LiteForex Analytics

[MikhailLF]

 Morning Market Review

EUR/USD

EUR is actively rising against USD during today's Asian session, hitting record highs since September 2018. The instrument is gaining about 0.55% and is trying to consolidate above the next resistance at 1.1700. EUR is supported by strong macroeconomic statistics on business activity from the eurozone countries, published last Friday. German Manufacturing PMI in July rose from 45.2 to 50 points, which was better than expectations. Services PMI in Germany jumped from 47.3 to 56.7 points against the forecast of growth only to 50.5 points. Composite PMI rose from 47 to 55.5 points in July, also beating its forecasts of 50.3 points. In the euro area, the Composite PMI consolidated above the 50-point mark, indicating a gradual recovery in the European economy after the crisis. At the beginning of the week, the European investors are focused on the report on business climate in Germany from IFO. Also, German Bundesbank Monthly Report is expected during the day.

GBP/USD

GBP strengthens against USD during today's morning trading, updating its highs since March 11. "Bullish" activity for the instrument is facilitated by the weak positions of USD. In turn, GBP was supported by the upbeat macroeconomic statistics from Great Britain released last Friday. Retail Sales in June grew by 13.9% MoM after an increase of 12.3% MoM in the previous month. Analysts had expected a slowdown in the index to 8% MoM. Markit Manufacturing PMI in July rose from 50.1 to 53.6 points, exceeding market forecasts of 52 points. Markit Services PMI rose from 47.1 to 56.6 points, which also turned out to be better than expectations of 51.1 points.

AUD/USD

AUD is recovering against USD during this morning session, again approaching record highs of July 22. The growth of the instrument proceeds against the background of a large-scale decline in USD at the beginning of the new week, practically across the entire spectrum of the market. In turn, AUD is supported by a noticeable increase in demand for it as a carry-trading currency, as well as by good macroeconomic statistics on business activity for July published on Friday. Commonwealth Bank Services PMI rose from 53.1 to 58.5 points, beating market expectations at 53.2 points. A similar index in the manufacturing sector rose from 51.2 to 53.4 points, which fell slightly short of the expected values of 53.6 points. Today, investors are focused on macroeconomic statistics from the US on the dynamics of durable goods orders in June. Interesting data from Australia will appear only on Wednesday, when the quarterly statistics on consumer inflation is released.

USD/JPY

USD is steadily declining against JPY during today's Asian trading, continuing to develop a strong "bearish" momentum that formed at the end of the last trading week. The instrument loses about 0.50% and is trying to consolidate below 105.50. USD remains under pressure from weak macroeconomic statistics and growing fears about the high level of uncertainty in the market. Friday's US data reflected a rise in the Markit Services PMI in July from 47.9 to 49.6 points, while the forecast was for an increase to 51 points. Manufacturing PMI in July rose from 49.8 to 51.3 points, which also turned out to be worse than market expectations of 51.5 points. Today, investors are focused on macroeconomic statistics from the US on the dynamics of durable goods orders in June. Analysts do not expect strong data to emerge, so USD may come under pressure again.

XAU/USD

Gold prices are actively growing during today's Asian session, renewing their record highs. The psychological level of 1900.00 was reached at the end of last week, but on Monday the instrument demonstrates the most active dynamics over the past few months. Gold is still supported by a high level of market uncertainty. The alarming situation with the dynamics of the incidence of coronavirus in the United States does not allow USD to start correction, while the worsening geopolitical risks between the USA and China is becoming a new driver for the growth of the instrument.

[MikhailLF]

 Morning Market Review

EUR/USD

EUR declines against USD during today's Asian session, retreating from record highs updated the day before. At the beginning of the week, the instrument showed the strongest growth in the past few months, taking advantage of the weakness of USD, which is in anxious anticipation of the results of the Fed's meeting, which will be held on July 28 and 29. In addition, investors fear the further spread of the coronavirus epidemic in the country, which could disrupt the government's plans for the pace of recovery of the national economy. In turn, yesterday's macroeconomic statistics from Germany supported EUR. German IFO Business Climate Index rose from 86.3 to 90.5 points in July, which turned out to be better than market expectations of 89.3 points.  IFO Current Assessment for the same period rose from 81.3 to 84.5 points, while the forecast assumed an increase in the indicator to 85 points.  IFO Expectations in July rose sharply from 91.6 to 97 points, exceeding forecasts of 93.7 points.

GBP/USD

GBP is correcting against USD during today's morning trading, retreating from the March highs, updated the day before. Technical factors contribute to the decline in the instrument, as USD remains strongly oversold. In addition, investors are fixing their profits ahead of the publication of the results of the Fed's meeting on Wednesday and the release of macroeconomic statistics from the US and Europe on Thursday. There will be not much UK data this week, so investors are likely to focus on US statistics. The focus will remain only on the negotiations between the UK and the EU. Earlier it was reported that the EU doubts the possibility of concluding a free trade agreement with the UK this year. London is somewhat more optimistic, but it is worth noting that the negotiation process is rather complicated.

NZD/USD

NZD declines against USD during today's Asian session, retreating from annual highs updated at the opening. The instrument loses about 0.40%, testing the level of 0.6650 for a breakdown. The emergence of corrective dynamics is facilitated by the growth of the oversold USD; however, fundamental factors are still playing against the American currency. Yesterday's macroeconomic statistics on Durable Goods Orders in the United States turned out to be quite good, but failed to provoke a noticeable rise in USD. The volume of orders in June slowed down from +15.1% to +7.3%, which came out close to the market forecasts at +7.2%. Nondefense Capital Goods Orders excluding Aircraft rose by 3.3% in June, after increasing by 1.6% last month. Investors expected an increase of 2.3%.

USD/JPY

USD is showing corrective growth against JPY during today's morning session, retreating from the local lows, updated at the beginning of the week. Technical factors contribute to the growth of USD, while investors are waiting for the publication of the results of the US Federal Reserve meeting on Wednesday. In addition, the US is to publish Q2 2020 annual GDP statistics on Thursday. The US economy is expected to show a record 34% YoY decline after contracting by 5% in Q1. The statistics from Japan published on Monday also contribute to the development of the uptrend for the instrument. Coincident Index in May fell from 80.1 to 73.4 points, which turned out to be worse than market expectations of 74.6 points. Leading Economic Index for the same period, on the contrary, rose from 77.7 to 78.4 points, but also turned out to be weaker than its forecasts of 79.3 points.

XAU/USD

Gold prices are showing ambiguous dynamics today, staying in the area of record highs, updated the day before. It should be noted that the instrument showed a sharp rise at the opening of today's session; however, the "bulls" retreated very quickly under the pressure of the correcting USD. The escalating conflict between the United States and China continues to provide strong support for gold. The parties continue to exchange mutual sanctions, which practically put an end to all previously reached trade agreements. In addition, the US economy remains in dire straits amid the raging COVID-19 epidemic in the country. This week, the US Federal Reserve will hold a meeting and important macroeconomic indicators for the US economy will be released as well.
 

