USD

The US dollar bulls are steering the ship at 105.34, rising in a rare synchronization with gold. This week, US CPI, PPI, and retail sales data all support the Federal Reserve's decision to pause rate hikes at the crucial FOMC meeting next week. The bets on high interest rates for an extended period are becoming increasingly prominent, with the market pricing in a 97% probability of a pause next week. The US dollar index has risen for the ninth consecutive week, closing above 105.00 over the weekend at 105.33, marking six-month and ten-month highs. This sustained growth is underpinned by strong performance in the US economy. Economic data released last week provided evidence of an inflation rebound, despite a slowdown in core interest rates. Additionally, the dovish decision by the European Central Bank is helping boost demand for the US dollar. This week, the FOMC is brewing a hawkish vs. dovish showdown, with the market expecting no significant changes from the Federal Reserve due to the recognition that they might raise rates further if inflation doesn't slow down. The current economic conditions indicate that the Federal Reserve has the capacity to adapt to another round of rate hikes, but an unexpected dovish shift could trigger a significant US dollar adjustment and an increase in commodity prices.

Last week, the US dollar index not only broke through the critical psychological level of 105 but also closed at 105.33 over the weekend, marking the second attempt this year to target 105 and setting six-month and ten-month highs. Currently, the price is attempting to test resistance levels at 105.35 (double top from February 22nd and 23rd) and 105.70 (upper channel line). Furthermore, the weekly candlestick chart of the US dollar index and the RSI technical indicator formed a "hidden bullish divergence" pattern twice, from May 2021 to July 2023, and from January 2022 to July 2023, still supporting the US dollar. Once it effectively breaks through 105.88 (this year's March high), further gains could target 107.03 (50% Fibonacci retracement level from 114.50 to 99.57) and even higher levels. However, it's essential to remain vigilant. If the US dollar index falls back below 105.00 and 104.90 (the middle axis of the upward channel) or if there's a need for a correction, a technical pullback may occur. In such a scenario, short-term targets for the bears could be set at around 104.57 (260-day moving average) and 104.45 (support trendline extending from the July low of 99.57) or even lower to 103.93 (240-day moving average).

Today, it might be considered to go long on the US dollar index near 105.10, with a stop loss at 104.90 and targets at 105.50 and 105.55.

WTI Spot Crude Oil

Due to an intensified supply-demand imbalance and the latest industrial output report from China, WTI crude oil prices rose for the third consecutive week last week, reaching a 10-month high of $90.52. WTI crude oil continues to demonstrate its bullish nature, seemingly ignoring short-term bearish factors such as an unexpected increase in EIA inventories. On the contrary, the oil market reacted sensitively to China's reserve requirement reduction measures, leading to a rapid strengthening of oil prices, which have now continued to rise and breached the $90.00 mark.

The latest data shows that China's crude oil imports have surged by 30% compared to the previous year, marking the third-highest level on record. Therefore, China's recent stimulus measures are seen as likely to boost crude oil demand. Additionally, the current oil price bull market is also driven by supply-side factors. Saudi Arabia and Russia announced additional production cuts in July and further extended these cuts until the end of the year in early September, which has become a core factor driving oil price increases. In the first half of the year, oil bulls underestimated the global economic recovery. As we enter the second half of the year, improving demand in some economies provides stronger reasons for the bullish trend in crude oil.

From a technical perspective, the focus is on whether WTI crude oil prices can break through the $90.00 mark and continue to rise or experience a correction after the overbought indicators have been addressed. Last week, WTI crude oil saw a substantial increase of 4.26%, and so far this month, it has climbed over 7%. It breached the $90.00 mark on Monday, reaching an intraday high of $90.52, the highest level in over ten months since November of last year. If it can maintain stability above $90.00, the next potential upside targets include the upper channel line at $91.50 and $93. However, considering that the RSI indicator is at its most severely overbought level since March 2022 (78.00), if WTI oil fails to break through the $90.00 mark and falls back, caution should be exercised as a pullback may occur. In such a scenario, key support levels to watch below include $88.00 (lower channel line) and $86.15 (14-day moving average). Of course, since WTI crude oil prices have broken through the long-term resistance level of $84.50, the upward targets may not stop at $90.00. Therefore, even in the event of a correction, the bullish outlook is unlikely to change, and a return to an upward trend is highly probable after a sufficient correction.

Today, it may be considered to go long on crude oil near $90.00, with a stop loss at $89.70 and targets at $91.15 and $91.30.

XAUUSD

Before the weekend, there was a sudden reversal in gold prices, surging to $1,930.50, forming a "double top" pattern with the week's starting price of $1,930.60. Technical analysis suggests that a larger breakthrough may occur next week, which would be a stronger bullish sign. The bullish reversal on Friday of the previous week and the subsequent price movement indicate a strong intraday momentum, suggesting that a pullback may have already completed, further confirming the anticipation of further upward movement.

The key price level to break through at this point is the high of $1,931, which is a minor swing high. A close above this price level in the days ahead will confirm the strength and increase the chances of continued bullishness. On the weekly chart, there is also a potential bullish pattern in gold, ending the previous week's trading with a bullish hammer candlestick pattern. A breakout above last week's high of $1,930.50-60 would represent a bullish weekly-level breakthrough, and daily closes above that price level would confirm the strength. The setup for the past three weeks has been a bullish adjustment strategy, marking a place where an intraweek downturn triggered a move lower, only to close back within the intraweek range but below the range's high. There are signs now that the recent swing low may have been completed, with initial upside targets including the range from the high on September 1st at $1,953 to the dip around $1,946.

