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US 10-year Treasury yields consolidate losses after the lowest daily close since February

August 3, 2021 09:05   FXStreet   Market News  

• US 10-year Treasury yields snap two-day downtrend near July lows.
• Yields closed near multi-day low after US ISM data, CDC comments amplified Delta covid variant concerns.
• The world’s largest pension fund’s cut of US bond weight adds to the T-bond yields’ weakness.
• US infrastructure spending talks, IMF’s historical additional to SDR defend bond bears.

After a dismal start to the week, market sentiment improves during Tuesday’s Asian session. While portraying the mood, the US 10-year Treasury yields add 1.8 basis points (bps) to flash the 1.18% coupon rate by the press time.

The risk barometer slumped to the lowest since July 20, also printing the lowest daily closing since February, the previous day amid escalating virus woes and downbeat US data.

Downbeat activity numbers from the world’s top two economies, namely the US and China, raised questions over the recovery moves from the pandemic. Beijing’s official gauge marked the slowest expansion in 17 months, followed by downbeat Caixin Manufacturing PMI, whereas the US ISM Manufacturing PMI eased to 59.5, versus 60.9 forecast and 60.6 prior readouts, during the stated period.

Further, the US Centers for Disease Control and Prevention (CDC) highlighted the Delta variant of the virus as “likely more severe” than earlier versions, per an internal report, made public on Friday, said Reuters. On the same line, the reintroduction of the local lockdowns in China and Aussie hardships due to the COVID-19 strain also amplifies the virus woes.

Alternatively, US Senators are hopeful of getting the much-awaited stimulus passed during this week. Further, the International Monetary Fund (IMF) announced the historical allocation of $650 billion to its Special Drawing Rights (SDRs) during late Monday.

Amid these plays, S&P 500 Futures rise 0.25% after a downbeat start to the week on Wall Street whereas Asian stocks trade mixed by the press time.

Looking forward, market players will keep their eyes on the virus updates and news from the US Senate for fresh impulse amid a light calendar. However, pre-NFP caution could limit the volatility.

Read: Forex Today: Dollar weak ahead of first-tier events

EUR/GBP retreats from 0.8550 ahead of German PMI data

August 3, 2021 09:05   FXStreet   Market News  

• EUR/GBP remains under pressure on Tuesday.
• The Euro remains muted despite the upbeat economic data.
• The sterling gains on the strong PMI data, coronavirus ebb.

EUR/GBP prints some minor losses in the Asian trading hours on Tuesday. The pair failed to capitalise on the previous day’s gain and retreats below  0.8550. 

At the time of writing, EUR/GBP is trading at 0.8544 down 0.04 % for the day.

The shared currency continues to decline against the pound despite some recent strong economic numbers. The IHS Markit Eurozone Manufacturing PMI came at 62.8 in July, as compared to market estimates of 62.6.

The Euro Area economy rose to 2.0% in June on a quarterly basis, beating the market expectations of 1.5% growth. Investors expected that the European Central Bank (ECB) would remain dovish in the near term after policymakers pledged last month to keep interest rates at record levels.

On the other hand, the sterling gained some traction on the optimism of falling coronavirus infections in the UK and on the upcoming Bank of England (BOE) policy meeting on Thursday.

Investors anticipate that BOE will not change its current monetary policy stance, the focus will be given to the forward guidance on growth and inflation.

As for now, the market dynamics continue to influence the pair’s performance in the short term.

EUR/GBP additional levels

EUR/AUD Price Analysis: Bears breaking from hourly support ahead of RBA

August 3, 2021 08:56   FXStreet   Market News  

• EUR/AUD bears are taking over ahead of the RBA event. 
• There s a daily support target that could be achieved ahead of the event. 

In a prior analysis from 28 July, it was illustrated that the bulls had wings for higher highs:

Prior analysis, daily chart

”Bulls are in control and seek a higher daily high in a continuation of the bullish trend.”

Live market analysis

The bulls indeed moved higher and now the price is testing support ahead of the Reserve Bank of Australia which is expected to pish back ideas of tapering due to the risk of covid. 

