Safe haven outperforms while dollar lags
Relatively sedate session sees the US dollar give up some gains while slight risk-off gives yen and franc a higher finish ahead of tonight’s Fed minutes.
EUR/USD: Italian political woes as PM resigns
This morning’s attention has been on Italy’s PM resignation and talks over the next two days to form a new government, though with the greenback lagging yesterday this pair’s price managed to finish higher (as well as the remaining majors against the dollar). There wasn’t much Eurozone economic data on the calendar yesterday, and that’s set to be the case today before preliminary PMIs are released tomorrow. In the meantime, it’ll be the Fed’s minutes released tonight that’ll keep investors on their toes to determine the likelihood of another rate cut, with Powell’s talk on Friday at Jackson Hole the next key item. Rate cut likelihoods out of the US central bank have already been dropping but are still majority pricing in a 0.25% drop next month, even as pressure from the White House rises to deliver even more monetary easing.
GBP/USD: Finishing higher against a lagging greenback
There’s been no notable Brexit progress as of yet, with a meeting schedule to take place between the UK’s PM and the German Chancellor. And while this pair’s price made fresh lows in yesterday’s session, it did finish higher thanks to a weakening US dollar. Thus far however, it hasn’t managed to undo what has been a bear trend technical overview that is stalling heavily at the lows and hurting sell breakout strategies that haven’t born any fruit for over a week, with sell reversals offering a better chance. In terms of sentiment, fresh longs have been taking profit and shorts initiating at the lows, resulting in retail bias dropping 4% to a still heavy long 73%. Light UK data around noon today, with the USD aspect of this pair set to get effected by tonight’s Fed minutes.
USD/JPY: Finishing lower yesterday with the bulk of those losses being undone as of today morning
The pair’s bear trend technical overview continues to get tested and stall heavily at current levels, needing little to shift back to a more consolidatory outlook with its ADX no longer showing a propensity to trend but with its price still below all its main long-term moving averages. The catalyst for the shift in the first place were significant risk-off moments in early August, and hence intraday movement hasn’t offered significant follow through on sell breakout strategies (and to a lesser extent reversals). Safe haven currencies’ yen and franc outperformed yesterday in a slight risk-off play, but that means the source of movement remains risk appetite and hence should be noted prior to initiating a trade in this pair ahead of tonight’s Fed minutes that are set to effect the USD aspect of this pair directly, and the JPY aspect indirectly via risk.
USD/CAD: Higher highs but a lower finish in line with its current consolidatory technical outlook
Oil prices were largely consolidatory yesterday in line with its technical overview, and both USD and CAD lagged against the remaining FX majors (though not by much). As it stands, while the bulk of the technical indicators are positive for this pair and showing an ongoing propensity to trend, intraday movement has been more in line with consolidatory conformist technical strategies, with reversals on a lack of difference between the two. However, two key items today are set to effect both aspects of this pair and entice contrarian breakout strategies: (1) Canadian CPI figures set to show modest growth for the month, and (2) the Fed’s minutes. Going into the event retail bias moved a notch higher to a heavy short 67%, with institutional bias at a majority short 58%.
AUD/USD: Finishing higher but still stalling near the lows on its daily chart
Commodity currencies underperformed against most of the FX majors yesterday, but with the greenback retreating the most, the pair’s price managed to finish higher. What it hasn’t managed to do just yet however, is take its pair’s price significantly off the lows to undo its current bear trend technical overview that’s been stalling heavily at the lows and with more of its technical indicators shifting back to neutral. Light Australian data this morning before tomorrow’s preliminary PMI figures, and Fed minutes in between set to shake USD related pairs – including this one.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.