Looking at the daily chart, gold prices were in a downtrend channel last week, briefly falling below the support level of $1,903.50, which is the 38.2% Fibonacci retracement level from the low of $1,614.90 in September 2022 to the high of $2,081.80 in May 2023. The price dropped to as low as $1,901. However, just before the weekend, the market experienced a V-shaped rebound, breaking above the $1,915 level and surging to $1,930.50, forming a "double top" with the high from the beginning of the week. The short-term upward momentum is currently being capped by the levels at $1,930.50-$1,930.60 and $1,931.30 (23.6% Fibonacci retracement level from $2,081.80 to $1,884.90).

Although these levels may serve as obstacles to further gold price increases, a break above $1,930-$1,931 could intensify the bullish pressure, potentially opening the door to $1,953 (this month's high) and $1,953.80 (25-week moving average). The next target could be $1,960.10 (23.6% Fibonacci retracement level from $2,081.80 to $1,884.90). If gold prices continue to face resistance at $1,930-$1,931 and fall back below the 200-day moving average ($1,922.80) support, it could signal a new downtrend towards the 220-day moving average at $1,908.70 and $1,901 (last week's low).

Today, it may be considered to go long on gold around $1,919, with a stop loss at $1,915 and targets at $1,932 and $1,935.

AUDUSD

Following a lackluster performance in the early part of last week, the Australian dollar saw a revival in the latter half amid improving risk appetite. The AUD/USD pair is currently forming a potential double bottom pattern. Double bottom patterns often indicate exhaustion of selling pressure before a sustained upward trend begins. The latest data released by the Australian Bureau of Statistics in late September (September 14) showed that Australia's unemployment rate for August remained steady at 3.7%, in line with expectations, and continues to stay at historic lows. After the data was released, the AUD/USD exchange rate briefly rose before consolidating and is currently trending higher.

The Australian job market still shows signs of cooling overall, reducing the urgency for the Reserve Bank of Australia to further tighten its policies. The market continues to expect the central bank to opt for a pause in rate hikes next month. In general, although Australian and U.S. interest rate paths are largely in sync through the end of the year, robust economic data from the United States has provided more support to the U.S. dollar. In contrast, the Australian economic outlook has been deteriorating since last year, primarily due to weakening demand from its largest export destination, China.

In recent weeks, the Chinese government has announced a series of stimulus measures to alleviate some downside risks, and these measures have gradually started to show positive effects in improving economic prospects. The substantial rebound of the Chinese yuan last week also helped the AUD/USD exchange rate stabilize at lower levels.

Over the past week, the AUD/USD exchange rate experienced narrow fluctuations, oscillating within the range of 0.6376 to 0.6473. The currency pair has formed a "double bottom" around 0.6357-0.6360. The neckline resistance is currently at 0.6522. If the AUD/USD can effectively break through this resistance, it is expected to accelerate buying momentum. This could pave the way for further upside towards 0.6626 (50% Fibonacci retracement level from 0.6895 to 0.6357) and 0.6629 (30-week moving average). At present, the AUD/USD is operating within a "downward channel," and if it falls below 0.6400 (a psychological round number), it may retest the previous "double bottom" lows at 0.6357 and 0.6315 (support trendline stretching from the low point of 0.6563 in February). The next level to watch would be 0.6207 (lower channel boundary).

Today, it may be considered to go long on the Australian dollar around 0.6405, with a stop loss at 0.6380, and targets at 0.6470 and 0.6480.

GBPUSD
Due to relatively weak UK Gross Domestic Product (GDP) data and strong US consumer inflation data, the British pound continued to be under pressure against the US dollar. The currency pair closed at 1.2380, marking a weekly decline of 0.67%. The economic conditions in the UK are less than ideal. Consumer inflation remains above 6%, one of the highest inflation rates among developed nations. Additionally, data released on Wednesday showed an economic contraction in July, with GDP falling by 0.5% following a 0.5% increase the previous month. Therefore, the challenge for the Bank of England is how to deal with this stagflation. The bank's governor, Andrew Bailey, recently stated that there is no need to raise interest rates further. Following the release of strong US consumer inflation data, the GBP/USD pair found some stability. It is currently hovering just below 1.2400 after touching a new low of 1.2378, the lowest since May. The pound had a poor performance last week as expectations for further rate hikes by the Bank of England declined. The currency pair failed to benefit from the correction in the US dollar index.

From a technical perspective, the GBP/USD pair has been in a downtrend since reaching a peak of 1.3134 on July 14th. Its exchange rate closed below the crucial 200-day moving average (1.2430) for the first time since March last week and closed below 1.2400 for the first time since May, at 1.2380. This could be seen as a new bearish trigger. Furthermore, the RSI on the weekly chart remains around the 42 area, far from oversold territory, implying a lower resistance path for the GBP/USD pair. Nevertheless, it's advisable to consider further bearishness only after confirming a break below the 1.2400 level. Subsequently, the GBP/USD pair may accelerate its decline, testing the monthly low from May, around the 1.2310-1.2300 area, and then heading lower to test the next relevant support levels at the 50-week moving average of 1.2279 and the 1.2240 area (lower channel boundary).

