Market Talk
– The dollar holds on to overnight gains on Friday morning in Asia, after weekly jobless claims fell to a near 18-month low, allaying fears of a slowing economic recovery, but also stoking worries the Fed could move sooner than expected to scale back its accommodative policies.
– The Labour Department said initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020. Data suggested that job growth could be hindered by labour shortages rather than cooling demand for workers.
– The Fed could still be on course to begin tapering later in 2021. Overnight, several Fed’s officials stated their cases for tapering; suggesting that the NFP report would not necessarily deter the central bank.
– The Euro moved up to 1.1824 in volatile trading, with the single currency bouncing between 1.1809 and 1.1842; after the European Central Bank kept its interest rate unchanged and said it would trim emergency bond purchases over the coming quarter.
– Gold was down on Friday morning in Asia, as the US dollar strengthened on the back of US initial jobless claims. Investors continue to bet on when the U.S. Federal Reserve will begin asset tapering when could have a strong bearing on the yellow metal.
– There will be no FX Commentary on Monday. Updates will resumes on Tuesday.
Chart Focus AUD/USD
Key Points
1. Sell AUD/USD recommendation.
2. Sell AUD/USD at 0.7395. Stop at 0.7430 and profit target at 0.7310
3. Strong initial jobless claims and lockdown in Australia are both likely to weigh on the Aussie dollar.
4. Price is resisted by a strong resistance point and MACD is hinting of a bearish price trend. These are sign of a bearish price movement.
Fundamental Comments
1. Weekly jobless claims allayed fears of a slowing economic is which good for the USD dollar.
2. Lockdown in Australia is likely to affect its economy and weighs on the Aussie dollar.
Technical Comments
1. Price is capped by the 20EMA as well as the Fibonacci 38% correction point.
2. MACD remains bearish and is hinting of a bearish price trend ahead.
Key Levels
| Support | 0.7345 | 0.7305 | 0.7280 |
| Resistance | 0.7395 | 0.7425 | 0.7475 |
USD/JPY – Price moved to a high of 110.44 on Wednesday but price was unable to move higher. We saw a decline to 109.61 overnight and this morning we had a rally that brought price to 109.90 at the point of this writing. We are likely to see price move to 110.45 again in the next 1-2 days ahead. Stochastic is in the oversold zone but both MACD and 20EMA remain bearish.
| Support | 109.85 | 109.55 | 109.10 |
| Resistance | 110.15 | 110.45 | 110.85 |
EUR/USD – Price remains below the 20EMA which is also acting as a resistance. Another resistance lies at 1.1865. If price is unable to move above 1.1865, we are likely to see another test of 1.1780 again in the next few days ahead after a corrective rally. Stochastic is rising but MACD remains bearish. MACD is hinting of a bearish price trend. 20EMA is bearish at the moment.
| Support | 1.1800 | 1.1755 | 1.1725 |
| Resistance | 1.1835 | 1.1865 | 1.1910 |
GBP/USD – Price has rallied to a high of 1.3862 after hitting a low of 1.3725 on Wednesday. We are likely to see this rally continue higher to 1.3860 in the next 24 hours head. Stochastic is in the middle of its range and is able to support price higher to 1.3860. MACD remains bullish and is hinting of a bullish price trend. 20EMA is also bullish with a steep slope hinting of a bullish trend.
| Support | 1.3830 | 1.3790 | 1.3750 |
| Resistance | 1.3865 | 1.3895 | 1.3925 |
XAU/USD – It looks like $1782.45 may have been the low. If this is the low, we are likely to see price moved above $1805.00 for a test of either $1814.15 or $1808.10 in a corrective rally over the next 1-2 days ahead. Stochastic is rising after a bullish crossover from the oversold zone. MACD is rising but remains bearish at the moment. 20EMA is neutral at the moment. Watch $1814.15 for clues to the next price direction.
| Support | 1792.40 | 1782.45 | 1770.70 |
| Resistance | 1804.75 | 1814.95 | 1821.20 |
USD/CHF – We have a buy call at 0.9150 overnight which was filled when price declined to a low of 0.9156, which was just above our stop loss. Our view remains unchanged. We are looking for a rally to 0.9260. Stochastic is inside the oversold zone. MACD remains bullish and is hinting of a bullish price trend but 20EMA is in a bearish trend at the moment.
| Support | 0.9150 | 0.9105 | 0.9065 |
| Resistance | 0.9185 | 0.9235 | 0.9265 |