Stuart's FX analysis

# Double bottom at 0.6841 area AUDUSD scrapes along the bottom The AUDUSD is scraping along the bottoms over the last 9 trading days. Between 0.68409 and 0. 6858, there have been a number of swing lows that have seen bounces back higher . The low today stalled at the low from Monday at the lowest of those extremes. Risk focused traders are leaning. If the low is broken it should open the door for more selling. The move lower today came after the pair first moved higher in the Asian session. That run higher saw the pair move up to test the falling 200 hour MA (green line) currently at 0.69039. The 100/200 hour MAs are both at that level currenly It would take a move above - and stay above - to give the dip buyers more control. Ahead of those MAs on the topside are the swing lows from August 5 at 0.6869, and then the swing low from August 2 at 0.69847. Admittedly, the price action over the last 9 trading days has seen price action above and below those levels. Nevertheless, w...

# Turnaround Tuesday disappeared faster than dessert does at the Moya household. US stocks turned negative after confidence and job opening data supported the argument for the Fed to stick to an aggressive stance in fighting inflation. ​ The S&P 500 index fell below the 4,000 level as more Fed speakers stood by Chairman Powell’s strong hawkish position. ​ Fed’s Bostic reiterated it is too early to declare victory in the inflation fight and Barkin stated that policy needs to be restrictive. ​ It seems like traders are leaning towards a 75 bp hike in September, a half-point in November and a 25bp increase in December. ​ Over the next few months, if the labor market doesn’t break and the consumer remains resilient, Wall Street might start pricing in rate hikes for February and March. US data shines US consumer confidence roared back as Americans started to believe the peak with inflation is in place. ​ The headline confidence reading rose to 103.2, well above the highest estima...

# Moves above swing highs between 1.3074 and 1.30835 USDCAD surges to new highs helped by oils sharp fall The price of crude oil has moved sharply to the downside today after doing the complete opposite yesterday. For the USDCAD yesterday, the price move moved (higher CAD) as it followed the rise in oil . Today, the USDCAD is moving sharply higher following the fall in oil. Technically, the price today has been able to get above old swing area between 1.30757 and 1.30922. The current price is trading at 1.3096 after reaching a high for the day of 1.31066. It would take a move back below 1.30757 level (low of the swing area) to hurt the bullish bias. On the topside, the next target area comes between 1.31274 and 1.31373 (swing areas between July 14 and July 15) Trading analysis offered by Flex EA . Source #RobotFX Team

# GBP/USD Brief analysis: The direction of the trend of the British pound sterling since February last year has been set by a downward wave. Quotes have reached the upper limit of the powerful support of the weekly scale of the chart. The wave structure does not look complete. The last section counts down from August 10. In the structure of this wave, the middle part (B) has been forming all last week. Forecast for the week: At the beginning of this week, the general flat mood of the movement is expected to continue with a downward vector. The decline is likely up to the support boundaries. By the end of the week, the probability of a reversal and the beginning of a price rise increases, up to resistance levels. Potential reversal zones Resistance: - 1.1940/1.1990 Support: - 1.1650/1.1600 Recommendations Sales: possible in fractional lots within the intraday. The potential is limited by the support zone. Purchases: will become possible after the appearance of confirmed rev...

# EUR/USD Brief analysis: The dominant trend of the euro has brought the quotes of the main pair to parity with the US currency. The price pushed through the strong support level, turning it into resistance. The next section of the trend is counting down from August 10. The flat section that started a week ago forms an intermediate correction. After its completion, the decline will continue. Forecast for the week: At the beginning of the week, the continuation of the "sideways" along the resistance zone is likely. In the second half, you can expect activation, reversal, and resumption of the downward movement of the price. The support zone is the lower limit of the probable weekly range of the move. Potential reversal zones Resistance: - 1.0000/1.0050 Support: - 0.9760/0.9710 Recommendations Purchases: Not recommended. Sales: will become possible after the appearance of confirmed reversal signals in the area of the resistance zone. USD/JPY Brief analysis: The up...

# US stocks are declining after a weekend filled with global central bank hawkishness reinforced the message that global central bank tightening will deliver pain to households and businesses. ​ Friday’s sharp selloff is continuing as expectations for the global energy crisis persist, which will keep inflation risks elevated and lead to a rapid deterioration of economic data. Powell sent a short and direct message that there won’t be a Fed pivot anytime soon and that has markets positioned for further equity weakness. ​ Investors were expecting that once the US got some ugly data, perhaps a couple of negative NFP reports, that the Fed would come to the rescue, but that might not be the case. ​ Premature loosening won’t be happening on the first signs that the economy is slowing down quickly and that raises doubts for anyone who bought stocks earlier this month. ​ ​ All about Europe this week The ECB rate decision will show that the current inflation narrative will force them to del...

# ​Gold edges higher as dollar rally halts Non-interest-bearing gold got crushed early as more global central bank rate hikes are getting priced in. ​ Gold is edging higher as the dollar rally halted as the euro rises on expectations the ECB will deliver more rate hikes than investors initially thought. ​ If the dollar does not rally here, that could provide some relief for gold. ​ If equities remain in risk aversion mode as the speculative money that bought risky assets this month grows nervous that economic growth is about to collapse, gold might be able to stabilize here. ​ Gold was vulnerable to a plunge towards $1700 but it is starting to show some resilience. ​ With the UK on holiday, today’s moves might be meaningless. ​ The true test for gold will come tomorrow. ​ Oil The one trade that everyone can agree upon is that the oil market will likely remain tight. ​ Oil rallied on rising risks of a potential civil war that could put Libyan output at risk and o...

# NZD/USD has stabilized today after ending the week with sharp losses. In the North American session, NZD/USD is trading at 0.6149, up 0.22% on the day. Earlier in the day, NZD/USD touched a low of 0.6102, its lowest level since July 14th. Powell’s speech hammers the New Zealand dollar The US dollar ended the week with sharp gains against the major currencies, with the exception of the euro. The New Zealand dollar took it on the chin, as NZD/USD fell 1.43% on Friday. The catalyst for the US dollar’s upward swing was a hawkish speech from Fed Chair Powell at the Jackson Hole Symposium. Powell’s message didn’t contain anything we haven’t heard in recent weeks from the Fed, but this time around, investors internalized Powell’s no-nonsense message that the Fed plans to stay aggressive until the fight against inflation is won. Powell stressed that the Fed would be vigilant not to ease policy prematurely, and added that the Fed would not change policy based on one or two reports of lower ...

# The week ahead was setup on Friday by Fed Chair Jerome Powell who expectedly delivered a hawkish slant to his address. He touched on the misalignment of demand and supply factors and the steps required (hiking rates) to realign the current high demand and low supply backdrop. Mr. Powell emphasized the Fed’s mandate to maintain price stability by forcefully using its tools to quell inflationary pressures before they become entrenched. The ECB now faces a tougher task as central bank divergence seems to be increasing once more. The job of the ECB is far fiddlier than the U.S. juggling multiple nations under a deteriorating fundamental setting and should keep the euro depressed through 2022. The lead up to Jackson Hole saw nothing of significance in the ECB minutes last week but there was mention of concern around the euro. The recent euro weakness will naturally contribute to inflationary pressures and trying to find a floor for the euro will prove difficult considering the grim econ...

# For the pound/dollar instrument, the wave marking looks quite complicated at the moment, but it does not require any clarifications yet. The upward wave, built between May 13 and May 27, does not fit into the overall wave picture, but it can still be considered corrective as part of the downward trend section. Thus, it can now be concluded that the downward section of the trend takes a longer and more complex form. At this time, we have completed waves a, b, and d, so we can assume that the instrument is continuing to build wave e. If this assumption is correct, then the decline in quotes should continue in the near future. However, I remind you that if impulse structures can become more complicated and lengthened, corrective ones can become even more so. Given the news background and the fact that the Fed will not stop raising interest rates now, the entire downward trend section may take a much longer form. The wave markings of the euro and the pound differ slightly in that the do...

