bearish momentum

Black line- support trend line The USDCHF pair has been in a strong uptrend since May 3rd 2023, forming higher highs and higher lows on the 4 hour chart. The pair has also been respecting the rising trend line that connects the swing lows of the uptrend. The RSI indicator has been mostly above the 50 level, indicating bullish momentum. The pair has recently tested the 0.9146 resistance level, which coincides with the 61.8% Fibonacci retracement level of the previous downtrend from 0.9336 to 0.8818.     Today price is under pressure after making a lower high at 0.9118. If the pair breaks below the support trend line at 0.904, it may signal a reversal of the uptrend and a possible retest of the lower Fibonacci retracement levels of 0.916 and 0.8940. The RSI may also fall below the 50 level, indicating bearish momentum. Traders need to be cautious as the trading week started with a higher high than Friday's high and price is now into negative territory suggesting a possible reversal is close.  

Black line- support trend line The USDCHF pair has been in a strong uptrend since May 3rd 2023, forming higher highs and higher lows on the 4 hour chart. The pair has also been respecting the rising trend line that connects the swing lows of the uptrend. The RSI indicator has been mostly above the 50 level, indicating bullish momentum. The pair has recently tested the 0.9146 resistance level, which coincides with the 61.8% Fibonacci retracement level of the previous downtrend from 0.9336 to 0.8818.     Today price is under pressure after making a lower high at 0.9118. If the pair breaks below the support trend line at 0.904, it may signal a reversal of the uptrend and a possible retest of the lower Fibonacci retracement levels of 0.916 and 0.8940. The RSI may also fall below the 50 level, indicating bearish momentum. Traders need to be cautious as the trading week started with a higher high than Friday's high and price is now into negative territory suggesting a possible reversal is close.  

EUR: Shrugging off the recession EUR/USD is back around the 1.0800 handle, with the moves once again coming entirely from the USD leg. Domestically, the news of the eurozone entering a technical recession after the 1Q GDP revision was understandably overlooked by the market, and may well be overlooked too by an inflation-focused ECB next week (here is our economist’s meeting preview).   There are no domestic drivers for the euro today, and in line with what we highlighted in the USD section above, we expect some consolidation around current levels in core dollar pairs. EUR/USD could stabilise marginally below 1.0800.   Elsewhere in Europe, we saw EUR/CHF come under pressure yesterday following hawkish comments from the Swiss National Bank Governor Thomas Jordan, where he highlighted how current rates are low and “it’s not really a good idea to wait then have higher inflation later”. The SNB will announce policy on 22 June, and we expect a 25bp hike following a similar move by the ECB. It appears however, that the market is pricing in more beyond that hike, which is not part of our baseline scenario at the moment.   GBP: EUR/GBP is undervalued EUR/GBP has moved back below 0.8600 after a very small rebound and we estimate the pair to be trading at around a 2.0% short-term undervaluation at the current levels, which falls beyond the 1.4% 1.5 standard-deviation lower-bound.   We remain of the view that EUR/GBP will increasingly struggle to find more bearish momentum now that markets are already pricing in 100bp of Bank of England tightening and the pair is already in undervaluation territory. On the cable side, we expect some stabilisation around 1.2550-1.2600. The UK calendar is empty today.

The XAU/USD chart shows a bearish momentum within a descending channel, indicating a predominant downward trend.       here is potential for a bearish reaction at the first resistance level of 1966.26, leading to a price reversal towards the first support level at 1933.95. Additional support is observed at 1914.16, offering significant buying opportunities. The resistance levels at 1966.26 and 1980.08 present obstacles for upward movement. Monitoring these levels can provide valuable insights for trading opportunities in the XAU/USD market.  

