USD/JPY has reversed course after taking out the July low (109.06) amid a recovery in longer-dated US Treasury yields, but fresh data prints coming out of the US may rattle the recent advance in the exchange rate as inflation is expected to slow for the first time in 2021.

Today’s ZEW economic expectations for Germany fell sharply from 63.3 to 40.4 with a warning of increasing risks for the economy from a ‘possible fourth Covid wave from autumn or a slowdown in growth from China’. This was the third fall in a row and is the lowest level since November 2020. The Euro Zone economic sentiment index also fell sharply from 61.2 to 40.4 in August.

DAX 30 Rejected Again at 15,800, ZEW Sentiment Slumps on Gloomy Outlook

Today’s data continued to heap the pressure on EUR/USD which has been steadily falling over the last two weeks. The pair briefly traded above 1.1900 at the end of July before turning lower again and trading at lows last seen in late March. The recent sell-off has been fueled by the turnaround in the US dollar, and the weakness in the Euro, as traders continue to price in the winding down of the US bond-buying program. Recent commentary from Fed members Bostic and Rosengren has added to market expectations that tapering may...

USD/ZAR DAILY CHART

Chart prepared by Warren Venketas, IG

The daily USD/ZAR chart above illustrates the sudden rise on the EM currency pair. Today’s price action shows a slowing in upside momentum as delta variant concerns weaken. The future of the rand is heavily dependent on dollar influences and global risk sentiment however, my long-term outlook remains bullish. Short-term the rand could see small gains to the 14.7500 support handle before pushing up towards 14.9000.

Resistance levels:

USD/CAD struggles to hold above the 200-Day SMA (1.2399) even as a growing number of Federal Reserve officials show a greater willingness to switch gears, and the update to the US Consumer Price Index (CPI) may undermine the recent advance in the exchange rate as inflation is expected to slow down for the first time in 2021.

US Dollar Bulls Stalling, GBP Buyers Step in, Risks Rise for CHF

In the week to April 3rd, the latest CFTC report showed a slight stalling in USD longs after recently flipping net long. Keep in mind, however, that this does not cover the period since the more hawkish than expected Vice Chair Clarida as well as the strong NFP report. In turn, speculators likely resumed USD buying and with yields finding a short term bottom, downside looks limited for the greenback into the Jackson Hole Symposium.

Broad demand for the Pound with leveraged funds and asset managers both net buyers. The most recent update from the BoE regarding the sequencing of its exit from very accommodative monetary policy is likely to provide underlying support, particularly against those that will likely stick to the lower for longer mantra, namely the ECB. Therefore, downside risks remain for EUR/GBP on the diverging monetary policy theme.

Speculative demand for safe havens differed as...

Double top patterns are noteworthy technical trading structures to learn and integrate into a trader’s arsenal. Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature.

Double Top Pattern: Main Talking Points:

Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Interpreting charts can be intimidating for novice traders, so understanding basic technical analysis is essential. This article reveals popular types of technical analysis charts used in forex trading, outlining the foundations and uses of these chart types.

Our DNA FX quiz can tell you what type of forex trader is buried within your DNA. Simply answer the 14 questions honestly to learn which style of forex trading you are best suited for.

If you’re new to forex trading the results will help you develop your trading style and strategies, but even established traders might discover something about themselves they weren’t aware of…

Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. While applying sound technical and fundamental analyses is key, having an additional feel for the market consensus can add depth to a trader’s view of forex and other markets. In this article, we outline what market sentiment is, how it relates to forex trading, and what the top sentiment indicators are.

The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. As a result, the ISM manufacturing, construction and services indicators can provide unique opportunities for forex traders, which makes understanding this data (and how to prepare for its monthly release) essential.

Talking points:

“Is there a best time frame to trade forex?” is a common question a lot of traders ask, especially those new to the forex market. The truth is, there is no single answer. It all depends on your preferred trading strategy and style.

Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Trend charts refer to longer-term time frame charts that assist traders in recognizing the trend, whilst trigger chart pick out possible trade entry points. This article will explore these forex trading time frames in depth, whilst offering tips on which can best serve your trading goals.

Talking points:

Risk management is at the core of any good trading plan, without having a sound set of principles to follow a trader is doomed to fail. We outline rules and factors to consider when customizing a risk management game-plan right for you.

We understand the difficulties of trading, which is why we’ve put together a variety of guides designed to help traders of all experience levels.

