Sample Category Title

Pivot (invalidation): 6.6050

Our preference Short positions below 6.6050 with targets at 6.5700 & 6.5450 in extension.

Alternative scenario Above 6.6050 look for further upside with 6.6400 & 6.6800 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 0.7185

Our preference Short positions below 0.7185 with targets at 0.7140 & 0.7120 in extension.

Alternative scenario Above 0.7185 look for further upside with 0.7210 & 0.7235 as targets.

Comment The RSI has broken down its 30 level.

Pivot (invalidation): 1.3165

Our preference Short positions below 1.3165 with targets at 1.3090 & 1.3060 in extension.

Alternative scenario Above 1.3165 look for further upside with 1.3200 & 1.3225 as targets.

Comment As Long as 1.3165 is resistance, look for choppy price action with a bearish bias.

Pivot (invalidation): 0.9685

Our preference Short positions below 0.9685 with targets at 0.9625 & 0.9600 in extension.

Alternative scenario Above 0.9685 look for further upside with 0.9710 & 0.9725 as targets.

Comment The break below 0.9685 is a negative signal that has opened a path to 0.9625.

Pivot (invalidation): 110.95

Our preference Short positions below 110.95 with targets at 110.20 & 110.00 in extension.

Alternative scenario Above 110.95 look for further upside with 111.15 & 111.40 as targets.

Comment As Long as 110.95 is resistance, look for choppy price action with a bearish bias.

Pivot (invalidation): 1.2895

Our preference Long positions above 1.2895 with targets at 1.2950 & 1.2985 in extension.

Alternative scenario Below 1.2895 look for further downside with 1.2870 & 1.2840 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Pivot (invalidation): 1.1635

Our preference Short positions below 1.1635 with targets at 1.1605 & 1.1570 in extension.

Alternative scenario Above 1.1635 look for further upside with 1.1660 & 1.1690 as targets.

Comment A break below 1.1605 would trigger a drop towards 1.1570.

The Euro ticked higher in early European trading but remains directionless and looking for fresh signals.

Thursday's long-legged Doji candle signaled indecision, as the pair faces strong headwinds from thin daily cloud, but the downside remains protected by 55SMA for now.

Conflicting daily indicators (momentum is weakening while slow stochastic continues to trend higher and MA's are turning to bullish configuration) lack clearer direction signal.

EU GDP data mark key event of the European session, with expectations for unchanged figures in Q2.

More significant US jobs data, due in early US session, are eyed for stronger signals.

According to the forecasts, US job growth is expected to pick up in August, with 191K jobs created in August, compared to 157K in July. Also, unemployment rate is expected to fall to 3.8% (18-year low) from 3.9% previous month.

Average hourly earnings are expected to rise 0.3% in August, unchanged from the previous month.

Trade conflicts between the US and China, as well as other major economies, such as Canada, Japan and European Union, maintain high tensions in the markets and could also trigger stronger action is the situation escalates.

Res: 1.1644, 1.1662, 1.1678, 1.1714
Sup: 1.1616, 1.1595, 1.1569, 1.1558

Rates: Developments on trade scene trump US payrolls

Development on the US trade scene could underpin demand for core bonds going into the weekend and overshadow today’s payrolls report. US President Trump’s verdict on an additional $200bn of Chinese goods looms, talks with Canada are deadlocked, negotiations with the EU restart on Monday and Japan could be targeted next.

Currencies: Will payrolls be able to provide any guidance for USD trading

Yesterday, EUR/USD didn’t show a clear picture as global uncertainty persisted. Today, the focus remains on the US. Payrolls are expected solid, but will the report be strong enough to inspire any sustained USD gains? USD/JPY is becoming more vulnerable to global trade tensions as US president Trump might target Japan next.