The inflation story should start to turn over the summer Then there’s the inflation data itself. The dividing line on the committee right now seems between those hawks that are seeing persistent ‘second-round effects’ of higher energy/food prices, and the doves that think headline/core CPI is simply just lagging behind the wider fall in input and product price inflation over recent months (see a speech by BoE’s Dhingra). Elements of both are true. April’s CPI figures were undeniably ugly, though some of the drivers – higher vehicle and alcohol prices, for example – are unlikely to form long-lasting trends. We agree with the doves that food inflation should begin to ease back in line with producer prices, while services inflation (particularly hospitality) should come under less pressure now gas prices are so much lower. The BoE’s own Decision Maker Panel survey of chief financial officers suggests pay and price expectations have also eased noticeably over recent months. If nothing else, hefty base effects should ensure that the headline inflation rate comes down over the summer months and fluctuates around 6%, and to a lesser extent the same is true of the core rate. Barring some further unpleasant and consistent surprises in the services inflation figures over the coming months, we think a 5% peak for Bank Rate seems reasonable. That implies rate hikes on Thursday and again in August.  However, as we discussed in more detail in a separate piece, we think the downtrend in wage growth is going to be slow – even if it has probably peaked. Labour market shortages look at least partly structural, and we suspect wage growth could end the year above 5% (7% currently). While that doesn't necessarily require the Bank to take rates much higher, it does suggest rate cuts are unlikely for at least a year, not least given the mortgage market structure discussed earlier.   Sterling trade-weighted index pushes back to early 2022 highs   Sterling can hold onto gains in the near term Sterling continues to ride high. On a trade-weighted basis, it is returning to levels last seen in early 2022 before Russia's invasion of Ukraine. Barring a surprisingly soft May UK CPI on Wednesday, 21 June, it looks like sterling can largely hang onto those gains if the Bank of England does not push back against very aggressive tightening expectations. Our strong preference has been that sterling will enjoy more upside against the dollar than the euro. Currently, we have a 1.33 end-year forecast for GBP/USD and the near-term bias is for 1.30 given what seems to be bearish momentum building against the dollar. EUR/GBP has been weaker than we had expected. And next week's BoE meeting may be too soon to expect a bullish reversal here. Yet, consistent with our house view that the Bank Rate will not be taken as high as the 5.65% level currently priced by investors for the end of this year, we suspect that EUR/GBP ends the year closer to the 0.88 area, meaning that current EUR/GBP levels should make a good opportunity to hedge sterling receivables for euro-based accounts. 

NZD/USD exhibits bearish momentum, as it remains below a major descending trend line.   The price may continue its downward movement towards the 1st support at 0.6114, which is an overlap support. The 2nd support at 0.6049 reinforces the bearish outlook with swing low support and a 78.60% Fibonacci Retracement. On the resistance side, the 1st resistance at 0.6189 poses a challenge as a swing high resistance. The 2nd resistance at 0.6239 further strengthens resistance with swing high characteristics and a 78.60% Fibonacci Retracement. These factors contribute to the overall bearish momentum of NZD/USD.  

USD/CAD approaches key support The Canadian dollar initially weakened after headline inflation fell to a 27-month low, dropping from 3.4% to 2.8%, more than the eyed 3.0% consensus estimate.  The rates that the BOC focuses on, the so-called trim and median core rates, were a little sticky, which could suggest underlying price pressures are still too high.  The Canadian dollar has been rallying but if global slowdown fears increase, that could keep the Loonie locked in its longer-term consolidating range. The Canadian dollar has major support from the trendline beginning last June.  If price breaks below the upward sloping trendline, bearish momentum could target the 1.3020 level.  A daily close below 1.2950 could open the door for selling momentum to target the 1.2750 area. Inflation is making its way towards the BOC’s 2% inflation target, but it seems more tightening might not be needed to get inflation there. If Friday’s retail sales report shows the consumer remains resilient, that could trigger further Canadian dollar strength.  

Crypto Bitcoin’s consolidating trading has seen price action reside closer to the lower boundaries as volatility disappears. Short-term support from the $29,500 level broke this early this morning and if bearish momentum builds, key support could target the $27,500 region.  The crypto news flow has been uninspiring, with many traders focusing on OPENAI’s Sam Altman’s Worldcoin crypto project. It will take a fresh catalyst to excite Bitcoin traders and right now it seems the price action is destined for a broadening formation, potentially targeting the $27,500 and $31,500 zone.  