# The wave marking of the 4-hour chart for the euro/dollar instrument at the moment still does not require adjustments, although wave 4 turned out to be longer than I expected. The whole wave structure can become more complicated once again, but any structure can always take a more complex and extended form. The construction of an ascending wave has been completed, which is interpreted as wave 4 of the downward trend section. If this is the case, the instrument continues to build a descending wave 5. The assumed wave 4 has taken a five-wave but corrective form. However, it can still be considered wave 4. There are no grounds to assume the completion of the downward trend segment yet. A successful attempt to break through the 0.9989 mark, which corresponds to 323.6% Fibonacci, indicates the market's readiness to continue reducing demand for the euro. I expect the decline in the quotes of the instrument will continue with targets located below the 1.0000 mark within wave 5. Wave 5 c...

# The US Dollar aimed higher against its major counterparts this past week, fulfilling a move that markets had been building up since the beginning of August. Throughout June and July, the markets priced in a pivot narrative for the Federal Reserve despite the highest inflation in 40 years and the most aggressive tightening in decades. This contrasted with the tone coming out of the Fed. It seemed that last week, the two finally moved into unison. Chair Jerome Powell’s speech at the annual Jackson Hole Economic Symposium seemed to do the trick. He reiterated much of the language that officials had been saying for weeks, adding that some households could feel the pain from the central bank’s policy tightening. Looking at the implied Fed policy curve in the aftermath of the symposium, the markets increased the overall rate outlook by 25 basis points. It should also be noted that quantitative tightening is continuing. The central bank’s balance sheet sits around 8.8 trillion, which is t...

# The Jackson Hole Economic Symposium was the highlight of the week as market participants awaited Fed Chair Jerome Powell’s speech. With the annual event hosted by the Federal Reserve Bank of Kansas City, this year’s topic was centered around ‘Reassessing Constraints on the Economy and Policy’ and the prominent threat of inflation. Visit DailyFX Education to learn about the role of central banks in global markets Preceding Powell’s commentary, a softer Core PCE (the Fed’s preferred measure of inflation) print initially allowed Bitcoin to move higher before plunging through prior support turned resistance at $21,500. As hopes of a 50-basis point rate hike at the September FOMC dwindled, the major cryptocurrency erased gains providing a platform for bearish continuation. DailyFX Economic Calendar Chart prepared by Tammy Da Costa using TradingView With monetary policy focused on driving inflation back towards the Fed’s target of 2% without disrupting the labor market, it could be ...

# What is driving the EURUSD, USDJPY, GBPUSD, USDCHF, USDCAD, AUDUSD and NZDUSD? In the video, a look at the US major indices and crude oil is analyzed.. In the weekend forex report for the week starting August 29, 2022, I first take a deep dive into the Fed Chair Powell Jackson Hole Symposium speech. The chair had a major change in his tone and the dollar moved higher as a result. After, I take a look at the technicals that are driving the major currencies vs the USD, as well as a technical look at the major US stock indices and Crude oil heading into the new trading week. Trading analysis offered by Flex EA . Source #RobotFX Team

# Long-term perspective. The GBP/USD currency pair has fallen by 90 points during the current week. It doesn't seem to be that much, but the pair is falling almost constantly if you don't consider those rare and weak corrections commensurate with the meager corrections in the euro currency. If the euro shows a maximum correction equal to 400 points, then the pound is equal to 500 points. That is, both major pairs continue to trade almost identically. The pound sterling finished the week near its 2-year lows, so there is no technical reason to expect the downtrend to end. Recall that usually, the trend ends with a powerful rebound and a sharp movement in the opposite direction. We are not observing this now. Jerome Powell's speech on Friday assured traders even more strongly that the Fed rate will continue to rise until the end of 2022 and maybe even in 2023. That is, it is still very far from the end of the tightening monetary policy cycle in the fight against inflation....