[MikhailLF]

 Morning Market Review

EUR/USD

EUR is again showing gains against USD during today's Asian session, returning to previous record highs, updated at the end of last week. Market activity remains moderate as investors are in no rush ahead of the publication of minutes from the US Federal Reserve's two-day meeting on Wednesday. Analysts do not expect any significant changes in the vector of monetary policy; however, the comments of officials are more important today than ever. There is a possibility that the Fed representatives will speak out on adjusting the target levels for inflation, given the alarming situation in the economy, as well as touch on the prospects for programs to support the economy, which are now being actively discussed in the Senate. Interesting statistics from Europe will appear only on Thursday, when Germany will report on the dynamics of GDP for Q2 2020, as well as publish the July statistics on unemployment and consumer inflation.

GBP/USD

GBP is showing ambiguous trading during today's morning session, close to the highs updated the day before. GBP retains a fairly confident "bullish" trend; however investors prefer to wait for the publication of the minutes of the Fed meeting. During the day, a block of macroeconomic statistics will be released in the UK, which, however, is unlikely to have a noticeable impact on the instrument's dynamics. One way or another, analysts expect the publication of the number of Mortgage Approvals in June (their number should increase by 33.9K). In addition, Consumer Credit data will be presented, as well as Net Lending to Individuals, which in May showed a decrease of 3.4B pounds.

AUD/USD

AUD has seen marginally gains against USD during today's Asian session, trading near record highs revised a week ago. Buying activity on the instrument is constrained by expectations of the publication of the minutes of the two-day Fed meeting, which, as analysts hope, will clarify the prospects for monetary policy in the near future. The macroeconomic statistics released in Australia today puts additional pressure on the instrument. Trimmed Mean CPI in Q2 2020 decreased by 0.1% QoQ after growing by 0.5% QoQ over the previous period. Analysts had expected an increase of 0.1% QoQ. At the same time, Consumer Price Index in Q2 2020 collapsed by 1.9% QoQ after rising by 0.3% QoQ earlier. Analysts expected a decrease of 2% QoQ.

USD/JPY

USD shows flat dynamics of trading during today's morning session, remaining near the local lows since mid-March, updated the day before. USD remains under significant pressure amid growing uncertainty associated with increased political risks, as well as the further spread of the COVID-19 epidemic in the country. Today, the activity of "bears" is somewhat reduced, which is associated with the expectation of the publication of the Fed meeting minutes. Analysts do not expect changes in the key interest rate, but they are eager to hear the comments of officials, since at present the country is clearly not coping with the number of economic challenges it faces. Interesting statistics from Japan will appear only on Thursday, when June data on the dynamics of Retail Sales and the volume of investments in the Japanese economy over the past few weeks are released.

XAU/USD

Gold prices are consolidating during today's Asian trading, retreating from record highs, updated the day before. The emergence of corrective dynamics from historical highs is associated with the expectation of the publication of the results of the US Federal Reserve meeting on Wednesday. In addition, technical factors also contribute to the development of the "bearish" trend, as the instrument has been actively increasing for eight trading sessions in a row. In turn, gold is still feeling significant support in the market. The increasing geopolitical risks, the unstable state of the American economy, as well as high uncertainty about the COVID-19 epidemic are pushing the asset to become a new reserve currency.
 

[MikhailLF]

EUR/USD: EUR is corrected

Current trend

EUR is showing flat dynamics against USD during today's Asian session, trading near record highs updated the day before. The positions of USD came under pressure again yesterday after the publication of the minutes of the US Federal Reserve meeting. As expected, the regulator did not change the parameters of monetary policy, and at the follow-up press conference, the Chair of the Fed, Jerome Powell, promised to continue using the full range of available instruments to support the national economy. In his speech, Powell also mentioned the volatile labor market, noting that many Americans have yet to lose their jobs.

European investors are focused on macroeconomic statistics from Germany and the eurozone today. Among other things, analysts expect the release of July data on the labor market and the dynamics of consumer inflation in Germany. In addition, data on German GDP for Q2 2020 will be published.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range expands, freeing a path to new record highs for the "bulls". MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic, having approached its highs, is trying to reverse downwards, signaling in favor of the development of corrective decline in the ultra-short term.

The "bearish" trend is likely to appear at the end of the trading week.

Resistance levels: 1.1804, 1.1850, 1.1900.
Support levels: 1.1723, 1.1657, 1.1600, 1.1546.

 

[MikhailLF]

 XAU/USD: general review

Current trend

Gold prices are showing moderate gains again in trading in today's Asian session, recovering from the correctional decline the day before. On Thursday, the instrument retreated from its record highs and interrupted the historic rally to the level of 2000.00 amid technical factors and corrective sentiment on the US stock markets. In turn, with the opening of the American trading session on Thursday, the pressure on USD began to increase after the publication of disappointing statistics on the annual dynamics of US GDP for Q2 2020. Political risks also intensified after Donald Trump posted a proposal on his Twitter to postpone the presidential elections in the USA due to the difficult epidemiological situation in the country.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is widening from above, clearing the way for the "bulls" to new all-time highs and the target level of 2000.00. MACD indicator is growing preserving a weak buy signal (located above the signal line). For a long time now, Stochastic has been near its highs, trying to reverse into a downward plane. As before, the indicator points at the greatly overbought instrument in the ultra-short term.

It is necessary to wait for clarification of the situation in the market to open new positions. Some of the long positions should be kept for some time.

Resistance levels: 1980.84, 2000.00.

Support levels: 1955.00, 1935.00, 1910.00, 1895.06.

[MikhailLF]

 Morning Market Review

EUR/USD

EUR shows flat dynamics of trading during today's Asian session, consolidating after the corrective decline in the instrument at the end of last week. On Friday, after updating record highs since May 2018, EUR fell sharply, which was mainly due to technical factors of taking long profits ahead of the weekend. Additional pressure on EUR positions was exerted by weak macroeconomic statistics on the dynamics of GDP in the euro zone for Q2 2020. In quarterly terms, GDP showed a 12.1% QoQ decline after a 3.6% QoQ contraction in the prior period. The indicator came out close to its forecasts at –12% QoQ. In annual terms, the decline in GDP in the euro area amounted to 15% YoY, which turned out to be slightly worse than analysts' expectations at the level of –14.5% YoY. In turn, data on consumer inflation in the euro area for July contributed to the strengthening of EUR. Consumer Price Index rose by 0.4% YoY, accelerating from the previous value of 0.3% YoY. Experts expected a slowdown to 0.2% YoY.

