AUDJPY Correction Levels (Aug 04, 2017)
AUDJPY staged a strong rally recently but appears to be topping out at the 89.00 area. A correction could be due before this pair heads any further north, and applying the Fibonacci tool on the latest swing low and high on the daily time frame shows that the 23.6% level lines up with a former resistance.
If this area of interest holds as support, price could make another attempt at breaking past the 89.00 to 90.00 ceiling and establishing a stronger climb. On the other hand, a larger pullback could still find support at the 38.2% Fib near 86.50 or until the 61.8% Fib at 85.00.
The 100 SMA crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside. However, these moving averages could still hold as dynamic support since they line up with the lowest Fib. Stochastic is heading down but is nearing oversold levels to signal that buyers could return to the game.
The RBA refrained from making any policy changes in their statement this week while maintaining their neutral bias. Data has been somewhat weaker than expected, though, particularly when it comes to trade activity so the central bank might sit on its hands for much longer.
As for the yen, the BOJ also kept its policy unchanged, contrary to some expectations that they could be more dovish. This allowed the yen to hold on to its gains and even take some risk-off flows away from the US dollar. Earlier today, the Japanese average cash earnings figure missed expectations and posted a 0.4% drop.
Up ahead, the NFP report could impact yen pairs since US bond yields tend to influence demand for the lower-yielding Japanese currency. A stronger than expected result could fuel demand for the dollar and lead to yen weakness while downbeat data could support the yen instead of the dollar.
By Kate Curtis from Trader’s Way
NZDJPY Long-Term Ceiling (August, 7, 2017)
NZDJPY is currently bouncing off the long-term range resistance at the 83.00 major psychological level, possibly putting it back on track towards testing support around 73.00 or at the mid-range area of interest around 78.00.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is also heading south to signal that selling pressure is still in play. However, the oscillator is already dipping into the oversold region to signal that Kiwi bears are tired and might let buyers take over.
The main event risk for this setup is this week’s RBNZ decision during which the central bank would likely keep interest rates on hold. Traders are also expecting a few dovish remarks since the latest batch of reports from New Zealand signaled a fall in dairy prices and overall inflation.
Meanwhile, the Japanese yen could be able to hold on to its gains as the BOJ didn’t sound as dovish as expected in their latest policy decision. In addition, potential dollar weakness on subdued tightening expectations could support the yen.
Keep in mind, however, that the latest NFP report turned out stronger than expected and provided some support for US bond yields, thereby weakening demand for the lower-yielding yen. US CPI readings are due later on this week and another batch of strong figures could continue to undermine yen strength.
By Kate Curtis from Trader’s Way
USDCHF Descending Channel (Aug 08, 2017)
USDCHF has been trending lower on its short-term time frames, with price moving inside an ascending channel that’s been holding since November last year. Price has bounced off support and is on its way to test the resistance.
Applying the Fibonacci retracement tool on the latest swing high and low shows that the 50% level lines up with the channel resistance at .9800 while the 61.8% level coincides with a broken support zone near .9900. The 100 SMA also lines up with the top of the channel, adding to its strength as a ceiling.
This short-term moving average is below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is heading up to the overbought level but hasn’t crossed down yet so there may still be some buying pressure left. If the resistance holds, USDCHF could make another test of the .9500 swing low.
Strong US equity performance allowed the dollar to hold on to its gains, particularly against the Swiss franc which is sensitive to potential SNB intervention. US consumer credit dipped, however, to signal weaker financial confidence.
SNB foreign currency reserves grew from 694 billion CHF to 714 billion CHF to signal that the central bank might be expanding its forex holdings to keep the franc weak. Swiss CPI was down 0.3% as expected.
The Swiss jobless rate is up for release today but no change from the 3.2% reading is eyed. As for the US, the NFIB small business index is due, along with the JOLTS job openings data and IBD/TIPP Economic Optimism index.
By Kate Curtis from Trader’s Way
AUDNZD Ascending Channel (Aug 09, 2017)
AUDNZD made higher highs and higher lows, moving inside an ascending channel on its 1-hour time frame. Price just bounced off the resistance and looks ready for another test of support.
