The US Dollar gained against most ASEAN currencies this past week, such as the Singapore Dollar, Thai Baht and Indonesian Rupiah. The Philippine Peso fared better, seeing a weekly gain against USD. The Greenback’s strength occurred despite average daily case growth in key ASEAN countries slowing – see chart below. Traders may now be focusing on more pressing external factors due next week.

Chart Created Using TradingView

Emerging Asia-Pacific currencies can be quite sensitive to capital flows, which are frequently impacted by external fundamental forces. Traders may be positioning themselves ahead of the Federal Reserve’s Jackson Hole Economic Policy Symposium on Thursday. There, the central bank could signal how soon it expects to begin tapering its massive balance sheet, which has been swelling since last year’s Covid outbreak.

That would be a sign that the extraordinarily easy credit conditions retail investors have been getting used to are slowly...

The Nasdaq 100 closed at a record high to start off this week, extending the dominant uptrend since last year’s Covid-induced bottom. Prices took out the key 14996 – 15172 resistance zone that had been in play since July. That exposed the midpoint of the Fibonacci extension at 15485. Above that price sits the 61.8% level at 15731 where beyond that sits the 78.6% point at 16080.

Negative RSI divergence is still present however, showing that upside momentum is fading. That can at times precede a turn lower. Such an outcome may place the focus on the 50- and 100-day Simple Moving Averages (SMAs). These could reinstate the dominant focus to the upside. Clearing the 100-day SMA could raise the risk of a more prominent correction, exposing the former 13829 – 14059 inflection zone.

Chart Created in TradingView

S&P 500 futures just barely managed to close at a record high on Monday, finishing at 4475 where the previous record was at 4474 on August 13th. This...

Gold prices got off to a solid start this week, benefiting from a weaker US Dollar and a small bump in Treasury buying. XAU/USD climbed 1.36% on Monday, with prices now tracking for a third weekly rise, although last week’s gain was marginal. Still, the yellow metal has held up rather well considering the upward price action seen in the US Dollar. A stronger USD typically acts as a headwind for gold prices.

The US Dollar’s upside reaction last week was due to increased bets that the Federal Reserve will begin reducing its pace of asset purchases, a move that is seen prefacing rate hikes. At the same time, increasing Covid cases around the globe, driven by the Delta variant, sent a wave of risk aversion through markets. That was likely responsible in part for underpinning gold prices as the metal attracts haven flows.

Comparing gold to a different currency base, such as the Euro, highlights the safe-haven flow seen last week, with XAU/EUR rising 0.91%. Bullion...

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NZD: After seeing a sharp reversal in yesterday’s session with market participants buying the dip in NZD, the currency is once again heading higher and currently outperforming the rest of the G10 complex with RBNZ officials reiterating that rate hikes are coming. The latest hawkish commentary came from the Assistant Governor who stated that last week, the Bank had considered a 50bps rate hike adding that they decided to hold rates due to the communication challenge and not the economic risks. That being said, while money markets are 50/50 as to whether the RBNZ hikes are its October meeting, this will largely depend on the Covid backdrop, in which a situation similar to Australia may well force the RBNZ to refrain from raising rates.

NZ New Covid Cases

Source: JHU CSSE Covid-19 Data

NZD/USD: Looking at the chart, near term resistance for NZD/USD resides at 0.6950-60 with the psychological 0.70 handle above, which also sits at a congested zone and thus may be...

Key economic data from the U.S. (durable goods orders and GDP growth) are in focus prior to the symposium later this week with South African unemployment rate coming in higher than previous (32.6%).

Since Q3 2020, the unemployment rate has been steadily rising alongside rand strength (see chart below) primarily due to dollar weakness - which could catch up with rand bulls as the dollar looks to rebound. The unemployment figure was highly anticipated by South Africans as the recent civil unrest in the provinces of Gauteng and KwaZulu Natal are to be included in the data.

South African unemployment rate vs USD/ZAR:

Source: Refinitiv

Actual Q2 data for 2021 increased to 34.4%, an expected rise which has yet to impact the USD/ZAR pair. This mornings pullback could have priced in this weaker print prior to release however, there is still room for further upside.

Source: DailyFX economic calendar

GET YOUR Q3 RAND FORECAST HERE!

USD/ZAR...