GBP/USD

GBP demonstrates moderate gains against USD again during today's morning session, returning to the local highs, updated at the end of last week. The instrument adds about 0.10% and is testing the level of 1.3100 for a breakout. The "bullish" activity for the instrument is supported by the weakness of USD, while the fundamental picture for GBP remains unchanged. Investors remain concerned about the uncertainty surrounding the conclusion of a trade agreement between the EU and the UK before the transition deadline at the end of the year. In addition, the UK is showing alarming statistics on the incidence of coronavirus, which puts plans to lift quarantine restrictions in the country into question. At the end of last week, Prime Minister Boris Johnson noted that further lifting of restrictions will inevitably lead to an increase of incidence. Today, investors expect the publication of statistics on business activity in the US and UK Manufacturing sector for July.

AUD/USD

AUD is marginally strengthening against USD during today's Asian session, recovering from a strong decline late last week as the instrument retreated from its record highs since February 2019. A certain support for AUD is provided by the macroeconomic statistics from Australia, published today. AiG Manufacturing index went up from 51.5 to 53.5 points in July. In the manufacturing sector, according to the Commonwealth Bank, activity rose from 53.4 to 54 points, better than the neutral forecasts. Inflation data from TD Securities in July showed an increase of 0.9% MoM and 1.3% YoY, which turned out to be significantly better than the data for the previous period: +0.6% MoM and +0.7% YoY. Chinese statistics also provided additional support to the instrument. Caixin Manufacturing PMI rose from 51.2 to 52.8 in July, beating market forecasts of 51.3.

USD/JPY

USD is showing ambiguous trading dynamics against JPY during today's Asian session, trying to develop corrective growth, the momentum for which was formed at the end of last week. Strengthening of USD positions is associated with technical factors, while there are still not many fundamental reasons for USD growth. Friday's statistics from the US again turned out to be heterogeneous, and the greatest support for USD was provided only by the Chicago PMI, which in July rose sharply from 36.6 to 51.9 points, which turned out to be better than expected by 43.9 points. JPY finds some support among macroeconomic publications from Japan. Jibun Bank Manufacturing PMI in July rose from 42.6 to 45.2 points with a neutral forecast. At the same time, the data also reflected the fall of the Japanese economy by 0.6% QoQ and 2.2% YoY in Q2 2020, which, however, did not come as a surprise.

XAU/USD

Gold prices are showing ambiguous dynamics during today's morning session, trading near record highs and a psychological level of 2000.00. The demand for the asset remains high against the background of continuing uncertainty in the market, as well as the progressive weakness of USD. The risks associated with the coronavirus pandemic are not going away and are likely to remain relevant until a resistant vaccine emerges and a widespread vaccination campaign begins. There are also geopolitical tensions on the market associated with the aggravation of relations between the United States and China. The parties continue to exchange mutual sanctions complicating the process of global economic recovery. Domestic political situation in the United States should be taken into account as well. In November, the US presidential election is to take place, which will have to be held in an environment of increased epidemiological risks.

[MikhailLF]

WTI Crude Oil: oil prices show flat dynamics

Current trend

WTI crude oil prices are trading flat after a moderate increase at the beginning of the week. The growth of quotations on Monday was caused by rather positive statistics on the corresponding sectors of the economy in Europe and Asia Pacific region. In turn, the further rising of the instrument was restrained by fears of an increase in the incidence of COVID-19, as well as growing supply of oil at the market. Since August, the volume of oil production cuts by OPEC+ members has been decreasing from the previously determined 9.7M barrels per day to the current 7.7M barrels.

Today, investors are focused on the publication of the API report on oil reserves for the week ending July 31. The previous report showed a sharp decline of 6.829M barrels.

Support and resistance

Bollinger Bands on the daily chart have been showing lateral trend for a long time. The price range almost does not change; however, it is quite consistent with the observed dynamics in the market. The MACD indicator is going down, maintaining a weak sell signal (located below the signal line). Stochastic, on the other hand, is showing moderate growth in response to the emergence of “bullish” trend on Monday.

To open new trading positions, one should wait until the signals from technical indicators are clarified.

Resistance levels: 41.00, 41.41, 42.00, 42.31.
Support levels: 40.00, 39.15, 38.47, 38.00.

[MikhailLF]

XAG/USD: prices update record highs

Current trend

Silver prices are actively climbing during today's morning trading, updating record highs since April 2013 and trying to consolidate above the level of 27.00. A new rally for the instrument was due to the weak macroeconomic publications from ADP on employment in the US, which could lead to a slowdown in the recovery of the American economy.

In turn, some support for USD is provided by positive expectations regarding the formation of a new package of measures to support the US economy in Congress by the end of this week. A vote for the introduction of new stimulus measures may take place as early as next week. Another support factor for USD is noticeable improvement in the situation with the dynamics of the coronavirus incidence in the USA, as well as a number of promising forecasts for the development of a vaccine against COVID-19 in the near future.

Support and resistance

Bollinger Bands in D1 chart show stable growth. The price range is expanding; however, it fails to catch the development of "bullish" sentiments. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic retains steady upward direction, but is located near its highs, which indicates overbought instrument in the ultra-short term.

Existing long positions should be kept until technical indicators are clarified.
Resistance levels: 28.00, 28.70.

Support levels: 27.00, 26.17, 24.92, 24.00.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is showing insignificant growth against USD during today's Asian session, correcting after falling the day before. USD was supported on Monday by decrees signed by President Donald Trump last weekend. Among other things, Trump has temporarily extended the payment of increased unemployment benefits to American citizens while lawmakers in Congress fail to agree on a new stimulus package. At the same time, the new benefit was revised downward from USD 600 to USD 400, and a quarter of the amount will have to be covered from the state budgets. European investors are awaiting the publication of macroeconomic statistics on economic sentiment from ZEW today. The indicators are predicted to show a slight increase in August; however, noticeable growth of EUR because of these data is unlikely.

GBP/USD

GBP shows moderate growth against USD during today's Asian session, continuing the development of the "bullish" impulse formed yesterday. The instrument is still trying to win back the losses of last Friday; however, the buying activity for GBP remains at a rather low level, as investors expect new drivers to appear on the market. Today traders are focused on the data on the UK labor market for June and July. Claimant Count in July rose sharply by 94.4K after falling by 28.1K last month. ILO Unemployment Rate remained at the level of 3.9% (3M) with the forecast of growth to 4.2% (3M).

