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The WTI extends strong advance into the second consecutive day and rose above psychological $70 barrier the first time since Aug 3, generating initial signal that two-week congestion under this level is over.

Fresh bulls hit five-week high, confirming a higher base at $67.60 and signaling continuation of recovery rally from $67.60 (Aug 20/23 lows). Close above $70 pivot (reinforced by 55DMA) would boost bullish signals and open way for surge through thickening daily cloud (spanned between $70.32 and $70.98) and test of next key obstacle at $71.17 (Fibo 61.8% of $76.95/$61.79).

Oil received fresh boost from shut output in the US, following damage from hurricane and expectations for higher demand, but most of impacted refineries managed to restart production faster than expected. Near-term bias is expected to remain with bulls while the price action stays above $70 level, while close below this level would signal another false break and weaken the structure. Converged 10/100DMA’s ($69.01) mark pivotal support, loss of which would shift near-term focus lower.

Res: 70.98, 71.16, 71.92, 73.37.
Sup: 70.00, 69.37, 69.01, 67.90.

Notes/Observations

• Quiet EU session as market await key data during the week (US readings include CPI inflation (Tues), industrial production (Wed), retail sales (Thurs)).
• Markets await key rate decisions in the following week including Fed (Sept 22nd) amid prospects that asset-purchase tapering will begin this year.
• House Democrats eye corporate tax rate hike.

Asia

• China govt said to be seeking to break up Alipay from company. Govt requesting the further breakup of Huabei and Jiebei into two independent apps.
• Japan Aug PPI (CGPI) M/M: 0.0% v 0.3%e; Y/Y: 5.5% v 5.7%e.
• North Korea test fired new long range cruise missile on Sept 11th and 12th and reportedly hits target 1,000 miles away.
• Japan candidate Kono leader in latest Asahi poll with 33% for LDP leadership race; In Nikkei/TV Tokyo poll Kono had 27% support, Ishiba 17%, Kishida 14%, Takaichi 7%.

Coronavirus

• UK Health Min Javid: Do not expect more lockdowns and so vaccine passports will not be used in UK.
• PM Johnson is expected to address parliament on Tuesday, Sept 14th about plans for managing Covid thru autumn/winter period.

Europe

• SNB Vice Chairman Zurbruegg: Reiterates stance that negative interest rates to prevent CHF currency (Franc) appreciation.
• EU's Dombrovskis (trade chief) stated that would look at concerns that the debt reduction rule was not realistic given the big rise in many member states’ debt to GDP ratios during the pandemic downturn (Reminder: On Sept 9th reports circulated that group of hawkish EU Finance ministers were set to take tough stance in talks over post-pandemic changes to budget rules).
• Greek PM Mitsotakis: Raises 2021 GDP growth forecast from 3.6% to 5.9%.
• UK PM Johnson expected to hold bilateral talks with President Biden during a 4 day trip to the US starting Sep 21st.
• UK Govt expected to further delay new post Brexit customs checks on EU goods for fear it could interfere with disruptions to shops and supermarkets for the Christmas season.
• Confederation of British Industry (CBI) said to have warned the UK Govt that if the corporate tax rate goes to 25% from the current 19%, there would be "consequences".

Americas

• Fed’s Harker (non-voter): Hope the tapering process will start sometime this year, weaker than expected employment data largely to supply issues.
• House Democrats said to be considering various tax increases; to increase (long term) capital gains tax rate to 28.8% (25% + 3.8% surcharge), 26.5% corporate tax rate [from 21.0%]; the draft plan is seeking to raise $2.9T in new taxes and revenues.
• Senator Manchin (D-WV) stated that lawmakers unlikely to complete spending package by congressional leaders' Sept 27th deadline. Reiterated view that could support a smaller $1.5T bill but there was no rush to push it through congress.
• House Democrats proposed increasing electric vehicle tax credits to as much $12,500 per vehicle for union-made zero emission models assembled in the US.

Energy

• Louisiana Gov declares state of emergency ahead of Tropical Storm Nicholas; Oil prices at one-week high as US supply concerns dominate.
• IAEA chief Grossi to visit Iran following agreement to resume cooperation with the nuclear watchdog agency; Grossi's visit expected to end IAEA board efforts to censure Iran.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.41% at 468.26, FTSE +0.48% at 7,062.85, DAX +0.69% at 15,717.10, CAC-40 +0.36% at 6,687.48, IBEX-35 +0.47% at 736, FTSE MIB +0.54% at 25,825.00, SMI +0.43% at 12,112.00, S&P 500 Futures +0.46%].