The Sunrise Headlines

• Major US equity indices losMajor US equity indices lost ground on Thursday with NASDAQ (-0.91%) underperforming for a second straight day. Asian markets wary looming new tariffs and open with losses, heading for their worst week since February.
• The public comment period on the tariffs targeting $200bn of Chinese imports ended this morning. So far, the White House has made no announcements. Businesses made a last-minute push to convince Trump to reverse course.
• US President Trump’s hunger for trade wars hasn’t been satisfied, hinting that Japan could be targeted next. He said he has a good relationship with Japan, but that it will end “as soon as he tells them how much they have to pay”.
• Brazilian’s far-right presidential candidate Jair Bolsonaro, who currently leads opinion polls, was stabbed during a street rally. The former Army officer underwent surgery and is in stable condition, according to hospital officials.
• The leaders of France, Belgium, The Netherlands and Luxembourg warned the UK that cherry picking of EU rules is not an option. French President Macron added that EU members will stay “extremely united”.
• Canada is still in full negotiations with the US over a renewal of Nafta. After talks yesterday, a US official said three key issues remain in the way of a deal: future trade disputes, dairy quotas and cultural issues. Talks continue today.
• Today’s US eco calendar contains payrolls, unemployment rate and average hourly wages for August. Several Fed members speak. In the UK, the BoE releases the household expectation for inflationains payrolls, unemployment rate and average hourly wages for August. Several Fed members speak. In the UK, the BoE releases the household expectation for inflation

Currencies: Will Payrolls Be Able To Provide Any Guidance For USD Trading

Will payrolls unlock the USD stalemate?

On Thursday, EUR/USD basically kept a sideways trading pattern. US data were mostly strong but failed to inspire any meaningful USD gains. The negative risk sentiment had also little impact on EUR/USD trading. The pair closed at 1.1623, little changed from Wednesday evening. The global equity correction finally also caused some safe haven bid for the yen. The slide in USD/JPY accelerated on press headlines that Japan could be the next target in president Trump’s campaign to address issues on trade. USD/JPY closed the day at 110.75 (from 111.53). This morning, global risk sentiment remains negative. Most Asian equity indices shows moderate losses. EM tensions haven’t disappeared yet, but most of the hard-hit EM currencies show signs of stabilization. EUR/USD hovers near 1.1625. The yen remains strong (USD/JPY near 110.60). Today, the focus probably remains on the US. Regarding the data, the US payrolls take center stage. Job growth is expected solid (191.000). Markets will again keep close eye on wage growth (AHE expected at 2.7% Y/Y). The payrolls remain important for USD trading. However, of late, the reaction of the USD (and of interest rate markets) to US eco data was often muted. A big surprise is apparently needed for markets to change expectations on the Fed rate path. New actions from president Trump on international trade (China tariffs/Canada) remain a wildcard. Risk-off related to trade war issues had only a limited impact on EUR/USD trading of late. USD/JPY might become more vulnerable. Recently, the dollar lost some momentum and pressure on the euro due to uncertainty on Italy eased. We maintain the view the EUR/USD 1.1791/1.1850 resistance will be tough and keep a cautious USD positive bias even as we are well aware that the USD momentum was far from impressive of late.

Yesterday, in technical trade, sterling trade with a slightly positive bias. There were no eco data and there was no high profile brexit news. EUR/GBP finished the session just below the 0.90 handle. More technical order driven trade might be on the cards today. There are only second tier eco data on the agenda in the UK today. Some more consolidation near EUR/GBP 0.90 might be on the cards. We don’t anticipate a sustained sterling rebound as long as there is no breakthrough on one of the key brexit issues.

EUR/USD: dollar going nowhere. Will payrolls give clear guidance?