This leaves scope for an upside continuation for the sessions ahead. 

The 1.62 area could come under fast pressure but a fuller retracement to at least the 38.2% Fibonacci could be on the cards leading into the meeting. 

If the meeting does not offer anything for the bulls, then the prior support in the 1.5980 regions would be vulnerable where the 21-EMA would reside as a further conviction for the bears to target:

1-hour chart

Meanwhile, the price is attempting a breakout on the hourly time frame to target the daily support as follows:

AUD/JPY Price Analysis: Remains pressured around mid 80.00s ahead of RBA

August 3, 2021 08:45   FXStreet   Market News  

• AUD/JPY refreshes intraday high during bearish consolidation near two-week low.
• Sustained trading below 200-DMA, five-week-old falling trend line favor sellers.
• Horizontal area from mid-February becomes the key hurdle to the north.

AUD/JPY picks up bids to 80.50, up 0.05% near intraday high, during Tuesday’s Asian session. In doing so, the cross-currency pair snaps a two-day downtrend while bouncing off the lowest since July 21.

Even so, the quote remains below 200-DMA, not to forget a downward sloping trend line from June 25.

Given the weaker conditions of the RSI line backing the pair’s sustained trading below the important moving average and resistance line, AUD/JPY bears are likely to keep the reins ahead of the RBA.

Should the Aussie central bank convey a dovish message, as it is likely to due to the Delta covid variant outbreak in Australia, AUD/JPY may not hesitate to challenge July’s low, also the lowest since early February, surrounding 79.85.

During the fall the 80.00 threshold may offer an intermediate halt whereas the 50% Fibonacci retracement level of October 2020 to May 2021 upside, near 79.50, becomes crucial support to watch afterward.

On the flip side, a clear break of the stated resistance line near 80.90 will need validation from the 81.00 round figure before confronting the 200-DMA level close to 81.50.

Even if the AUD/JPY bulls manage to cross the 81.50 hurdle, a horizontal area comprising multiple levels since February, around 82.00–82.15 will be a tough nut to crack for them.

Overall, AUD/JPY trend remains bearish ahead of the key RBA rate decision, which is likely to extend the downtrend. However, any surprise may help the pair to break the immediate resistances.

Read: Reserve Bank of Australia Preview: Dovish twist as lockdowns continue

AUD/JPY: Daily chart

Trend: Bearish

WTI seesaws around $71.00 as coronavirus concerns battle stimulus hopes

August 3, 2021 08:26   FXStreet   Market News  

• WTI remains sidelined after posting the heaviest losses in two weeks.
• IMF announces historical allocation to SDRs, US Senators jostle over infrastructure spending.
• US, China PMIs convey virus-led threats to global economy, US CDC highlights Delta covid variant as more severe.
• API data, risk catalysts will be important to follow for fresh impetus.

WTI licks its wounds around $71.00, down 0.05% intraday around $71.15 during Tuesday’s Asian session. The oil benchmark marked the biggest daily losses in two weeks the previous day, amid the virus-influenced economic concerns, before the latest stimulus optimism offers a breathing space to the traders.

July’s activity numbers from the world’s top two economies, namely the US and China, came out disappointing and raised questions over the recovery moves from the pandemic. While Beijing’s official gauge marked the slowest expansion in 17 months, followed by downbeat Caixin Manufacturing PMI, the US ISM Manufacturing PMI eased below forecast and prior readouts to 59.5 during the stated period.

In addition to the PMI numbers, comments from the US Centers for Disease Control and Prevention (CDC) also amplified the covid woes. Reuters quoted an internal report, made public on Friday, to highlight the Delta variant of the virus as “likely more severe” than earlier versions. Also portraying the virus fears was the reintroduction of the local lockdowns in China and Aussie hardships due to the COVID-19.

As a help, the International Monetary Fund (IMF) announced the historical allocation of $650 billion to its Special Drawing Rights (SDRs) during late Monday. Additionally, the US policymakers are also hopeful of getting the much-awaited stimulus passed during this week.