Market Focal Points/Key Themes

Equities

• European indices open modestly higher and continued their rise throughout session with Dax slightly outperforming others; sectors with better performance include technology and industrials. On corporate front, Valneva received notice of termination of COVID-19 vaccine supply agreement by UK govt and trades sharply down, nearly 30%; UK retailer Associated British Foods trades lower as much as 4% following its trading update. On M&A front, Zooplus over the weekend received increased offer while Ocean Yield in Oslo rose more than 25% on acquisition’s offer. No major equities events scheduled for the upcoming US session.
• Consumer discretionary: Zooplus [ZO1.DE] +8% (increased offer), EasyJet [EZJ.UK] -14% (rights issue; Ryanair press interview).
• Consumer staples: AB Foods [ABF.UK] -4% (trading update).
• Healthcare: Valneva [VLA.FR] -30% (UK alleged Valneva is in breach of its obligations).
• Industrials: Ocean Yield [OCY.NO] +26% (offer).

Speakers

• ECB’s Schnabel (Germany) stated that sentiment in EU was picking up; Would only begin normalizing rates when ECB was confident of reliably reaching the inflation target. Diligently monitoring the possibility of higher inflation. Reiterated stance that inflation likely to notably decrease in 2022. Adjusted for base effects and pandemic impact then inflation remained too low rather than too high. Stressed that ECB to act quickly and resolutely if inflation target reached sooner.
• BOE's Hauser commented that central bank balance sheet would be structurally larger in the future even after the current QE programs are unwound.
• German Economy Ministry: Q3 GDP growth to be significantly better compared to Q2.
• Poland Central Bank member Zyzynski stated that he saw no change in interest rates in 2021 but possible a hike next year. Believed rise inflation is transitory and the central bank should wait it out.
• China Foreign Ministry spokesperson: Reiterates that US-China trade relationship should be based upon mutual respect.

Currencies/Fixed income

• USD was a touch firmer in a quiet session aided by growing Fed tapering expectations. Markets await key data during the week (US readings include CPI inflation (Tues), industrial production (Wed), retail sales (Thurs)) and also eyeing the numerous key rate decisions in the following week including Fed (Sept 22nd) amid prospects that asset-purchase tapering will begin this year.

Economic data

• (SE) Sweden Sept SEB Housing-Price Indicator: 41 v 39 prior.
• (DE) Germany Aug Wholesale Price Index M/M: 0.5% v 1.1% prior; Y/Y: 12.3% v 11.3% prior.
• (TR) Turkey July Current Account Balance: -$0.7B v -$0.5Be.
• (TR) Turkey July Industrial Production M/M: -4.2% v +2.2% prior; Y/Y: 8.7% v 15.2%e.
• (IT) Italy Q2 Unemployment Rate: 9.8% v 10.0%e.
• (CH) Swiss weekly Total Sight Deposits (CHF): 714.8B v 714.9B prior; Domestic Sight Deposits: 635.9B v 636.5B prior.
• (CZ) Czech July Current Account Balance (CZK): -19.5B v -14.7Be.
• (HK) Hong Kong Q2 Industrial Production Y/Y: 5.6% v 2.6% prior.
• (HK) Hong Kong Q2 PPI Y/Y: 2.7% v 1.9% prior.

Fixed income issuance

• (ID) Indonesia opened its book to sell EUR-denominated 12-year bonds via syndicate; guidance seen +140-145bps to mid-swaps.
• (NO) Norway sold NOK6.0B vs. NOK6.0B indicated in 12-month Bills; Avg Yield: 0.47% v 0.32% prior; Bid-to-cover: 2.36x v 1.64x prio.

