Sat, Sep 25, 2021 @ 19:15 GMT

USD Edges A Bit Higher

The dollar seems about to end the week where it begun, maybe a bit higher after a roller coaster week where fluctuation was determined by market appetite which shifted from risk off to risk on while attention is now being placed on the Fed’s meeting next Wednesday. US stocks traded mixed given also that the initial jobless claims figure released for past week took the markets by surprise as it came out higher than expected nevertheless, big-cap tech stocks seem to continue to drive the markets higher. The price of gold showed little volatility rising a bit yesterday yet relenting most of the gains during today’s Asian session and seem about to end the week lower for the first time in five consecutive weeks being in the greens. We see the case for the markets to keep their eyes on today’s financial releases while fundamentals could still affect the markets.

Nasdaq continued to rise yesterday aiming for the 15000 (R1) resistance line, which marks an all time high level for the index. We maintain a bullish outlook for the index as long as it remains above the upward trendline incepted since the 19th of July. Please note that the RSI indicator below our 4-hour chart is at the reading of 70, which on the one hand confirms the bulls dominance, yet on the other hand it may imply that the index is oversold and a correction lower is possible. Should the bulls actually maintain control over the index, we may see it breaking the 15000 (R1) all time high level, with the next possible stop maybe on the 15175 (R2) level. Should a correction lower take place and the bears take over, we may see the index breaking the 14825 (S1) support line and aim for the 14650 (S2) support level.

After the ECB, EUR traders focus on July’s PMIs

The common currency slipped lower against the USD yesterday as it also did against the pound and the Japanese yen after ECB’s interest rate decision, which remained on hold, yet failed to impress EUR traders overall. The bank maintained a dovish tone as it tweaked its guidance in order to better reflect its recently slightly elevated inflation target and pledged to keep a “persistently accommodative” stance until its inflation target is met consistently. Today EUR traders could be focusing on the release of the area’s preliminary PMI figures for July with the heavy-point of interest being at Germany’s manufacturing PMI as it encapsulates the economic activity for the spearhead of Eurozone’s economy.

EUR/USD slipped yesterday, breaking below the 1.1785 (R1) support line, now turned to resistance. We tend to maintain a bias for a sideways motion as the pair’s price action seems to revolve around the 1.1785 (R1) level. Please note that the RSI indicator below our 1-hour chart is below the reading of 50, which may imply a slight advantage for the bears. Should the pair come under the selling interest of the market, we may see it breaking the 1.1695 (S1) support line and aim for lower grounds. Should buyers be in control of the pair’s direction, we may see EUR/USD breaking for the 1.1785 (R1) resistance line and aim for the 1.1885 (R2) resistance level.

Other economic highlights today and the following Asian session:

Today during the European session we get UK’s retail sales growth rate for June and the preliminary PMI readings of France, Germany, the Eurozone and the UK for the month of July. In the American session we get Canada’s retail sales for May, and from the US the preliminary PMI readings for July, while oil traders may be more interested in the release of the weekly Baker Hughes oil rig count. During Monday’s Asian session, we get New Zealand’s trade data for June and from Japan the preliminary Jibun bank manufacturing PMI for July.

US 100 Cash H1 Chart

Support: 14825 (S1), 14650 (S2), 14475 (S3)
Resistance: 15000 (R1), 15175 (R2), 15350 (R3)

EUR/USD H4 Chart

Support: 1.1695 (S1), 1.1605 (S2), 1.1520 (S3)
Resistance: 1.1785 (R1), 1.1885 (R2), 1.1990 (R3)


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