Since then, the highs kept getting lower, and the R1 monthly resistance at $0.32 quickly showed its support, holding price action up.

Let the sellers have their fun, and buyers will have an excellent entry level to take over

Sellers will try to break that R1 monthly resistance level to push buyers out of their longs and make a profit by running their stops. Expect a violent dip if that R1 resistance level gives way at $0.32. 

That is where the market is about to stop selling XLM. About 10% further down, a historical level is offering itself at $0.30. That level originates from June 20 and has shown its importance at least five times up to now. Expect that a lot of buyers will have this level as their queue to start buying XLM. That works both ways for sellers as well. They will want to book profit on their shorts when they add a position on the monthly R1 resistance level break, so this level will act as a handover from sellers to buyers.

XLM/USD daily chart

Extra motivation for buyers is the 55-day Simple Moving Average (SMA) coming in just below $0.30. Between that 55-day SMA around $0.29 and the historical level at $0.30, it would make it ideal for a tiny fade-in trade for buyers. Buyers will need to watch out for putting their stop below that 55-day SMA. 

To the upside, expect a retest of the monthly R1 resistance level at $0.32 before shooting higher toward that red descending trend line again. 

For the sellers, a run further down toward the monthly pivot at $0.26 will be tempting but questionable as buyers  look for that $0.30 level as their queue.

EUR/USD: Euro forecast to move lower to 1.16 in 6M – Rabobank

165217   August 31, 2021 23:49   FXStreet   Market News  

The euro should not receive much support from the European Central Bank (ECB) next week according to analysts from Rabobank. They continue to forecast a decline to 1.16 on a six-month horizon. 

Key Quotes: 

“Now that Jackson hole is in the rear view mirror two events are coming quickly into focus. This first is this week’s release of the US labour market data which will bring fresh information about the post pandemic healing that is taking place across the jobs market. The second is next week’s ECB meeting. This should bring clarity as to whether or not it is too early for the ECB to start signalling an intention to start scaling back its asset purchase programme. Despite the release of stronger than expected Eurozone CPI data this morning at 3.0% y/y for August, we don’t expect the EUR to pick up much lasting support from the ECB next week. We continue to forecast a move lower in EUR/USD towards 1.16 on a 6 month.”

“Although US rates are still very low across the curve, the prospect of higher US rates is not good news for USD borrowers in emerging markets. For Asian markets in particular, the debate about Fed tightening has likely emphasized the economic impact dealt by the Delta variant in recent months. Figure 1 suggests that some of the USD’s recent better tone has been a function of safe haven demand. Given continued concerns about the impact of Covid in a number of countries around the world, combined with fears liked with slowing Chinese growth, we expect that apprehension about the outlook for many emerging markets will be USD supportive into the winter in the Northern Hemisphere.”
 

US dollar catches a bid into the month-end fix

165215   August 31, 2021 23:02   Forexlive Latest News   Market News  

Dollar strengthens

There are big dollar-positive flows pushing up the US dollar into the month-end London fix. With the holiday yesterday, month-end flows could be especially large.

At the same time, it might not only be the fix as Treasury yields move up as well.

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AUD/USD retreats from two-week highs, holds above 0.7300

165214   August 31, 2021 22:56   FXStreet   Market News  

• AUD/USD consolidates daily gains during the American session.
• US Dollar Index stays in the negative territory 92.50.
• CB Consumer Confidence came in lower than market expectation in August.

The broad-based selling pressure surrounding the greenback allowed the AUD/USD pair to gather bullish momentum on Tuesday. After rising to a two-week high of 0.7343 during the European trading hours, however, the pair seems to have gone into a consolidation phase and was last seen trading at 0.7320, rising 0.38% on a daily basis.

Focus shifts to Australian GDP report

Following Friday’s sharp decline on the back of FOMC Chairman Jerome Powell’s cautious tone regarding asset tapering, the US Dollar Index (DXY) moved sideways on Monday but extended its slide on Tuesday. As of writing, the DXY was down 0.22% on the day at 92.50.

Earlier in the day, the data from the US revealed that the Conference Board’s Consumer Confidence declined to 113.8 in August from 125.1 in July, missing the market consensus of 124. Wall Street’s main indexes are posting modest daily losses after this report and allowing the DXY to limit its losses for the time being.