Looking ahead

• OPEC Monthly Oil Report.
• G20 Finance Ministers and central baker meeting.
• (FR) Bank of France Aug Industry (Business) Sentiment: 105e v 105 prior.
• (MX) Mexico Aug ANTAD Same-Store Sales Y/Y: No est v 15.3% prior.
• 05:25 (EU) Daily ECB Liquidity Stats.
• 05:30 ((DE) Germany to sell €4.0B in 6-month BuBills.
• 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.5-2.5B in 6-month bills.
• 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
• 06:00 (IL) Israel to sell 2024, 2026, 2031, 2047 and 2051 bonds (6 tranches).
• 06:00 (RO) Romania to sell RON400M in 5% 2029 Bonds.
• 06:45 (US) Daily Libor Fixing.
• 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
• 08:00 (PL) Poland July Current Account Balance: -€0.2Be v €0.3B prior; Trade Balance: €0.3Be v €0.8B prior; Exports: €22.8Be v €23.7B prior; Imports: €22.3Be v €22.9B prior.
• 08:00 (IN) India Aug CPI Y/Y: 5.7%e v 5.6% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
• 09:00 (FR) France Debt Agency (AFT) to sell €5.6-6.8B in 3-month, 6-month and 12-month bills.
• 09:45 (UK) BOE to buy £1.147B in APF Gilt purchase operation (3-7 years).
• 10:00 (SE) Sweden Central Bank (Riksbank) Skingsley on digital currencies.
• 11:30 (US) Treasury to sell 13-week and 26-week bills.
• 14:00 (US) Aug Monthly Budget Statement: -$175.0Be v -$302.1B prior.
• 16:00 (US) Weekly Crop Progress Report.
• 17:00 (KR) South Korea Aug Import Price Index M/M: No est v 3.3% prior; Y/Y: No est v 19.2% prior.
• 17:00 (KR) South Korea Aug Export Price Index M/M: No est v 3.5% prior; Y/Y: No est v 16.9% prior.
• 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 100.0 prior.
• 21:30 (AU) Australia Q2 House Price Index Q/Q: 6.2%e v 5.4% prior; Y/Y: 14.0%e v 7.5% prior.
• 21:30 (AU) Australia Aug Business Confidence: No est v -8 prior; Business Conditions: No est v 11 prior.
• 23:00 (KR) South Korea July M2 Money Supply M/M: No est v 0.8% prior; “L” Money Supply M/M: No est v 0.8% prior.
• 23:00 (TH) Thailand Central Bank to sell THB55B in 3-month Bills.
• 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills

The GBPJPY is making a bullish bounce and I expect a continuation of a bullish move.

We can see that the JPY generally is weakening the structure of the GBPJPY is looking more bullish than bearish. Pay attention to a possible bounce. 152.10 is the zone where we could expect it. Targets are 152.35 followed by 152.50 and 152.70. At this point only the break above the trend line is needed to confirm the bullish momentum.

Gold is edging sideways after retreating below the horizontal simple moving averages (SMAs) and the 1,800 level. Directional impetus in the price is absent, feeding a phase of consolidation in the precious metal, something also being endorsed by the converged SMAs.

The short-term oscillators are also lacking clear suggestions relating to the price’s next path as momentum appears to have dried up. The MACD is flat beneath its static red trigger line slightly north of the zero threshold, while the RSI is hovering underneath the 50 level. The stochastic lines have merged in oversold territory and have yet to signal any convincing directional preference in the price.

In order to boost upside momentum, buyers would need to initially push above a resistance zone existing between the 50-day SMA at 1,798 and the 100-day SMA at 1,816. Overstepping this tough barricade, the 1,827-1,834 curbing barrier, which began forming in mid-July could interrupt additional advances. However, if buyers conquer this obstacle and the upper Bollinger band, they may attack the 1,844-1,855 resistance border before eyeing the 1,870 inside swing high from June 10.

In the negative scenario, sellers face an immediate support base of 1,772-1,782, which is strengthened by the lower Bollinger band. Driving the price of the commodity beneath this barrier, next target support may emanate from the section of 1,715-1,727. From here, should the demand for gold continue to wane, the price could then target the long-term foundation of 1,660-1,680.

Summarizing, in the near-term picture gold is sustaining a neutral tone mostly fluctuating between 1,715 and 1,834. That said, a preliminary break below 1,772 or above 1,834 could set a price course into motion.

Oil moving higher

When one looks back at oil’s price volatility over last week, what stands out is the short-term gnomes rush from one side of the range to the other on a daily basis. So, despite a lot of intra-day noise, prices really went nowhere last week. Friday was much the same, the rally almost exactly unwinding the falls of the day before as the theme of the day became Hurricane Ida disrupted US production, despite no one really caring about the previous session. Nobody is better at fitting the most esoteric news stories to fit/justify the price action than oil markets.