It’s worth noting that the escalating tussles between the US and Iran, as well as China’s support to Taliban-led governance in Afghanistan after American troops’ exit, become positive catalysts for the oil prices.

Amid these plays, S&P 500 Futures gains 0.23% intraday whereas the US 10-year Treasury yields print 1.3 basis points of an upside to 1.187% after closing at the lowest since February the previous day.

Looking forward, industry oil inventory figures from the American Petroleum Institute (API), prior -4.728M, will be the key data to watch. However, major attention will be given to the qualitative catalysts for the near-term direction.

Technical analysis

Having defied the last week’s breakout of a one-month-old resistance line, near $71.55, WTI buyers jostle with 50-SMA, around $71.30. Hence, oil sellers remain hopeful until the quote posts a clear upside break of $71.55.

USD/CHF remains poised to extend losses below 0.9050 amid risk-aversion

August 3, 2021 08:26   FXStreet   Market News  

• USD/CHF continues with the downside momentum on Tuesday.
• US Dollar Index remains steady at 92.00 despite softer economic data.
• The Swiss franc remains in demand amid market uncertainty on its safe-haven appeal.

USD/CHF remains muted in the Asian trading session on Tuesday. The pair hovers in a narrow trade band with no meaningful traction.

At the time of writing, USD/CHF is trading at 0.9054, up 0.01% for the day.

The US dollar index trades at 92.05, with 0.02 losses in the Asia-pacific timings. The greenback remains under selling pressure after the Fed’s less hawkish tone and the mixed economic data.

The US ISM Manufacturing Purchase Manager Index (PMI) fell to 59.5 in July, below the market forecasts of 60.9, the weakest reading in the previous six months. The labor challenge and transport inefficiencies were identified as major factors to obstacle the growth.

On the other hand, the Swiss franc gained on its mixed economic data.

The Switzerland Manufacturing PMI rose 71.1 in July from the previous 66.7 in June whereas the Retail Sales edged higher marginally 0.1%  in June on a yearly basis, following a 2.8% jump in May.

As for now, traders are waiting for the US Factory Orders and Fed’s Bowman speech to gauge the market sentiment.

USD/CHF additional levels

Container shipping giant Maersk lifts its earnings outlook – freight rates high & rising

August 3, 2021 08:09   Forexlive Latest News   Market News  

Maersk minting cash, citing:

I.e …. In the wake of the coronavirus pandemic, shortages of container ships and logjams at ports around the world combined with high consumer demand for material goods have caused freight rates to skyrocket to record levels.

Invest in yourself. See our forex education hub.

Ireland Purchasing Manager Index Manufacturing dipped from previous 64 to 63.3 in July

August 3, 2021 08:05   FXStreet   Market News  

Feed news

US said to have asked 24 Russian diplomats to leave by September 3 – visa expiry

August 3, 2021 08:02   Forexlive Latest News   Market News  

Info comes via a Reuters report citing a weekend media piece. 

GBP/USD Price Analysis: 100-day EMA defends bulls around 1.3900

August 3, 2021 08:02   FXStreet   Market News  

• GBP/USD sellers take a breather after two-day downtrend.
• Bullish MACD, sustained trading beyond key EMAs keep buyers hopeful.
• Two-month-old resistance line, July’s top guard immediate upside.

Having portrayed a two-day pullback from the highest levels since late June, GBP/USD licks its wounds around 1.3890 amid Tuesday’s Asian session.

In doing so, the cable seesaws between a downward sloping trend line from June 01 and 100-day EMA. However, bullish MACD and a successful rise above 200-day EMA favor buyers.

It’s worth noting that the GBP/USD buyers may not only wait for a clear run-up past the stated resistance line around 1.3910 but could also need a daily closing beyond July’s top of 1.3983 for conviction.

Following that, late June’s swing high near the 1.4000 threshold and a horizontal area surrounding 1.4100 will be the key to watch.