Using the Fib tool on the latest swing low and high shows that the 61.8% level lines up with the channel support around 1.0725 and a former resistance level. This also coincides with the 100 SMA dynamic support.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. Stochastic is still turning lower to indicate that sellers are on top of their game but the oscillator is dipping into the oversold region to signal a return in bullish pressure.
Australia reported a 1.2% drop in its Westpac consumer sentiment index after previously rising by 0.4%. Chinese CPI also dipped from 1.5% to 1.4% instead of holding steady, signaling weaker inflation pressures down the line.
New Zealand is waiting for the RBNZ decision but this is expected to be downbeat as well. Quarterly inflation and employment have been disappointing so the central bank might blame the Kiwi’s appreciation for this, taking the opportunity to talk down the currency.
Earlier in the week, New Zealand reported a drop from 2.1% to 2.2% in quarterly inflation expectations while Australia has its MI inflation expectations report due in tomorrow’s Asian session.
By Kate Curtis from Trader’s Way
NZDJPY Trend Pullback (Aug 10, 2017)
NZDJPY has been trending lower on its short-term time frames after recently bouncing off a long-term ceiling. Price is forming a descending trend line and a correction is underway.
Applying the Fib retracement tool on the latest swing low and high shows that the 50% level lines up with the falling resistance around 81.30. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than the reverse.
Stochastic seems to be turning down from the overbought area, though, which suggests that sellers are eager to push price back down to the swing low near 80.15 or lower.
The RBNZ decided to keep interest rates unchanged at 1.75% as expected, adding that accommodative monetary policy remains appropriate for now. They did express concern about weak price pressures and reiterated that a lower NZD is needed.
Meanwhile, the Japanese yen has gained support on risk-off flows coming from the tensions with North Korea. The latest headlines are suggesting that Pyongyang is looking into a simultaneous firing of missiles on Guam, the nearest U.S. territory in the Pacific, and calling Trump’s “fire and fury” remark as “nonsense.”
Any indication that the situation is getting worse could mean more downside for higher-yielding currencies like the Kiwi and a likely rally in the safe-haven yen. On the other hand, easing tensions could bring risk-taking back to the table and keep the pair supported.
By Kate Curtis from Trader’s Way
EURGBP Countertrend Setup (Aug 11, 2017)
EURGBP is still trending higher as it tests the top of the ascending channel resistance visible on the 4-hour time frame. Stochastic is moving up to signal that there’s still some bullish pressure left but the oscillator is also closing in on the overbought zone to indicate potential profit-taking.
If that happens, price could pull back to the channel support near the .8900 major psychological mark. However, the 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. The gap between the moving averages is also widening to indicate stronger bullish momentum.
A small pullback could last until the mid-channel area of interest close to the 100 SMA dynamic support or find a floor closer to the 200 SMA dynamic inflection point. Sustained buying momentum could even lead to an upside break of resistance at .9100 and a steeper rally.
Euro zone economic reports have been mostly stronger than expected so far this week, supporting the odds of ECB tapering before the end of the year. Data from the UK has been less upbeat, with manufacturing production falling flat and the goods trade balance showing a larger deficit of 12.7 billion GBP.
German and French final CPI readings are due today and no downgrades could allow the shared currency to hold on to its gains. There are no reports due from the UK economy so traders might hold out until next week’s batch of top-tier data, which includes CPI, jobs, and retail sales figures.
By Kate Curtis from Trader’s Way
Another NZDJPY Correction (Aug 14, 2017)
NZDJPY continues to trend lower as its moves below a descending trend line visible on the 1-hour and 4-hour time frame. Price could be due for another pullback to the trend line, which lines up with the 61.8% Fibonacci retracement level.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. The 100 SMA also lines up with the trend line resistance, adding to its strength as a ceiling. If it holds, another drop to support at the 79.00 handle could take place.
Stochastic is already indicating overbought conditions and might be heading lower so the pair could follow suit. Also, a bearish divergence can be seen since stochastic made higher highs while price had lower highs.
Over the weekend, New Zealand reported a 2.0% rise in its headline retail sales and a 2.1% increase in core retail sales. This is stronger compared to the previous period’s 1.5% gains. Prior to this, however, the RBNZ sounded less upbeat about inflation prospects and even expressed their desire to see a lower Kiwi.