Brent crude rose by 2.13% to USD 72.85 on Friday, with WTI climbing 2.40% to USD 69.60 a barrel, cancelling out Thursday’s price drops. Things have got a little more interesting in Asia with oil rising once again today, perhaps driven by the North Korean cruise missile test or news that Russia is struggling to raise production to meet its OPEC+ quotas. Either way, Brent crude is 0.40% higher at USD 73.15, and WTI is 0.55% higher at USD 69.95 a barrel. The latter may also be getting some post-Ida tailwinds.

Although it would not surprise me in the least if oil prices unwound their gains later today, with looking bid-at-the-top and offered-at-the-bottom oil’s Modus Operandi at the moment, today’s rally in Asia could potentially change the technical picture.

A rise by Brent crude through USD 73.70 a barrel could signal the rally has legs and target gains to the USD 776.00 a barrel area. Support is USD 72.70, followed by a big hole to USD 71.00 a barrel. Similarly, if WTI rises through resistance at USD 70.80, its rally could extend to USD 74.00 a barrel in the coming days. support is at USD 69.60, followed by a very little until USD 67.60 a barrel.

Gold nervously steady

Gold continues to range between USD 1780.00 and USD 1800.00 an ounce, with a slight rise in the US dollar on Friday, pushing it 0.38% lower to USD 1787.50 an ounce. Another directionless session in Asia has seen it creep 0.23% higher to USD 1791.60 an ounce.

Gold’s price action continues to be seriously underwhelming, unable to rally when the US dollar falls and moving lower when it rises. Gold needs to recapture and hold above USD 1800.00 an ounce this week, preferably USD 1830.00, to soothe the nerves of nervous long-positions.

The balance of probabilities is increasing, though, that gold has more downside ahead. A daily close below USD 1780.00 opens further losses to USD 1750.00 an ounce. Failure of the latter could see gold fall as low as USD 1700.00 an ounce. Resistance in the USD 1800.00 to USD 1805.00 an ounce area continues to cap insipid attempts at recovery.

US dollar trading sideways

In a week loud on noise but thin on substance, currency markets ranged noisily last week. I expect more of the same this week, with things becoming more exciting next. US yields rose slightly on Friday, enough to lift the dollar index 0.13% higher to 92.64, where it remains in Asia. A 92.30 to 93.00 should contain the noise this week.

EUR/USD has edged lower to 1.1805 this morning after testing and failing at 1.1850 on Friday. Failure of 1.1800 could extend losses to 1.1750 this week 1.1750 to 1.1850 should contain. GBP/USD is almost unchanged at 1.3845 from Friday and looks to be mid-range between 1.3800 and firm resistance ahead of 1.3900.

Likewise, AUD/USD and NZD/USD closely barely changed on Friday, rising slightly to 0.7355 and 0.7110 today. Failure of support at 0.7345 for AUD/USD could extend losses to 0.7300, but NZD/USD looks well supported ahead of 0.7080. Both Antipodeans are well-placed to benefit from any quick rebound in risk sentiment this week, having weathered the worst of Covid-19 for now with markets, if not domestically.

USD/JPY remains firmly anchored in a sideways 109.50 to 100.50 range, as it has been for almost a month now. I am not taking my feet off the table or putting down my book until either 109.50 or 110.50 breaks on a daily closing basis.

That taper-talk has seen Asian FX edge lower today as the procession of neutral PBOC USD/CNY fixes continues, giving no alternative narrative for now. USD/KRW has climbed 0.40% to 1174.50 today after North Korea test-fired a cruise missile over the weekend. Such Pyongyang sell-offs are usually short-lived these days, and rightly so. USD/IDR, USD/MYR, USD/SGD and USD/THB are all 0.10% higher today, but Asian FX looks as adrift as the G-10 right now. I expect the non-descript range-trading to continue for the rest of the session barring a newswire surprise.

Asian markets follow Wall Street with losses

Wall Street finished the week on a sour note, with all three major indices closing lower in what was when all said and done, a bull-market correction in a slow week. We could be in for much the same this week ahead of a mouth-watering last week of the month and quarter. The S&P 500 closed 0.77% lower, as did the Dow Jones, while the Nasdaq retreated by 0.87% over an App Store case. In the spirit of noisy range-trading, futures on all three have jumped in Asia on no news at all, defying the negativity in Asia. S&P 500 and Dow futures are 0.30% higher, with Nasdaq futures up 0.12%.

The Nikkei 225 has unwound early losses in Asia and is now down just 0.05% as stimulus hopes and bullish retail investor momentum rule the roost. Similarly, the Kospi is now down just 0.05%. Typhoons and the Ant Financial break-up story are weighing on China markets today, notably the Hang Seng where Ali Baba is listed. The Hang Seng has plunged 1.75%, while the Shanghai Composite is flat, and the CSI 300 is 0.40% lower.