Alternatively, a downside break of 100-day EMA, near 1.3870, may recall the 1.3800 round figure to the chart before direct GBP/USD sellers to the early July’s low close to 1.3730.

In a case where the pair bears remain dominant past 1.3730, the 200-day EMA level of 1.3705 and the last month’s bottom surrounding 1.3570 should gain the market’s attention.

GBP/USD: Daily chart

Trend: Further recovery expected

Ethereum Classic price squeezed, puts ETC on the verge of a sharp move

August 3, 2021 07:56   FXStreet   Market News  

• Ethereum Classic price closed the week with a 4.25% gain and the month of July with a loss of -11.27%, lagging many cryptocurrencies.
• ETC 10-week simple moving average (SMA) pressing down on price as it moves from support to resistance.
• 2018 high at $47.00 remains influential, providing a solid layer of support as the consolidation continues.

Ethereum Classic price has not accomplished anything since claiming the 2018 high on July 24, showing a 3.60% gain over the last nine days. The lack of price traction stands in contrast to the unstoppable advance for Ethereum over the last 13 days. Nevertheless, the outlook continues to be tilted to the upside as long as ETC can hold the 2018 high of $47.00.

Ethereum Classic price failure at key level dyes the altcoin red

Ethereum Classic price continues to traffic in a descending parallel channel with the 10-week SMA at $51.47 and the Ichimoku Cloud exerting downward pressure on ETC while the 2018 high limits downside risk. The resulting price contraction has pushed the Bolling Band Width (BBW) to a reading of 0.08, matching the width that preceded the November 2020 spike of over 50% and the bounce in early March of over 30%. In fact, only the reading at the beginning of January is tighter. It resolved into a significant rally of nearly 60%.

If the Ethereum Classic price compression resolves to the upside, it may be swift, with the June 30 high at $62.45 being the first credible resistance. There is no resistance of note after $62.45 until the 38.2% Fibonacci retracement of the May-June correction at $80.75 and then the May 26 high of $84.09, presenting a gain of 63% from the current ETC price.

ETC/USD daily chart

A daily close below $47.00 invites an Ethereum Classic price decline to the midline of the descending parallel channel at $38.52, followed by the confluence of the 200-day SMA at $36.96 with the 2020 ascending trend line at $36.34. Additional weakness will not attract support until the lower line of the channel at $26.12, delivering a 49.43% loss for those ETC investors that practice a buy-and-hold strategy.

It has been mentioned before, but it is difficult to foresee a 49% decline when Ethereum Classic price trades in a constructive position within the overall price structure. Specifically, ETC is changing hands well above the 50-week SMA and the 200-day SMA, two critical moving averages. Moreover, ETC is not negatively influenced by a bearish Death Cross pattern or resistance attributable to the May crash lows. The only apparent technical restraint is the 10-week SMA at $51.47.

The bullish outlook for Ethereum Classic price is being challenged over the last few sessions. However, it is still transacting above the 2018 high of $47.00. With the BBW highlighting an extreme contraction in price, ETC investors can anticipate a swift move in the coming days with the bias directed higher due to the bullish position of the cryptocurrency in the price structure and the strong bid in the cryptocurrency complex.

AUD/NZD Price Analysis: Bears in control ahead of RBA

August 3, 2021 07:56   FXStreet   Market News  

• AUD/NZD traders are attacking the daily and 4-hour support. 
• The RBA is on the cards for later today as a major risk event.  

AUD/NZD is under pressure ahead of the Reserve Bank of Australia today. 

From a technical perspective, there are prospects of a downside continuation and the following illustrates this in regard to the market structure on both the daily and 4-hour time frames:

Daily chart

The daily chart is showing that the price has corrected a significant portion of the bearish impulse. 

At this juncture, there are expectations of an onward move to the downside to break into fresh territories. 

4-hour chart

From a 4-hour perspective, the bears are taking on support in 1.540 which could equate to a sell-off from the prior structure.

Or, the more conservative bears will want to see a break of support in 1.0540 before committing: