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Daily Pivots: (S1) 1.2682; (P) 1.2727; (R1) 1.2817; More...

Intraday bias in USD/CAD remains on the upside as rise from 1.2492 continues today. Further rise would be seen to 1.2492 resistance first. Also, larger rise from 1.2005 is still in progress with 1.2421 support intact. Break of 1.2947 will confirm resumption for 1.3022 fibonacci level next. On the downside, though, break of 1.2635 minor support will turn bias back to the downside for 1.2421 structural support.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

Daily Pivots: (S1) 0.8525; (P) 0.8539; (R1) 0.8555; More...

With 0.8561 minor resistance intact, fall from 0.8612 is still in favor to extend to retest 0.8448 low. Also, with 0.8668 resistance intact, larger fall from 0.9499 is probably still in progress, and break of 0.8448 will resume. On the upside, however, break of 0.8561 minor resistance will turn bias back to the upside for 0.8612 resistance.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8668 resistance holds, towards long term support at 0.8276. However, firm break of 0.8668 resistance would argue that a medium term bottom was already formed. Stronger rise would be seen to 0.8861 support turned resistance to confirm completion of the corrective pattern.

Daily Pivots: (S1) 1.6104; (P) 1.6128; (R1) 1.6165; More...

EUR/AUD's rise from 1.5907 continues today and intraday bias is staying on the upside. Further rise would be seen to retest 1.6434 resistance first. With 1.5898 support intact, larger rise from 1.5250 is still in progress, and break of 1.6434 will confirm resumption, for 1.6988 fibonacci level. On the downside, break of 1.6059 minor support will turn bias back to the downside for 1.5898 structural support instead.

In the bigger picture, rise from 1.5250 medium term bottom is currently seen as a correction to the down trend from 1.9799 first. Stronger rise could be seen to 38.2% retracement of 1.9799 to 1.5250 at 1.6988 next. We'd tentatively expect strong resistance from there to limit upside, at least on first attempt. Meanwhile, break of 1.5898 support will indicate that the rebound has completed. Larger down trend from 1.9799 might be ready to resume through 1.5250 low.

Daily Pivots: (S1) 1.0912; (P) 1.0925; (R1) 1.0945; More....

Intraday bias in EUR/CHF stays on the upside as rise from 1.0694 is in progress. 1.0985 resistance is the next target. Sustained break there will target a test on 1.1149 high. On the downside, however, break of 1.0837 support will argue that the rebound has completed, and turn bias back to the downside for 1.0694 low.

In the bigger picture, the stronger than expected rebound from 1.0694 and break of 55 week EMA (now at 1.0861) mixes up the medium term outlook. On the upside, break of 1.1149 will resume the whole rise from 1.0505 (2020 low). On the downside, break of 1.0694 will revive some medium term bearishness for 1.0505 and below.

Daily Pivots: (S1) 128.69; (P) 129.18; (R1) 129.45; More....

Intraday bias in EUR/JPY remains neutral and further fall is in favor with 129.65 minor resistance intact. On the downside, break of 128.59 will target a test on 127.91 low first. Break there will resume larger decline from 134.11 to 127.07 key support level next. On the upside, however, break of 129.65 will turn bias back to the upside for 130.73 resistance.

In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. As long as 127.07 resistance turned support holds, further rise is still expected to retest 137.49 (2018 high). However, firm break of 127.07 will argue that the medium term trend has reversed, deeper fall would be seen to 61.8% retracement of 114.42 to 134.11 at 121.94.

STOCKS

There seems to be short selling on the equities ahead of the FOMC due this week. Need to be careful on the equities breaking below immediate supports. Dow and Dax have crucial support near 34500 and 15400 which needs to hold to prevent strong bearishness. Nikkei and Shanghai have bounced from respective supports but need to see if that holds for the near term. Indian equities too have supports coming up which need to hold to prevent fresh fall.

Dow (34584.88, -166.44, -0.48%) has been stuck within 35000-34500 over the past few sessions and can slowly move up while 34500 holds as decent support for the near term. A break on the downside can take the index towards 34000.

DAX (15490.17, -161.58, -1.03%) has fallen sharply but has support near 15400 which needs to hold to bring the index up soon. Any break below 15400 would be strongly bearish. Watch price action near 15400 closely.

Nikkei (30500.05, +176.71, +0.58%) has risen back to 30500.The view is to see a test of 30500/750,while above 30,500.if the index breaks below 30500 then a dip towards 30,000 is possible in the coming days.