From Avalanche and Compound to VC Spectra: A Strategic Investment Shift While Avalanche (AVAX) shows signs of the end of the bull run, Compound (COMP) remains stagnant after rallying in the first week of July. All these factors attract investors to VC Spectra (SPCT), which is gaining traction as a brand-new decentralized hedge fund.  Let’s learn more about how VC Spectra (SPCT) leads the way in the upcoming crypto market.   >>BUY SPCT TOKENS NOW<<   Avalanche (AVAX) Foundation Commits $50 Million to Buy Tokenized Assets On July 25, 2023, Avalanche (AVAX) Foundation announced that AVAX blockchain will purchase $50 million of tokenized assets minted on the network. This program is called Avalanche (AVAX) Vista. The AVAX foundation’s vow to purchase tokenized assets is a noteworthy example of the growing recognition of the benefits of tokenization across different asset types. Tokenization has become a dominant force in the crypto market this year, capturing the attention of investors and enthusiasts alike. The initiative is expected to encourage more financial institutions to explore and adopt blockchain-based services, thus fostering the value of Avalanche (AVAX). Meanwhile, Avalanche (AVAX) is trading at $13.30, a 0.37% increase in the last 24 hours. However, Avalanche (AVA) trading volume plummeted to $58 million. Analysts believe that Avalanche's (AVAX) bullish run is over, heading to bearish momentum. Some reports even speculate that Avalanche (AVAX) will fall severely to $10 in the next few months.     Compound (COMP) Price Rally Brought Investors to Joy Compound (COMP) price movement over the last month has lured its investors. Interestingly, there was a robust climb in the Compound (COMP) price, coinciding with its founder Robert Leshner stepping down as CEO.  Leshner launches Superstate Trust, a new short-term government bond fund startup, securing $4 million in funding from DeFi investors. Compound (COMP) has experienced incredible growth of 96% in the past 30 days. After making a significant rise in early July, Compound (COMP) has struggled since last week.  Meanwhile, Compound (COMP) stands at $72.65, a 0.16% decrease from yesterday. Besides that, Compound (COMP) trading volume decreased by 37.67%. Analysis indicates Compound (COMP) potential signs of downhill momentum. Nevertheless, technical analysts are optimistic about a potential bullish trend reversal for Compound (COMP).     VC Spectra (SPCT): The Future of Altcoins As a decentralized hedge fund, VC Spectra (SPCT) aims to democratize blockchain technology access, offering investors profitable returns. It enables peer-to-peer trading and asset management without the involvement of intermediaries or third-party custodians. VC Spectra (SPCT)  aims to tackle issues in the blockchain and technology industry by providing investors with a decentralized trading platform and asset management protocol. The platform operates on a trustless, transparent blockchain infrastructure secured by cryptography and smart contracts. Beyond token ownership, VC Spectra (SPCT) offers unique features like buyback options and quarterly dividends based on token holdings. In Stage 2 of its public presale, SPCT tokens are priced at $0.011, with over 36.8 million tokens already sold and a 37.5% return from Stage 1. VC Spectra (SPCT) stands out in today's crypto landscape with its exceptional real-life utility and substantial growth potential. Investing now in VC Spectra (SPCT) promises a potential 627.27% gain after the presale, with the added benefit of a limited-time 25% bonus on all deposits.   Learn more about the VC Spectra presale: Buy Presale: https://invest.vcspectra.io/login Website: https://vcspectra.io  Telegram: https://t.me/VCSpectra Twitter: https://twitter.com/spectravcfund  

Traders push back RBA rate hike bets until November WTI and Brent crude implied volatility falls to lowest since 2020 Turkey unloads significant portion of gold holdings The Australian dollar tumbled after the RBA kept rates on hold again and signaled they might be done tightening.  Given most economists expected a hike, aussie-dollar was ripe for a plunge.  US dollar strength also supported the decline after the Treasury increased their net borrowing estimate.     Oil The oil price rally is ready for a break as US stocks soften and the dollar firms up.  August is off to a slow start for energy traders as the outlook on demand could face rising prices.  The oil market will likely remain tight even if the oil giants, like BP start delivering large price increases.  Oil remains one of the most attractive trades and buyers will likely emerge on every dip.   Gold Gold prices are not seeing safe-haven flows as US equities tumble, because the US dollar is catching a bid as yields rise higher.  Gold is going to need to see Treasury yields come down, but that might not happen until the market fully prices all the longer-dated issuance that is coming from the Treasury.  Gold’s moment in the sun is coming, but first markets need to see the bond market selloff end. If bearish momentum remains in place, gold could find major support at the $1940 level. Until we get beyond Apple earnings and the NFP report, positioning might be limited.  

