Markets in Motion: Today's Forex Vibes & Volatility

Market Analysis

GOLD

GOLD is currently consolidating after testing the lower boundary and is now testing the EMA200. While this consolidation is happening within the larger range, we expect further bearish movement as prices maintain a selling structure. For the time being, we will wait to see how the markets will progress in the coming days.

SILVER

Prices show weakness after multiple tests of the 36.7308 resistance level failed. Prices are currently seeing growth in bearish movement. There is still a chance for prices to maintain a consolidation as the price is within its range, but it is no longer being squeezed by the EMA200. We will wait for a clear break of structure.

DXY

The Dollar‘s sudden weakness came after yesterday’s Core Producer Price Index (PPI) data was released, coming in weaker than expected at 0.0% versus a 0.2% forecast. There was also some added traction last night from news of a rumor that President Trump was firing Fed Chair Powell, which was quickly extinguished after Trump denied the claims. The RSI and the MACD are currently seeing a sudden drop. The RSI is nearing overbought levels [on bounces], showing that there is potential for the sell-off to continue. However, it is important to note that this might be reflecting the price reaction to news rather than broader market volatility.

GBPUSD

The Pound consolidated last night. There is some traction due to the sudden weakness in the Dollar. However, it is still expected that prices will continue lower, as the overall price action is very bearish. Even if the MACD and the RSI are showing increased bullish momentum and volume, this is likely being caused by the recent news-driven volatility. We will wait for the market to normalize before taking action.

AUDUSD

Weakness in the Aussie Dollar follows our expectations, as a significantly weaker-than-expected jobs report was released this morning. The data showed Employment Change at only +2k (versus a +21k forecast) and the Unemployment Rate rising to 4.3% (versus a 4.1% forecast). This has drawn concerns from analysts, with some thinking that the RBA's decision to hold back on rate cuts was a wrong call. Abhijit Surya, an economist at Capital Economics, noted, "The sharp rise in Australia's unemployment rate in June to 4.3% makes the Reserve Bank of Australia's decision to leave rates on hold earlier this month look like a policy error." Surya added that he's increasingly convinced the incoming data will prompt the RBA to cut rates further than most are currently anticipating.

NZDUSD

The Kiwi is currently experiencing increased selling momentum and volume. The expectation now is that this selling pressure will continue in the coming days. Therefore, we will be looking for more bearish opportunities in this market.

EURUSD

Euro prices remain bearish, even with the exaggerated wick from last night's trading. The MACD is finding bullish volume while the RSI is reporting oversold levels. Although, like all the other pairs, we will wait to see how prices normalize before reading too deeply into the indicators. For now, it is important to note that the overall price action is still very bearish.

USDJPY

Not much has changed with the Yen, only that there is more structure for buying [in USD/JPY] to come from now after the wick was used to test the EMA200. Despite the MACD and RSI currently showing selling pressure, the price action is holding at key support, suggesting a potential reversal. We are therefore more confident in looking for buying opportunities now.

USDCHF

The Franc is currently seeing increased bullish momentum and volume [for USD/CHF]. There is an opportunity for prices to continue bullishly in the coming days, but we also continue to see underlying strength in the Franc itself. We will follow the technical readings for the pair; with the MACD and the RSI finding increased bullish momentum and volume, we will continue to look for more buying opportunities.

USDCAD

The CAD is still consolidated. We will wait for the consolidation to end.