FX Commentary – Gold To Decline To $1453

– U.S. President Donald Trump tweeted on Wednesday that increased tariffs on 250 billion dollars’ worth of Chinese goods that were set to kick in on October 1 have now been delayed to October 15 “as a gesture of good will” and in consideration of the 70th anniversary celebrations of the People’s Republic of China.

– The yen was the weakest since Aug. 1 as optimism over U.S.-China trade talks boosted risk sentiment and reduced demand for safe havens. China announced its first batch of tariff exemptions for 16 types of U.S. products, days ahead of a planned meeting between the two countries to try and de-escalate their bruising tariff fight.

– Gold rose on expectations of monetary policy easing by top central banks while global growth risks continue to linger, although improved appetite for riskier assets capped bullion’s gains and kept it near a four-week low. Spot gold is still targeting $1,453, as it has breached a support at $1,497 per ounce, according to Reuters technical analyst Wang Tao.

– U.S. data on Wednesday showed that U.S. producer prices unexpectedly rose in August and underlying producer prices rebounded, but that data will not change financial market expectations that the Federal Reserve will cut interest rates again next week to support a slowing economy.

– Euro slumped as investors await the ECB’s decision on interest rates, set to be announced at 7:45 p.m.  There is a unanimous consensus for easing measures to be announced, but a great deal of uncertainty on what exactly these measures might entail.

– There will be no Daily FX Commentary on Friday 13 Sep 2019

Chart Focus GBP/JPY
Key Points
1. Sell GBP/JPY recommendation
2. Sell GBP/JPY at 133.50. Stop at 133.90 and target at 130.80
3. Worries and uncertainty over a no-deal Brexit is likely to weigh on Sterling
4. Rising Wedge chart pattern is warning of a reversal and momentum indicators are also warning of a reversal

Fundamental Comment

1. Worries over a hard Brexit will weigh on Sterling
2. Uncertainty over Brexit is likely to benefit safe haven JPY

Technical Comments

1. Worries over a hard Brexit will weigh on Sterling
2. Uncertainty over Brexit is likely to benefit safe haven JPY

Key Levels

Support 132.90132.50132.15
Resistance 133.55133.85134.15

Technical Overview

USD/JPY – Price reached a high of 108.16 this morning, filling our profit order at 107.95. We are out with a 75 pips profit. Stochastic is still rising and MACD is rising as well but price has reached the Fibonacci 161.8% projection target. There was also a Spinning Top candlestick pattern warning of a possible price high.

Support 107.90107.50107.20
Resistance 108.25108.55108.95

EUR/USD – Yesterday, we had raised our stop for our buy call on 9 Sep to cost at 1.1025. Our stop was taken out last night. The next direction for this pair will depend on the outcome of the ECB meeting at 7.45pm tonight as well as the press conference at 8.30pm. Stay aside for today.

Support 1.09851.09501.0925
Resistance 1.10251.10551.1085

GBP/USD – Price range was just 65 pips as UK parliament goes into a recess. Our view remains the same as yesterday. If price is unable to move above 1.2385, there is a danger of a price decline to 1.2230. MACD is still bullish but Stochastic is declining. 20EMA is flat at the moment. Wait for better trading signals.

Support 1.22901.22551.2205
Resistance 1.23351.23851.2420

XAU/USD – Price may have made a temporary low at 1484.37 and could be heading higher to 1499 to 1504 to test the upside. This rally is likely a correction rally in a bigger bearish trend. MACD is still bearish but Stochastic is rising. 20EMA is still pointing lower but could be turning flat soon.

Support 1484.401474.251463.95
Resistance 1500.751515.051529.20

NZD/USD – Our buy call was filled yesterday when price reached a low of 0.6405. Our view remains unchanged. We would recommend bringing stop higher to 0.6395 and keep profit target at 0.6490. MACD is bullish and is rising. Stochastic has a bullish crossover and is rising. Both momentum indicators are hinting of further price advance.

Support 0.64050.63850.6355
Resistance 0.64450.64700.6500

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