FX traders in place for busy day ahead

The greenback sent mixed signals on Monday gaining against the EUR and the GBP while clearly losing ground against the safe haven driven CHF and JPY. The medium importance NY Fed Manufacturing reading was weaker than both the expected and the previous reading not helping much. Then again the Dollar index indicated the currency was up for the day as some traders anticipate the upcoming events as a potential source of volatility and a possible rebound. During Tuesday’s early US session we get the US Retail Sales and Industrial Production rates for July. As a closing later in the US session the market will be monitoring Fed Chairman Powell’s speech before a virtual town hall meeting.

Pound traders also have an interesting European morning on Tuesday with the UK employment report for June to be released. The GBP finished lower against the USD and the EUR on Monday as traders may be in a wait and see position for the upcoming data. EUR traders may also get a piece of the action on Tuesday with the release of the Eurozone Preliminary GDP rates for Q2. EUR/USD could be driven by US fundamentals at the moment yet we expect the currency pair to display some reaction if the GDP rates impress or disappoint traders. The safe haven currencies, CHF and the JPY gained ground against the USD in the past days and thus stood out. Safe haven inflows could be based on worries over political tensions in Afghanistan. Moreover, the markets are also considering a global economy crack on recovery with questionable economic data from the US and China in the past days possibly supporting safe havens.

At the moment GBP/USD is trading between the (R1) 1.3845 resistance and the (S1) 1.3795 support. According to the RSI indicator below our chart the bearish tendencies seem to persist thus the (S1) 1.3795 could be tested first in a continuous downward momentum. Below that the (S2) 1.3775 line could be the next stop lower while the (S3) 1.3740 is in our view the lowest support according to the most recent price action. However, in case the momentum turns into a bullish one we could see a resurgence for the (R1) 1.3845 line. Higher the (R2) 1.3880 can potentially be the next target for the bulls as it was tested various times in August. Finally if cable is undertaken by a strong bullish trend then the (R3) 1.3920 can also become a target.

Sugar prices jump to multiyear high levels

Raw sugar future prices reached 20.10 cents per lb during Monday’s session, surging to its highest since February 2017. According to a Bloomberg report the market seems to focus on the drought taking place in Brazil which is expected to persist in the next weeks with high temperatures and dry forecasts probably adding further support to prices. The latest weather circumstances are an addition to the frost Brazilian sugar crops had faced previously in the year. Some analysts argue that prices may remain higher in the long-term as a new crop may be required to be planted which takes a considerable amount of time until it is able to produce. If future crops and potential supply is impacted then prices could be elevated for more than a year.

Yesterday, Sugar tested the currently noted (R1) 19.95 but was not able to break above it. In case the level is breached then we can say traders may be aiming for the (R2) 20.10 line or even higher for the (R3) 20.30 level. However we have set the yellow upward trendline to highlight the upward momentum which could also be in for a reverse. In these circumstances we may observe a move down to the (S1) 19.60 level. Beneath the (S1) we tend to note the (S2) 19.40 level that was formed previously in August. Even lower the (S3) 19.15 represents the lowest line for this analysis. Overall the steep upward trend seems be getting closer to the yellow line possibly implying some stabilization or even some bearish tendencies.

Tuesday’s Asian session provides volatility

During today’s RBA meeting minutes the central bank clearly noted that the recent lockdowns in the country seem to have impacted recovery while unemployment is expected to rise slightly in various areas because of these circumstances. Overall the statement seemed to have invited bearish tendencies for AUD against the USD. The trend could also dominate the course of the currency pair into the European session. On a separate note news that the first Covid-19 case since February was found in New Zealand has enacted a considerable selling trend for NZD/USD. NZD traders may be puzzled after the news as RBNZ’s interest rate decision tomorrow may have been their main focus until this update.

금일 주요 일정

Today during the European session we get the UK employment report for June and Eurozone’s Preliminary GDP estimates for Q2. Later in the early US session we get Canada’s House starts figure for July, the US Retail Sales and Industrial output for July, the weekly API Crude Oil inventories and finally Fed Chair Jerome Powell’s speech. In Wednesday’s Asian session we get the Japanese Machinery Orders for June and the Japanese Trade balance for July. Then the Australian Wage Price Index rates for Q2 will be coming out. Finally the star event of the session will be the RBNZ interest rate decision.

GBP/USD 4시간 차트