  Australia’s central bank, RBA has kept its policy cash rate unchanged at 4.1% for the second consecutive month. The tonality of the latest monetary policy implies that RBA is now data-dependent, and indirectly acknowledged the negative adverse lagged effects of higher interest rates towards economic growth. Overall, RBA may continue to remain on hold on its policy cash rate at 4.1% for the rest of 2023 which in turn negates any potential major bullish movement of the AUD/USD. Expectations of interest rates traders were right in line with the Australian central bank, RBA’s latest monetary policy decision (no interest rate hike today) that was in contrast to the 25-basis points hike consensus from the majority of the economists surveyed. RBA has decided to hold on to its official policy cash rate at 4.1% for the second consecutive month; data from the ASX 30-day interbank cash rate futures as of 31 July 2023 has indicated a patty pricing of only a 14% chance of a 25-bps hike, down significantly from a 41% chance being priced a week ago. These are the key takeaways from today’s RBA monetary policy statement; The Board has decided to hold the interest rate steady this month to access the impact of the prior rate increases and monitor the economic outlook. Risk of below-trend growth for the Australian economy due to weak household consumption growth and dwelling investment. The labour market has remained tight, with job vacancies and postings at high levels, though labour shortages have lessened. But the unemployment rate is expected to rise gradually from 3.5% to around 4.5% in late 2024. Even though wage growth has picked up due to the tight labour market and high inflation but wage growth, together with productivity growth remains consistent with the inflation target. The current growth rate of 6% inflation in Australia is still considered too high. The central forecast expects CPI inflation will decline to around 3.5% by the end of 2024 and revert to the target range of 2% to 3% by late 2025. The Board may consider further tightening of monetary policy to ensure inflation returns to the target range of 2% to 3% depending on data and evolving risk assessments.   Switched to being “data-dependent” suggests RBA may stand pat on interest rates till end of 2023 The last point as mentioned above stood up starkly, in the previous July’s monetary policy statement, it was noted as “some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve”. In today’s monetary policy, it has been stated as “that will depend upon the data and the evolving assessment of risks”. Hence, this latest framing of being data-dependent, and acknowledging the implied negative adverse lagged effects of a higher interest rate environment towards economic growth (risk assessment) seems to portray that if the recent trend of key economic indicators continues their respective trajectories, it is likely the RBA may continue to remain on hold on its policy cash rate at 4.1% for the rest of 2023 while monitoring the global inflationary environment.   Lacklustre sentiment for AUD/USD     AUD/USD minor short-term trend as of 1 Aug 2023 (Source: TradingView, click to enlarge chart)  A “data-dependent” RBA has knocked out the bullish tone of AUD/USD after a reprieve rebound seen yesterday, 31 July where the pair staged a minor rebound of 117 pips from its last Friday, 28 July intraday low of 0.6622 to an intraday high of 0.6739 during yesterday’s US session. Right now, it has shed -81 pips to print a current intraday low of 0.6657 at this time of the writing, and the Aussie is the worst performer intraday today, 1 Aug (-0.65%) among the major currencies against the US dollar; EUR (-0.03%), CHF (-0.03%), GBP (-0.07%), CAD (-0.22%), and JPY, (-0.34%). The Aussie has resumed its underperformance against the US dollar seen in the last two trading days of last week where the AUD/USD recorded an accumulated loss of -1.68% from 27 July to 28 July versus EUR/USD (-0.63%), GBP/USD (-0.71%), and JPY/USD (-0.65%) over the same period ex-post FOMC, ECB, and BoJ. From a technical analysis standpoint, short-term bearish momentum remains intact as yesterday’s rebound has failed to surpass the 200-day moving average after a re-test on it, now acting as a key short-term pivotal resistance at around 0.6740 with the next major support coming in at 0.6600/6580.    

Canada lost 6,400 jobs in July as the unemployment rate rose for a third straight month Canadian wage pressures jump to 5.0%, which might not let policymakers signal that the peak in rates is in place Crude prices rally for a sixth straight week on OPEC+ determination to keep oil market tight   USD/CAD The past few weeks have not been kind to the Canadian dollar, but that could be changing.  The general rise in the dollar has stemmed from concerns over the US debt situation.  With both the Fed and BOC in similar positions when it comes to their respective tightening cycles, the Canadian dollar seems like it might be better positioned over the short-term as traders unwind their US dollar bets.  The USD/CAD shows the correlation with rising oil prices has not provided much support to the loonie, but that could be changing here.  If bearish momentum accelerates, further downside could target the 1.3300 handle.  The Canadian dollar could remain in oversold territory a while longer, which could support a further decline towards the 1.3250 region.  To the upside, the 1.3400 level provides major resistance.   Oil Crude prices are rising as the dollar drops following a mixed NFP report and as OPEC+ remains committed to keeping the oil market tight.  Saudi Arabia’s decision to extend a unilateral 1-million barrel oil cut did not surprise anyone. Energy traders however wanted to see if Russia would extend their export cut pledge and they did. Oil is at a 3-month high and starting to attract more buyers.  The crude price rally could continue since the US economy remains resilient and if China’s data next week confirms that part of the world’s crude demand is growing. The $85 level should provide key resistance for WTI crude, but if that doesn’t slow the rally, every trader will have their eyes on the $90 level.   Gold Gold prices are rallying as the bond market selloff ends following a mixed NFP report that did not derail some expectations that the Fed is still probably done raising rates.  This jobs day still suggests a soft landing is obtainable but if wage growth remains strong over the next couple of months that could create some problems.  Higher rates for longer is still an environment that gold can thrive in, especially if Wall Street becomes fixated over the deficit