In Japan, the preliminary GDP reading chalked up a stronger 1.0% growth figure compared to the earlier 0.3% expansion. The yen is also gaining support from risk-off flows coming from the tensions with North Korea.
New Zealand has its GDT auction coming up later in the week, along with its quarterly PPI report. Stronger than expected gains in producer prices and dairy prices could revive better inflation expectations and prevent the RBNZ from jawboning further.
By Kate Curtis from Trader’s Way
GBPNZD Ascending Triangle (Aug 15, 2017)
GBPNZD has formed higher lows and found resistance around the 1.7900 major psychological level, creating an ascending triangle pattern on its 4-hour time frame. Price is still hovering around the triangle support near the 1.7750 mark, still deciding whether to make a bounce or a break.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the moving averages are close to the triangle support, adding to its strength as a floor. Stochastic is still heading down, though, so there’s room for price to drop. Note that the chart pattern is approximately 400 pips tall so the resulting breakout could last by the same amount.
Over the weekend, New Zealand reported stronger quarterly retail sales figures compared to the previous period. Headline retail sales ticked 2.0% higher while core retail sales advanced 2.1%. There have been no reports from the UK economy yesterday.
UK CPI is up for release today and a rebound is expected from 2.6% to 2.7% for the headline reading and from 2.4% to 2.5% for the core figure. Stronger than expected results could revive BOE tightening expectations while weak data could push the pound much lower.
New Zealand has its GDT auction coming up in the next Asian session and a rebound in dairy prices could lift the Kiwi. Quarterly PPI figures are lined up for Thursday.
By Kate Curtis from Trader’s Way
EURUSD Short-Term Downtrend (Aug 16, 2017)
EURUSD is starting to trend lower and move inside a descending channel formation. Price is bouncing off support and might be due for a test of the resistance at the 1.1800 major psychological level.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. However, the gap between the moving averages is narrowing to signal a potential upside crossover. If so, bulls could return to the game and push for an upside break of resistance.
Stochastic is heading higher to show that bullish momentum is still in play. This oscillator is already nearing overbought levels to signal rally exhaustion. In that case, the moving averages around the middle of the range could hold as resistance and trigger another move back to support.
Euro zone data turned out weaker than expected in the previous session as Germany printed a 0.6% expansion for Q2 versus the projected 0.7% growth figure. French and Italian banks were closed for the holiday so there were no other reports to prop up the shared currency.
Meanwhile, the US dollar drew strong support from upbeat retail sales and Empire State manufacturing index. Not only did the July figures beat expectations but the June report also enjoyed upgrades. Import prices came in line with estimates of a 0.1% uptick.
The euro region’s flash GDP is due today and analysts are expecting to see another 0.6% growth figure. The US has its FOMC minutes lined up and any remarks downplaying the odds of a September hike could be dollar bearish.
By Kate Curtis from Trader’s Way
NZDJPY Inverse Head and Shoulders (Aug 17, 2017)
NZDJPY appears to be done with its tumble as price is forming an inverse head and shoulders pattern on its 1-hour time frame. Price also seems to have broken past the neckline at 80.00 to confirm that gains are in the cards.
The chart pattern is approximately 100 pips tall so the resulting rally could be of the same size. However, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse.
Price is still testing the 200 SMA dynamic resistance but a break higher could be enough to confirm that buyers are regaining the upper hand. Stochastic is also pointing up to signal that bullish momentum is returning.
New Zealand reported stronger than expected quarterly PPI, which sets the tone for stronger inflationary pressures down the line. Over the weekend, the Q2 retail sales figures also indicated a strong pickup in consumer spending, which would likely support overall growth.
As for the yen, the pickup in risk appetite after concerns about North Korea eased is forcing the lower-yielding currency to retreat. However, Japan just reported stronger than expected trade balance, supporting the idea of JGB trimming by the BOJ.
There are no other reports due from either Japan or New Zealand for the rest of the week so this pair could move to the tune of overall market sentiment, which might be driven by headlines in the next few days.