On the other hand, if the GBP/USD exchange rate sees a subsequent rally, it may encounter resistance around the 1.2460 area (support line extended from the low point of 1.2308 in May). Successfully breaking through this resistance area could trigger a short-covering rally, pushing the GBP/USD pair up to the psychological level of 1.2500. Although it might fade quickly near the 134-day moving average at 1.2579, the recovery momentum could continue toward the 100-day moving average (currently near 1.2650).

Today, it is advisable to consider shorting the British pound around 1.2405, with a stop loss at 1.2435 and targets at 1.2340 and 1.2330.

USDJPY

The US dollar against the Japanese yen once again reached recent highs last week, nearing 148.00 yen. This was due to financial institutions continuing to exhibit fragile market sentiment, while the market awaited further guidance. The trading price of the US dollar against the Japanese yen is at levels not seen since early November 2022. The new high since October 2022 suggests that speculators consider the US dollar to yen currency pair to be overbought, but there's room for it to become even more overbought. Short-term considerations should closely monitor the global market's nervousness regarding US inflation data, including the rising energy costs reflected in the current value of Western oil. It's also worth noting that Japan's inflation data earlier this week was slightly below expectations from the Producer Price Index report. A weakening yen may help Japanese export companies, which are still a significant part of the country's economic landscape. Many analysts within Japan may take a positive stance on the better industrial data today. However, even with these improved economic data, the continued uptrend of the US dollar against the Japanese yen remains a primary item on the short-term chart. Expectations are for future volatility in the US dollar to yen currency pair, and the likely direction of that volatility continues to be to the upside.

From the daily chart, it is evident that at the beginning of last week, the US dollar against the Japanese yen opened 80 pips lower following a speech by Bank of Japan Governor Haruhiko Kuroda, reaching a low of 145.89 for the week. However, this decline was short-lived, and the USD/JPY pair rose to its highest level since November 2022, with the currency pair returning to recent highs of 147.95 by the weekend. Currently, on the weekly chart, the USD/JPY pair is oscillating around the upper resistance line of the "ascending wedge" at 148.40 and formed a "hammer" bullish pattern in the closing price over the weekend. Bulls have strong control in the market and are likely to trigger a bullish breakout rapidly, with initial resistance levels focused on 148.00-148.40, and further attention to 148.80 if broken. If the uptrend continues, bulls may target the key psychological level of 150.00, which is also the upper boundary of the uptrend channel that began in early March. Conversely, in a bearish scenario, technical support for the USD/JPY pair is at 146.72 (5-week moving average) and 145.90 (last week's low). If further declines occur, the next potential support area should be around the month's low of 144.44 yen.

Today, it is advisable to consider going long on the US dollar around 147.50, with a stop loss at 147.10 and targets at 148.40 and 148.60.

EURUSD

The euro against the US dollar is currently experiencing its longest consecutive decline since 1997, with a weekly drop of 0.37% to 1.0660. Retail traders continue to bet on the US dollar, and the euro/US dollar is nearing its lowest levels since March, at 1.0632, heading for its 9th consecutive weekly decline. The European Central Bank (ECB) has raised interest rates for the tenth consecutive time, bringing inflation back to target levels. The latest forecasts suggest that the decline in inflation may be more challenging than previously thought. The dovish shift by the ECB suggests that interest rates may have peaked at least in the short term, leading to a decline in the euro to US dollar exchange rate, which has now fallen below the 1.0700 level. From a technical perspective, the recent breakthrough of the important 200-day simple moving average at 1.0827 for the euro/US dollar currency pair is seen as a significant technical signal that has sparked interest from bearish traders. Additionally, oscillators on the daily chart show that the price is still in a deeply negative zone and has not yet entered oversold territory, further validating the negative outlook for the euro/US dollar.

The euro/US dollar has extended its decline below the 200-day moving average. Currently, the price has fallen to the May low of 1.0635 and closed at 1.0660, the lowest since March. Given this, the euro/US dollar is facing a potential key turning point. However, even if there is a rebound from support levels, the exchange rate may not necessarily overturn the horizontal channel's lower support line at 1.0790 on the weekly chart since the beginning of the year, which has now turned into a resistance line. If the short-term fails to break above this lower support line, it could guide the price lower to the May low of 1.0635, forming a "double bottom" bearish pattern with last week's low of 1.0632. Breaking below this double bottom would strengthen the bearish view to 1.0405 (50% Fibonacci retracement level of 0.9535 to 1.1275). Initial support is at the 65-week moving average of 1.0552. In the event of a reversal in the trend, a rebound could target 1.0790. The next level would be a retest of 1.0864 (23.6% Fibonacci retracement level) and the 10-week moving average at 1.0911.

Today, it is recommended to consider going short on the euro around 1.0685, with a stop loss at 1.0705 and targets at 1.0625 and 1.0615.

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

USD Index

The economic data released by the United States is "encouraging." Not only were retail sales well above expectations, but the Producer Price Index (PPI) also showed an upward trend. In addition, initial jobless claims were lower than expected, indicating that the U.S. economy is still hot and ready to withstand further interest rate hikes by the Federal Reserve. Following the data release, traders' expectations of the Fed keeping rates unchanged at its policy meeting on September 19-20 weakened, causing the U.S. dollar index to briefly rise by 40 points to 105.43. The August Consumer Price Index (CPI) increased as expected by 0.6% month-on-month, the highest in 14 months, and overall inflation trends continue to favor the Federal Reserve. However, the unexpected resilience of inflation in August suggests the possibility of at least one more rate hike this year. The U.S. dollar index remains resilient, but it surged after the data release, leaving most U.S. dollar currency pairs struggling, with many nearing recent lows.