NZD/USD

NZD is strengthening against USD during today's Asian session, recovering from a sharp decline at the end of last trading week, when the instrument responded to the publication of the US labor market report for July. Macroeconomic statistics from China provide some support to the instrument, while the continuing geopolitical tensions between the USA and China, as well as the uncertain situation around the COVID-19 pandemic contribute to the development of multidirectional dynamics. Macroeconomic statistics from New Zealand released tonight did not have a noticeable effect on the instrument. Electronic Card Retail Sales in July decreased from 15.6% MoM to 1.1% MoM, which turned out to be significantly worse than the expected 13.8% MoM. At the same time, in annual terms, the indicator increased from 8% YoY to 11.4% YoY. New Zealand investors are focused on the RBNZ meeting on interest rates, which will take place on Wednesday. Analysts do not expect changes in the vector of monetary policy at the moment.

USD/JPY

USD has shown moderate gains against JPY during this morning session, trying to consolidate above 106.00 again. USD is supported by the initiatives of Donald Trump, who signed several decrees aimed at stimulating the economy, without waiting for the resolution of all controversial issues in the American Congress. According to the signed order, the government will resume the payment of increased unemployment benefits of USD 400, which will be partially funded from the budget of specific states. The move, according to analysts, will not only help ease the debt burden of American citizens, but will also allow Trump to increase his popularity among voters ahead of the presidential elections this fall.

XAU/USD

Gold prices are declining during today's Asian trading session, continuing the development of the corrective impulse that formed at the end of the last trading week, when the instrument retreated from its record highs. Moderate growth of USD in response to the signing by Donald Trump of a number of decrees, in particular, on the resumption of the payment of increased unemployment benefits, contributed to the maintenance of the "bearish" dynamics on the instrument yesterday. In turn, the further escalation of tensions between the USA and China contributed to the strengthening of gold, which remains in high demand as a safe-haven asset.
 

[MikhailLF]

Morning Market Review

EUR/USD

EUR declines against USD during today's Asian session, updating local lows of August 3. The instrument loses about 0.2%, preparing to test the level of 1.1700 for a breakdown. USD was again supported by President Donald Trump, who announced the preparation of a bill to reduce the capital gains tax. However, closer to the end of the afternoon session, the market still returned to negative dynamics. The euro, in turn, received support after the publication of the results of the ZEW study. ZEW Economic Sentiment in the euro area in August rose from 59.6 to 64 points, which turned out to be significantly better than market expectations of 59.9 points. ZEW Economic Sentiment in Germany for the same period soared from 59.3 to 71.5 points, while forecasts assumed its decline to 58 points.

GBP/USD

GBP declines against USD in today's Asian session, testing the level of 1.3000 for a breakdown. British investors remain focused on Tuesday's publications from the UK, as well as the data on US producer inflation for July. Claimant Count Change in the UK in July showed a record increase of 94.4K, while in June applications showed negative dynamics at the level of –28.1K. Experts expected the growth by 10K only. Claimant Count Rate fell by 2.2% in July after rising by 7.3% a month earlier. At the same time, the ILO Unemployment Rate in June (for 3 months) remained at the level of 3.9%, despite the projected growth to 4.2%.

AUD/USD

AUD shows negative dynamics paired with USD at trading on Wednesday, developing a corrective impulse formed at the end of the last trading week. The decline in the instrument proceeds against the background of some strengthening of USD, which reacts to the actions of Donald Trump. Earlier, the US president extended the payment of an increased unemployment benefit as a temporary support measure, as Democrats and Republicans have so far failed to reach consensus on negotiations on a new economic aid package. The day before, Trump announced work on a bill that provides for a reduction in the capital gains tax, which also triggered the emergence of a short-term impulse for growth. The pressure on AUD on Wednesday is exerted by weak macroeconomic statistics from Australia. Westpac Consumer Confidence in August showed a sharp decline of 9.5% after falling by 6.1% in the previous month. Wage Price Index in Q2 2020 slowed down from +0.5% QoQ to +0.2% QoQ, which was worse than market expectations at +0.3% QoQ.

USD/JPY

USD is showing moderate growth against JPY during today's Asian session, updating the local highs of July 24. The day before, the instrument rose sharply in response to a number of optimistic news from the US. In particular, investors welcomed Donald Trump's new initiative to reduce some of the taxes for businesses, and also took a lead from the stabilization of the dynamics of the incidence of COVID-19 in the USA. USD was also supported by the data on producer inflation from the USA. Producer Price Index excluding Food & Energy in July increased by 0.5% MoM and 0.3% YoY, which turned out to be significantly better than market expectations of 0.1% MoM and 0.0% YoY. Today American investors await the publication of the July statistics on consumer inflation, as well as the release of Monthly Budget Statement in the USA.

XAU/USD

Gold prices are showing a steady decline, retreating from record highs. The day before, the instrument fell by more than 3.5% in response to the emergence of new legislative initiatives from US President Donald Trump, who proposed to lower the capital gains tax. In addition, expectations of progress in the discussion of a new economic aid package in the US Congress contributed to the decline in the value of the asset. Finally, the markets have widely discussed the statement of President of the Russian Federation Vladimir Putin, who announced the registration of the world's first vaccine against COVID-19, called Sputnik V. It is expected that the mass production of the new vaccine may begin in September, but the drug will enter civilian circulation only closer to the end of all testing stages, that is, in January 2021.

[MikhailLF]

NZD/USD: the pair corrects downward

Current trend

The NZD/USD pair corrects downwards against the global growth of the US dollar, trading near the level of 0.6568.

Yesterday, the Reserve Bank of New Zealand decided to leave the interest rate unchanged at 0.25%. At the same time, the regulator expanded the large-scale asset purchase program (LSAP) to 100 billion New Zealand dollars in order to further reduce retail interest rates to achieve the target volume. The bank noted that New Zealand has contained the local spread of COVID-19 in recent months, easing social constraints and revitalizing economic activity, as seen in earlier figures.

There was not much macroeconomic data from the US this week, and it is worth highlighting only yesterday's data on the Core Consumer Price Index, which reached 0.6% for July against the background of the forecast of 0.2%. The situation inside the country continues to be tense, which does not allow the dollar to finally consolidate in an upward trend. As a result of yesterday's session, the USD Index fell again and is now trading around 93.230.

Support and resistance

On the global chart, the upward movement develops within a wide upward channel, and the price is very close to the support line. Technical indicators start to reverse. Fast EMAs of the Alligator indicator crossed, and the AO oscillator histogram approached the transition level.

Resistance levels: 0.6695, 0.6790.
Support levels: 0.6520, 0.6380.

[MikhailLF]

Brent Crude Oil: the price consolidates

Current trend

Oil prices dropped slightly yesterday and are developing flat dynamics during the first hours of the Friday session. The instrument is still near the level of $45 per barrel but the “bulls” have not yet succeeded in consolidation above this resistance.

This week, some support to the quotes was provided by the data of the report of the US Department of Energy, which recorded another reduction in the stocks of oil and petroleum products in American warehouses. So, for the week of August 7, the figure fell by 4.512 million barrels after falling by 7.373 million barrels in the previous period. Analysts expected a decrease of only 2.875 million barrels.