Slowing Europe  In Europe, the latest data released yesterday showed that growth and industrial production slowed, but slowed less than expected, while employment deteriorated less than expected – giving the European Central Bank (ECB) a good reason to continue its fight against inflation. But on a microscopic level, the Ifo said that Germany's skilled worker pool is worsening. The Netherlands unexpectedly slipped into recession after showing two straight quarter contraction, and Eastern Europe continues feeling the pinch of Ukrainian war; the Polish economy printed a 3.7% contraction. Plus, Europe's got a China problem. The European luxury goods have been supporting a rally in the European stocks as a result of higher Chinese purchases of the luxury products. But the souring economic conditions in China, falling home prices, rising unemployment and deteriorating sales growth weigh on valuations of companies like LVMH and Hermes. The Stoxx 600 is getting ready to test the 200-DMA, near 453, to the downside, and trend and momentum indicators hint that a deeper selloff could be on the European stocks' menu this quarter.   On the currency front, the weak data – even though it was stronger-than-expected, combined with a broad-based surge in the US dollar, kept the EURUSD below the 100-DMA yesterday, near 1.0930. The pair fell to the lowest levels since the beginning of July and the strengthening bearish momentum calls for a deeper downside correction. The next natural target for the EURUSD bears stands at 1.0790, the 200-DMA. The ECB will likely keep its hawkish stance unchanged, but when the Fed hawks step in, the other central bank hawks just need to wait before their hawkishness is reflected in market pricing

Yesterday, the pair formed several good signals to enter the market. Let's analyze what happened on the 5-minute chart. In my morning review, I mentioned the level of 1.0870 as a possible entry point. Growth and false breakout of this level generated a sell signal, and the pair fell by more than 60 pips. During the US session, safeguarding the support level at 1.0808 and weak US data produced a buy signal. As a result, EUR/USD managed to compensate for all morning losses and rose by more than 50 pips.   For long positions on EUR/USD: Softer-than-expected preliminary US PMI data exerted downward pressure on the dollar and the euro strengthened in the second half of the day. Obviously, there's a lot of market manipulation, making the situation increasingly tense before the Jackson Hole symposium. Yesterday's data made it clear: if the Federal Reserve continues its tight policy stance, the economic situation will only worsen. This has further confused market participants, who were expecting hawkish statements from Fed Chair Jerome Powell. In the absence of EU reports in the first half of the day, I expect EUR/USD to trade within the channel. Therefore, it is advisable to trade on a dip following a false breakout near the low of 1.0849, which is in line with the bullish moving averages. An immediate resistance target is set at 1.0889, formed on Tuesday.   A breakout and a downward test of this range will strengthen demand for the euro, suggesting a bullish correction around 1.0928. The ultimate target is found at 1.0958, where I will be locking in profits. If EUR/USD declines and bulls are idle at 1.0849, the bear market will persist. Only a false breakout around the next support at 1.0827 will signal to buy the euro. I will initiate long positions immediately on a rebound from the low of 1.0804, aiming for an upward correction of 30-35 pips within the day.   For short positions on EUR/USD: The sellers lost all their advantage yesterday and now they need to start from the beginning. Today, to maintain the bearish momentum, sellers will have to assert their strength at the new resistance of 1.0889. The pair may test this level soon. The absence of economic reports will help the bears with a false breakout of this level and will lead to another descent towards the 1.0849 support. However, only a breakout below this range, followed by an upward retest, will generate another sell signal, paving the way to the low of 1.0827, where I expect big buyers to emerge in hopes of building the lower band of the new ascending channel. The ultimate target is seen at 1.0804, where I will be locking in profits. If EUR/USD moves upward during the European session and lacks bearish activity at 1.0889, the bulls may try to re-enter the market. In such a scenario, I would go short only when the price tests the new resistance at 1.0928 that was formed yesterday. Selling at this point is possible only after a failed consolidation. I will initiate short positions immediately on a rebound from the high of 1.0958, considering a downward correction of 30-35 pips within the day.     COT report: The COT (Commitment of Traders) report for August 15 shows a notable increase in long positions and a drop in short positions. These figures already factor in the crucial US inflation data, which brought back some buyers to the market. The Federal Reserve meeting minutes released last week also indicated that not all committee members are aligned with the idea of raising interest rates to combat inflation. This keeps the chances of the euro's recovery alive, especially following the Jackson Hole symposium happening later this week where Federal Reserve Chairman Jerome Powell is scheduled to speak. His address might shed light on the central bank's future policy direction. It is important to note that the recent decline in the euro seems to be appealing to traders. The optimal medium-term strategy under current conditions remains buying risk assets on a dip. The COT report highlights that non-commercial long positions increased by 4,418 to stand at 232,466, while non-commercial short positions decreased by 5,634 to 72,603. Consequently, the spread between long and short positions surged by 1,125. The closing price was lower, settling at 1.0922 compared to 1.0981 the previous week.     Indicator signals: Moving averages: Trading is taking place around the 30-day and 50-day moving averages, indicating market uncertainty. Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart. Bollinger Bands If EUR/USD declines, the indicator's lower border near 1.0825 will serve as support.   Description of indicators: • A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart; • A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart; • MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period; • Bollinger Bands: 20-day period; • Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements; • Long non-commercial positions represent the total number of long positions opened by non-commercial traders; • Short non-commercial positions represent the total number of short positions opened by non-commercial traders; • The non-commercial net position is the difference between short and long positions of non-commercial traders.    