The Federal Reserve is set to announce its interest rate decision next Thursday and provide further explanations in the subsequent press conference. The market currently expects the Fed to keep rates unchanged, but Chairman Powell's remarks could become the primary driver of market price movements. If the Fed expresses caution when discussing further rate hikes, as Powell did at last month's Jackson Hole Global Central Bank Symposium, then the possibility of further rate hikes will largely depend on data performance.

In terms of the medium-term trend of the U.S. dollar index, the exchange rate found solid support at 99.57 and initiated a rebound. After three weeks of continuous upward momentum, the U.S. dollar index's trend has gradually changed, no longer seen as a minor rhythm of the previous downtrend but forming a major alternation in rhythm. After finding support around 102 and experiencing alternating bullish and bearish candles, the exchange rate broke through the key resistance level of 103.50-60, entering an upward trend in the medium term. The short-term trend of the U.S. dollar index has once again entered a sideways consolidation pattern, trading within the short-term range of 105.35-104.45, with the current trend relatively calm. The U.S. dollar is approaching support levels, and if it falls below the low point, it may target 104.10 (support trendline extending from the July low of 99.57) and the significant level of 104.40 (240-day moving average). The next level to watch is the 103.50 level. Resistance levels are currently at 105.35 (double top from February 22 and 23) and 105.88 (March high).

Today, it may be considered to go long on the U.S. dollar index near 105.15, with a stop loss at 104.90 and targets at 105.55 and 105.65.

WTI Crude Oil

On Thursday, oil prices reached a new high for the year, with Brent crude oil breaking above $93 for the first time this year, and U.S. WTI crude oil rising above the $90 mark. The spot price also touched a recent high of $90.19. U.S. crude oil inventories unexpectedly increased, causing crude oil prices to rise initially and then pull back. WTI crude oil briefly touched an intraday high of $89.40 before retracing. U.S. crude oil inventories increased by 3.955 million barrels up to September 8, well above the expected decrease of 1.912 million barrels. IEA Monthly Report: Saudi oil production cuts could lead to increased oil price volatility. Global observed petroleum inventories decreased by 76.3 million barrels in August, reaching their lowest level in 13 months. Overall, rising oil prices have been a significant driver of the August Consumer Price Index (CPI), accounting for more than half of the CPI increase, while the continuous rise in the housing index has also driven the rebound in the core CPI for August. The market is concerned that as the oil supply gap widens, if oil prices continue to climb towards $100, it could lead the Federal Reserve to maintain interest rates at a higher level for a longer time to control inflation. OPEC, EIA, and IEA monthly reports have reinforced the market's constructive view of oil, and with U.S. inflation rebounding for two consecutive months, higher interest rates could increase oil storage costs, making the closing price of WTI crude oil this week crucial.

WTI crude oil is expected to record its third consecutive week of gains and may achieve its highest closing price of the year. There is no doubt that once the levels representing a trend reversal are breached, it will trigger more buying interest and provide further upward momentum for oil prices. Therefore, it is crucial to monitor whether the closing price of WTI crude oil this week can stabilize above 87.20-50 (the high points of the past five trading days), which could be an important observation for the short-term bull and bear trends. If oil prices break above 89.36 (123.6% Fibonacci retracement level from 84.51 to 63.93) and 90.00 (a psychological round number), there is potential for further gains towards the $92.00-93.00 levels. On the downside, 87.20-50 has become a strong support, and if it is breached by the bears, the next support level to watch would be 84.51 (the low point on April 17).

Today, it may be considered to go long on crude oil near 89.70, with a stop loss at 89.40 and targets at 91.05 and 91.20.

XAUUSD

Yesterday's latest data showed that U.S. retail sales in August increased by 0.6%, well above the expected 0.2%. Data released on the same day also indicated that initial jobless claims in the U.S. for the week ending September 9 were 220,000, lower than the expected 225,000, and the Producer Price Index (PPI) also showed an upward trend. After the data release, spot gold temporarily declined by $6 in the short term, reaching an intraday low of $1,901.20 per ounce. Due to a stronger U.S. dollar, gold prices retreated, and the market expects the Federal Reserve to maintain interest rates at its policy meeting next week, which temporarily limits the downside for gold prices. Furthermore, the probability of keeping the benchmark interest rate unchanged through November is 56.1%. Considering the above data, gold prices may continue to face pressure because rate hikes could lead to increased demand for safe-haven assets, and gold is typically considered a safe-haven asset. However, if future inflationary pressures continue to rise, the Fed may adopt a more aggressive rate hike strategy, which could exert greater pressure on gold prices.

Gold prices have once again fallen below the recent weekly low, and the double bottom structure has not materialized, suggesting that gold may be testing new lows. Looking at the daily chart, short-term resistance levels to watch first are around the 200-day moving average at $1,921.60 and $1,930.70 (this week's high). The recent key level for gold bears remains at $1,930, and until the daily chart breaks above and stays above this level, any rebounds could be viewed as shorting opportunities. Gold ETFs are still in a phase of continuous selling, suggesting a bearish outlook. If gold falls below this week's low of $1,905.70, the key support levels to watch below are $1,900 (a psychological level) and $1,884.90 (the low on August 21).