In turn, pressure on the instrument intensified after OPEC's statements that the cartel expects a decrease in energy demand in 2020 by 9.06 million barrels per day. A month ago, OPEC was counting on a decline of 8.95 million barrels per day.

Support and resistance

On the daily chart, Bollinger bands are moving flat. The price range expands slightly from above, letting the “bulls” renew local highs. The MACD indicator is slightly declining, maintaining a poor sell signal (the histogram is below the signal line). Stochastic, reacting to attempts to grow the instrument in the middle of the week, reversed upwards.

To open new trading positions, it is better to wait until the signals from technical indicators are clarified.

Resistance levels: 45.00, 45.87, 46.49, 47.50.
Support levels: 43.94, 43.00, 41.50, 40.00.

[MikhailLF]

 USD/CAD: the instrument is consolidating

Current trend

During the morning session, the USD/CAD pair shows flat dynamics, consolidating near the local lows of January 2020. At the end of last week, USD rose after the publication of positive macroeconomic statistics but the “bullish” momentum quickly lost its strength. Retail sales rose by 1.2% MoM for July after rising by 8.4% MoM for June. Analysts had expected the value to rise by 1.9% MoM. At the same time, the indicator of the "retail control group" for the same period increased by 1.4% MoM, which was much better than the forecasts of +0.8% MoM.

Canada has pleased investors with an increase in the volume of industrial orders. In June, the index rose by 20.7% MoM after rising by 11.6% MoM in the previous month. Analysts expected the volume to grow by only 16.4% MoM.

Support and resistance

On the daily chart, Bollinger bands smoothly reverse into a horizontal plane. The price range is expanding from below, letting the “bears” renew local lows. The MACD indicator is growing, maintaining a poor buy signal (the histogram is above the signal line). Stochastic is showing a similar trend, reversing upwards near the level of 20. The indicator readings signal in favor of the development of the upward trend in the ultra-short term.

The development of corrective growth is possible in the short and/or super short term.

Resistance levels: 1.3250, 1.3300, 1.3350, 1.3400.
Support levels: 1.3200, 1.3150, 1.3100.
 

[MikhailLF]

Morning Market Review

EUR/USD

EUR is gaining ground against USD during today's Asian session, developing an uptrend in the short term and recovering to its previous record highs updated on August 6. The growth of the instrument is facilitated by technical factors while there are not many new drivers in the market. From the macroeconomic statistics published on Monday, only a nondescript NY Empire State Manufacturing Index can be noted, which in August fell sharply from 17.2 to 3.7 points, while investors expected its correction to 15 points. Today, investors are focused on statistics from the US on the dynamics of retail sales. In addition, with the opening of the US session, traders will pay attention to the data on the housing market for July. Interesting data from the eurozone will appear only on Wednesday, when the July statistics on consumer inflation will be published, as well as a meeting of the Economic and Financial Affairs Council will be held.

GBP/USD

GBP is trading higher against USD during today's morning session, gradually recovering to its previous local highs since early March. USD is under pressure from not the most confident macroeconomic statistics from the United States, as well as the continuing high incidence of coronavirus in the USA. GBP, in turn, reacts negatively to the attempts of the UK authorities to keep the incidence rate within the current values. Earlier it became known that citizens who return to the UK from overseas travel will be forced to be on lock down.

NZD/USD

NZD is trading negatively against USD during today's Asian session, reversing downwards again after a tentative rally earlier in the week. The instrument loses about 0.25%, testing the level of 0.6540 for a breakdown. Macroeconomic statistics released on Monday in New Zealand and the USA turned out to be mixed, but did not bring any noticeable changes to the market dynamics. Business NZ Performance of Services Index in July fell from 54.1 to 53.2 points. The US disappointed investors with the decline in the NY Empire State Manufacturing Index, which fell sharply in August from 17.2 to 3.7 points (the forecast assumed a slight decline to 15 points). Today traders are awaiting the release of the New Zealand Global Dairy Price Index data for July.

USD/JPY

USD is significantly declining against JPY during today's Asian trading, continuing to develop a strong "bearish" trend that formed at the end of the last trading week. JPY managed to demonstrate growth on Monday, ignoring the publication of weak macroeconomic statistics from Japan. The data reflected a sharp decline in Japan's GDP dynamics in Q2 2020 by 27.8% YoY after a 2.2% YoY contraction in the previous period. Market forecasts turned out to be quite accurate, but still suggested a slightly less active decline by 27.2% YoY. On a quarterly basis, the Japanese economy lost 7.8% QoQ against the forecast of –7.6% QoQ.

XAU/USD

Gold prices are relatively stable during today's Asian session and are consolidating near 1990.00 after the active growth of the instrument the day before. The demand for the metal rose again at the beginning of the week, responding to the weak macroeconomic background in the US and Japan. In addition, investors are still rather skeptical about the new economic aid package being developed by US lawmakers. Additional risks are generated by the upcoming US presidential elections, which, obviously, will be held in a tense atmosphere. In turn, it should be noted that some support for USD on Monday was provided by the news that the US and China decided not to consider the results of the implementation of the first phase of the trade agreement concluded at the beginning of the year. Due to the outbreak of the epidemic, China was unable to fulfill its obligations to purchase agricultural products from the USA, but it had quite objective reasons for that.

[MikhailLF]

Morning Market Review

EUR/USD

EUR has shown slight gains against USD during today's Asian session, trading near record highs, updated the day before, when EUR was supported by USD weakness. Uncertainty around the new package of measures to stimulate the US economy continues to exert powerful pressure on USD. American lawmakers still have not come to a consensus, and investors fear that against this background, the Fed may again begin to soften monetary policy, up to the introduction of negative interest rates. Today, European traders focus on macroeconomic statistics on consumer inflation for July. In addition, a meeting of the EU Economic and Financial Affairs Council will take place today.

GBP/USD

GBP is trading higher against USD this morning, hitting record highs since the start of the year. The instrument showed steady growth the day before, despite the fact that there were practically no interesting macroeconomic statistics on the market. Moreover, USD managed to get tangible support after the publication of data on the US housing market. Building Permits rose by 18.8% MoM in July after rising by 3.5% MoM in June. Housing Starts in the same period increased by 22.6% MoM, accelerating from 17.5% MoM. Today, GBP may be affected by publications from the UK on the dynamics of producer and consumer inflation in July, and the US will release the minutes of the July Fed meeting.

