The USD/CAD pair is adjusted at 1.3569, which is due to the weakening of the US dollar.The Canadian dollar is showing strengthening, remaining above the levels of the previous week. It was supported by wholesale trade data: in July, the volume of wholesale sales, excluding oil and cereals, increased by 1.1% on a monthly basis and by 0.4% to 82.7 billion Canadian dollars annually. Growth was recorded in four of the seven main sectors, with the largest contribution from trade in agricultural goods (+9.2%) and beverages (+1.7%). At the same time, the segments of goods for personal use and household showed the largest reduction — by 22.2% and 2.5%, respectively. As a result of the increase in production, inventories of goods increased from -0.1% to 0.5% in July, and the ratio of inventories to sales remained at 1.54 points, which indicates a stable situation in the sector.Since the beginning of the week, the US dollar has been showing a decline and is trading at 101.00 in the USDX index. Investors practically did not react to the data on price indices in international trade published on Friday: in August, the export price index fell by 0.7% in both annual and monthly terms, after rising by 1.2% earlier. The import price index was -0.3% on a monthly basis and 0.8% on an annual basis, which is lower than the previous value of 1.7%. This indicates a slowdown in U.S. foreign trade for the second month in a row, which may be due to higher interest rates in the country, while other leading economies are already starting to lower them.Resistance levels: 1.3610, 1.3710.Support levels: 1.3540, 1.3440.AUD/USD: after correction, the pair moves back to growthThe AUD/USD pair is showing moderate growth, returning to the "bullish" trend after a slight correction observed at the end of last week. Now the instrument is trying to overcome the level of 0.6725, which is facilitated by the expectation of changes in the monetary policy of the US Federal Reserve System, in particular, a possible adjustment in the cost of borrowing.Investors also drew attention to macroeconomic indicators from China, released over the weekend. The data turned out to be weaker than expected: in August, industrial production increased by 4.5%, slowing from 5.1%, although 4.8% was forecast. Retail sales also showed a decrease, increasing by 2.1% against the expected 2.5% and the previous figure of 2.7%. Since the beginning of the year, investments in urban economy have decreased to 3.4%, which turned out to be slightly below expectations of 3.5%.On Thursday at 03:30 (GMT+2), the market will pay attention to the Australian labor market report for August. Employment is expected to decline from 58.2 thousand to 30.8 thousand, while the unemployment rate is likely to remain at 4.2%. Reserve Bank of Australia (RBA) Chief Economist Sarah Hunter earlier noted that the labor sector continues to recover, although population growth is outpacing employment figures. Companies are also reducing the amount of hours worked, which may affect the decisions of the regulator. In order to combat inflation, the RBA has already raised the interest rate by 425 basis points, bringing it to a 12—year high of 4.35%.Resistance levels: 0.6732, 0.6750, 0.6775, 0.6800.Support levels: 0.6700, 0.6675, 0.6642, 0.6622.USD/JPY: analysts do not expect a rate hike by the Bank of Japan this monthThe USD/JPY pair is showing a downward trend, approaching the July 2023 lows at 140.20. The depreciation of the US currency is due to expectations of a change in the monetary policy of the US Federal Reserve System (FRS). The Fed's two-day meeting starts tomorrow, and the baseline scenario still assumes an interest rate cut of 25 basis points. However, the probability of a more significant 50 basis point decline has increased markedly and, according to the CME FedWatch Tool, is 59% compared to 30% last week. In addition, market participants are waiting for signals from the Fed about a possible additional rate cut before the end of the year.The Bank of Japan will also hold a meeting this week, and although the regulator is expected to maintain its current monetary policy, the comments of the bank's representatives will be carefully analyzed by investors. In addition, Japanese inflation data for August will be published on Friday. Forecasts indicate a slight acceleration in the consumer price index, excluding fresh food prices, from 2.7% to 2.8%. If the forecasts come true, this may strengthen the position of the Bank of Japan on the issue of further interest rate increases. According to a Reuters poll, none of the 52 economists expects a rate increase at the September 19-20 meeting. However, 54% of respondents assume that changes in monetary policy are possible by the end of the year, which is slightly less than 57% last month. The median forecast indicates an increase in the rate by 25 basis points, reaching the level of 0.50%. Among a narrower group of 23 experts, the majority favored a policy adjustment in December.Resistance levels: 141.00, 141.76, 142.50, 143.35.Support levels: 140.00, 139.35, 138.50, 137.50.Oil market analysisAt the beginning of the week, Brent Crude Oil prices showed a weak downward momentum, developing after Friday's decline, when quotes retreated from peak values on September 6. They are currently testing the 71.20 level, trying to break it down. Investors are awaiting the results of the two-day meeting of the US Federal Reserve System, which begins tomorrow. Analysts predict a reduction in the interest rate by 25 basis points to 5.00%, and are also waiting for signals regarding further steps by the regulator.Oil dynamics are also under pressure from the recent decision of OPEC and the International Energy Agency (IEA), which lowered their forecasts for oil demand due to the slowdown in the economies of Europe and China. This concern intensified after the publication of macroeconomic data: in August, industrial production fell from 5.1% to 4.5%, which was lower than expectations of 4.8%. Retail sales also fell from 2.7% to 2.1%, although 2.5% was forecast. In addition, analysts note a slowdown in oil demand growth, linking this to China's transition to more environmentally friendly fuels and a decrease in gasoline demand in developed countries. Brent futures prices have fallen from a high of $82.0 per barrel in early August to a three-year low below $70.0 per barrel. This happened despite a reduction in Libyan oil supplies and a continued decrease in reserves. According to forecasts, the indicator will grow by only 900 thousand barrels per day in 2024 and by 950 thousand barrels per day. barrels per day next year, which may lead to a decrease in consumption in developed countries by almost 2 thousand barrels per day compared to the level preceding the COVID-19 pandemic.Resistance levels: 72.00, 73.00, 74.00, 75.04.Support levels: 71.00, 70.00, 69.00, ...
On Monday, USD/JPY continues to decline, testing the minimum values of July 2023 in the region of 140.20. Pressure on the US dollar is increasing due to expectations of the upcoming easing of monetary policy by the Fed, whose two-day meeting begins tomorrow. The basic forecast still assumes a 25 basis point rate cut, but the probability of a more significant easing, by 50 basis points at once, has increased to 59%, compared with 30% last week. Investors also hope that the regulator's statements will contain signals about possible rate changes before the end of the year.A meeting of the Bank of Japan is expected later in the week. Although experts do not predict further tightening of the regulator's policy, the comments of the Central Bank's management are interesting to investors. On Friday, inflation data in Japan for August will be published. The core consumer price index (excluding products) is expected to rise from 2.7% to 2.8%. This may strengthen the position of the Japanese regulator on the issue of raising rates. According to a Reuters poll conducted late last week, none of 52 economists expect a rate hike at the September meeting of the Bank of Japan, but 54% are confident that it will happen before the end of the year. The forecast for the rate at the end of the year remains at 0.50%.The yen is also supported by positive data on industrial production in Japan. In July, it increased from 2.8% to 3.1%, and in annual terms — from 2.7% to 2.9%.On the chart, technical indicators confirm the downtrend. The indicator of the Bollinger bands is directed downwards, indicating an increase in the "bearish" movement. The MACD shows a confident sell signal, and the stochastic turns to decline.It is recommended to open short positions after a confident breakdown down to the level of 140.00. The first target will be 138.00. We will place the stop loss at the level of 141.00.For purchases, we will wait for a rebound from the 140.00 level with a breakdown up to the 141.00 mark. The target is at 143.00. We will set the stop loss at ...
EUR/USD: ECB rate cut is forecast by a quarter of a percentThe EUR/USD pair is trading near the 1.1015 mark, being close to the local lows recorded on August 16. Market activity remains low as investors await the decision of the European Central Bank (ECB), which will be announced today at 14:15 (GMT+2). It is expected that the regulator will reduce the main interest rate by 25 basis points — from 4.25% to 4.00%, and the deposit rate — from 3.75% to 3.50%. However, inflationary risks remain significant. Recent data on the growth of the eurozone's gross domestic product (GDP) for the quarter were revised from 0.3% to 0.2%, which, along with a deterioration in business sentiment, raises concerns about economic growth in the region. Although the market is not considering the possibility of reducing rates by 50 basis points, the situation may change depending on incoming data. It is likely that Christine Lagarde, the head of the ECB, will maintain a rhetoric focused on flexibility and analysis of economic indicators at each meeting. Investors will closely monitor the comments of other ECB representatives in order to adjust their expectations regarding the regulator's further steps by the end of the year.In parallel, inflation data from the United States, published on Wednesday, showed a sharp slowdown in annual dynamics to 2.5% in August, which is lower than the forecast of 2.6%. Monthly inflation was 0.2%, as expected. The core consumer price index (excluding food and energy) remained at 3.2% year-on-year and rose slightly from 0.2% to 0.3% over the month. These data did not change market expectations regarding a possible rate cut by the US Federal Reserve by 25 basis points in September.Resistance levels: 1.1050, 1.1100, 1.1150, 1.1200.Support levels: 1.1000, 1.0964, 1.0930, 1.0900.GBP/USD: UK GDP for July remained unchangedThe GBP/USD pair is reducing positions from annual highs against the background of the strengthening of the US dollar and is currently trading at 1.3044.Economic data from the UK for July turned out to be weaker than expected, which did not allow the pound to move to an upward trend. Gross domestic product (GDP) in monthly terms remained at the same level, while experts predicted growth of 0.2%. On an annualized basis, GDP increased from 0.7% to 1.2%, but this turned out to be lower than the projected 1.4%. The weakening of the economy is due to a drop in industrial production: in July, its volumes decreased by 0.8% on a monthly basis and by 1.2% on an annual basis. The National Institute of Economics and Social Research (NIESR) has revised its forecast for GDP growth in August from 0.5% to 0.3% in quarterly terms. Against this background, investors' attention is also focused on employment indicators. In July, the number of employed increased from 97.0 thousand to 265.0 thousand, and the number of applications for unemployment benefits in August decreased to 23.7 thousand, with expectations of 95.5 thousand. The unemployment rate fell from 4.2% to 4.1%, and average wages slowed to 4.0% against forecasts of 4.1%. These indicators may allow the Bank of England to continue easing monetary policy. It is expected that at the meeting on September 19, the regulator may reduce the interest rate by 25 basis points.Resistance levels: 1.3080, 1.3260.Support levels: 1.3000, 1.2850.USD/JPY: exchange rate is falling under the influence of Naoki Tamura's speechThe USD/JPY pair rose to the level of 142.98, which was facilitated by statements by Naoki Tamura, a member of the Board of the Bank of Japan.On Thursday, Tamura, answering questions about a possible increase in interest rates by the end of the year or in the first quarter of next year, noted that the timing will depend on current economic and inflationary conditions. Unlike the United States and Europe, where changes in rates occur more quickly, Japan is likely to act more restrained. According to him, the country's economy is developing in accordance with forecasts made in July, but excessive attention to market stability may limit the freedom of action of the Bank of Japan in conducting an adequate monetary policy in the face of changing price dynamics. Tamura also stressed that undesirable volatility can complicate the management of the economy, so it is important to act gradually to avoid sharp fluctuations in the markets. In the long term, the regulator should follow fundamental economic indicators, carefully raising rates and assessing the impact of each step. Against the background of these statements, the USD/JPY pair reached new heights, exceeding Wednesday's maximum at 142.55 and rising to 143.04.Resistance levels: 144.10, 147.00, 149.25.Support levels: 140.80, 137.63, 134.00.Silver market analysisThe XAG/USD pair continues to move within the corrective trend, trading at around 28.73. At the same time, the dynamics of silver is significantly inferior to gold, which remains at a level close to historical highs, demonstrating a more stable position in the precious metals market.The demand for silver futures is noticeably decreasing: the average daily trading volume for the current week fell from 67.2 thousand to 51.4 thousand contracts. Option activity also remains at a minimum level — only 9,699 contracts were concluded the day before, which is one of the lowest figures since the beginning of summer. Such a drop in activity indicates that investors do not expect significant movements in the price of silver in the short term and prefer to refrain from transactions with this asset, waiting for clearer signals from the market. As a result, silver is now less attractive compared to gold and foreign exchange assets, and significant changes in the dynamics of quotations should not be expected in the near future.Resistance levels: 29.10, 30.10.Support levels: 28.40, ...
EUR/AUD: Australia's economic indicators have reduced pressure on the euroThe EUR/AUD pair is trading at 1.6627 on the morning of September 5, showing a slight increase of about 0.01% compared to the previous trading session. Market activity remains relatively stable despite the volatility caused by external macroeconomic data.The economic situation in the eurozone continues to be unstable. The index of business activity in the services sector (PMI) in August amounted to 47.9 points, which is lower than forecasts and indicates a slowdown in economic activity. At the same time, GDP data for the second quarter showed an increase of 0.3%, which is in line with analysts' expectations. The continued pressure on the eurozone economy is due to rising energy prices and the consequences of geopolitical instability.The Australian economy is also facing challenges. Recent retail sales data showed a decrease in the growth rate from 0.5% to 0.4%, indicating weakness in domestic demand. Despite this, the labor market remains stable, and the unemployment rate is at 3.6%. The Reserve Bank of Australia (RBA) did not change the interest rate at the last meeting, keeping it at 4.1%, however, the head of the RBA announced the possibility of further tightening monetary policy in the event of a deterioration in the inflationary situation.Resistance levels: 1.0850, 1.0940.Support levels: 1.0800, 1.0720.NZD/USD: a tool on the way to corrective growthThe NZD/USD pair shows a slight increase, continuing to develop a weak upward momentum, which was formed after recovering from local lows reached on August 23. Now the instrument is trying to break through the 0.6200 mark, while market participants are waiting for the publication of important data on the US labor market, which will take place at the end of the week. Today at 14:15 (GMT+2), a report from ADP on private sector employment for August will be presented. If the forecasts come true and the employment rate will rise from 122.0 thousand. up to 145.0 thousand, the US dollar may receive additional support, which will reduce the likelihood of softening the Fed's rhetoric at the September meeting.This week, investors also paid attention to the dairy product price index, a key export item of New Zealand. In August, the indicator decreased by 0.4% after an increase of 5.5% in July. Additionally, data on the ANZ commodity price index was published, which increased by 2.1% after falling by 1.7% in the previous month.Markets continue to