Shanghai (3613.97, +6.87, +0.19%) has held support at 3570 and bounced from there. While the support holds, the index has scope to rise towards 3625-3650 soon.

Nifty (17585.15, -0.25%) can come down to 17400/200 before a bounce is seen in the medium term.

Sensex (59015.89) has come down sharply after testing the high of 59737.32 levels. The view is bearish to see a corrective fall towards 58500 before we see a resumption in the uptrend in the medium term.

COMMODITIES

Markets seem to be selling into the FOMC this week. All commodities trade in the red but has important supports coming up which need to hold for reversals to be seen either by end of this week or in the coming week. Copper has broken below initial support at 4.20 but has crucial lower supports at 4.10-4.00. Silver and Gold have supports near 22-21 and 1725-1700. Brent and WTI have immediate supports near 74 and 71-70 respectively.

Brent (74.80) has dipped a bit, trying to come down since the last 3-sessions but has support at 74 which if holds can keep a range of 74-76/77 for a few sessions.

WTI (71.21) has also come down and could test immediate support near 71-70 which if holds can keep the price within 70-73 for a while.

Gold (1746.20) has fallen sharply over the last week and may continue to trade below 1800 for the early sessions this week. Decent support is visible near current levels but if the price fails to hold and move up from here immediately, we may see a further fall towards 1725-1700 in the near term.

Silver (22.12) is also down and headed towards support at 22-21 which may hold to produce a bounce back towards 24; else the decline may extend towards 20 on the downside. Watch price action near immediate support levels.

Copper (4.1795) has surprised by breaking below our expected support at 4.20. While the price continues to trade lower, we may have to allow for a further fall towards 4.10-4.00 before a bounce is seen from there in the medium term.

FOREX

Sharp rise in the Dollar Index ahead of the FOMC this week. Most currencies have broken immediate supports and trade weak over the past few sessions. There is lack of directional clarity just now but we may expect volatility through this week before getting more clarity on the market direction. We would be careful and keep a close watch on movement this week. Dollar Index has broken above 93.25 and could be headed towards 93.70/75 while Euro can fall towards 1.17-1.16. USDCNY is to test important resistance near 6.48. USDINR may rise towards 73.80-74.00.

Dollar Index (93.33) has broken above 93.25 and looks strong towards 93.70/75 in the near term. Thereafter whether it will hold below 74 or break on the upside is to be seen. Some clarity is possible after the FOMC meeting this week.

Euro (1.1712) has fallen sharply and could be headed towards 1.17-1.16 in the near term. Within the range, decent support is seen near 1.1660-1.1650 levels which might hold to give a short corrective rise. For now view is not very clear.

EURJPY (128.78) has dipped and can test support near 128 in the near term. Whether it will bounce from there or extend its fall further is to be seen.

Dollar-Yen (109.90) rose from 109.11 over the last 3-4 sessions but has not been able to break above 110-110.20. We continue to look for a trade range of 110.50/20-109.25/00 for the near term.

Aussie (0.7235) has fallen too and can test 0.72. If that breaks, we may expect a bounce else the downtrend may continue towards 0.7100. Watch price action near 0.72.

Pound (1.3712) has fallen sharply and could test 1.37 just now which if fails to produce a bounce, can open up chances of a fall to 1.3650-1.36 in the medium term. Watch price action near 1.37 over the very near term.

USDCNY (6.4655) has risen sharply over the last 2-sessions from 6.43 to current levels. It will now have to be seen if resistance near 6.48 holds or breaks. Watch price action near 6.48.

USDINR (73.48) held below 73.60 last week but the pair has moved up sharply on the NDF market which now quotes at 73.81/82 indicating a possible sharp gap up opening on the OTC market today. In that case, a rise to 74 could be on the cards before facing rejection from there. This brings back the 73.60/80-74.00 range for the near term.

INTEREST RATES

The US Treasury yields have been moving up ahead of the US Federal Reserve meeting on Wednesday. Key resistances are ahead and it will have to be seen if the Fed will provide a fresh trigger to break these resistances or not. We have to wait and watch. The German yields are at their key resistances which if broken can see an extended rise and delay the expected reversal. The 5Yr and 10Yr GoI can remain in the 5.6%-5.64% and 6.15%-6.2% range respectively in the near-term. The bias is bearish to break these ranges on the downside.

