August 2022

EUR/USD – 1.0301 As euro's recent daily choppy swings from August's 1.0293 high had ended with Wednesday's jump to a 5-week peak of 1.0368 after softer-than-expected U.S. CPI, suggesting rise from July's 20-year 0.9953 bottom would head towards 1.0418 before prospect of a strong retreat later. On the downside, only a daily close below 1.0265/70 would indicate a temporary top is in place and risk stronger retracement towards 1.0247, then 1.0203. Data to be released on Thursday U.K. RICS housing price balance, Japan market holiday, Australia consumer inflation experience, U.S. initial jobless claims, continuing jobless claims and PPI.

EUR/USD – 1.0198 Euro's decline from Tue's near 4-week peak at 1.0293 to 1.0124 (Wednesday) suggests recent upmove from July's 20-year bottom at 0.9953 has made a top and despite staging a rebound to 1.0253 Thursday, selloff to 1.0142 on Friday and then Monday's rebound to 1.0221 on broad-based usd's weakness in tandem with U.S. yields would yield further choppy swings before fall. Below 1.0124/30, 1.0097 later. On the upside, only a daily close above 1.0221 would bring stronger gain to 1.0240/50 but 1.0290/95 should hold. Data to be released on Tuesday New Zealand retail sales, Australia NAB business conditions, NAB business confidence. U.K. BRC retail sales. U.S. labor costs, productivity and redbook retail sales.

Another decisive week for global markets lies ahead. The main event will be the latest CPI report from the United States, which will reveal whether inflation has finally started to cool off. That’s what business surveys and commodity prices suggest, setting the stage for a retracement in the almighty dollar. 

EUR/USD – 1.0166 Euro's decline from Tuesday's near 4-week 1.0293 peak to 1.0124 (Wednesday) suggests recent rise from July's 20-year bottom at 0.9953 has made a top and despite staging a strong bounce to 1.0253 on Thursday, subsequent selloff to 1.0142 on blowout U.S. NFP Friday would re-test 1.0124, 1.0090/95 but 1.0048/50 may hold. On the upside, only a daily close above 1.0209 would prolong choppy swings and risk gain to 1.0235/39 before down. Data to be released today Japan current account, trade balance, Eco watchers current, Eco watchers outlook, New Zealand inflation forecast, Swiss unemployment and EU Sentix index on Monday.

Markets After a bumper nonfarm payrolls print, market attention turns to US CPI on Wednesday. A slowdown in inflation remains the base case, but details of the CPI data will be critical. Back-to-back storming inflation prints will likely lead to complete repricing of the September Fed meeting and, ultimately, where the Fed ends up. Still, last Friday's payroll report indicates an overheated labour market that continues to tighten further. Hence at minimum, the markets expect another 100bp of Fed funds rate increases over the next three meetings: +50bp in September and +25bp in November and December, with risks skewed towards significant increases.  The FOMC would prefer to decelerate the pace of rate hikes, but the data permits them to do so. Lately, the data the FOMC uses as critical inputs for its decision-making process has shown signs of an overheated labour market and intense wage pressures. Hence this week's inflation report seems very unlikely to offer “compelling evidence” of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode.   Oil Brent has fallen to a 6-month low, with analysts struggling to produce a satisfactory explanation when investors ask why.  The broader market sentiment has turned negative… Read More »Bumper payroll report , CPI up next

S&P 500 bearish overtures were refused, bonds remained optically risk-on and strong, but the true picture reflects a daily stall. Refusal to drive prices higher in the absence of convincing, credibly strong NFPs. I have a hunch that a careful look under the hood would reveal some signs of weakness in the job market, the way hours worked last time did. While the Fed isn‘t drumming this point really as tightening would come at the expense of unemployment rate, because wage inflation needs to be broken down as well in order to get overall inflation under control. Some officials such as Kashkari aren‘t hiding the fact it would take several years to achieve the 2% goal again. Let‘s have a look at yesterday‘s Bank of England moves, kind of foreshadowing what‘s reasonable to expect from the Fed. In the UK, the prospect of entering recession Q4 2022 amd remaining in it for more than a couple of quarters, is being acknowledged. The central bank though intends to keep tightening anyway, preferring to take on inflation after it ran out of control longer they publicly anticipated. Meanwhile in the States, unemployment claims have edged higher – indicative of growing softness in… Read More »Bull trap ready