By Kate Curtis from Trader’s Way
GBPJPY Triangle Breakdown (Aug 18, 2017)
GBPJPY was previously trading inside an ascending triangle visible on its daily time frame and has just broken below support to signal that bears have gotten the upper hand. The chart pattern is around 2300 pips tall so the resulting selloff could be of the same size.
The 100 SMA is still above the longer-term 200 SMA so the path of least resistance is to the upside. However, the gap is pretty narrow so a downward crossover could be possible, drawing more sellers in the mix. Stochastic is already indicating oversold conditions, though, so profit-taking could take place.
Economic data from the UK has been mostly stronger than expected this week, with the claimant count change, average earnings index, and retail sales all coming in higher than consensus. However, CPI was still notably weak and this carries the most weight in dictating BOE policy biases.
As for the yen, the lower-yielding currency is able to gain on risk-off moves in the past few days, as well as dollar weakness on the rumored resignations among top officials in Washington. There are prevailing speculations that the Trump administration will have a hard time pushing its fiscal policy reform forward now that several GOP members are distancing themselves from the President.
Japan is still set to print its CPI readings at the end of the week and strong figures could prompt more expectations of further BOJ tapering. The central bank has already trimmed its JGB purchases in its recent operations, adding another bullish factor for the Japanese currency.
By Kate Curtis from Trader’s Way
GBPNZD Range Setup (Aug 22, 2017)
GBPNZD has recently bounced off the top of its range at the 1.7900 major psychological level and is making its way to the bottom at 1.7400. If this holds as support, another bounce back to the resistance could take place.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside, which means that the support is more likely to hold than to break. These moving averages could also hold as near-term inflection points.
Stochastic is pulling up to show a return in buying pressure as well, which signals that bulls could push price back up for another test of resistance.
UK Rightmove HPI printed a 0.9% drop in price levels versus the earlier 0.1% uptick. Only the CBI industrial orders expectations report is due today and a dip from 10 to 8 is eyed.
In New Zealand, credit card spending ticked up by 7.2%, slower than the earlier 8.3% gain. There are no reports due from New Zealand for the rest of the day, leaving the Kiwi at the mercy of market sentiment.
More volatility for this pair could be seen later in the week with the release of the UK preliminary GDP and the Jackson Hole Symposium. New Zealand also has its trade balance lined up on Thursday’s early Asian session.
By Kate Curtis from Trader’s Way
EURUSD Short-Term Range (Aug 23, 2017)
EURUSD has been moving inside a range visible on its 1-hour time frame, finding support at the 1.1700 mark and resistance at 1.1800. Price is currently hovering around the mid-channel area of interest and could be due for a move back to support.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. However, these moving averages are also holding as dynamic support for the time being and may be enough to push price back to the top of the range. Stochastic is on its way up to indicate that buyers are in control of price action for now.
The spotlight is on ECB Governor Draghi’s upcoming speech in the Jackson Hole Symposium as many are counting on him to share more details on tapering asset purchases. However, the latest ECB statement revealed that policymakers aren’t keen on giving more clues on their next moves just yet.
Meanwhile, the dollar has gained some support from safe-haven flows as the tensions with North Korea are resurfacing. The joint military exercises between the US and South Korea aren’t being viewed favorably by Pyongyang so there are concerns that this could prompt missile action from Kim Jong Un.
Euro zone data turned out weaker than expected so far this week as the German ZEW economic sentiment index fell from 17.5 to 10 versus the 14.8 consensus while the region’s index dropped from 35.6 to 29.3. Flash manufacturing and services PMIs are due and strong reports could allow the shared currency to rebound.
By Kate Curtis from Trader’s Way
AUDNZD Potential Correction (Aug 24, 2017)
AUDNZD has been trending higher but is recently testing a ceiling at the top of its ascending channel visible on the 4-hour time frame. Price could be due for a correction to the channel support and applying the Fib tool shows the potential inflection points.
The 61.8% Fib is closest to the channel support at the 1.0850 minor psychological level and the 100 SMA, which could hold as dynamic support. This short-term moving average is above the longer-term 200 SMA to signal that the path of least resistance is to the upside.
However, stochastic is turning lower to show that profit-taking is likely to happen soon. In that case, the resistance is likely to hold and might provide an opportunity for a countertrend play.