The US 2Yr (0.22%), 5Yr (0.86%), 10Yr (1.36%) and the 30Yr (1.90%) Treasury yields have moved up further on Friday. As mentioned Friday, the 10Yr can test the key resistance at 1.4% but the chances of the rise extending to 1.45%-1.5% will have to be seen. The 30Yr can rise to 2% on a sustained move above 1.9%.

The German 2Yr (-0.71), 5Yr (-0.61%), 10Yr (-0.28%) and 30Yr (0.21%) yields sustain higher. The 10Yr has come closer to -0.25% and has chances to extend the upside to -0.2%. The 30Yr is at a crucial resistance and a further rise from here can take it up to 0.35%. In that case the reversal that we have been expecting from -0.25% (10Yr) and 0.2% (30Yr) will get delayed.

The Indian 10Yr GoI (6.1672%)and the 5Yr GoI (5.6157%) can consolidate sideways in the near-term. The 10Yr can trade in the range of 6.15%-6.20% and 5Yr in the 5.60%-5.64% range. The broader bias is bearish to see a downside breakout of these ranges and a fall to 6.1%-6% (10Yr) and 5.55%-5.5% (5Yr) eventually.

Key Highlights

• EUR/USD started a fresh decline from the 1.1900 resistance zone.
• A major bearish trend line is forming with resistance near 1.1800 on the 4-hours chart.
• GBP/USD also traded below the key 1.3800 support zone.
• Gold price extended its decline below the $1,780 support zone.

EUR/USD Technical Analysis

The Euro failed to clear the 1.1900 resistance zone against the US Dollar. EUR/USD traded as high as 1.1909 before it started a fresh decline.

Looking at the 4-hours chart, the pair traded below a couple of important support near 1.1850 and 1.1820. There was also a break below two bullish trend lines at 1.1850 and 1.1815.

The pair traded below the 50% Fib retracement level of the key upward move from the 1.1663 swing low to 1.1909 high. It is now trading well below the 1.1800 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

An immediate resistance is near the 1.1720 level. If there is a close below the 76.4% Fib retracement level of the key upward move from the 1.1663 swing low to 1.1909 high, the pair might continue to move down.

The next major support could be 1.1680. Any more losses might push the pair towards the 1.1620 support zone in the near term.

On the upside, there is a major resistance forming near 1.1800. There is also a key bearish trend line forming with resistance near 1.1800 on the same chart.

Looking at GBP/USD, the pair faced an increase in selling pressure and there was a clear break below the main 1.3800 support zone.

Economic Releases

• German Producer Price Index for August 2021 (YoY) – Forecast +9.2%, versus +10.4% previous.
• German Producer Price Index for August 2021 (MoM) – Forecast +0.8%, versus +1.9% previous.

Daily Pivots: (S1) 150.65; (P) 151.29; (R1) 151.61; More...

GBP/JPY's fall from 152.82 resumes today by breaking 150.80 temporary low. Intraday bias is back on the downside, and deeper fall would be seen to retest 148.43/149.16 key support zone. Decisive break there will carry larger bearish implications. On the upside, above 151.90 minor resistance will turn bias back to the upside for 152.82 resistance instead.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). As long as 149.03 support holds, such rise would still resume at a later stage. However, sustained break of 149.03 support will indicate rejection by 156.59. Fall from 156.05 would be at least correcting the whole rise from 123.94. Deeper fall would be seen back 38.2% retracement of 123.94 to 156.05 at 143.78 first.

Yen jumps broadly in Asian session today as Hong Kong stocks are accelerating its free fall. Dollar is following as the second strongest for now, and then Swiss Franc. Commodity currencies are naturally the weakest, as led by Australian Dollar, but Sterling is not too far away. Four central banks will meet this week. In particular, traders could be turning more cautious towards FOMC policy decision and economic projections. While an announcement of tapering is very unlikely, there is scope of some hawkish surprises.

Technically, Sterling appears to be underperforming Euro today, but that's mainly because Euro was the worse one last week. A development is note is whether the tide between Sterling and Euro is turning as risk sentiment turns sour. For now, deeper fall is in favor in EUR/GBP as long as 0.8561 minor resistance holds. But break of this resistance will bring stronger rise to 0.8612, and possibly resume the rebound from 0.8448 low.

In Asia, Japan and China are on holiday. Hong Kong HSI is down -4.13%. Singapore Strait Times is down -0.33%.

Hong Kong HSI takes another beating as selloff in property stocks spreads

Asian markets are trading in risk-off mode, as Hong Kong stocks are taking another beating while Japan and China are on holiday. Selloff in shares of the troubled Chinese giant Evergrande Group is spreading to other property stocks. The group has just announced over the weekend to start repaying its wealth management products with real estates.

