CURRENCY HIGHLIGHTS – September 2019
EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. The European Central Bank announced a stimulus package to boost growth and inflation. The US Federal Reserve is expected to cut rates by 25bps next Wednesday. Pressure on EUR/USD not over yet, the bearish path is set to continue.
The EUR/USD pair is closing a second consecutive week with gains at around 1.1070, retreating from a high at 1.1109. A scarce macroeconomic calendar kept the pair in a dull range during the first half of the week, also the wait and see stance ahead of the ECB monetary policy decision on Thursday. One done, one to go, as the US Federal Reserve will be announcing its decision on monetary policy next Wednesday, September 18.
Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 is the critical Fibonacci support.
The USD/JPY pair maintains its bullish stance according to intraday technical readings, although the volume momentum is missing. In the 4 hours chart, the pair is above a bullish 20 SMA, while the 100 SMA is crossing above the 200 SMA in the 106.60 region. Technical indicators have eased within positive levels, with the Momentum maintaining its bearish slope, but the RSI is flat at around 62. A key support is located at 107.45, the 61.8% retracement of the August decline. The bullish case will remain in place as long as this level contains declines.
GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension, as UK prime minister Boris Johnson faces growing criticism.
Sterling has nudged higher over the month, aided principally by slightly better-than-expected wages, jobs and retail sales data. UK inflation also edged higher and in a world without Brexit, these releases would have the Bank of England discussing whether the current monetary policy was appropriate or if it needed to be tightened. However, as has been the case for many, many months, Brexit is still the driver for Sterling and will remain so until October 31.
Sterling technical are covered in a different section but the chart below shows a familiar pattern. Since late-April there have been three occasions when moves lower are met with a quick reversal before the overall bearish pattern takes over.
The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand.We believe Gold is setting up for an upside breakout move after breaking predicted targets above $1450.
The yellow metal is trading in a bull trend above its main daily simple moving averages (SMAs). The market is challenging the 1,485 support above the 50 SMA. A break below the level can open the doors to a selloff towards the 1,400 figure.
The first level of resistance is likely the 1,520.00 resistance followed by 1,560 near the 2019 high.
BITCOIN and ALTCOINS
Since our recent BTC analysis, Bitcoin has stabilized in a range between $10.000 and $10.800. Most of altcoins dropped slightly against Bitcoin who remains the absolute king of digital assets in the moment. Many other players are also entering blockchain and crypto field and the future of money is digital for sure.
Institutional investors are investing 200-500 million dollars weekly. Daily volume of trading with cryptocurrencies has surpassed 50 billion dollars. The general sentiment in the crypto market is very positive and as said many times already, we expect a huge breakout of cryptocurrency.