# Long-term perspective. The EUR/USD currency pair has lost about 90 points during the current week. Thus, we can immediately conclude that the global downward trend persists, and the euro continues to fall. The pair made sluggish attempts to adjust a little from Tuesday to Thursday, but nothing came of it. Recall that within the framework of the entire global downward trend, which has lasted for more than a year and a half, the maximum correction of the pair was 400 points. That's how the euro currency adjusted a couple of weeks ago. And then, having considered its mission accomplished, it rushed down again. At the same time, it rushed without any "push" in the form of a fundamental event or a macroeconomic report. It just resumed a landslide fall. In the same week, traders took a short pause against the background of Friday's speech by Jerome Powell. The Jackson Hole Symposium is a simple economic conference. We did not expect the head of the Fed to radically chan...

# The Australian Dollar finished last week vulnerable to US Dollar strength in response to Federal Reserve Chair Jerome Powell’s much anticipated Jackson Hole symposium address. His remarks were pretty much in line with expectations, but doubts linger of his dedication to extinguishing inflation. On one hand, he invoked the inflation fighting spirit of Paul Volker, then in almost the same breath, he revived the extremely loose policy minded Alan Greenspan and Ben Bernanke. Where exactly Mr Jerome Powell sits on the scale of gumption to fight horrendously high inflation, remains a mystery. Nonetheless, the US Dollar was bought in response. In terms of the Aussie Dollar, for many years, the RBA has called out stagnant wage growth as a problem within the Australian economy. That might be about to change at a time when it is the last thing that they may want. In June, the government raised the minimum wage by 5.2%. This week, the Federal government will host a jobs summit and a number...

# Overview: The resistance of GBP/USD pair has broken; it turned to support around the price of 1.1817 last week. Thereby, forming a strong support at 1.1817. The direction of the GBP/USD pair into the close this week is likely to be determined by trader reaction to 1.1817 and 1.1979. The GBP/USD pair climbed above the level of 1.1817 before it started a downside correction. The GBP/USD pair set above strong support at the level of 1.1817, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 1.1817 because the trend is still showing strength above it. The level of 1.1817 coincides with the golden ratio (23.6% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 70. At the same time, the RSI is still signaling an upward trend, as the trend is still...

# Overview : The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 1.0080 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 1.0080 (right now). The bias remains bearish in the nearest term testing 1.0011 or lower. Immediate support is seen around 1.0011. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.0011, because in general, we remain bearish on August 26h, 2022. Yesterday, the market moved from its top at 1.0080 and continued to drop towards the top of 1.0011. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 1.0080 (major resistance)...

# On Friday, the EUR/USD pair again reversed in favor of the European currency and began the growth process, simultaneously consolidating over the downward trend corridor. At the same time, I formed an ascending mini-corridor, which so far characterizes the mood of traders as "bullish." I don't think the pair will spend much time in it, but closing under it will favor resuming the fall of quotes in the direction of the 0.9782 level. The current week has turned out to be quite boring. There was practically no background information. Of all the reports and events that did exist, I can only note the business activity index in the US services sector, which continued its decline and finished the last month at 44. If the pair continued its trend decline on Monday, it would not move from its place in the next four days. This week's most important event tonight is Jerome Powell's performance in Jackson Hole. Opinions among traders and analysts, as usual, were divided. S...

# According to the hourly chart, the GBP/USD pair continued its incomprehensible movements on Friday, which began on Tuesday. At first, the pair desired to start an upward pullback, but on Wednesday, it became clear that there would be no pullback. The activity of traders decreased more and more every day, and on Wednesday, Thursday, and Friday, the pair spent time between the low and the peak of Tuesday. The downward trend corridor still characterized the mood of traders as "bearish," so the fall of the British dollar may resume at any moment. Such a moment may come even tonight when Jerome Powell's performance begins. Although I do not expect any revelations from the Fed president, it should be recognized that traders can react very violently to his speech. In general, the British pound almost completely copies the euro currency. This is visible even this week. One might think that the information background from the European Union and the UK does not matter now becaus...