analyze the next steps of the Reserve Bank of New Zealand (RBNZ), which recently cut the interest rate by 25 basis points, which happened a little earlier than expected. This decision has caused optimism among businesses and consumers, strengthening confidence in the economic recovery. According to the regulator's forecasts, by the middle of next year the rate may fall below 4.50%. According to Centrix, the level of mortgage delinquency remains 12.0% higher than last year, but there is a positive trend against the background of lower borrowing costs, which contributes to the correction of consumer spending. Despite the recent rate hike, New Zealand house prices remain 19.0% below the November 2021 peak, less than half of the more than 40.0% increase during the COVID-19 pandemic.Resistance levels: 0.6200, 0.6221, 0.6254, 0.6300.Support levels: 0.6177, 0.6153, 0.6130, 0.6100.USD/JPY: the Bank of Japan noted moderate growth ratesThe USD/JPY pair remains near the minimum recorded on August 5 at 143.50, while market activity remains subdued, as investors await the publication of data on the American labor market.Statistics from Japan continue to show mixed results. In July, the wage level fell from 4.5% to 3.6%, which exceeded forecasts of 3.1%, but this may put pressure on inflation, which the Bank of Japan focuses on when developing monetary policy. The index of business activity in the services sector remained at 53.7 points, below the expected 54.0 points, and the composite index rose from 52.5 to 52.9 points, falling short of the projected 53.0 points.Hajime Takata, a member of the Board of the Bank of Japan, noted that the Japanese economy is recovering at a moderate pace, despite the volatility in the markets in August. According to him, the country continues to move towards achieving the inflation target, and import prices are also rising. Takata added that the current real interest rate remains below the calculated one, which indicates favorable conditions for monetary policy. Experts expect that the Bank of Japan may raise the interest rate again by the end of the year.Resistance levels: 144.00, 145.00, 146.00, 147.00.Support levels: 143.35, 142.50, 141.68, 141.00.Silver market analysisDuring the Asian session, the XAG/USD (silver) pair demonstrates multidirectional dynamics, remaining near the level of 28.25. On the eve of the quotes were adjusted, retreating from the lows recorded on August 15. The main pressure on the price is exerted by the revision of short- and medium-term strategies of investors in response to large-scale stock sales, which also affected commodity markets.The activity of market participants remains low in anticipation of the publication of key data on the US labor market, scheduled for the end of the week. These data may influence the Federal Reserve's decision on future monetary policy at the September meeting. The baseline scenario assumes a reduction in the interest rate by 25 basis points, but the probability of a more significant reduction by 50 basis points is estimated at no higher than 35.0%. The number of new jobs outside the agricultural sector is expected to grow from 114.0 thousand. up to 160.0 thousand, and the average hourly wage will increase from 0.2% to 0.3% on a monthly basis and from 3.6% to 3.7% on an annual basis. The unemployment rate is expected to decrease from 4.3% to 4.2%. Weaker data may increase the likelihood of a change in the monetary exchange rate, which will support the asset.Resistance levels: 28.30, 28.68, 29.00, 29.35.Support levels: 28.00, 27.60, 27.30, ...
The dollar fell against the Canadian dollar and hovered near multi-month lows against European currencies on Tuesday as Treasury bond yields were little moved amid expectations the US Federal Reserve will not raise interest rates in the near future.Dallas Fed President Robert Kaplan reiterated on Monday that he does not expect interest rates to rise until next year, lowering expectations that inflationary pressures could force the Fed to change policy sooner than stated.Read more: Causes of inflation and scientific approaches to their studyThe yield on 10-year US Treasury bonds stood at 1.6454%, continuing a decline from last week's five-week high.The dollar index to a basket of six major currencies was down 0.19% to 89.991 by 09:34. The euro rose 0.25% to $1.2181, close to its lowest level since February 26. At the same time, the pound rose 0.31% to $1.4178. The British currency was supported by the lifting of coronavirus restrictions in the UK.The Canadian dollar rose 0.31% against the US dollar to $1.2029, almost hitting a six-year high, thanks to higher oil prices. "The Aussie rose 0.46% to $0.7799. The New Zealand dollar rose 0.58% to $0.7242.The mainland yuan rose 0.2% to 6.4257. The Japanese yen rose 0.1 per cent paired with the dollar, to 109.08 yen.In the cryptocurrency market, bitcoin rose 3.81% to $45.255 but remained near a three-month low following tweet from Tesla CEO Elon Musk. Etherium rose 7.58% to $3,529.95, recovering from a two-week low hit on Monday.Read more: The history of Federal Reserve (Fed) and its ...
The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...