The Kiwi was weighed down by the release of the New Zealand Treasury’s pre-election update, which contained downgrades on growth forecasts and a less upbeat view on employment and wages. New Zealand’s trade balance is up for release next and a narrower deficit of 200 million NZD is eyed compared to the earlier 242 million NZD shortfall, likely indicating a pickup in export activity.
Meanwhile, the Aussie has been able to stay afloat on the lack of negative updates from the Land Down Under. The comdoll has also drawn support from a rebound in iron ore prices after the commodity rebounded off technical support levels. There are no major reports lined up from both Australia and New Zealand until the end of the week, though, so profit-taking or consolidation could ensue.
By Kate Curtis from Trader’s Way
EURCAD Bearish Channel (Aug 25, 2017)
EURCAD is trending lower and is moving inside a short-term descending channel visible on the 1-hour chart. Price just bounced off the resistance and is making its way back to support at the 1.4700 handle.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, which means that the downtrend is more likely to continue than to reverse. In addition, the 100 SMA appears to be holding as dynamic resistance while the 200 SMA is close to the channel resistance, adding an extra layer of resistance.
Stochastic is on the move up, though, so there may be some bullish pressure left in play. In that case, another test of the channel resistance could take place before more bears push for the trend to resume.
There have been no major reports from the euro zone in the previous trading sessions, leaving traders to price in their expectations for ECB head Draghi’s speech in Jackson Hole. According to a source from the ECB, policymakers aren’t ready to share more details on their next policy moves just yet, which suggests that there could be room for disappointment during the event.
As for the Canadian dollar, the currency has been able to hold on to its gains despite the dip in crude oil. Hurricane Harvey is projected hit Texas on Friday so refineries are ramping up output to prepare for likely shutdowns when the storm hits. This could keep supply elevated throughout next week, possibly leading crude oil to retreat.
By Kate Curtis from Trader’s Way
NZDJPY Support Turned Resistance (Aug 28, 2017)
NZDJPY recently broke below support at the 79.50 minor psychological level then dipped to the 78.50 mark. Price pulled up from there and applying the Fibonacci retracement tool on the latest swing high and low on the 1-hour time frame shows that the 61.8% level lines up with the broken support.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In fact, the 100 SMA already seems to be holding as dynamic resistance at the moment since it lines up with the 50% Fib. A larger pullback could last until the 200 SMA just past 79.50.
Stochastic is on the move down so the pair might follow suit, but the oscillator also seems to be turning higher to suggest that Kiwi bulls aren’t giving in so easily.
Economic data from Japan turned out mixed last week, with the national core CPI advancing from 0.4% to 0.5% and the Tokyo core CPI beating expectations by posting a 0.4% gain. The services producer price index, however, came in short of expectations with a 0.6% gain versus the 0.8% consensus.
Japan is set to print its household spending report and unemployment rate on Tuesday. Retail sales and preliminary industrial production data are also lined up for the week. There are no major reports from New Zealand so market sentiment could be responsible for directing Kiwi price action.
By Kate Curtis from Trader’s Way
EURCAD Inverse Head and Shoulders (Aug 29, 2017)
EURCAD seems ready to go for a move higher as it formed an inverse head and shoulders pattern on its daily time frame. Price has yet to break past the neckline at the 1.5000 major psychological level before confirming the potential long-term climb. The chart pattern is approximately 500 pips tall so the resulting rally could be of the same size.
The 100 SMA is safely above the longer-term 200 SMA so the path of least resistance is to the upside. The 100 SMA also recently held as dynamic support and might continue to do so in the event of another pullback. Stochastic hasn’t quite reached oversold levels on the daily time frame yet but the oscillator is already pulling up to signal a return in bullish momentum.
Crude oil has tumbled nearly 3% at the start of the week as investors are worrying about a potential buildup in supply while refineries in Texas are shut down due to Hurricane Harvey. The tropical storm is expected to move to Louisiana later in the week and might lead to temporary closures in processing facilities there as well.
Medium-tier data from the euro zone has been weaker than expected so far this week but traders appear optimistic that the ECB is moving closer to tapering its asset purchase program sooner or later. The German GfK consumer climate index is due later today and no change from the 10.8 reading is eyed.