# EUR/USD Daily Chart EUR/USD bears have been disappointed with the past three weak follow-through bars after August 23. Some are buying back shorts around the low close (August 23), which is why the market is bouncing here. The market formed a Low 1 short yesterday. However, it is a bull doji bar and follows two other bull doji bars. This increases the odds of trading range price action and lowers the probability of selling below yesterday’s bar. Another reason why traders bought at or below yesterday’s low. Bulls are starting to do a good job of causing the market to stall around the 1.000 big round number. Next, the bulls need to get a strong bull bar closing on its high and preferably closing above the highs of the past four bars. The selloff down to August 23 is in a tight channel, which increases the odds that the first reversal down will fail, so the market still may have to go more sideways at this price level. Bears see the past four bars as a pullback and a minor ...

# The US nonfarm payrolls report will take centre stage next week as speculation about the size of the Fed’s next rate hike goes into overdrive. Investors will also be keeping a close eye on the latest inflation readings in the euro area ahead of the September rate decision amid growing gloom about the bloc’s economic outlook. PMI indicators out of China and as well as quarterly data from Australia and Canada will be important too in helping to gauge the health of the big economies. Will the August NFP change anything for the dollar? The August payrolls report will headline another data-packed week in the United States as it will be one of the last pieces of the puzzle for the Federal Reserve before it meets in September. But before the all-important jobs numbers, there’s a raft of other releases to get through. Kicking things off on Tuesday are the S&P CoreLogic Case-Shiller Home Price index and the Conference Board consumer confidence index. On Wednesday, the Chicago PMI and the...

# Gold price is under pressure. Price is around $1,747 but the kijun-sen (yellow line indicator) has moved higher and the tenkan-sen (red line indicator) is turning lower. A cross of the tenkan-sen below the kijun-sen would be a bearish signal. If price breaks again below and out of the cloud, we will have an even stronger bearish signal. Cloud support is at $1,740. Bears need to break below this level in order to continue their move lower towards $1,700. Bulls on the other hand need to break above $1,760 at least and then above $1,780. Trading analysis offered by Flex EA . Source #RobotFX Team

# Black lines- Fibonacci retracements EURUSD is trading above recent highs of 1.0010. Price is now at 1.0030 with a 4 hour candle close above the recent highs and above both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). Support by the two indicators is at 0.9992 and 0.9970. Price remains below the Kumo (cloud) which is the main bearish characteristic of the chart. The Chikou span (black line indicator) is still below the candlestick pattern trying to break above resistance at 1.0030-1.0050. As long as price is below the Kumo, trend will remain bearish according to the indicator. There are some signs that could be the start of a bounce or trend reversal, but it is too early to tell. Upside bounce target for EURUSD is the lower cloud boundary and 50% retracement at 1.0070-1.0080. Trading analysis offered by Flex EA . Source #RobotFX Team

# Now we realize how little we understand inflation. This is how Jerome Powell argued in the Portuguese Sintra, admitting the mistake of the end of 2021. Then the Fed insisted that high prices were temporary. The time has come for Jackson Hole, and the American central bank can no longer afford to be wrong. It must throw all its strength into the fight against inflation, which puts the EURUSD bulls in a hopeless position. Markets are growing on expectations, and no one cares about what happened in the past. Yes, the United States faced a technical recession in the first half of the year, but the quotes of the main currency pair are based on expectations of a recession in the eurozone economy. According to UBS, it is already there. The bank forecasts a 0.1% contraction in the currency bloc's GDP in the third and 0.2% in the fourth quarter. It lowered the estimate of gross domestic product growth for 2023 from 1.2% to 0.8%. These projections are based on the assumption that gas pric...