Easy-going Monday with a twist

In a rather easy-going Monday, the USD tended to remain relatively steady against its counterparts during the Asian session. As the calendar seems to be rather empty of US high-impact financial releases, we expect fundamentals to lead the market. Fed policymakers may be getting the lion’s share of the attention and any signals intensifying the market’s dovish expectations for the Fed’s intentions could weigh on the USD and vice versa. We have to note, though, that despite the strengthening of the USD on Friday, Gold’s price managed to continue to rise, nearing new record high levels. US stock markets seem to remain optimistic as they remain in the greens, but not crypto traders, which closed a substantial amount of Bullish positions.

The USD index after bouncing on the 96.00 (S1) support line and three consecutive days being in the greens seems to be stabilizing somewhat. The RSI indicator has neared the reading of 50 implying a substantial easing of the bearish market sentiment of the market for the greenback. Yet the downward trendline guiding it since the 1st of August remains intact allowing us to maintain our bearish outlook. Should the bears be in charge, the USD index may break the 96.00 (S1) support line thus forming a new lower trough and start aiming for the 94.60 (S2) support level, which has not seen any price actio0n for roughly the past three years. Should the bulls take over we may see the index breaking the prementioned downward trendline in a first signal of an interruption of the downward movement continuing higher by breaking the 96.75 (R1) line with the next possible target for the bulls being set at the 100.10 (R2) resistance barrier.

Gold’s price is nearing the 3710 (R1) resistance line threatening to reach new record high levels. Gold’s movement allowed us to shift the upward trendline guiding it to the right and as long as the upward trendline remains intact we intend to maintain our bullish outlook. The RSI indicator has bounced on the reading of 70, implying a strong bullish market sentiment for the precious metal, yet at the same time reminding traders that gold is at over bought levels and is ripe for a correction lower. Yet the distance between gold’s price and the upper Bollinger band may imply that there is still room for the bulls to play. Should the bulls actually maintain control over the gold’s price we may see it breaking the 3710 (R1) line and start aiming for the 3850 (R2) level. Should the bears take over, we may see gold’s price breaking the prementioned upward trendline clearly and continuing lower to break the 3575 (S1) line and start aiming for the 3450 (S2) support level.

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Today we note the release of Canada’s PPI rates for August and Euro Zone’s preliminary consumer confidence for September. On a monetary level, we note that BoE Chief Economist Pill, NY Fed President Williams, St. Louis Fed President Musalem, Richmond Fed President Barkin, Cleveland Fed President Hammack, BoC Senior Deputy Governor Rogers, BoE Governor Andrew Bailey and BoC Deputy Governor Kozicki are scheduled to speak. In tomorrow’s Asian session, we get Australia’s manufacturing PMI figure for September.

As for the rest of the week:

On Tuesday we get France’s, Germany’s, the Eurozone’s, the UK and the US preliminary PMI figures for September as well as UK’s CBI trends figures for the same month. On Wednesday, we get Japan’s preliminary manufacturing PMI figure for September, Australia’s CPI rate for August, and Germany’s Ifo indicators for September. On Thursday, we get Japan’s chain store sales rate for August, Germany’s Ifo consumer sentiment for October, the UK’s CBI distributive trades figure for September, the US durable goods rate for August, final GDP rate for Q2 and the weekly initial jobless claims figure. On Friday, we note Japan’s Tokyo CPI rates for September, the US consumption rate and the US PCE rates both for August, Canada’s final GDP rate for July and the US final UoM consumer sentiment figure for September. On a monetary level we would like to note the Riksbank’s interest rate decision, the CNB’s interest rate decision, the SNB’s interest rate decision.