While the USD gained versus all other currencies on Friday, the picture was partially reversed this morning when Asian markets opened. Talk of a possible rate hike this year, has scared stock markets again as a high interest rate environment is creating alternative investments for money that would have gone to stocks in search for higher returns. China’s index is pausing from a 3 day rise, as the government has not given any indications of further intervening to support the economy. Weekend discussions in Jackson Hole were slightly more hawkish than discussed with most FED members being confident in the pace of the US economic recovery. GOLD remains unchanged, while OIL fell -1.75%.
As the first week of the month, it will be a very busy calendar ahead of us. On Tuesday China releases the PMI reports, while Australian GDP is on Wednesday same as the US ADP. Friday features the all-important Nonfarm payroll release.
Heading into Europe, German retail sales, Eurozone CPI and US Chicago PMI are the key data.
Trading quote of the day: “The ability to foresee that some things cannot be foreseen is a very important quality”. – Rousseau
USDJPY
Pivot: 120.25
Likely scenario: Long positions above 120.25 with targets @ 121.75 & 122.35 in extension.
Alternative scenario: Below 120.25 look for further downside with 119.4 & 118.9 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
USDCAD
Pivot: 1.3195
Likely scenario: Long positions above 1.3195 with targets @ 1.33 & 1.3345 in extension.
Alternative scenario: Below 1.3195 look for further downside with 1.316 & 1.314 as targets.
Comment: The RSI has just landed on its neutrality area at 50% and is turning up.
USDCHF
Pivot: 0.955
Likely scenario: Long positions above 0.955 with targets @ 0.9675 & 0.973 in extension.
Alternative scenario: Below 0.955 look for further downside with 0.948 & 0.943 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
GOLD
Pivot: 1123
Likely scenario: Long positions above 1123 with targets @ 1146.5 & 1153 in extension.
Alternative scenario: Below 1123 look for further downside with 1117 & 1109 as targets.
Comment: The RSI is mixed with a bullish bias.
OIL
Pivot: 42.75
Likely scenario: Long positions above 42.75 with targets @ 46 & 46.9 in extension.
Alternative scenario: Below 42.75 look for further downside with 41.75 & 40.55 as targets.
Comment: The RSI has just landed on its neutrality area at 50% and is turning up.
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