Today, it may be considered to go short on gold before $1,914, with a stop loss at $1,918 and targets at $1,903 and $1,901.

AUDUSD

Australian employment data for August came in better than expected, but the Australian dollar initially rose and then pulled back; it is currently rebounding. The Australian dollar's fundamental outlook remains under pressure due to factors such as weakening Chinese demand, internal issues, and the strong U.S. economy. The overall Australian job market still shows signs of cooling, reducing the urgency for the Reserve Bank of Australia to tighten its policies further. The market continues to expect the central bank to pause its rate hikes next month. From a technical perspective, the AUD/USD is in a critical support area on the weekly chart and has formed a double bottom pattern, suggesting the potential for a short-term rebound. In the middle of the week, the AUD showed choppy performance, repeatedly oscillating between slight gains and mild losses without clear directional guidance. Despite the indecisive environment, the AUD/USD seems to be in the process of building a potential double bottom pattern.

With speculative short positions on the Australian dollar at their highest level since early 2022, the AUD/USD appears oversold on the weekly chart. In recent weeks, the currency pair has held above 0.6357, while forming a short-term double bottom bullish pattern, which may indicate that the AUD/USD is attempting to establish a midterm bottom. On the daily chart, the AUD/USD has formed a double bottom pattern (in mid-August and early September), with short-term potential for a rebound to test 0.6500 (a psychological round number) and the late August high of 0.6522. If these levels are breached, it could set the stage for further upside towards 0.6562 (38.2% Fibonacci retracement level of the rebound from 0.6895 to 0.6357), paving the way for a potential break above the important psychological level of 0.6600.

On the downside, if the double bottom support at 0.6357 is broken, further downside targets could be 0.6272 (the low from November 3 last year) and potentially the 0.6170 level, which was last seen in October 2022.

Today, it may be considered to go long on the Australian dollar before 0.6410, with a stop loss at 0.6380 and targets at 0.6470 and 0.6480.

GBPUSD

Previous data showed a significant unexpected contraction in the UK's economy in July, with Gross Domestic Product (GDP) shrinking by 0.5% compared to a forecasted contraction of 0.2% from June. This data has raised concerns about the UK economy entering a pessimistic phase of stagflation, and the probability of further interest rate hikes for the Pound has diminished significantly. In this scenario, the Pound is likely to appear vulnerable in the forex market. In recent times, the GBP/USD has closed below 1.25, making the downward trajectory of the Pound more apparent. Although technical indicators suggest it is oversold, it cannot be ruled out that the GBP/USD may continue its downward trend and explore lower levels. Only a break above the strong resistance level at 1.2550 in the near term could potentially temporarily halt the decline and initiate a recovery attempt.

Since mid-July, the GBP/USD has experienced a significant drop, briefly breaking below the 200-day moving average at 1.2430 and reaching a three-month low of 1.2396 yesterday. Currently, the GBP/USD is below the 200-day moving average. The bulls are struggling to reclaim this technical support, and if they can regain and hold above the 200-day moving average in the coming trading days, it would provide the clearest guidance that the GBP/USD has likely bottomed out and is poised for a swift recovery. In this case, the GBP/USD could potentially rise towards 1.2607 (23.6% Fibonacci retracement level from 1.3143 to 1.2446) and 1.2618 (120-day moving average). If the upward momentum continues, the focus would then shift to 1.2712 (38.2% Fibonacci retracement level) and 1.2746 (high from August 30). On the other hand, if the GBP/USD fails to hold above 1.2430, it would signal bearish pressure and open up the possibility of a decline towards 1.2400 (a support trendline starting from the low of 1.2275 on April 3). The next level to watch would be 1.2308, which could be a crucial support. This suggests that the worst may be over for the Pound.

Today, it is advisable to consider going short on the Pound before 1.2435, with a stop loss at 1.2460 and targets at 1.2360 and 1.2350.

USDJPY

The Japanese Yen is showing signs of weakness, with market participants digesting comments from the Bank of Japan Governor Haruhiko Kuroda regarding the possibility of an early exit from the negative interest rate policy. Following comments from Kuroda that pushed up the yen and bond yields, Hiroshi Ando, Secretary-General of the ruling Liberal Democratic Party, expressed a leaning towards adopting an ultra-loose monetary policy on Tuesday. On Wednesday, the USD/JPY rose above the 147.70 level. Overall inflation in the US for August continues to show growth, keeping US bond yields on an upward trajectory. Recently, the yields on 10-year and 20-year US bonds have approached 4.26% and 4.53%, respectively, further pressuring Japanese bond yields. The Bank of Japan has maintained a super-loose policy on interest rates for a long time, and its inaction on monetary policy has put direct pressure on the yen, leading to its depreciation. Despite concerns about potential interventions by the Bank of Japan, the USD/JPY is slowly rising.