AUD/USD

AUD is trading flat during today's Asian session, staying in the area of record highs since February 2019, updated the day before. AUD showed moderate gains, taking advantage of the weakness in USD. In turn, the published minutes of the RBA meeting almost did not affect the dynamics of the instrument, since, unlike the Fed, the Australian regulator feels some freedom in its actions. The Fed, according to analysts, is in an unenviable situation, since US lawmakers still have not been able to ensure the adoption of a new bill on financial aid to citizens and businesses. Insignificant pressure on the instrument on Wednesday was exerted by macroeconomic statistics from Australia. Westpac Leading Index in July slowed down from +0.5% MoM to +0.05% MoM.

USD/JPY

USD is strengthening against JPY during today's Asian session, correcting after active decline at the beginning of the week. The instrument adds about 0.17% and is testing the level of 105.50 for a breakout. The growth of USD proceeds against the background of strengthening technical factors, as investors close part of their short positions. In addition, the Japanese macroeconomic statistics released on Wednesday put some pressure on JPY. Machinery Orders in June unexpectedly declined by 7.6% MoM after an increase of 1.7% MoM a month earlier. Analysts had expected further growth by 2% MoM. In annual terms, the decline in Machinery Orders accelerated from the previous –16.3% YoY to –22.5% YoY, which turned out to be worse than the forecasts of –17.6% YoY.

XAU/USD

Gold prices are trading with a downtrend during today's Asian session, retreating from local highs since August 11, updated the day before. Yesterday, the instrument showed moderate growth, briefly having consolidated above 2000.00 again, against the background of a large-scale weakening of USD in the market. Investors are waiting for qualitative changes from the Fed and US lawmakers, but so far there is very little optimistic news. Moreover, against the backdrop of a difficult epidemiological situation and the upcoming elections in the USA in the coming autumn, the risks of uncertainty increase markedly. Today investors are awaiting the publication of the minutes of the July Fed meeting.

[MikhailLF]

Morning Market Review

EUR/USD

EUR is showing slight gains against USD during today's Asian session, recovering from a strong decline the day before, which was triggered by the publication of the last month FOMC Meeting Minutes. The protocols disappointed investors with negative forecasts and the lack of proposals for any specific measures to implement economic and fiscal stimuli. The FOMC members continue to believe that the current epidemic carries long-term risks and can significantly reduce the pace of recovery in certain sectors of the US economy. Wednesday's weak macroeconomic statistics from the euro area put additional pressure on EUR. Consumer Price Index in the euro area fell by 0.4% MoM in July after rising by 0.3% MoM a month earlier. Analysts expected a reduction of 0.3% MoM. Core CPI fell by 0.3% MoM, accelerating the decline from –0.2% MoM.

GBP/USD

GBP is trading with ambiguous dynamics against USD during today's Asian session, located at the level of 1.3100, which was reached against the background of the active decline in GBP the day before. GBP retreated from its all-time highs on Wednesday, in response to the publication of the FOMC Meeting Minutes, which helped strengthen USD amid growing worrisome market sentiment. In turn, the macroeconomic statistics from the UK, published yesterday, provided GBP with quite tangible support, thanks to which the instrument renewed its highs. Consumer Price Index in July rose by 0.4% MoM, accelerating from 0.1% MoM in June. Analysts had expected decline by 0.1% MoM. In annual terms, inflation reached 1% YoY, which also turned out to be better than the neutral forecasts of 0.6% YoY. Retail Price Index in July also increased from 0.2% MoM to 0.5% MoM against the forecast of 0.1% MoM.

AUD/USD

AUD is trading ambiguously against USD during today's Asian session, consolidating after the correctional decline the day before. The instrument has retreated from record highs since February 2019 amid the publication of the FOMC Meeting Minutes from last month. As expected, the minutes did not bring anything concrete to the market, but disappointed investors with negative forecasts and assessments by the Committee members. First of all, there are still risks of a further slowdown in the American economy amid the epidemiological situation. It is not the first time that the protocols have highlighted the need for new economic and fiscal stimulus, but US lawmakers still cannot agree on the amount of potential assistance to the weakened economy. Today, investors are on the publication of data on the dynamics of jobless claims in the USA.

USD/JPY

USD demonstrates flat trading dynamics against JPY during the morning session, consolidating near 106.00. The active growth of USD, provoked by the emergence of the ambiguous FOMC Meeting Minutes, quickly dried up, and now investors are looking for new drivers for growth. Some pressure on JPY is exerted by the nondescript statistics from Japan on Thursday. Foreign Investment in Japan Stocks for the week ending August 14 rose from JPY 165.5 billion to JPY 371 billion. At the same time, Foreign Bond Investment over the same period fell sharply by JPY 182.2 billion after an active growth by JPY 1.442 trillion over the past week. The most interesting macroeconomic statistics from Japan will appear on Friday, when data on the national Consumer Price Index for July, as well as on the PMI in the manufacturing sector from Jibun Bank for August are released.

XAU/USD

Gold prices are recovering during today's Asian session, partially offsetting the sharp drop the day before. By the end of Wednesday, the instrument showed a confident decline in response to the growth of USD after the publication of the controversial FOMC Meeting Minutes. Investors were disappointed with the published minutes, as they again did not contain any specific measures to stabilize the economic situation in the country. Committee members agreed on the need for more aggressive fiscal stimuli, but US lawmakers have yet to overcome existing differences. The question of the possibility of introducing negative interest rates, judging by the protocols, was not raised at all.

[MikhailLF]

EUR/USD: EUR is recovering

Current trend

EUR is strengthening against USD today, developing the correctional dynamics of Thursday, which replaced the active decline in the instrument on Wednesday amid the publication of the FOMC Meeting Minutes. The recovery of EUR is facilitated not only by technical factors, but also by the macroeconomic statistics from the USA published on Thursday. Initial Jobless Claims for the week ending August 14 increased sharply again from 971K to 1.106M, while analysts expected a further decline in the figure to 925K. At the same time, Continuing Jobless Claims for the week ending August 7 fell from 15.48M to 14.844M, which was better than the projected 15M.

Today, European investors are focused on the data on business activity in the euro area for August. Manufacturing PMI is expected to continue moderate growth, while Services PMI is still characterized by negative forecasts.

Support and resistance

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is narrowing from below, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD preserves a moderate downtrend and a previous weak sell signal (located below the signal line). Stochastic demonstrates much more confident dynamics and does not react to the resumption of growth of EUR at the end of the week.

To open new trading positions, it is necessary to wait for the signals from technical indicators to be clarified.

Resistance levels: 1.1914, 1.1964, 1.2000.
Support levels: 1.1850, 1.1780, 1.1700, 1.1657.

[MikhailLF]

GBP/USD: the pair declines

Current trend

The GBP/USD pair declines after the explosive growth of USD against a basket of world currencies.