Also due today are the French consumer spending and preliminary GDP numbers, and upbeat results could give the euro another boost. As for the Canadian dollar, the RMPI and IPPI could prove to be short-term catalysts if they come in significantly stronger or weaker than expected.
By Kate Curtis from Trader’s Way
EURCAD Double Top (Sep 05, 2017)
EURCAD could be in for a selloff as the pair formed a double top classic reversal pattern and broke below the neckline at the 1.4750 minor psychological level. Price is pulling up to this broken support level, which might now hold as resistance.
The 100 SMA is still above the longer-term 200 SMA, though, so the path of least resistance might still to the upside. However, the gap between the moving averages is narrowing to signal a potential downward crossover and pickup in selling pressure. Stochastic is on the move up to signal that buyers still have the upper hand until the oscillator reaches the overbought level and turns lower.
Data from the euro zone has been mixed so far this week, with the Spanish unemployment change falling short of estimates and the Sentix investor confidence index turning out higher than consensus. Canadian banks were closed for the holiday on Monday so the Loonie has taken its cue from crude oil prices and market sentiment.
Both the ECB and the BOC have monetary policy statements lined up this week so there could be room for a lot of volatility for this pair. These central banks are among the more hawkish ones so expectations are running high for comments on tapering for the ECB and another potential hike from the BOC.
Disappointment from either central bank could mean big moves for this pair. There have been talks of potential ECB jawboning as the shared currency has been advancing against its peers in the past weeks while the Loonie could stay sensitive to overall risk sentiment and crude oil action.
By Kate Curtis from Trader’s Way
AUDNZD Short-Term Triangle (Sep 11, 2017)
AUDNZD has been moving sideways recently with higher lows and lower highs creating a symmetrical triangle pattern on its 1-hour time frame. Price has just bounced off support and could be due for a test of resistance again.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This suggests that an upside break is more likely to occur than a break lower, although it’s also worth noting that the gap between the moving averages is narrowing to show a slowdown in bullish momentum.
Stochastic is turning higher to indicate that bulls could stay in control until the oscillator reaches overbought levels. The chart pattern is approximately a hundred pips tall so the resulting breakout could be of the same size.
The main event risks for the Aussie this week is Australia’s jobs report, which might show a 19.2K gain in hiring versus the earlier 27.9K increase. Stronger than expected results could lead to an improvement in the 5.6% jobless rate and more gains for the Aussie.
Meanwhile, the Kiwi has medium-tier reports like the FPI and Business NZ manufacturing index on the docket. China is also set to print its industrial production, retail sales, and fixed asset investment figures due this week and these could be catalysts for additional volatility as well.
By Kate Curtis from Trader’s Way
EURUSD Double Top (Sep 12, 2017)
EURUSD appears to be tired from its climb as the pair is forming a double top reversal pattern on its 4-hour time frame. Price failed in its last two attempts to break past the 1.2070 area and is on its way to testing the neckline at the 1.1850 minor psychological support.
A break below the neckline support could confirm the potential selloff, which might last by around 200 pips or the same height as the chart formation. However, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. In addition, the moving averages are close to the neckline, adding strength to support.
Stochastic is pointing down to indicate that sellers are in control of EURUSD price action, but the oscillator is closing in on the oversold level to signal that profit-taking might happen soon.
The dollar has been able to recover against most of its peers at the start of the week, thanks to strong stock market performance and easing geopolitical concerns. The US government has dialed down on its proposed sanctions on North Korea, lowering the chances of another retaliation from the hermit nation. Apart from that, news that Hurricane Irma is weakening has also been positive for the US markets.
Data from the euro zone has been stronger than expected as Italian industrial production ticked 0.1% higher instead of posting the projected 0.5% decline. French final non-farm payrolls for Q2 and the Italian quarterly unemployment rate are lined up next. Only the NFIB Small Business Index and JOLTS job openings are due from the US today.
Keep in mind, however, that the ECB is currently undergoing tapering expectations for either October or December even after Governor Draghi tried to downplay the idea in their statement last week. Meanwhile, Fed rate hike expectations for this month are running low but the idea of starting the balance sheet runoff could still keep the dollar supported.
By Kate Curtis from Trader’s Way
