White House economic adviser Larry Kudlow told CNBC on Thursday that he is encouraged by the decline seen in the weekly Jobless Claims data.
“Heavy borrowing is necessary to fight coronavirus pandemic,” Kudlow added and reiterated that coronavirus aid talks are currently at a stalemate. “I wouldn’t mind a small, interim stimulus package.”
These comments don’t seem to be having a significant impact on market sentiment. As of writing, the S&P 500 Index was down 0.05% on a daily basis at 3,378.Full Article
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The USD/JPY pair moved back closer to three-week tops set on Wednesday, with bulls still awaiting a sustained move beyond the 107.00 round-figure mark.
The managed to attract some dip-buying near the 106.55 region and moved into the positive territory for the fifth consecutive session on Thursday. The uptick was supported by a goodish intraday bounce in the US Treasury bond yields, albeit a combination of factors kept a lid on any strong follow-through positive move, at least for the time being.
The political deadlock over the next round of the US fiscal stimulus measures continued exerting downward pressure on the US dollar, which remained depressed despite upbeat US macro data. According to the Labor Department, the number of Americans filing for unemployment benefits fell to 963K as against consensus estimates pointing to a reading of 1.12 million.
Apart from this, a cautious mood around the equity markets extended some support to the safe-haven Japanese yen. This, in turn, further contributed towards capping the upside fo the USD/JPY pair. Hence, it will be prudent to wait for some strong follow-through buying beyond the 107.00 mark before positioning for an extension of the recent bounce from five-month lows.
In the meantime, the broader market risk sentiment and the USD price dynamics will be looked upon for some short-term trading opportunities.
EUR/USD is extending the upside momentum for another session on Thursday, managing to reclaim the mid-1.1800s and clinch fresh multi-day peaks at the same time.
As usual in the last couple of sessions, sellers appear to have resurfaced around the greenback, particularly after DXY failed to surpass the key barrier in the 94.00 neighbourhood.
Positive results in the ZEW survey and the Sentix index earlier in the week helped setting the firm note around the single currency. Adding to the improved sentiment in the broader risk galaxy, US weekly Claims rose less than expected while 10-year yields remain on the rise.
In the meantime, investors continue to look to any developments from a potential stimulus bill, still under debate among US lawmakers.
In the euro calendar, no surprises from the German CPI in July, with consumer prices contracting 0.5% inter-month and 0.1% from a year earlier.
EUR/USD pushed higher and recorded new highs near 1.1920 in the second half of last week, triggering a corrective move that met solid contention in the 1.17 region for the time being. The July-August rally, while largely triggered by broad-based dollar-selling and improved sentiment in the risk-associated universe, found extra sustain in auspicious results from domestic fundamentals, which have been in turn supporting further the view of a strong economic recovery following the coronavirus crisis. Also lending wings to the momentum around the euro appear the recently clinched deal on the European Recovery Fund – which helped putting political fears within the bloc to rest (for now) – and the solid position of the current account in the region.
At the moment, the pair is gaining 0.47% at 1.1838 and a breakout of 1.1916 (2020 high Aug.6) would target 1.1996 (high May 14 2018) en route to 1.2032 (23.6% Fibo of the 2017-2018 rally). On the downside, immediate support is located at 1.1695 (monthly low Aug.3) followed by 1.1495 (monthly high Mar.9) and finally 1.1448 (50% Fibo of the 2017-2018 rally).Full Article
The NZD/USD pair rose toward 0.6600 during the Asian session supported by a sharp upsurge witnessed in the positively-correlated AUD/USD pair but struggled to preserve its bullish momentum. With the risk-averse market atmosphere making it difficult for the kiwi to find demand, the pair edged lower and was last seen losing 0.22% on the day at 0.6560.
In addition to the dismal market mood, the dovish shift seen in the Reserve Bank of New Zealand’s, which expanded its quantitative easing to 100 billion NZD, policy outlook on Wednesday doesn’t allow the NZD to gather strength against its peers.
Commenting on the RBNZ’s policy announcement, “the RBNZ will want to keep its options open. In this regard, a negative OCR and foreign asset purchases will remain options on the table,” said UOB Group analysts. “The RBNZ may consider expanding the programme to include other assets (including foreign assets). This could help cap excessive gains in the New Zealand dollar.”