At the time of writing, Hong Kong HSI is down more than -4% or -1000 pts. As for the near term, 61.8% projection of 29394.68 to 24748.84 from 26560.03 at 23688.90 would be an important level to defend this week. Some support could be seen there to bring at least some consolidations first. However, any further downside acceleration could easy push HSI through the level to 100% projection at 21914.19. That's a possible scenario considering the FOMC event risk this week.

AUD/JPY extends decline on risk aversion, could target a test on 77.88 support first

AUD/JPY's fall from 82.01 resumes today on general risk-off sentiments in Asian markets. For now, further decline is expected as long as 80.49 minor resistance holds. Sustained trading below 61.8% retracement of 77.88 to 82.01 at 79.45 will raise the chance that it's indeed ready to resume whole decline from 85.78 high. Retest of 77.88 low should be seen first.

As the fall from 85.78 is now seen as a correction to up trend from 59.85, break of 77.88 would pave the way to 38.2% retracement of 59.85 to 85.78 at 75.87 next. Such development, if happens, could be a prelude in similar selloff in other Yen crosses.

Jam-packed week with BoJ, Fed, SNB and BoE

Four central banks will meet this week, BoJ, Fed, SNB and BoE. BoJ would be a non-event as there is no ground for scaling back stimulus given that the country was still in deflation. Upcoming leadership election of the ruling Liberal Democratic Party would be more crucial in determine how LDP would perform in the general election just two months away, and thus the impact on the markets. SNB will also stand pat and maintain that Franc remains high while negative rates and intervention are necessary. Meanwhile, BoE is also not expected to make any change in monetary policy and rhetorics, at least until November's new economic forecasts.

September seems not the time for Fed to announce tapering yet, based on the disappointing August NFP numbers. Yet, recent upbeat data keep Fed on track for a decision later in the year. Chair Jerome Powell has this great opportunity to prepare the markets for a November announcement, and that's what markets are eager to hear too. Additionally, Fed will release new economic projection, and eyes will be on whether policymakers would pull ahead the expected first hike from 2023 to 2022.

In addition to the above, RBA will release meeting minutes. ECB will publish the monthly economic bulletin. Focuses will also be on PMIs from Australia, UK, Eurozone, US and Japan, as well a German Ifo business climate. Overall a jam-packed week and here are some highlights:

• Monday: UK Rightmove house price; Germany PPI; US NAHB housing index.
• Tuesday: RBA minutes; Swiss trade balance; UK public sector net borrowing; Canada new housing price index; US building permits and housing starts, current account.
• Wednesday: BoJ rate decision SNB quarterly bulletin; Eurozone consumer confidence; FOMC rate decision, US existing home sales.
• Thursday: Australia PMIs; Eurozone PMIs, ECB monthly bulletin; SNB rate decision; BoE rate decision; UK PMIs; Canada retail sales; US jobless claims, PMIs, leading index.
• Friday: New Zealand trade balance; Japan CPI, PMI manufacturing; Germany import prices, Ifo business climate; US new home sales.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 150.65; (P) 151.29; (R1) 151.61; More...

GBP/JPY's fall from 152.82 resumes today by breaking 150.80 temporary low. Intraday bias is back on the downside, and deeper fall would be seen to retest 148.43/149.16 key support zone. Decisive break there will carry larger bearish implications. On the upside, above 151.90 minor resistance will turn bias back to the upside for 152.82 resistance instead.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). As long as 149.03 support holds, such rise would still resume at a later stage. However, sustained break of 149.03 support will indicate rejection by 156.59. Fall from 156.05 would be at least correcting the whole rise from 123.94. Deeper fall would be seen back 38.2% retracement of 123.94 to 156.05 at 143.78 first.

Economic Indicators Update

AUD/JPY's fall from 82.01 resumes today on general risk-off sentiments in Asian markets. For now, further decline is expected as long as 80.49 minor resistance holds. Sustained trading below 61.8% retracement of 77.88 to 82.01 at 79.45 will raise the chance that it's indeed ready to resume whole decline from 85.78 high. Retest of 77.88 low should be seen first.

As the fall from 85.78 is now seen as a correction to up trend from 59.85, break of 77.88 would pave the way to 38.2% retracement of 59.85 to 85.78 at 75.87 next. Such development, if happens, could be a prelude in similar selloff in other Yen crosses.