Sample Category Title

For the 24 hours to 23:00 GMT, the USD declined 0.16% against the CAD and closed at 1.3161.

In the Asian session, at GMT0300, the pair is trading at 1.3155, with the USD trading 0.05% lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.3139, and a fall through could take it to the next support level of 1.3122. The pair is expected to find its first resistance at 1.3185, and a rise through could take it to the next resistance level of 1.3214.

Trading trend in the Loonie today is expected to be determined by Canada’s housing starts for August, slated to release later in the day.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD rose 0.11% against the USD and closed at 0.7112.

LME Copper prices declined/rose 0.7% or $42.5/MT to $5840.5/MT. Aluminium prices rose/declined 1.5% or $30.0/MT to $2000.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7114, with the AUD trading slightly higher against the USD from yesterday’s close.

Overnight data revealed that Australia’s business conditions index jumped to a level of 15.0 in August, following a revised level of 13.0 in the previous month. On the contrary, the nation’s business confidence index dropped to a level of 4.0 in August, compared to a level of 7.0 in the prior month.

The pair is expected to find support at 0.7096, and a fall through could take it to the next support level of 0.7078. The pair is expected to find its first resistance at 0.7132, and a rise through could take it to the next resistance level of 0.7150.

Looking forward, investors will keep an eye on Australia’s Westpac consumer confidence index for September, scheduled to release overnight.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Gold rose 0.09% against the USD and closed at USD1200.70 per ounce.

In the Asian session, at GMT0300, the pair is trading at 1198.70, with gold trading 0.17% lower against the USD from yesterday’s close.

The pair is expected to find support at 1195.33, and a fall through could take it to the next support level of 1191.97. The pair is expected to find its first resistance at 1202.93, and a rise through could take it to the next resistance level of 1207.17.

The yellow metal is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver rose 0.42% against the USD and closed at USD14.21 per ounce, tracking gains in gold prices.

In the Asian session, at GMT0300, the pair is trading at 14.17, with silver trading 0.28% lower against the USD from yesterday’s close.

The pair is expected to find support at 14.09, and a fall through could take it to the next support level of 14.012. The pair is expected to find its first resistance at 14.26, and a rise through could take it to the next resistance level of 14.36.

The white metal is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Crude Oil declined 0.56% against the USD and closed at USD67.62 per barrel, amid speculations that renewed sanctions on Iran will tighten the world's crude oil supply.

In the Asian session, at GMT0300, the pair is trading at 67.58, with oil trading 0.06% lower against the USD from yesterday's close.

The pair is expected to find support at 67.10, and a fall through could take it to the next support level of 66.62. The pair is expected to find its first resistance at 68.29, and a rise through could take it to the next resistance level of 69.00.

Crude oil is trading below its 20 Hr and 50 Hr moving averages.

Australia NAB Business Confidence dropped to 4 in August, down from 7and missed expectation of 5. That's a two year low since August 2016, and it's below long-run average. Confidence is lowest in wholesale and manufacturing, highest in mining and construction. And, confidence declined across all states except Western Australia and Queensland in the month, with New South Wales and Victoria continue to lag.

However, Business Condition rose to 15, up from 12 and matched expectations. Results were driven by increases in the profitability and trading indices. Forward looking indicators also rebounded a little in the month. Surveyed price and wage variables continue to show a gradual building of inflationary pressures.

Full release here.

Canada and the US will restart high-level trade talks in Washington today. Whether it's still NAFTA or not, the two sides reached a deadlock in three key issues, Canadian dairy market access, cultural exemption for Canada and Chapter 19 dispute resolution mechanism. Not much news is released regarding the discussions as both sides agreed not to negotiate in public.

Canadian Prime Minister Justin Trudeau just reiterated yesterday that "we continue to work hard and we are positively optimistic that we can get a win-win-win for all three countries." Foreign Minister Chrystia Freeland, who'll be in Washington today, said last week that the negotiation has entered into a "very intense phase" and the officials have been working 24-7.

US Trade Representative Robert Lighthizer just finished a meeting with European Trade Commissioner Cecilia Malmstrom in Brussels yesterday. Malmstrom said in a tweet that "Lighthizer discussed how the EU-US achieves concrete results in the short to medium term towards a free trade agreement." And they'll meet again at the end of September.

Lighthizer's office described the talks as constructive. Also, work would be done in October to identify tariff and non-tariff barriers that could be cut. And trade chiefs of EU and US will follow up in November to finalize certain results.

In the US, House Republicans released the so called "Tax Reform 2.0" yesterday, aiming to put it to committee-level vote this Thursday, and a full House vote on October 1. There are three major elements in the new package. Firstly, the temporary individual rates lowered in the December tax cut plan would be make permanent. Secondly, maximum age for some contributions to retirement accounts would be eliminated. Thirdly, new businesses would be allowed to write-off more start-up costs.