On Wednesday, second-quarter GDP data from Australia will be looked upon for fresh impetus. Investors expect the Australian economy to expand by 9.2% on a yearly basis. A lower-than-forecast print could make it difficult for the AUD to continue to outperform its American counterpart and vice versa.

Technical levels to watch for

XRP army play key role in SEC vs Ripple case while price remains range-bound

165213   August 31, 2021 22:56   FXStreet   Market News  

• Enraged by the confusing guidance of the Securities Exchange Commission over the years, the “XRP Army” questions the agency’s credibility.
• Ripple has filed a motion to expose XRP holdings of SEC employees, the court gives the agency until September 3 to respond.
• The altcoin’s price remains range-bound above $1.14, an upswing to $2 becomes more likely.

Ripple seeks to unearth SEC employees’ crypto holdings in a pushback against the agency in the midst of the court saga between the two entities.

XRP Army comes to Ripple’s rescue in the SEC v Ripple case

The US Securities and Exchange Commission (SEC)’s lawsuit against Ripple has garnered traders’ attention in the crypto community since December 2020. The case is drawing to a slow close as “XRP Army,” a group of XRP investors and traders, come forward to protect their interests. 

The SEC lawsuit alleges that the distribution of XRP is “one long unregistered securities trade” since 2013, and that XRP itself is a security. The agency states that every market participant who traded or exchanged XRP in the past eight years should have known it is a security. This statement was the last straw in the case that triggered the XRP Army show of strength. 

John Deaton, the founder of Crypto-Law.us, is one of the army’s big names on crypto Twitter. Deaton tweeted earlier today:

XRP Army has shared videos featuring Robert Jackson (former SEC commissioner) where the then-Chairman  encouraged “slow-moving” formal decision making. The content has reached millions of crypto traders through Twitter and YouTube as the XRP Army documents every proceeding in the SEC v Ripple case meticulously on social media. 

The latest update in the case is the SEC’s request for audio and video recordings of Ripple staff meetings. Though Ripple Labs failed to inform the plaintiff that meetings were routinely recorded, the agency claims to have learned about the same from Ripple’s former Chief Compliance Officer Antoinette O’Gorman on August 4. 

The SEC has compelled Ripple Labs to produce the recordings and the latter retaliated by filing a motion for data of SEC employees’ XRP holdings. The court has granted SEC until September 3, 2021, to respond to Ripple Lab’s motion. 

Ripple Labs stated in the motion that their previous efforts to obtain the said information from the agency have failed. The defendants noted, 

We met and conferred with the SEC on this issue on July 8, July 15, August 18, and August 25, without progress.

Though Ripple Labs is making strides in its case, XRP Army’s support has captured mainstream media attention and drawn interest from XRP traders and investors. Nearly every update has had some impact on the altcoin price. 

After remaining range-bound below $1.14, the altcoin is now set to make an upswing with the latest turn of events. FXStreet analysts have predicted that XRP’s chances for a surge to $2 have increased. 

Dallas Fed August service sector index 16.5 vs 21.7 prior

165212   August 31, 2021 22:33   Forexlive Latest News   Market News  

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Shiba Inu prepares to rebound to $0.000009

165211   August 31, 2021 22:26   FXStreet   Market News  

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Dogecoin price looks ready to resume uptrend toward $0.40

165210   August 31, 2021 22:26   FXStreet   Market News  

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US: CB Consumer Confidence drops to 113.8 in August vs. 124 expected

165209   August 31, 2021 22:17   FXStreet   Market News  

• US CB Consumer Confidence Index came in lower than expected in August.
• US Dollar Index consolidates daily losses around 92.50.

Consumer confidence in the US weakened in August with the Conference Board’s Consumer Confidence Index declining to 113.8 from 125.1 (revised from 129.1) in July. This reading came in worse than Reuters’ estimate of 124.

Further details of the publication revealed that the Present Situation Index fell to 147.3 in August from July’s revised levels of 157.2.

Market reaction

This report received little to no reaction from investors. As of writing, the US Dollar Index, which tracks the USD’s performance against a basket of six major currencies, was down 0.2% on the day at 92.51.