On the daily chart, the USD/JPY has tested the 148.00-148.40 level multiple times recently without success. Therefore, the USD/JPY will likely need a bigger catalyst to attempt to approach the 148.00-148.40 price range. Once these levels are broken by the bulls, further targets are expected at the 150.00 level and even the highest level before Japan's intervention last year at 151.94. On the other hand, from a purely technical perspective, signs of a bearish divergence are gradually becoming apparent, so it's essential to remain vigilant against the possibility of a reversal. The RSI and stochastic indicators are in a downturn, and the MACD indicator has also shown a downward crossover signal, suggesting the need to be cautious about the potential for a USD/JPY downturn. Currently, support will first be observed at 146.00 (a support trendline starting from the low of 141.50 on August 7) and the 30-day moving average at 145.80, followed by a focus on the 144.11 level (38.2% Fibonacci retracement level from 138.05 to 147.87).

Today, it is advisable to consider going short on the US dollar before 147.90, with a stop loss at 148.20 and targets at 146.80 and 146.70.

EURUSD

The European Central Bank (ECB) raised interest rates for the tenth consecutive meeting on Thursday to combat stubborn inflation but signaled that it may have concluded its tightening cycle. The deposit rate was increased from 3.75% to 4%, marking a historic high. Markets and economists expect this to be the ECB's final tightening move for the foreseeable future, with a long pause expected, followed by a potential rate cut in the second half of next year. Despite the ECB's surprise 25 basis point rate hike, the EUR/USD came under selling pressure, dropping nearly 90 pips. Short-term German 2-year and 10-year bond yields declined, while US 2-year bond yields rose. This may reflect concerns among traders about the deteriorating economic outlook in the Eurozone as the ECB continues to raise rates. The EUR/USD fell to a one-week low and is currently trading at 1.0655. Upbeat economic data from the United States, including strong retail sales, rising PPI, and lower-than-expected initial jobless claims, indicate that the US economy is still robust and prepared for further Fed rate hikes. This suggests that the possibility of another Fed rate hike this year cannot be ruled out.

For the Euro, the ECB's decision appears to be a lose-lose situation. Even if the Euro initially strengthens due to the rate hike, the reaction is likely to be mild and short-lived. This is because the rate hike only exacerbates concerns about slowing economic growth and the potential for a mild recession.

On the daily chart, there are signs of a bullish divergence based on various technical indicators, and there is a potential MACD signal line crossover. This suggests the possibility of a short-term oversold rebound. Overall, the EUR/USD remains below the 200-day moving averages at 1.0826 and 1.0825 (a downward trendline formed since the high of 1.1275 in July), maintaining a solid downtrend. On the downside, if the EUR/USD falls below 1.07, or even breaks below 1.0686 (the low from September 7) and 1.0676 (the 250-day moving average), the next levels to watch would be 1.0614 (55-week moving average), and ultimately, the exchange rate would be targeting the 1.05 level.

Today, it is advisable to consider going short on the Euro before 1.0658, with a stop loss at 1.0680 and targets at 1.0585 and 1.0575.

Disclaimer:

The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

USD

Due to the surge in oil prices leading to an overall increase in inflation, consumer prices in the United States rose slightly in August. However, the core Consumer Price Index (CPI) continued to trend downward. The Dollar Index saw little change. While strong inflation data is unlikely to shake the expectation of the Federal Reserve keeping interest rates unchanged in next week's policy statement, it may increase expectations of further rate hikes in upcoming meetings. The Dollar Index experienced its largest single-day drop since July earlier this week. Part of the dollar's strength is driven by the recent sharp rise in oil prices. Midweek, WTI crude oil futures briefly surpassed $89 per barrel and reached their highest level since November 2022. Higher energy costs may keep the Federal Reserve vigilant to ensure that monetary policy remains restrictive for an extended period to bring inflation back to the target level of 2% sustainably. Currently, the market believes that the bearish fundamentals for the dollar this week have already been established, and Bank of Japan Governor Kuroda merely provided the necessary catalyst.

Last week, the Dollar Index broke above the trendline resistance, effectively surpassing the May high of 104.70, and briefly exceeded the 105.00 threshold to reach 105.15, the highest level in several months. Given that short-term upward momentum is clearly dominating the market, the Dollar Index is still expected to maintain its upward trajectory, especially if it successfully holds above the technical support at 104.07 (240-day moving average). In this context, the subsequent Dollar Index is expected to rise again towards 105.15 (last week's high) and the strong resistance at 105.37 (38.2% Fibonacci retracement level of the overall decline from 114.77 to 99.57). If it continues to rise, the Dollar Index may revisit the March high of 105.88. Conversely, if bears reenter the market and trigger a decline in the Dollar Index, initial support should be watched around the 104.07 level, with further attention to the important level of 102.93 (August 30th low) if broken.

Today, it may be considered to short the Dollar Index near 104.90, with a stop loss at 105.05 and targets at 104.35 and 104.25.

WTIUSD

Yesterday, crude oil prices hit a new high for the year, with WTI crude oil reaching a peak of $88.95 per barrel, the highest in 10 months. The rise is mainly attributed to the optimistic monthly report from OPEC, which predicts strong oil demand for this year, despite ongoing oil production cuts by Saudi Arabia and Russia. OPEC maintains the belief that global oil demand will grow strongly in 2023 and 2024, citing signs that major economies are growing stronger than expected. The organization anticipates a global oil demand increase of 2.25 million barrels per day by 2024. Crude oil prices are rebounding after the OPEC monthly report showed that the oil market is much tighter than originally thought. Additionally, the U.S. Energy Information Administration raised its forecasts for crude oil prices in 2023 and 2024, and it is expected that global oil inventories will decline by the end of this year after Saudi Arabia decided to extend its 1 million barrels per day production cut plan until year-end.