BOC rate hike odds for the October 25th meeting rise from yesterday’s 23.9% to  28.8% Hours worked climbed to the highest level since February CAD futures open interest rise to best levels since mid-March Canada’s economy isn’t quite ready to cool.  The latest Canadian employment report showed hiring bounced back in August, doubling expectations. The near 40,000 added jobs exceeded the 17,500 consensus estimate and proved that the prior month’s unexpected shedding of jobs was not the beginning of a new trend.  The BOC will pay close attention to the wage growth acceleration of 5.2%, which was expected to soften to 4.7%. There is a lot of data before the October 25th BOC meeting, but it still seems like they’ve reached the terminal rate for this tightening cycle.   Open Interest in Canadian dollar futures The Canadian dollar is the top performing G10 currency and that could continue given how the futures market is positioned.  The last time open interest for Canadian dollar futures were at these levels was the middle of March, which was when USD/CAD started its decline from around the 1.37 level to the 1.3300 area.   Canada’s strong jobs report showed full-time employment rebounded from 1,700 to 32,200, while part-time work created 7,800 jobs, much better-than-the prior month’s decline of 8,100 positions.  The unemployment rate held steady at 5.5%, which was better than the expected increase of 5.6%.    The majority of the job gains stemmed from the professional and technical services, and construction.  The regions that benefited the most were Alberta, British Columbia and Prince Edward Island.  Nova Scotia was the only region that lost jobs.  While the job gains are a positive sign, when you figure in population growth, this pace won’t cut it for keeping the unemployment rate steady.  About 50,000 jobs per month would be needed to support a steady unemployment rate.   USD/CAD 60-minute chart After breaking down below the 1.3650 level, bearish momentum is slowing down ahead of the 1.3600 level.  If the start of next week does not include a risk averse start, the Canadian dollar could have a strong move here.  Unless the uptrend line (which started in July) is broken substantially to the downside, the prevailing bullish trend may remain in place.      