Meanwhile, the data published by the US Department of Labor showed on Thursday that the weekly Initial Jobless Claims fell below 1 million for the first time since the unprecedented upsurge witnessed back in March.
Although the initial market reaction provided a modest boost to the greenback, the US Dollar Index failed to stage a convincing recovery and was last seen losing 0.33% on a daily basis at 93.12.
There won’t be any significant macroeconomic data releases in the remainder of the day. In the early Asian trading hours on Friday, the Business NZ PMI data from New Zealand will be looked upon for fresh catalysts.
from a number of Fed officials and the impasse in the US government around
additional stimulus, have been playing their part to weigh on the US Dollar on
Thursday. Still risk correlated FX has been less inclined to be making any big
moves, with these same stories somewhat offsetting the Dollar outflow.
Gold is looking for a new direction after crashing by $200 before recovering by $100. Some of the recent moves were fueled by US bond auctions. These have been causing jitters in yields – sending XAU/USD down when returns rose and doing the opposite when the tide turned again.
Another reason for the decline is profit-taking – the precious metal entered overbought conditions on several charts. How is gold positioned now?
The Technical Confluences Indicator is showing that fierce resistance awaits at $1,933, which is a dense cluster including the Simple Moving Average 10-15m, the Fibonacci 23.6% one-month, the Bollinger Band 15min-Middle, and the SMA 10-1h.
The next target is close – $1,936, which is where the BB one-day Middle and the BB 15min-Upper hit the price.
Some support awaits at $1,917, which is where the Fibonacci 38.2% one-day hits the price.
A more considerable cushion is at $1.910, which is the confluence of the BB one-hour Lower and the PP one-week Support 2.
Overall, resistance is stronger than support.
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.Full Article
The greenback got a mild boost with better-than-expected US employment-related data, with US futures also advancing with the headline. The EUR/USD pair, however, is trading in the 1.1830 price zone, still bullish in the short-term, FXStreet’s Chief Analyst Valeria Bednarik reports.
“US data surprised to the upside, as Initial Jobless Claims for the week ended August 7 fell to 963K, the first time below 1M since mid-March. Continuing Jobless Claims for the week ended July 31, shrank to 15.486M, also beating the market’s expectations.”
“The 4-hour chart shows that the EUR/USD pair continues to develop well above its moving averages, while technical indicators eased modestly but hold well above their midlines. The pair could turn bearish on a break below the 1.1790 support, while a retest of the year high will be likely on an extension above 1.1870.”Full Article
The index is just below the all-time high of 3393 touched in February.
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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.Full Article
Better initial jobless claims had little effect on the foreign exchange market but one spot to watch is in USD/JPY, which stalled out at 107.00 yesterday in a minor double top. It fell to 106.57 in Asia but has battled back to a high of 106.99.
It sits just below there at the moment with many eyes watching the bond market. US 10-year yields are up 0.7 bps to 0.6817% today with the rest of the curve slightly lower. There will be a 30-year sale later today.
A break higher clears the way for a return to the late-June high of 107.44 and would be a fifth consecutive gain.
The EUR/USD pair recovered the 1.1800 level as demand for the greenback receded, reaching a higher high for the week at 1.1853. The pair held near the mentioned high ahead of US data and after Germany reported July inflation, which remained unchanged at -0.1% YoY. Enthusiasm fades, with global equities under pressure and government debt yields stable near their recent highs.
US data surprised to the upside, as Initial Jobless Claims for the week ended August 7 fell to 963K, the first time below 1M since mid-March. Continuing Jobless Claims for the week ended July 31, shrank to 15.486M, also beating the market’s expectations.
The greenback got a mild boost with better-than-expected US employment-related data, with US futures also advancing with the headline. The EUR/USD pair, however, is trading in the 1.1830 price zone, still bullish in the short-term. The 4-hour chart shows that the pair continues to develop well above its moving averages, while technical indicators eased modestly but hold well above their midlines. The pair could turn bearish on a break below the 1.1790 support, while a retest of the year high will be likely on an extension above 1.1870.
Support levels: 1.1790 1.1740 1.1690
Resistance levels: 1.1870 1.1915 1.1950Full Article