There's no such thing as a quiet week in the markets these days and this week has undoubtedly been no different. The jobs report was always expected to be the highlight but the Bank of England gave it a good run for its money on Thursday, hiking by the most in 27 years while putting out some pretty dire economic forecasts. It would appear we have very little to look forward to for the next couple of years here in the UK. While I believe other central banks are slowly gravitating toward the economic reality of soaring energy costs, high and widespread inflation, and rapidly rising interest rates, the BoE has very much been at the forefront of accepting the country's fate. That's probably as much a reflection of the fundamental shortcomings as much as anything but the latest forecasts really were especially bleak and may make some other countries, particularly across Europe, a little nervous. The US may already be in a technical recession, depending on your definition, but the economy is still in very good shape. The jobs report is expected to show that once more today, with 250,000 jobs forecast to have been added last month leaving… Read More »The goldilocks report

USD/CAD holding steady ahead of jobs data USDCAD shifted to the sidelines immediately after charting a new lower low at 1.2766 in the short-term picture, unable to reach the constraining 20-day simple moving average (SMA).   The technical indicators state a bearish-to-neutral bias as the RSI keeps flattening marginally below its 50 neutral mark and the MACD is extending its short horizontal move slightly below zero around its red signal line. Hence, traders may keep directing the market sideways unless they see a break above the 20-day SMA at 1.2900, and more importantly, a close above the 1.2963 restrictive zone. If that turns out to be the case, the bullish correction could ramp up to 1.3026, where the flattening 200-weekly SMA has been ceasing upside pressures over the past two months. Higher, a rally above the 1.3077 – 1.3120 resistance region could clear the way towards the 1.3222 top. Should sellers retake control, initial limitations could occur around the 1.2800 level. A successful step lower may then halt around the 200-day SMA at 1.2740, a break of which could re-test the restrictions within the 1.2960 – 1.2940 zone before stretching towards the 2021 support trendline seen at 1.2612. Summarizing, USDCAD is in a… Read More »USD/CAD holding steady, GBP/JPY tests support trendline [Video]

In this week’s Live from the Vault, Andrew Maguire is joined once again by Craig Hemke, founder of the TF Metals Report, to discuss the Fed’s refusal to accept the US is slipping into a recession. The two industry allies contemplate the approaching end of the COMEX’s confidence scheme, as investors wake up to widespread spoofing and join the mass exodus to fairer alternatives.

The price of the Australian Dollar almost stabilized on Friday. The Moving Average indicator maintains its bullish price signals. The momentum oscillator, the Relative Strength Index, remains within its normal zone; rising momentum will confirm the continuation of the uptrend. During today's European session, the AUD/USD pair traded inside a tight range. without making any significant breakthrough. Therefore, the difference between the day's high and low did not surpass 30 pips. At press time, the AUD/USD was trading at 0.6950, down 0.0020 or 0.29% for the intraday. This analysis relies on a 4-hour timeframe On a four-hour timeframe, the Moving Average Indicator reading reveals bullish signals. The signal indicates the continuance of the bullish trend in the short term. whereas the 50-MA rises above the 100-MA. In the meantime, the 100-MA rises above the 200-MA, supporting the bullish trend over the longer period. With a score of 52.8 on the value line, the Relative Strength Index remains in the neutral range. Any increase in the RSI would protect the Australian dollar from sliding back below the descending trendline. During the preceding two trading sessions, the AUD/USD exchange rate has been quite stable. Therefore, if the AUD/USD wants to maintain its… Read More »The intraday AUD/USD spot price has been very consistent during Friday’s prior trading sessions