Singapore has slumped by 0.85%, with Taipei 0.25% lower and Kuala Lumpur falling 0.70%, despite the government and opposition tentatively agreeing on party reform measures over the weekend. Bangkok is unchanged, with Jakarta falling 0.55% and Manila lower by 0.15%.

Australian markets are bucking the trend as M&A fever saw a higher offer for an attempted takeover of Sydney Airport today. The ASX 200 and All Ordinaries are 0.25% higher.

With a lack of strong directional drivers, Hong Kong aside, the rally in US index futures has taken the edge of early losses in Asia. Asian markets ex-Hong Kong are likely to continue to claw back earlier losses as nerves subside. I expect Europe to open flat this afternoon.

Asian markets seeing red

Asian equity markets are starting the week on a sour note after a negative close on Wall Street. Typhoon Chanthu is bearing down on Shanghai, forcing the closure of schools, ports and flight cancellations and may mute activity on mainland markets today. Grabbing attention, though, is a Financial Times story stating that China’s government intends to break up Alipay, owned by Ant Group. Shares in Alibaba Group Holdings, listing in Hong Kong, have opened substantially lower, taking the Hang Seng with them. As I said last week, buying the dip in China equities in this environment remains akin to catching a very sharp falling knife.

Cryptos have edged lower today, following South Korea’s Financial Services Commission announcing a September 24th deadline for local and foreign crypto exchanges to register as local legal entities. The process involves partnering with a local bank, which, unsurprisingly, are reluctant to do so. The intention has been out there for a while, but a hard deadline announcement seems to have delivered a reality bites moment. Bitcoin is down 2.15% as I write, and the technical picture is starting to look concerning. A daily close under USD 45,000.00 targets a fall to USD 35,000.00. Before the perpetual mega-bull haters start, a close above USD 46,500.00 invalidates the formation.

The week’s data calendar is a bit thin globally, meaning we are probably destined for another choppy week of gyrations based on the intra-day themes of the day. Today’s theme suddenly appears to be inflation once again, with yet another Fed President talking tapers sooner rather than later. Nobody cared last week when talk like this emerged, but it’s a slow news day today, and the low attention span FOMO gnomes need “something” to concentrate on.

India releases WPI Inflation later this evening, which should show inflation hovering near its 6.0% target. But it is “big” Wednesday that looms as Asia’s highlight. It features Japan’s Balance of Trade and China’s Industrial Production, Retail Sales and Fixed Asset Inflation. India releases its Trade Balance and Indonesia its Trade Balance and Consumer Confidence. China’s data will obviously be under the brightest spotlight, with nerves rising that its economic recovery is slowing. A soft Retail Sales number heightens those fears and will likely see another fall in local equity markets.

The US releases August Inflation and Core-Inflation tomorrow evening, Industrial Production on Wednesday, and Retail Sales on Thursday. A print well above 0.50% MoM will have tapering chatter rising once again in a slow week, but this FOMC ain’t for moving this month after the Non-Farm Payroll shocker. I want to remind everyone the Fed has a twin mandate, not a singular one. The US Retail Sales is arguably more important. A soft number will have the delta-nerves increasing and some hand wringing about the US recovery. That will probably have the short-term FOMO gnomes then mulling a delayed Fed taper. I told you it was a slow news week.

Things get much more exciting next week. The Canadian election is on Monday, and the daughters and Mrs Halley will be gutted if Justin Trudeau loses because he is so good-looking. That, to be fair, is a much deeper analysis than a lot I see these days by short-term markets to justify moves in asset prices.

More importantly, we have an FOMC meeting next week. Despite the increasing noise from Fed officials, I expect no taper announcement, although they may signal its game-on for the November meeting. We also have a plethora of other central banks announcing policy decisions. Japan, Indonesia and the Philippines in Asia, the United Kingdom, Switzerland, Sweden, Norway and Brazil. It’s not an exhaustive list; I’ve probably missed some. China also announces its most later Loan Prime Rate decision.

Unfortunately, this week looks like another “wait-and-see” affair. It’s usually good for intra-day volatility but bad for those with a time-horizon over 24 hours long, as the markets flip-flop between opposing themes daily. In the spirit of wait-and-see, this week could be a good one to watch from the side-lines.