General Trend:

• Markets are cautious following the end of the public comment period released to the US’ proposed tariffs on $200B in China goods
• Asian chip names decline amid earlier losses in the US
• China PBoC again skips daily open market operation in favor of a medium-term lending facility (MLF)
• Japan continues work to restore power after the recent Hokkaido earthquake
• Japan July household spending rises for the first time since Jan
• South Korea President Moon’s approval rating moves below 50% for the first time (Gallup)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.8%
• Elders and Bingo Industries to be added to the S&P ASX 200 index; GMA Australia and Greencross to be removed, effective at the open of trading on Sept 24th
• (AU) Australia Jul Home Loans: +0.4% v -0.1%e; Investment Lending: -1.3% v -2.7% prior
• (AU) Australia sells A$1.0B v A$1.0B indicated in May 21 2030 bonds, avg yield 2.5859%, bid to cover 3.3x
• (AU) Australia hires banks for planned sale of new Feb 21 2050 index bonds through syndication; expected to be priced in the week of Sept 17th
• (AU) Australia Aug AiG Performance of Construction Index: 51.8 v 52.0 prior
• (NZ) Reserve Bank of New Zealand (RBNZ) Gov Orr: Economic outlook is 'not that bad' due to terms of trade, supportive NZD and low interest rates
• (NZ) New Zealand PM Ardern: Minister for Broadcasting, Communications and Digital Media Clare Curran has resigned as a minister; says government is 'stable'

China/Hong Kong

• Shanghai Composite opened +0.2%, Hang Seng -0.3%
• (CN) CHINA PBOC CONDUCTS CNY176.5B 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) VS CNY149B PRIOR AT 3.30% V 3.30% PRIOR; confirms skip of OMO (13th straight skip)
• (CN) China PBoC set yuan reference rate: 6.8212 v 6.8217 prior
• (JP) China and Japan to hold talks related to infrastructure on Sept 25th - Japanese Press

Japan

• Nikkei 225 opened -0.6%
• Sumco [3436.JP]: Says its Chitose silicon wafer plant has been halted following earthquake due to ongoing power reductions; to check inside of the plant once the power returns
• There is speculation that the recent Hokkaido earthquake in Japan could lead to higher prices for silicon wafers (Taiwanese Press)
• (JP) Pres Trump reportedly hinted in press interview that trade fight with Japan may be next on agenda – CNBC
• (JP) Japan Finance Min Aso: Declines comment on remarks by US President Trump regarding US/Japan trade
• (JP) JAPAN JUL HOUSEHOLD SPENDING Y/Y: +0.1% V -0.9%E (first rise since Jan)
• (JP) Japan Jul Labor Cash Earnings Y/Y: 1.5% v 2.4%e; Real Cash Earnings: 0.4% v 1.1%e
• (JP) Japan Aug Official Reserve Assets: $1.26T v $1.26T prior

Korea

• Kospi opened -0.4%
• (KR) Gallup Poll: The approval rating for South Korea President Moon declines to 49% v 53% prior (first time below 50%)
• (KR) South Korea is planning to sell KRW600B in 50-yr bonds on Sept 12th; Planning to also sell an indeterminate amount of 50-yr bonds in Q4

North America

• US equity markets ended mostly lower: Dow +0.1%, S&P500 -0.4%, Nasdaq -0.9%, Russell 2000 -0.8%
• S&P500 Energy -1.8%, Tech -0.7%
• (BR) Brazil Hospital gives update on earlier stabbing of President Candidate Bolsonaro (PSL party): The candidate is said to be recuperating 'well' after surgery and he is expected to recover quickly, it could take two months for Bolsonaro to fully recover
• (CA) Canada Foreign Min Freeland: Continues to work 'very intensely' on talks with US officials; briefed PM Trudeau on the state of the talks; Talks to continue on Friday
• (CA) Canada Gov't Official: NAFTA talks are unlikely to reach deal this week
• (US) US President Trump: Believes Canada will end up as part of a 'new NAFTA'; US will get 'great' deal with China for farmers
• (US) DOE CRUDE: -4.3M V -2ME

Levels as of 01:30ET

• Nikkei 225, -0.8%, ASX 200 -0.5%, Hang Seng -0.4%; Shanghai Composite +0.3%; Kospi -0.6%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 -0.1%
• EUR 1.1632-1.1614 ; JPY 110.76-110.38 ; AUD 0.7205-0.7154 ;NZD 0.6595-0.6565
• Aug Gold +0.2% at $1,206/oz; Sept Crude Oil +0.1% at $67.81/brl; Dec Copper -0.9% at $2.612/lb