In this week’s edition of The Macro Setup, featuring Dan Nathan and Guy Adami, we discussed the impact of the Federal Reserve’s upcoming Jackson Hole Economic Policy Symposium across various assets classes, including gold, Bitcoin, and stocks.

Fed Chair Jerome Powell is due to speak at Jackson Hole this Friday, August 27 at 10 ET/14 GMT, but the announcement that the event would be moving to a virtual setting may have taken some wind out of the speculative sails that a taper announcement would be coming. After all, if the Fed doesn’t feel comfortable having its annual meeting in person, policymakers likely feel like it’s enough of a threat to the US economy that stimulus efforts are still required.

US rates markets are acting consistent with this hypothesis. Tapering isn’t tightening, and while throughout 2021, particularly the past few months, the US Treasury yield curve has been behaving if tapering may be coming soon, Fed rate hike odds (vis-à-vis Eurodollar...

It’s been a busy past week in USD/CAD.

Last Tuesday I had warned of a potential breakout in the pair as USD/CAD had moved up to a key spot of resistance with two really big drivers on the horizon for the following Wednesday. Canadian inflation was due that morning, and FOMC meeting minutes were scheduled for release later that day. The one-two punch of those releases not only brought a breakout beyond the 1.2621-1.2652 zone that I had talked about; but also a breakout beyond the six-month-high of 1.2800 as bulls

Prices in USD/CAD ran all the way up to the 1.2950 level, just shy of the 1.3000 psychological level to set a fresh nine-month-high in the pair. But that’s when the proverbial music stopped, as a reversal began on Friday that has continued to evaporate those breakout gains through this week’s open.

This backdrop is accented with some interesting observations on the chart. That Friday candle where sellers came rushing into the market ended as a...

The surge of new US covid cases in recent is starting to temper expectations that Fed chair Jay Powell will announce a taper timetable at the, now virtual, Jackson Hole Symposium starting on Thursday. The latest data show that there were in excess of 266k new covid cases reported on Monday, an unwanted multi-month high.

Dallas Federal Reserve President Robert Kaplan, who said two weeks ago that the central bank should start tapering in September, changed his tune last week and said that the recent spread of the delta-variant is causing concern and that he may adjust his view on tapering if growth were to slow.

The US dollar has fallen sharply from multi-month highs, with Monday’s sell-off giving gold a boost higher. The greenback has been trading with tapering announcement priced-in for late this year, and the increasing spread of covid in the US is now draining some of that premium out of the dollar. While the technical set-up for DXY still favors higher...

AUD/USD appears to have reversed course ahead of the November 2020 low (0.6991) after marking the first five-day decline in nearly a year, but the recent rebound in the exchange rate may end up being short lived as it trades within the confines of a descending channel.

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.

The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Often associated with indecision in the market, Spinning Top candles can provide valuable supporting information to a trading strategy. The main talking points of this article are:

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.

The bull flag pattern is a great pattern to add to a forex trader’s technical arsenal. Explosive moves are often associated with the bull flag. This article will look at the potentially higher probability forex trading opportunities of the bull flag pattern.

Learn to trade the bull flag pattern: Main talking points??

Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Being aware of these errors, can help traders become more efficient in their forex trading. Although all traders make trading mistakes regardless of experience, understanding the logic behind these mistakes may limit the snowball effect of trading impediments. This article will outline the top ten trading mistakes and ways to overcome them. These mistakes are part of a constant learning process whereby traders need habitually familiarise themselves with them to avoid repeat wrongdoings.

The video included highlights six trading mistakes, however there will be more covered in the article below. It is important to note that trading comes with the inevitability of loss, but these may be minimised with the exclusion of human error/mistakes.

Prior to committing to forex trading, consider...

There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Each major geographic market center can exhibit vastly unique traits and tendencies that can allow traders to effectively execute strategies at any time.

Although the forex market is the most liquid of all asset classes, there are periods whereby volatility is constant, and others subdued. Understanding these different forex session times can improve the reliability of a forex trading strategy.

In this article, we will explore each of these forex market sessions including their key characteristics – forex time zones and how they affect trading.

The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Often associated with indecision in the market, Spinning Top candles can provide valuable supporting information to a trading strategy. The main talking points of this article are:

“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:

Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. This article will cover the shooting star reversal pattern in depth?and how to use it to trade forex.