But some analysts saw the new tax plan as merely a political move ahead of mid-term elections. There is no chance of passing the Congress in short term. However, it will put Democrats in the position of opposing the tax cuts just ahead of November 6 elections. And there are also criticisms on adding another several billion dollars to the deficit.

STOCKS

Dow (25857.07, -0.23%) dipped in yesterday’s session and could head lower to test 25750 as mentioned in the earlier edition. Some bearishness in the near term is a possibility.

Dax (11986.34, +0.22%) could pause near current levels for a couple of sessions before resuming the fall towards 11800-11700-11600 zone. Note that decent supports are visible near each of the mentioned levels which could bring in a medium term bounce for Dax. For the current week, Dax looks bearish.

Nikkei (22596.26, +1%) has bounced from support on the daily candle chart. The bounce if continues could take it higher towards 23000 resistance in the near term. Thereafter, it would be important to see in which direction the index breaks out to indicate signs of longer term movements.

Shanghai (2661.34, -0.31%) has fallen as expected. There is some scope of falling towards 2650, which if breaks could move down further towards 2630.

Weekly Nifty (11438.10, -1.30%) chart has support just above 11200 which could possibly be tested by next week before the index bounces back to move higher. Immediate support to look at would be 11400-11390 levels which if breaks could take the index towards 11200.

COMMODITIES

Crude prices are at important levels and could move either side, clarity of which is not there just now. Gold and Copper looks bearish for the near term but could eventually rise higher with weekly long term supports holding well.

Brent (77.51) moved up a little to test 78 again while WTI (67.58) is stable. As we have been mentioning for quite some time now, WTI has long term supports on the 3-day and weekly candle charts and could move up in the longer term while Brent needs to breaks above 78 to ensure an upmove. It would be interesting to see which one impact the other as a fall from 78 on Brent could prevent a rise in WTI just now and a sharp rise in WTI if seen could help Brent break above the crucial resistance at 78.

Gold (1199.00) is almost stable just now. 3-day and weekly candles show a scope of re-testing 1180 on the downside while the price is below 1210 resistance. At the same time long term support on the weekly line chart suggest bullishness in the longer term indicating that a fall towards 1180, if seen would be short lived and could soon pick up upside momentum.

Copper (2.6235) looks bullish in the longer run with the weekly long tern support holding just above 2.55. But on the shorter term charts a last leg of a fall towards 2.55 is possible before the price moves higher. A sustained rise above 2.65 would negate this fall however where the bullish momentum might pick up. For now, while Shanghai has some downside in the near term, Copper could possibly remain sideways if not see a fall.

FOREX

Resistances @ 1.165 on Euro-Dollar and @ 6.87 on USDCNY could help the Rupee consolidate below 72.65 in the next few sessions. However, we can't yet rule out a quick rise to 73+ in the near term either.

Euro (1.1589) bounced from horizontal support near 1.153 yesterday. It should stay below immediate resistance near 1.165 in the next 1-2 sessions. Movement could be minimal till the ECB meet on Thursday.

Dollar Index (95.24) came off from resistance near 95.5 yesterday. It is likely to stay above support near 95 in the next 1-2 sessions. We prefer a rise past 95.5 in the coming weeks. The US CPI release on Thursday might well be the trigger for some more Dollar strength ahead.

Dollar Yen (111.36) has immediate resistance at 111.50, which if breached will lead it to the next important resistance near 111.75-80. However, looking at the 3 day candles, it seems that resistance @ 111.50 could hold for the time being - the preference is slightly tilted towards a test of support near 110.75 in the next 2-3 sessions.

Euro Yen (129.06) has immediate resistance on daily candles near 129.25. Moreover, given our above forecasts for EURUSD and USDJPY, if we keep the upper targets for both as 1.165 and 111.50 respectively (for this week), then the upside cap for Euro-Yen comes out to be 129.9. Preference is for a downmove to 128.5-128.0 in the next 2-3 sessions.

Pound (1.3032) breached resistance near 1.30 on daily candles yesterday and now has crucial resistance near 1.3050-1.3100, which we think should hold and push Pound down in this week back towards 1.295.

Dollar Yuan (6.87) could have some temporary resistance near current levels and could see a dip to 6.85 in the next 1-2 sessions. A breach above 6.87 would be bullish and could take it to 6.89 rather quickly.

Dollar Rupee (72.455): Dollar Rupee has scope of testing levels above 73 on a break above 72.80. Important levels to watch above 72.55 is 72.80 which may hold at first testing. But at the same time, given the current upward momentum, we cannot rule out 73 or higher in the next few sessions.

