FOREX: USD Strength Extends, NZD and GBP Technical Breaks Exacerbate Momentum
Sep-25 18:54
- Firmer-than-expected US GDP data on Thursday, alongside lower-than-expected weekly jobless claims has kept the greenback trading with a very supportive tone throughout the US session. The dollar index (+0.68%) has been steadily grinding higher, extending to a high of 98.61 as we approach the APAC crossover, now ~2.4% above the post-Fed cycle lows. The DXY appears to have solidly broken above the 50-day EMA, a bullish development.
- While associated declines across the G10 have been broad based, with the likes of EUR and JPY falling around 0.65%, both GBP and NZD are the clear underperformers, with significant technical breaks exacerbating downside momentum.
- For GBPUSD (-0.83%) specifically, we highlighted the breach of two support trendlines, drawn from both the Aug 01 and the January lows. Spot has moved sharply lower, and has significantly bridged the gap to the first target of 1.3333, the Sep 3 low and a key support. Below here, a key medium-term level resides at 1.3140. Both fiscal uncertainty and political tensions are rising in the UK, potentially underpinning the fundamentals behind the latest GBP pessimism.
- For NZDUSD (-0.86%), today’s weakness has seen the pair dip through the noted pivot level of 0.5800. A daily close below this mark would be a further bearish development, targeting a Fibonacci retracement at 0.5728.
- US data will continue to set the tone for the dollar, with markets eagerly awaiting next week’s employment report. On Friday, the monthly Personal Income and Outlays report for August will provide greater clarity on recent momentum. Core PCE will also be watched with it widely expected to print softer than the 0.35% M/M seen for core CPI.
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COMMODITIES: Crude Slides, Gold Rises Amid Threat To Fire Fed Governor Cook
Aug-26 18:44
- Crude came under pressure on Tuesday, fully unwinding Monday’s gains, as oil markets remain focussed on Russian oil supply amid laboured peace efforts.
- WTI Oct 25 is down by 2.4% at $63.3/bbl.
- On the bearish side, Trump’s 50% tariffs on India for buying Russian oil come into effect on Wednesday while Indian buying shows signs of resuming.
- Crude arrivals into India will likely increase in September and October, driven by higher inflows of Russian crude, Vortexa reports. This could signal that secondary Russian oil sanctions may do little to dent buying.
- A bear cycle in WTI futures remains intact, with initial support at $61.29, the Aug 13 low, which was recently pierced. A continuation lower would open $57.71, the May 30 low.
- Key short-term resistance has been defined at $69.36, the Jul 30 high.
- Meanwhile, spot gold has risen by 0.5% to $3,384/oz, taking total gains from last week’s low to over 2%.
- The move comes amid a further dip in the US dollar today, following headlines surrounding the uncertain future of Fed Governor Lisa Cook.
- The medium-term trend condition in gold remains bullish and moving average studies remain in a bull-mode position, highlighting a dominant uptrend.
- The sideways direction that has been in place since the April peak appears to be a pause in the uptrend. A continuation of gains would open $3,439.0, the Aug 23 high.
US STOCKS: Drifting Mildly Higher, Dog Days Settle In
Aug-26 18:37
- Stocks have inched mildly higher late Tuesday, top end of narrow session ranges on quiet late summer trade. Currently, the DJIA trades up 35.31 points (0.08%) at 45319.15, S&P E-Mini Future up 10 points (0.15%) at 6465.25, Nasdaq up 40.4 points (0.2%) at 21489.94.
- Industrials, Health Care and Information Technology sector shares continued to lead gainers in the second half: Boeing +3.16%, GE Vernova +2.74%, Southwest Airlines +2.40%, Howmet Aerospace +2.39% and General Electric +2.02%.
- The Health Care sector was largely buoyed by pharmaceuticals: Eli Lilly & Co +4.51%, Regeneron Pharmaceuticals +2.10%, Humana Inc +0.96% and UnitedHealth Group +0.91%.
- Leading tech stocks included: Leading tech stocks: QUALCOMM +2.01%, Palantir Technologies +1.82%, Advanced Micro Devices +1.81% and Monolithic Power Systems +1.45%.
- On the flipside, Energy and Communication Services shares underperformed in late trade: Paramount Skydance -4.01%, Charter Communications -2.39%, Fox Corp -1.74% and AT&T -1.46%.
- Energy stocks weighed by a drop in crude prices (WTI -0.77 at 64.03): Halliburton -1.99%, Devon Energy -1.65%, Diamondback Energy -1.49% and ConocoPhillips -1.44%.
BOC SAYS INDEPENDENCE KEY IN A MORE SHOCK-PRONE WORLD
Aug-26 18:30
- BOC SAYS INDEPENDENCE KEY IN A MORE SHOCK-PRONE WORLD
- MACKLEM SPEECH DOESN'T COMMENT ON OUTLOOK FOR POLICY RATE
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