The U.S. dollar could find some support from August seasonality, which tends to favor the currency, while profit-taking could keep the currency from weakening further in the short term, says Bank of America. Yet a recovery is not in sight, with market positioning showing that investors are still betting the dollar will fall. The failure to agree on additional U.S. fiscal stimulus is weighing on the currency and the longer the discussions take, the worse for the U.S. economy, says the bank. "The consensus, based on our discussions with investors, remains very much bearish," it says. The DXY U.S. dollar index is last flat at 93.3200.An agreement on additional fiscal stimulus in the U.S. is probably already largely priced into the U.S. dollar, which indicates EUR/USD will continue to move sideways in the coming days, says Commerzbank. This suggests investors remain hopeful that the two main U.S. political parties will eventually break the impasse over the next round of coronavirus aid even if no more talks are scheduled. EUR/USD trades last down 0.1% at 1.1809.
👉 Kamala Harris Is ‘Something You Cry About’ for Black Female Executives. For other Black women who have made it to the top, the Democratic vice presidential pick is more than historic.
👉 The US dollar index (USDX) dropped to 93.23, closing below the 5-day EMA. The yield on 10-year Treasuries rose to 0.72%, the highest level in eight weeks. USDJPY extended the rally to a three-week high of 106.92.
👉 EUR surged above 1.18 despite the concerns of the US-EU trade relationship. GBP declined late in the session but closed the day higher at 1.3067.
👉 AUD dropped to 0.7147. Australia added 114k jobs in July but the unemployment rate rose to 7.5%, the highest level since 1998. NZD further weakened to a three-week low of 0.6547 as more virus cases were reported. USDCNH traded at 6.9492 ahead of a slew of economic data today.
👉 Gold continued the recovery to $1953.21 amid the USD weakness. Silver rose sharply to $27.47. WTI crude (XTIUSD) edged lower to $42.31. The International Energy Agency cut the oil demand forecast for the second half of 2020.
👉 RBA Governor Lowe said the view is that best course of action is to continue with current package and they considered the possibility of a regular program of bond purchases, while he stated the conditions for a rate increase will not likely be met for at least 3 years and hopes cash rate will not be this low for 5 years but it is possible. Furthermore, Lowe stated that have not ruled out a separate bond-buying program or other adjustments to the package and stated that negative rates are extraordinary unlikely for Australia, while he would like AUD to be lower but added cannot say that the currency is overvalued and that they are not prepared to intervene in FX to weaken AUD.👉 Speaking of the virus, Bill Gates, who has pledged more than $350 million to fight it, spoke with us about when he expects to see a vaccine and the conspiracy theorists who claim he seeded the disease for his own nefarious purposes.
👉 UK PM Johnson's office said UK infections appears to have levelled off and that the plan to reopen more parts of the economy in England can resume following a 2 week pause, while it also plans to raise fines on those that repeatedly flout rules on facemasks.
👉 US seized 4 vessels of Iranian fuel cargo recently that was sent to Venezuela without the use of force after federal prosecutors filed a suit for their seizure last month.
INTRADAY MARKET INSIGHTS
USD/JPY Intraday:
Further advance. The pair keeps trading on the upside while being supported by the ascending 20-period moving average, which stands above the 50-period one. The technical configuration remains bullish. The trailing key support has been raised to 106.75. Unless this level is breached, the pair is expected to proceed toward 107.15 and 107.30 on the upside.
EUR/USD Intraday:
Rebound expected. The pair is rebounding from a low of 1.1792 seen overnight. It has returned to levels around the 20-period moving average, while the relative strength index climbing toward 50 showing a lack of downward momentum for the pair. Trading at levels above the key support at 1.1795, the pair should target 1.1840 on the upside. Alternatively, a break below 1.1795 would trigger a further fall toward 1.1780.
AUD/USD Intraday:
Under pressure. The pair retreated after failing to penetrate the high of August 11 at 0.7190. Currently, the prices are trading below both declining 20-period and 50-period moving averages. The relative strength index is locating at the selling zone between 30 and 50. Hence, below 0.7160, expect a drop with targets at 0.7130 and 0.7120 in extension. In an alternative scenario, a break above 0.7160 would bring a rebound with 0.7180 and 0.7190 as targets.
NZD/USD intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
GBP/USD Intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
USD/CHF Intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
USD/CAD Intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
EUR/JPY Intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
EUR/GBP Intraday:
Bullish bias remains. The pair keeps trading within a consolidation range after a recent rally. Currently, it is hovering around both the 20-period and 50-period moving averages, while the relative strength index stays above the neutrality level of 50, indicating a bullish bias. Above the key support at 0.9021, expect an advance to 0.9072 and 0.9086. Alternatively, a break below 0.9021 would trigger a pull-back to 0.8998.
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By — Don Quixote