Bullish tone dissipated last Friday, 15 September ex-post Arm’s IPO spectacularly first-day positive performance as the Nasdaq 100 had a weekly close below the 50-day moving average for the 4th time in the past six weeks. Rising market-based inflationary expectations in line with recent magnificent rallies seen in oil prices may cause the Fed to be less dovish on the timing to enact the first interest rate cut in 2024. 15,540 is the key short-term resistance to watch. This is a follow-up analysis of our prior report, “Nasdaq 100 Technical: Bearish momentum reasserts” published on 25 August 2025. Click here for a recap. The price actions of the US Nas 100 Index (a proxy for the Nasdaq 100 futures) have whipsawed in the past four weeks, it cleared above the 15,135 short-term resistance (also the 20-day moving average) as highlighted in our previous report but the bulls failed to make any headway above the 15,460/15,540 medium-term resistance and staged a weekly close below its 50-day moving average on last Friday, 15 September. Last week’s bullish hesitancy is primarily driven by the fears that the US central bank, the Fed in the upcoming FOMC meeting this coming Wednesday, 20 September together with the latest “dot-plot” release may indicate a stance or guidance that a higher level of interest rate can persist for a longer period of time after the last hike on the Fed funds rate in 2023 (either in the November or December FOMC based on interest rates futures data from CME FedWatch tool as of 18 September 2023). Rising market-based inflationary expectations may catch dovish market participants off guard Fig 1: Correlation between WTI crude oil and US 5-year & 10-year breakeven inflation rates as of 19 Sep 2023 (Source: TradingView, click to enlarge chart) A potential Fed’s guidance that indicates a persistent longer period of higher interest rates for next year that stretches beyond Q2 of 2024 due to higher oil prices that have driven up market-based inflationary expectations (5-year & 10-year break-even inflation rates) may catch the market off guard as there is a high chance of 55% for the Fed to enact its first interest rate cut in June 2024 FOMC as inferred from the CME FedWatch tool. The US Nas 100 Index falls under the “long-duration” risk asset classification that is vulnerable to a higher interest rates environment that persists for a longer-term horizon where profit margins of the top component stocks; the magnificent seven mega-caps (Apple, Amazon, Alphabet, Meta, Microsoft, Tesla & Nvidia) are primarily dependent on longer-term revenues or cash inflows that are likely to be received further far out in the future which in turn tend to have lower present values if discounted by a higher interest rate factor, hence higher opportunity costs for holding such mega-cap stocks. To offset such potentially higher opportunity costs, the current lofty valuations (forward price to earnings ratios) of these mega-cap stocks need to come down considerably either by higher earnings growth or lower share prices. If the global demand environment remains lackluster or even slips into a recession or stagflation in 2024, the latter is more likely to occur which can put downside pressure on the US Nas 100 Index. Medium-term momentum remains bearish Fig 2: US Nas 100 medium-term trend as of 19 Sep 2023 (Source: TradingView, click to enlarge chart)   Last week’s close below the 50-day moving average of the US Nas 100 Index has occurred in conjunction with a bearish momentum condition reading as indicated by the daily RSI. The daily RSI has inched downwards and shaped a “lower low” right below a former key parallel ascending support now turns pull-back resistance at the 60 level which suggests a potential resurgence of medium-term bearish momentum. Price actions have broken down below the 20-day moving average Fig 3: US Nas 100 minor short-term trend as of 19 Sep 2023 (Source: TradingView, click to enlarge chart) Last Friday’s 15 September price actions of the Index staged a bearish breakdown below its 20-day moving average and yesterday’s 18 September minor rebound seen at the start of the US session has halted at the 20-day moving average. These observations suggest that short-term bearish momentum remains intact. Watch the 15,540 key short-term pivotal resistance and a break below 15,085 may trigger a further slide towards the next intermediate support at 14,750 in the first step. On the other hand, a clearance above 15,540 invalidates the bearish tone for the next intermediate resistance to come in at 15,800 (27 July/ 29 July 2023 minor swing highs).    

The current major uptrend phase of GBP/JPY has almost reached a key inflection/resistance level of 187.30. The weekly RSI momentum indicator has flashed out bearish conditions that advocate a potential multi-week bearish mean reversion/counter-trend movement. 50 is the key short-term resistance to watch with intermediate supports coming in at 180.60 and 179.20.     Bulls may have hit a major roadblock   Fig 1: GBP/JPY major trend as of 25 Sep 2023 (Source: TradingView, click to enlarge chart) The multi-month major uptrend phase of GBP/JPY in place since its September 2022 low of 149.05 has almost reached a key inflection/resistance level of 187.30 (printed an intraday high of 186.77 on 22 August 2023) which is defined by the September/November 2015 swing highs, upper boundary of the major ascending channel from September 2022 low, and a cluster of Fibonacci extension levels projected from various swing lows within the major uptrend. In addition, the weekly RSI momentum indicator has flashed a bearish divergence condition at its overbought region, suggesting that the upside momentum of the major uptrend phase has eased off. These observations in turn increase the odds of a multi-week bearish mean reversion/counter-trend movement at this juncture.   Oscillating within a steeper minor descending channel   Fig 2: GBP/JPY minor short-term trend as of 25 Sep 2023 (Source: TradingView, click to enlarge chart)   In the shorter term as seen in the 1-hour chart, the price actions of GBP/JPY have started to oscillate within a steeper descending channel in place since the 6 September 2023 high of 185.78. Also, it has accelerated on the downside ex-post Bank of England’s monetary policy decision to keep its policy interest rate unchanged at 5.25% on last Thursday, 21 September. Interestingly, the minor snap-back in price actions seen last Friday, 22 September after the prior day’s 205 pips intraday plunge has managed to stall at the pull-back resistance of the former broken-down ascending channel support from the 23 August 2023 low and the 61.8% Fibonacci retracement of last Thursday, 21 September intraday plunge from 182.86 high to 180.81 low. In addition, the hourly RSI has shaped a “lower low” and started to inch lower right below the 50 level, suggesting short-term bearish momentum has resurfaced. Watch the 182.50 key short-term pivotal resistance to maintain the bearish bias for another potential down leg to test the intermediate supports of 180.60 and 179.20. However, a clearance above 182.50 negates the bearish tone to see the next resistance coming in at 183.80 (also the downward-sloping 20-day moving average).