WTI crude oil, after consolidating in a narrow range for five trading days, continued to rise and approached the $90 mark, in line with market expectations. Given that WTI crude oil has broken through the "double top" highs at $83.50 formed in April and August of this year, the medium-term trend of oil prices may have shifted to the upside. Overall, there is a bullish outlook for oil prices in the medium term, although short-term corrections cannot be ruled out. The $83.50 level has now become a strong support, and if WTI crude oil further stabilizes above the recent five-day highs in the range of $87.20 to $87.50, it is likely to continue to rise to $89.36 (123.6% Fibonacci retracement level from $84.51 to $63.93) and the psychological level of $90.00.

Today, it may be considered to long crude oil near $87.80, with a stop loss at $87.40, and targets at $88.95 and $89.20.

XAUUSD

In August, the seasonally adjusted core CPI (Consumer Price Index) in the United States recorded an annual rate of 4.3%, reaching its lowest point since September 2021 and declining for the sixth consecutive month. The seasonally adjusted CPI for August showed a monthly rate of 0.6%, the highest since June 2022. Following the release of US CPI data, spot gold briefly dipped by nearly $9 before a slight rebound, reaching a high of $1916.50 per ounce. Gold had been on a continuous decline since the beginning of the week, primarily due to investor caution regarding inflation data, the performance of the US economy, and the monetary policy of the Federal Reserve. Investors were more inclined to hold assets such as the US dollar. These factors led to a cautious retracement in the price of gold. Gold traders refrained from making new bets ahead of the crucial US CPI data set to be released on Wednesday. Given the non-yielding nature of gold, this upcoming CPI report has the potential to trigger explosive levels of volatility. Looking at the price movement, recent gold prices seem to lack a clear direction, with decreasing volatility. Gold prices have been hovering around the technical resistance zone of $1930 - $1938, which is also the convergence point of the 50-day simple moving average and a short-term downtrend line extending from the May high.

The daily gold chart indicates a downside bias in the price trend. Gold is trading below all of its short-term moving averages, including the 20-day (at $1917.80), 50-day (at $1931.60), and 100-day (at $1948.00) moving averages. The RSI (Relative Strength Index) technical indicator has gained downward momentum, crossing below the 50 midline into negative territory. Gold found a rebound point near the low of the week at $1907.40, which corresponds to the 23.6% Fibonacci retracement level of the decline from $1982.10 to $1884.70. Over the next few trading days, gold may continue its descent. If it breaks below $1900 (a psychological level), it could accelerate its decline to the $1884.90 level (the low from August 21st). On the other hand, if gold manages to move back above the 200-day moving average at $1921.60, it could encourage bullish momentum to target $1930.70 (the high of the week) and $1940 (a resistance trendline originating from the downward extension of the high from July 20th, 1987).

Today, it may be considered to short gold near $1913, with a stop loss at $1917, and targets at $1905 and $1903.

AUDUSD

In the early part of this week, the AUD/USD pair has shown a somewhat stable performance, although it hasn't managed to consolidate the gains from the beginning of the week. The market has been primarily driven by risk-off sentiment and moderate strength in the US dollar. However, it appears that the AUD/USD is forming a double bottom, which often signals exhaustion of selling pressure before a rebound. The market widely expects the Federal Reserve (Fed) to pause its rate hikes at the upcoming policy meeting next week, but there is still a possibility of rate hikes this year if the data indicates that economic and inflation cooling is not happening quickly enough. According to the CME's FedWatch tool, the expectation for the Fed to keep rates stable next week is at 93%, with around a 40% chance of a 25-basis-point rate hike at the November meeting. In addition to the consumer price data announced on Wednesday, investors will also be watching producer price and retail sales data on Thursday.

The AUD/USD pair fell to 0.6357 on September 5th, matching the low on September 6th, following a low of 0.6363 on August 17th. It then touched lows of 0.6362 and 0.6367 on September 7th and 8th, respectively. Therefore, it's worth noting that if the exchange rate does not clearly break below this range in the short term, and with technical indicators like RSI and stochastic oscillators rebounding from oversold levels, there is an inclination for the AUD/USD to stabilize in the short term. Looking at the daily chart, the current resistance is located at 0.6521 - 0.6522 (highs on August 30th and September 1st). If the AUD/USD can cleanly break through this barrier, it may trigger more upward momentum towards 0.6562 (38.2% Fibonacci retracement level of the rebound from 0.6895 to 0.6357), paving the way towards the psychological level of 0.7000. As for nearer-term support, refer to 0.6357 (previous low), and further support can be seen at 0.6272 (low on November 3rd, 2021) and the October 2022 low of 0.6170, with a critical reference at the psychological level of 0.6000.

Today, it may be considered to long the AUD near 0.6405, with a stop loss at 0.6380 and targets at 0.6475 and 0.6485.

