Sept 20 – Daily Briefing- Forex & Commodities In Focus

EUR/USD – Ascending Triangle Pattern In Play

The U.S. dollar trimmed lower against the euro and declined to the lowest in almost three weeks. As for the European Affairs Minister, Italy proposed the public debt within the Eurozone nations to be taken below 60% of the gross domestic product, via a long-term restructuring approved by the European Central Bank. The thoughts of reduction in debt extended support to the EUR/USD.

EUR/USD – Technical Levels
R3: 1.1828
R2: 1.1748
R1: 1.1717
Key Trading Level: 1.1667
S1: 1.1636
S2: 1.1587
S3: 1.1506

Trend continuation of EUR/USD is likely to be resolved by how investors react to the 1.1666 level which coincides with an ascending trendline. Therefore, a buying momentum above is needed if we want to see this pair reaching the 1.1900 final target. It is worth noticing that 1.1725 represents a heavy hurdle. On the contrary, the failure of the 1.1666 area would bring bears (i.e., sellers) back into the play field. Near-term downside targets are 1.1602, 1.15 and 1.10.

GBP/USD – UK Inflation Figures Underpins Sterling

After yesterday upbeating inflation figures, today´s docket brought us Retail Consumer data. Overall, retail sales numbers were worse than in the previous term but a bit better than expected, i.e., the (YoY) in August came at 3.3% v. 2.3% expected and 3.8% previous. By the time of writing this report, the Pound is reached yesterday´s High at 1.3200, the highest since July.

We still believe that everything for the Sterling is about Brexit and its negotiation ongoings. We could well witness a similar price action as yesterday, as we observe that sentiment is shifting to the downside. How long this will take is still uncertain.

GBP/USD – Technical Levels
R3: 1.3319
R2: 1.3225
R1: 1.3191
Key Trading Level: 1.3132
S1: 1.3098
S2: 1.3039
S3: 1.2945

The GBP/USD remains bullish at this point as long as it holds the 1.3135 support level. Rebound from 1.3135 could extend the Cable higher to 1.3190. However, the bearish breakout of 1.3135 can cause a drop up to 1.3100.

 

USD/JPY – Ascending Triangle Pattern

The USD/JPY remain mostly unchanged as the Bank of Japan interest rates were left unchanged at -0.1%, which was in line with traders forecasts. The Central Bank is also keeping its promise to keep 10-year government bond yields at 0% over the mid-term.

While leaving policy stable, inflation remains the biggest fear of both the government and BoJ. However, confidence towards the economy was pondered in the monetary policy statement regardless of growing tensions around global trade war. The Japanese Yen advanced from ¥112.324 to ¥112.349 against the Dollar, upon an announcement of the statement.

USD/JPY – Technical Levels
R3: 112.61
R2: 112.26
R1: 112.06
Key Trading Level: 111.91
S1: 111.7
S2: 111.56
S3: 111.21

For the moment, the immediate support level is likely to be 112.150. In the 4 hours chart, the pair extends moving away from it’s 100 and 200 SMA, with the smallest gaining upward traction, currently at about 111.45.

In the cited chart, the Relative Strength Index is crossing above 50, signifying the bullish bias of traders. As a result, the pair is heading north towards the potential target levels of 113.100, 114.150 and 115.300.

Gold – Ascending Triangle Pattern In Focus

The precious metal gold bounced as the dollar declined, symbolizing investors are starting to bother about the impact of the U.S.-China trade war on the U.S. economy, attracting some buyers back into gold investments. Gold prices have decreased by nearly 12% since April, damaged by the intensifying conflict and on growing U.S. interest rates with investors buying the dollar in the hope the United States has limited to lose from the conflict.

Gold – Technical Levels
R3: 1214.88
R2: 1207.08
R1: 1202.72
Key Trading Level: 1199.27
S1: 1194.92
S2: 1191.47
S3: 1183.66

For the moment, gold has formed an ascending triangle pattern which is signaling the bullish bias of traders. The precious metal is trading at 1203 with an immediate support near 1197 and a resistance at 1209.