INTEREST RATES

India 10 year bond yield (8.1578%): Contrary to expectation, the GOI 10 year yield moved up yesterday and now has resistance coming up near 8.18%-8.20%. We prefer a dip from current levels or from 8.18%-8.20%. Conversely, if the resistance is breached in the next few sessions, the next upside target would be near 8.25%-8.30%, from where the yield should then come off.

Following news points are currently important in context of US Yields:

New treasury auctions of 10 year and 30 year notes in this week could potentially push US yields slightly higher.

US CPI data release on Thursday coupled with the ECB meet could both act together to push up US yields. Expectations are for strong US CPI numbers: on Friday, US non farm payroll data beat expectations and the average hourly earnings also came out strong.

Earlier in the previous week, US manufacturing data had also reflected improvement - another reason for yields to be bullish.

Meanwhile the US-China trade conflict continues to intensify with Trump reportedly saying that tariffs might be imposed on all Chinese imports to USA (ie on $467 bn worth of goods)

if that happens, risk aversion would prevent any significant rise in yields. This is one of the major reason why we believe that the May high of 3.125% for the US 10 year yield might have been the year's top.

US 10 Year Yield (2.93%) breached the 2.9% resistance level and is likely to rise more towards the 3% barrier before coming off from there once again. A break above 3% is not preferred.

Repeating yesterday’s comment regarding German yields: German 10 year yield (0.40%) is trading near immediate resistance @ 0.40% . Looking at the German 5 Year yield (-0.17%), which has breached above the resistance near -0.20% and the German 30 Year yield (1.08%) which has enough to room to go up towards 1.10%-1.15%, there is a slight chance that the German 10 Year yield could go above 0.4% in the near term - moreover horizontal support near 0.3% on medium term chart has been holding very well.

However, a dovish stance by ECB on Thursday could prove to be bearish for yields

Key Highlights

• The British Pound found support near 1.2900 and recovered against the US Dollar.
• There is a major bullish trend line formed with support at 1.2840 on the 4-hour chart of GBP/USD.
• The UK Gross Domestic Product in July 2018 increased 0.3% (MoM), more than the 0.2% forecast.
• Today, the UK Claimant Count Change for August 2018 will be released, which is forecasted to post 3.6K.

GBPUSD Technical Analysis

This past week, the British Pound declined below the 1.2900 support against the US Dollar. The GBP/USD pair traded towards the 1.2800 area where buyers emerged and later the pair recovered.

Looking at the 4-hours chart, the pair traded as low as 1.2785 and later jumped back above the 1.2900 and 1.3000 levels. It traded as high as 1.3028 and recently corrected lower. It moved below the 38.2% Fib retracement level of the last wave from the 1.2785 low to 1.3028 high.

However, declines were limited by the 1.2900 support and the 50% Fib retracement level of the last wave from the 1.2785 low to 1.3028 high. Below the 1.2900 level, there is a major bullish trend line formed with support at 1.2840 on the same chart.

Therefore, dips near the 1.2900 level, the 100 simple moving average (red, 4-hours), and the trend line remains supported. On the upside, the 1.3030 level is a major resistance along with a connecting bearish trend line with current resistance at 1.3035.

If the pair breaks the 1.3030 resistance and the trend line, there could be an upside break towards the 1.3100 and 1.3200 levels.

Fundamentally, the UK saw the release of the Gross Domestic Product for July 2018 by the National Statistics. The market was looking a growth of around 0.2% in the GDP compared with the previous month.

The actual result was better than the forecast as the GDP grew 0.3% in July 2018. More importantly, the trade balance in July 2018 posted a trade deficit of £-0.111B, much less than the market expectation of £-2.100B.

Moreover, the report added that:

UK gross domestic product (GDP) grew by 0.6% in the three months to July. GDP growth was driven by services and construction, with a small drag on growth from production. Three-month growth highest since August 2017.

Overall, the report was positive and it could help the British Pound and GBP/USD in the near term.

Economic Releases to Watch Today

• UK Claimant Count Change August 2018 – Forecast 3.6K, versus 6.2K previous.
• UK ILO Unemployment Rate July 2018 (3M) – Forecast 4.0%, versus 4.0% previous.
• UK Average Earnings Including Bonus July 2018 (3Mo/Year) – Forecast +2.5%, versus +2.4% previous.
• UK Average Earnings Excluding Bonus July 2018 (3Mo/Year) – Forecast +2.8%, versus +2.7% previous.
• German ZEW Business Economic Sentiment Index for September 2018 – Forecast -14.1, versus -13.7 previous.
• US Wholesale Inventories for July 2018 – Forecast +0.7%, versus +0.7% previous.