GBPUSD

Boosted by favorable developments in non-US currencies, such as the Renminbi, the British pound to US dollar (GBP/USD) exchange rate saw a significant rebound correction opportunity. However, it turned out that the rebound in GBP/USD was short-lived. The latest employment report from the UK was mixed and did not provide the expected boost to GBP/USD, highlighting the current weakness in the trend. Additionally, hawkish comments from Bank of England officials failed to support the GBP/USD trend. Deputy Governor of the Bank of England, Dave Ramsden, stated on Tuesday that "there is an upside risk to inflation in August" and warned of the "risk of a second round of inflation," indicating that "a lot of tightening will be introduced." However, these hints of "high inflation" from the BoE Deputy Governor did not change the downward trend of GBP/USD during the trading session. Since recent movements in non-US currency exchange rates against the US dollar have been primarily driven by the strength or weakness of the US dollar, the outlook for GBP/USD this week may largely depend on the US CPI (Consumer Price Index) data for August. Considering that some leading indicators have already hinted at a potential rebound in US inflation in August, if the data confirms this expectation, or even shows a stronger-than-expected inflation rebound, the US dollar may continue to strengthen, potentially putting further pressure on GBP/USD.

The daily chart shows that GBP/USD briefly rebounded above 1.25 but proved to be short-lived. Failing to hold above 1.25 and resume its downward movement, the next target is towards the 200-day moving average at 1.2420. This level is an important support level to watch, as GBP/USD has been trading below the 200-day moving average since March 9th of this year. If the 200-day moving average is strongly supported in subsequent movements, there may be potential for a rebound correction rally. However, if the 200-day moving average is effectively breached, further declines could target levels like 1.2400 (a support trendline extending from the low on April 3rd at 1.2275) and 1.2300 (a psychological level). On the other hand, if there is a short-term rebound back above 1.2548 (this week's high), further upward movement may target resistance levels at 1.2607 (23.6% Fibonacci retracement level of the rebound from 1.3143 to 1.2446), 1.2617 (120-day moving average), and the next level at 1.2712 (38.2% Fibonacci retracement level).

Today, it is advisable to consider going long on the British pound near 1.2470, with a stop loss at 1.2440, and targets at 1.2550 and 1.2560.

USDJPY

Comments from the Governor of the Bank of Japan, Haruhiko Kuroda, have increased market expectations that the Bank of Japan may abandon its negative interest rate policy. However, on Tuesday, influential ruling party member and Secretary-General of the Liberal Democratic Party in the Senate, Hiroshi Shigefumi, expressed his preference for an ultra-loose monetary policy. As of now, the Bank of Japan still remains an outlier among central banks globally, and even if it abandons its negative interest rate policy, the reality is that interest rate differentials will remain significant. The trend towards carry trades is unlikely to dissipate easily. Intraday, US inflation data is set to be released, and if the data remains robust, it will increase bets on potential future rate hikes, which would not be favorable for the Japanese yen. Since the USD/JPY pair broke above the 145 level, which was a warning line for the Bank of Japan's intervention last year, traders have been concerned about when the Bank of Japan might intervene. Therefore, it is essential to remain cautious and guard against knee-jerk overreactions due to potential Bank of Japan intervention.

From a technical standpoint, if the USD/JPY exchange rate moves higher, be watchful of resistance in the range of 147.85-148.40, while on the downside, support can be found in the range of 145.90-145.50. Technical indicators such as RSI and stochastic oscillators have already started to decline, and the MACD indicator has crossed below the signal line again, indicating the need to be cautious about potential downside risks for the USD/JPY pair. Current support levels to watch for include 146.10 (lower boundary of the ascending channel), the 30-day moving average at 145.63, and then the 38.2% Fibonacci retracement level at 144.11 (from 138.05 to 147.87). As for current resistance levels, attention should be given to 147.87 (previous high), which restricted upward movement last week. Further resistance is expected at 148.80 (upper boundary of the ascending channel) and the psychological level of 150.

Today, it is advisable to consider going short on the USD near 147.75, with a stop loss at 148.10, and targets at 146.30 and 146.20.

EURUSD

For the September ECB (European Central Bank) interest rate meeting, it is expected that the ECB will keep interest rates unchanged. However, the ECB may accompany this decision with hawkish comments and potentially use a reduction in the balance sheet as a supplement. If this happens, it may temporarily stabilize the Euro. Ahead of the ECB meeting on Thursday, investors will be waiting for the US Consumer Price Index (CPI) inflation data to be released on Wednesday. While inflation data is unlikely to shake the expectation that the Federal Reserve will maintain interest rates in its policy statement next week, strong data could increase expectations for further rate hikes in upcoming meetings. In that case, the Euro would still face downside pressure.

This week, the Euro appears to be undergoing a consolidative rebound, but the strength is limited. On the daily chart, the 20-day (1.0802) and 200-day (1.0826) moving averages have formed a "death cross," indicating a bearish trend bias that has not changed. It is essential to continue guarding against the risk of the Euro being sold at higher levels. From a technical perspective, the descending trendline formed since the July high at 1.1275 is currently around the 1.0825 level, and the 200-day moving average is also positioned at a similar level, at 1.0826. If the exchange rate can break above this area in the near future, it would provide more confirmation that the EUR/USD exchange rate can stabilize again. The next target could be seen at 1.0883 (76.4% Fibonacci retracement level of the rebound from 1.0945 to 1.0686). As for downside support, it can be found at 1.0686 (low on September 7th) and the critical 1.0676 level (250-day moving average), which would point toward the 1.05 level, a support level the Euro held in February and March of this year.

Today, it is advisable to consider going long on the Euro near 1.0700, with a stop loss at 1.0675, and targets at 1.0755 and 1.0775.

The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.