Even a significant block of positive macroeconomic information released by the UK Bureau of Statistics on Friday failed to reverse the downward trend. The July Core Retail Sales was 2.0%, better than the 0.2% expected. Retail Sales were 3.6%, which is better than the forecasted 2.0%. August Composite PMI rose to 60.3 points from 57.0 points for July. Manufacturing PMI reached 55.3 points from 53.3 points a month earlier. Service PMI remained at 60.1 points, which is better than the forecast of 57.0 points.

USD rose significantly, causing the pair to fall. USD Index rose from 92.400 to 93.200 in one trading session after August US Manufacturing PMI data release. It amounted to 53.6 points against the forecast of 51.9 points. Existing Home Sales also increased significantly for July, reaching 5.86 million against 4.70 million for June.

Support and resistance

The instrument moves within a broad ascending channel, and after four days of volatile dynamics, it is in a downward wave. The readings of the indicators reflect further decline and on the global chart, they reflect the possibility of a reversal. Fluctuation range of the EMA indicator Alligator narrows and the histogram of the AO oscillator approaches the zero line.

Resistance levels: 1.3240, 1.3350.
Support levels: 1.3030, 1.2620.

[MikhailLF]

USD/JPY: the growth continues

Current trend

The pair is showing gains amid negative news from Japan, trading at 106.00.

JPY continues to be under pressure from domestic fundamental factors. It became known recently that the two largest airlines, All Nippon Airways and Japan Airlines, will significantly reduce the number of domestic flights due to the introduction of additional quarantine measures in connection with the second wave of the COVID-19 pandemic. All Nippon Airways will cut up to 45% of all its flights, while Japan Airlines will cut its number of flights by 43%.

USD began to fall in price against the basket of major currencies again today dropping to the level of 93.150, but this had practically no effect on the pair's rate, as it continues to grow against the background of yesterday's active upward momentum.

Support and resistance

The global descending channel continues to form. At the local interval, the price has reached the resistance line of the inner channel and is ready to form a downward reversal. Technical indicators give a new sell signal. The fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator is in the negative zone.

Resistance levels: 106.50, 107.90.
Support levels: 105.40, 104.00.
 

[MikhailLF]

EUR/USD: downward correction

Current trend

After a downward correction, the EUR/USD pair is trying to recover, trading at 1.1813.

As soon as the American currency tried to form a new uptrend, another fundamental hit forced the USD Index to decline. Wisconsin has declared an emergency and a curfew at night after police injured African American Jacob Blake on August 23. The US currency is declining, despite the positive data on New Home Sales for July, which rose to 901K against 784K forecasted.

Analysts' expectations of a significant decline in German Q2 GDP came true. A small positive point was that the values were slightly better than forecasts: –9.7% QoQ versus –10.1% expected and –11.3% YoY versus –11.7%. A slight increase is also observed in the IFO business climate index for August, which amounted to 92.6 points against the background of the forecast of 92.2 points.

Support and resistance

The instrument trades within the ascending channel. After reaching the support line, the price practically formed a local Head and shoulders reversal pattern. Fast EMAs on the Alligator indicator have crossed and are ready to overcome the signal one upwards, and the AO oscillator histogram is approaching the transition level.

Support levels: 1.1785, 1.1711.
Resistance levels: 1.1840, 1.1950.

[MikhailLF]

AUD/USD: trading near record highs

Current trend

AUD maintains an uptrend against USD in the ultra-short term, again approaching record highs since August 19. The instrument is supported by the weak USD, which is retreating practically across the entire spectrum of the market in anticipation of today's publication of updated data on the dynamics of US GDP. In addition, investors are awaiting a speech by the Fed Chairman, Jerome Powell, who may announce changes in the vector of the regulator's monetary policy.

The macroeconomic statistics from Australia also provide moderate support to the instrument. Yesterday, investors drew attention to the data on the dynamics of Construction Work Done. In Q2 2020, the indicator decreased by 0.7% QoQ, after a 1% QoQ decline in the previous quarter. Analysts had expected a sharp 5.8% QoQ drop. Today's Private Capital Expenditure data showed a 5.9% QoQ decline despite forecasts of an 8.4% QoQ fall.

Support and resistance

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is slightly expanding from above, but is limiting the development of "bullish" trend in the ultra-short term. MACD indicator is growing preserving a weak buy signal (located above the signal line). Stochastic rises more steadily but is rapidly approaching its highs, which reflects risks of the overbought AUD in the ultra-short term.

Existing long positions should be kept until technical indicators are clarified.

Resistance levels: 0.7249, 0.7274, 0.7300.
Support levels: 0.7226, 0.7200, 0.7150, 0.7130.
 

[MikhailLF]

Morning Market Review

EUR/USD

EUR is strengthening against USD during today's Asian session, recovering from the active multidirectional dynamics on Thursday, which was the result of the reaction to the speech of the Fed Chairman Jerome Powell and the publication of macroeconomic statistics from the US. Powell's speech supported USD for a while, as the markets saw the long-awaited changes in monetary policy: now the Fed does not limit inflation to a strict threshold of 2%, but will allow prices to stay above this level for some time so that the American economy could recover after the crisis. Additional support for USD was provided by the updated data on the dynamics of US GDP for Q2 2020. According to new estimates, the indicator dropped by 31.7% YoY, which was better than the market's expectations at –32.5% YoY.

GBP/USD

GBP is growing against USD during today's morning trading session, developing the uptrend that formed earlier this week. Yesterday's trading proceeded with multidirectional dynamics due to the Fed Chairman Jerome Powell's speech; however, GBP still managed to update its record highs since December 17, 2019. Today, investors are focused on the Bank of England Governor Andrew Bailey's speech, in which he may clarify the prospects for the monetary policy of the regulator. Also at the end of the week, traders await the publication of July statistics on Personal Income and Spending of American citizens.

NZD/USD

NZD is actively growing against USD during today's Asian session, forming a fairly strong "bullish" trend in the short term. The instrument adds about 0.45% and is testing the level of 0.6660 for a breakout. The uptrend for the instrument at the end of the week is supported by corrective sentiments for USD. USD showed moderate growth after the speech of the Fed Chairman, Jerome Powell, who announced changes in monetary policy in terms of adjusting the inflation target. NZD so far is ignoring the appearance of weak macroeconomic statistics from New Zealand on Friday. Meanwhile, the ANZ Consumer Confidence index in August fell from 104.3 to 100.2 points. Total Filled Jobs in July fell by 7.418M after rising by 2.2M last month.

USD/JPY

USD is actively strengthening against JPY during today's morning trading session, updating local highs since August 14. The pair is gaining about 0.30% and is preparing to test the strong resistance at 107.00. The appearance of a "bullish" momentum for the instrument was caused by yesterday's publication of good macroeconomic statistics from the USA, as well as by the results of the speech by the Fed Chairman, Jerome Powell, who was able to calm and support the markets for a while. Weak statistics from Japan provide additional support to the pair today. Tokyo Consumer Price Index slowed down in August from the previous 0.6% YoY to 0.3% YoY, which turned out to be much worse than market expectations at 0.8% YoY.