In a speech, ECB Executive Board member Isabel Schnabel said inflation in Eurozone is "likely to ease noticeably next year". She warned that "a premature monetary policy tightening in response to a temporary rise in inflation would choke the recovery and be most harmful to those who are already suffering from the current spike in inflation."

Also she said, "there are good reasons to assume that the current constellation of fiscal and monetary policy in the euro area may finally chart the path out of the low interest rate environment."

Full speech here.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1823
Prev Close: 1.1810
% chg. over the last day: -0.11%

The US dollar ended the week with an increase of about 0.6% against the euro. The US policy prospects, which increased the US Treasury bond yields, had a positive effect on the dollar index. On the other hand, last week, ECB officials said they plan to start cutting stimulus programs in the next quarter, which will play in favor of strengthening the European currency in the medium term.

Trading recommendations

Support levels: 1.1783, 1.1759, 1.1704, 1.1620
Resistance levels: 1.1840, 1.1894, 1.1934, 1.1969

From the technical point of view, the general trend on the EUR/USD currency pair is bullish, but on the background of the dollar index growth, the EUR/USD quotes are declining, forming a local downtrend. The breakout of the downtrend line was false on Friday. The MACD indicator is in the negative zone, but there are the first signs of sellers’ weakness. Under such market conditions, buy trades can be considered from the support levels, or after the breakout of the downtrend line. It is better to look for sell trades from the resistance levels, where sellers show initiative.

Alternative scenario: if the price breaks through the 1.1704 support level and fixes below, the mid-term uptrend will likely be broken.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3833
Prev Close: 1.3830
% chg. over the last day: -0.02%

The growth of Great Britain's economy slowed down, as the increase in the number of coronavirus cases and the shortage of labor has inflicted a hit on the recovery. Due to a large labor shortage and the complex procedure for hiring foreign workers, the United Kingdom is at risk of a shortage of products on store shelves. According to the representative of Logistics UK, currently, the lack of drivers ranges from 90,000 to 120,000 people, while British are reluctant to work in this industry. The UK-EU trade volume is also decreasing as Brexit and Covid reduced exports.

Trading recommendations

Support levels: 1.3793, 1.3750, 1.3692, 1.3632, 1.3614, 1.3525
Resistance levels: 1.3886, 1.3935, 1.4002

On the hourly time frame, the GBP/USD trend is bullish. But amid the growth of the dollar index, the GBP/USD quotes are declining. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from the support levels near the moving average line. Sell positions can only be considered from the resistance levels with short targets throughout the day.

Alternative scenario: if the price breaks through the 1.3692 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 109.73
Prev Close: 109.90
% chg. over the last day: +0.15%

The producer price index in Japan remained at about the same level, indicating that inflation at industrial companies is not rising. Many economists expect that Japan's new prime minister will continue working on monetary policy stimulation along with the National Bank of Japan.

Trading recommendations

Support levels: 109.62, 109.43, 109.19, 108.65
Resistance levels: 110.11, 110.40, 110.66, 110.95, 111.48

The main trend on the USD/JPY currency pair is bullish. But the Japanese yen has shown strength in recent days, which, together with the rise in the dollar index led to the formation of a wide trading range, within which the price has consolidated. The MACD indicator has become inactive. Under such market conditions, traders should look for buy trades from the support level where buyers show initiative throughout the day. Sell positions should be considered on the lower time frames with short targets from the zones where sellers show initiative.

Alternative scenario: if the price falls below 109.43, the uptrend is likely to be broken.

News feed for 2021.09.13:

• Japan PPI (m/m) at 02:50 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2661
Prev Close: 1.2691
% chg. over the last day: +0.24%

In Canada, the unemployment rate decreased to 7.1% after companies added 90,200 jobs in August. This is a good sign for the economy. The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Both the dollar index and oil prices increased at the end of last week. As a result, the price of USD/CAD is trading in a wide corridor with a slight advantage of the dollar index, which contributes to the growth of quotes.

Trading recommendations

Support levels: 1.2625, 1.2583, 1.2518, 1.2425
Resistance levels: 1.2713, 1.2812, 1.2891, 1.2951

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. But the price has consolidated in a local correctional upward movement. The MACD indicator shows weak buying pressure. Buy positions can be considered from the support levels where buyers show initiative, and only with short targets. It is better to look for sell positions from the resistance levels of a higher time frame.

Alternative scenario: if the price breaks through the 1.2812 resistance level and fixes above, the uptrend will likely resume.