Risk management is one of the most important aspects to successful trading, but far too often it’s overlooked. Job #1 for a trader is to always keep yourself in the game. A sound strategy and the discipline to follow it will go long way towards ensuring you stick around.

If you are in the learning stage, your objective is to keep losses very small until you figure out what you are doing from an analytical and strategy standpoint. Adhering to sound risk parameters early-on will go a long way towards building a foundation for later on.

For the more...

Our DNA FX quiz can tell you what type of forex trader is buried within your DNA. Simply answer the 14 questions honestly to learn which style of forex trading you are best suited for.

If you’re new to forex trading the results will help you develop your trading style and strategies, but even established traders might discover something about themselves they weren’t aware of…

The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA).The MACD displays a MACD line (blue), signal line (red) and a histogram (green) - showing the difference between the MACD line and the signal line.

The MACD line is the difference between two exponentially levelled moving averages – usually 12 and 26-periods, whilst the signal line is generally a 9-period exponentially smoothed average of the MACD line.

These MACD lines waver in and around the zero line. This gives the MACD the characteristics of an oscillator giving overbought and oversold signals above and below the zero-line respectively.

Looking to develop your confidence in oil trading and using technical indicators? Our advanced trading guides cover more sophisticated techniques and new concepts to take your trading to the next level.

Trading bias is a predisposition or perspective of the financial markets whereby traders believe there is a higher probability of a certain outcome as opposed to any other alternate possibilities.

These trading biases are determined by technical and/or fundamental factors that support a specific outlook that explains market behaviour. This often relates to market trends being either bullish/bearish which signals appropriate trading strategy and style.

Technical analysis of charts aims to identify patterns and market trends by utilising differing forms of technical chart types and other chart functions. Interpreting charts can be intimidating for novice traders, so understanding basic technical analysis is essential. This article reveals popular types of technical analysis charts used in forex trading, outlining the foundations and uses of these chart types.

The Singapore Dollar is facing its next test against the US Dollar after USD/SGD broke under rising support from June. The pair left behind a Hammer candlestick pattern as it retested the former 1.3495 – 1.3530 inflection zone. This is a sign of indecision which can at times precede a turn higher. While the near-term bias still holds slightly bearish, a ‘Golden Cross’ between the 50- and 200-day Simple Moving Averages underpins an upside bias in the medium-term. Keep a close eye on these SMAs which may act as key support.

Chart Created in TradingView

The US Dollar continues to make gains against the Thai Baht, as USD/THB retests highs from 2020. Clearing this range exposes peaks from 2018 which make for a key zone of resistance between 33.518 and 33.320. Negative RSI divergence does show that upside momentum is fading, which can at times precede a turn lower. In such a case, keep a close eye on the 20-day SMA. Breaking under could open the door to a material...

Crude oil prices rose over 30 percent year-to-date as increased vaccination rates and reopening after pandemic-inspired lockdowns led traders to bet on a boom in economic activity. It seems only natural that the need for key growth inputs would rise in this scenario. Pent up demand for travel – both recreational and commercial – was a key drivers envisioned in this model.

Crude oil prices rising with inflation expectations as demand picks up

However, with a new strain of Covid-19 spreading throughout the world, a shadow of doubt is now being cast on future growth prospects and thereby on demand prospects for key raw materials, like oil. Rising tensions between the US and Iran may give the Brent crude benchmark some respite however. The multi-trillion dollar question is, will this be enough to reverse the macro trend?

The spread of the Delta variant poses the biggest fundamental risk to crude oil prices as the new and more contagious strain spreads across...

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Notes: In last month’s Gold Weekly PriceOutlook we noted that, “A three-week rebound off uptrend support in Gold has already covered 38.2% of the June decline and while the recent stretch could ease in the days ahead, we’re on the lookout for a possible exhaustion high later in the month.” XAU/USD continued to struggle into 1830 for the following four-weeks before collapsing last week with the breakdown breaking below the ascending pitchfork formation we’ve been tracking off the yearly low. The decline took a leg lower into the open this week before rebounding off critical technical support at the 1670/82 support confluence- a region defined by the 61.8% extension of the 2020 decline, the objective yearly opening-range low and the 38.2% retracement of the 2015 advance. We’re looking for guidance off this mark with the bears vulnerable while above.

A proposed descending formation off...