XAU/USD

Gold prices are rising during today's Asian session, recovering from the decline the day before, which was a reaction to the long-awaited speech of the Fed Chairman Jerome Powell. In the long term, the US regulator will not restrict inflation to a threshold of 2%, but will allow prices to remain above this level for some time to compensate for years of extremely low consumer prices. In addition, Powell, in his speech, paid much attention to the situation on the labor market, promising to develop a number of new measures to stabilize and restore it. Additional support for USD was provided by the revised indicators of US GDP dynamics for Q2 2020. However, even according to the updated data, the US economy lost more than 31%.

[MikhailLF]

USD/JPY: the pair is trading in both directions

Current trend

The US dollar is actively growing against the Japanese yen today, compensating for the sharp drop at the end of last week. Then the yen showed active growth and retreated from two-week lows in response to the resignation of Japanese Prime Minister Shinzo Abe, who decided to leave the post due to deteriorating health. The demand for the Japanese currency rose markedly, as analysts suggested the beginning of a possible repatriation of capital due to the sharply increased political uncertainty.

This week, the yen is pressured by the ambiguous macroeconomic statistics. Retail sales in July decreased by 3.3% MoM and 2.8% YoY, which turned out to be significantly worse than the market forecasts of +8% MoM and +2.4% YoY. Industrial output contracted by 16.1% YoY in July after falling by 18.2% YoY last month. MoM, the indicator rose by 8%, sharply accelerating from the previous value of +1.9%.

Support and resistance

Bollinger Bands in the D1 chart demonstrate a gradual decrease. The price range is narrowing from above, reflecting a sharp change of trend in the short term. MACD is going down having formed a weak sell signal (histogram is located under the signal line). Stochastic is declining more actively and is currently rapidly approaching its minima.

The current showings of the indicators do not contradict the further development of the downtrend in the short and/or ultra-short term.

Resistance levels: 105.67, 106.00, 106.46, 106.79.
Support levels: 105.29, 105.00, 104.50, 104.17.

[MikhailLF]

XAG/USD: silver prices rise

Current trend

Today, during the Asian session, silver prices are actively growing, renewing local highs since August 11 and continuing the development of the “bullish” impulse that formed at the end of the last trading week. The instrument is strongly supported by the Fed's soft monetary policy, as well as the continuing uncertainty in the American economy in connection with the upcoming presidential election. The epidemiological situation in the world also raises concerns. Despite the successes achieved in the development of a vaccine, an effective remedy has not yet appeared, and most of the world's economies still have to maintain some of the quarantine restrictions, taking new measures to stimulate and support growth.

On Tuesday, investors expect a block of macroeconomic statistics on business activity in the US for August. Also, Lael Brainard, a member of the US Federal Reserve Open Market Committee, will speak during the day.

Support and resistance

On the daily chart, Bollinger Bands grow moderately. The price range expands but not as fast as the “bullish” activity develops. MACD reverses upwards, forming a new buy signal (the histogram is above the signal line). Stochastic grows more actively but is rapidly approaching its highs, indicating that silver is overbought in the ultra-short term.

It is better to keep the current long positions in the short-term and/or ultra-short term until the signals from technical indicators are clarified.

Resistance levels: 28.78, 29.81, 30.50.
Support levels: 28.00, 27.00, 26.17, 24.92.

[MikhailLF]

 Morning Market Review

EUR/USD

EUR is trading in both directions against USD during today's Asian session, consolidating at 1.1900. EUR retreated from its record highs since May 2018 and the important psychological level of 1.2000, responding to the emergence of not the most confident macroeconomic statistics from Europe yesterday. Core Consumer Price Index in the euro zone slowed down in August from 1.2% YoY to 0.4% YoY, which turned out to be noticeably worse than market expectations at 0.9% YoY. Consumer Price Index for the same period fell by 0.2% YoY, while investors expected its growth by 0.2% YoY. Unemployment Rate in the euro area in July rose from 7.7% to 7.9%, which was only 0.1% better than the forecasts. In turn, USD received some support after the publication of statistics from the US on business activity from ISM. Today, traders are focused on the US ADP report on Employment Change in August, as well as the monthly economic review, the Fed's Beige Book.

GBP/USD

GBP is trading near zero against USD during today's morning session, retreating from its highs since the end of last year. The instrument was supported moderately by data from the UK yesterday, but later, with the publication of statistics on business activity from the US, the "bulls" began to rapidly lose their positions. The UK data was encouraging showing growth in Consumer Credit. In July, the indicator rose by GBP 1.2 billion after falling by GBP 0.382 billion in the previous month. Analysts had expected positive dynamics at GBP 0.678 billion to appear. At the same time, Markit Manufacturing PMI in the UK in August fell from 55.3 to 55.2 points. Today analysts expect the speeches of the representatives of the Bank of England, Andrew Haldane and Ben Broadbent, who may concretize the prospects of the monetary policy of the regulator for the near future.

AUD/USD

AUD is trading down against USD during today's Asian session, interrupting yesterday's "bullish" rally when it hit record highs since August 2018. In addition to the correctional growth of USD, AUD is under pressure from the macroeconomic statistics from Australia published on Wednesday. Australian GDP for Q2 2020 collapsed by 7% QoQ after falling by 0.3% QoQ in the prior period. The forecasts suggested a 6% QoQ decline. In annual terms, the Australian economy declined by 6.3% YoY, which also turned out to be significantly worse than market expectations at the level of –5.3% YoY. In Q1 2020 the Australian economy showed growth by 1.4% YoY.

USD/JPY

USD is trading marginally higher against JPY, testing 106.00 for a breakout. The instrument received support the day before after the publication of upbeat statistics from the US on business activity; however, the positions of USD remain extremely vulnerable ahead of the publication of the labor market report at the end of the week. ISM Manufacturing PMI in the USA in August rose from 54.2 to 56 points, which significantly exceeded the projected 54.5 points. ISM Manufacturing New Orders Index for the same period jumped from 61.5 to 67.6 points, while analysts expected it to decline to 53.5 points.

XAU/USD

Gold prices are slightly declining during today's Asian session, developing weak corrective dynamics after updating local highs since August 19. The instrument is still supported by the prospect of maintaining low interest rates in the US for a long period of time. Earlier, the Fed changed its approach to its inflation target and allowed prices to rise above 2% to offset the negative effect of a prolonged period of low inflation. In addition, the previous epidemiological risks remain in force, posing a threat of re-closure of economies and the return of part of quarantine restrictions. Finally, USD remains under pressure ahead of the US presidential elections this fall.