The EURUSD slips into bearish consolidation zone ECB's Isabel Schnabel, who has been one of the most hawkish voices during the bank's latest monetary policy tightening campaign, started to sound dovish this week. Schnabel said that inflation is slowing at a 'remarkable' pace. The 10-year bund yield melted to 2.23% level – last seen back in June.   Yes, but Schnabel also said that officials 'have been surprised many times in both directions'. But traders are now set to sell the euro on dovish ECB expectations until inflation proves the contrary. The EURUSD slipped below 1.08 and to the 100-DMA, where it found some support. Following yesterday's selloff below the major 38.2% Fibonacci retracement, the pair is now in the bearish consolidation zone, with a strengthening bearish momentum that hints that the selloff could continue to 1.07/1.0730. Note that the market could absorb a further selloff at the current levels as the RSI is now at a mid-range: we are far from oversold conditions.   Gold sees support near the $2000 per ounce as falling US yields and fading appetite for equities continue to push capital into the precious metal.  Crude oil remains sold in a lower-highs-lower-lows pattern that paves the way for a further fall to the $70pb target, and China is not happy because Moody's cut its outlook for the Chinese sovereign bonds to negative warning that the country's usage of fiscal stimulus to support local governments and its spiraling property downturn pose risks to its economy. The Chinese CSI 300 fell to the lowest levels in almost 5 years, and nothing helps to undo the damage that government crackdowns and the COVID-zero policy have inflicted on investor confidence. China's stimulus measures brought Moody's to cut its sovereign debt outlook but couldn't bring investors or homebuyers back to the market. 

EUR: Not easy to pick a bottom Shorting the euro appears to be one of the most popular bets in FX at the moment. Comments by hawkish hardliners like Isabel Schnabel yesterday – who suggested that another hike is now off the table and essentially moved the discussion to rate cuts – have added further pressure on the euro. We continue to point to how the current downward correction in EUR/USD is not out of line with short-term rate differentials; when taking the two-year swap rate gap (-130bp) as a driver, a further leg lower to the 1.06 area would not be an aberration. That makes us reluctant to call for the bottom in EUR/USD just yet, and even more so in EUR-crosses, especially against the likes of AUD and NZD. A catalyst for an idiosyncratic euro rebound is not in sight, at least for today, when there are no scheduled European Central Bank speakers and the eurozone’s data calendar only includes the October retail sales – hardly ever a market mover in the region. The big slump (7.3% YoY) in Germany’s factory orders for October (data released this morning) is likely to keep the negative euro narrative alive at the start of the European session. EUR/USD is now trading very close to the 1.0770 100-day MA support, and a break lower can further fuel the bearish momentum. A test of 1.0700 before the weekend is entirely possible if the dollar remains bid.

Scream correction.  By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   US crude plummeted 4% yesterday and sank below the $70pb mark and Brent slipped below $75pb. Momentum traders and falling volumes worsened crude's recent plunge while OPEC's latest announcement of output cuts and Saudi's additional threats that they will extend their solo cut beyond Q1 went totally unheard. Worse, as the bears saw that investors ignored the supply cuts and threats, they feel more confident to increase their bets against crude. And indeed, the cartel's shrinking share of global output and frictions among members regarding the supply cut strategy mean that either the supply cuts don't make much difference, or further action will be difficult and perhaps too costly. Add the global slowdown woes into that mix, the dwindling falling interest and algorithmic trades' lack of emotion regarding the OPEC news, you understand why the barrel of crude is below $70pb and not above $100pb this December, as many banks had forecasted at the start of the year. And if a more than 4.5mio barrel fall in the US oil reserves last week couldn't halt yesterday's oil selloff, it is because the most recent number was blurred by a big margin error, the biggest on record – or the bulls just couldn't find the energy to swim against such a strong tide.   The question on the back of everyone's mind is: could crude oil extend losses? At the current levels, crude oil is trading near oversold market territory, therefore your algorithmic models based on market metrics should take than into account and slow selling. As such, we shall see a certain rebound at the current levels. Yet any price recovery could remain limited at $75/78 range, including the minor 23.6% Fibonacci retracement and the 200-DMA, and once the time is right, we could see this negative move extent to $65/67 region.   Remains the question of US strategic reserves that the US is said to consider refilling between $67/72 region. Yes, that will certainly help slow the downside pressure at this range but keep in mind that these  buybacks are limited to about 3 mio barrels per month due to physical constraints and won't reverse the tide.   Now that OPEC risk is out of the way, the biggest upside risk for oil is Middle East tensions.