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USD Gains A Bit Yet Ended Last Week Lower

The greenback seems to have begun the week on the front foot, as traders begin to prepare for some high impact financial releases scattered through the week, while on fundamentals, the Fed’s intentions are still considered of key importance and rising US yields on Friday provided support. It should be noted that during today’s Asian session Philadelphia Fed President Patrick Harker added to the market’s concerns, sounding somewhat hawkish as he expressed the hope for FOMC to start tapering soon, possibly this year. In a rather slow Monday, given the low number of high impact financial releases, traders may remain patient for Tuesday’s August CPI release, while fundamentals may take the lead for now. US stockmarkets were for a fifth consecutive day in the reds, as worries for the economic rebound of the US seem to persist. Gold prices traded in rather narrow range during today’s Asian session, and we expect issues such as the direction of the USD and US yields, as well as the Fed’s intentions and the expectations for the US CPI data of Tuesday to be among the main factors for its direction. The sterling also tended to remain rather stable against the USD and the EUR on Friday, yet gained against JPY, as GBP traders prepare for a number of important financial releases due out this week, while BoE in the past week sounded rather confident. The Canadian Dollar retreated against the USD as the Canadian elections on the 20th of September are nearing and uncertainty seems to remain high about the result, which could weigh on the CAD, despite oil prices rising during Friday’s session. Oil prices rose, as worries for production levels seemed to rise, given that the production at the Gulf of Mexico seems to remain low after hurricane Ida’s passing.

The USD index rose aiming for the 92.75 (R1) resistance line, yet the picture of a sideways movement seems to be maintained. Please note that the RSI indicator below our 4-hour chart is higher than the reading of 50 with an upward slope which may imply a slight advantage for the bulls. Should the USD remain in high demand, we may see the Index breaking the 92.75 (R1) resistance lien and aim for the 93.20 (R2) level. Should a selling interest be displayed by the market we may see the USD reversing course and take aim for the 92.30 (S1) support line and if broken the path opens for the 91.75 (S2) support level.

Gold prices maintained a tight range bound movement just below the 1800 (R1) resistance line. We tend to maintain our bias for a sideways movement for the precious metal and the RSI indicator below our 4-hour chart is below the reading of 30, yet with an upward slope, which may imply that the bearish sentiment may be dwindling. Should the bulls actually take charge of the bullion’s direction, we may see gold’s price aiming if not breaking the 1760 (S1) support line. Should the bulls take over we may see gold’s price breaking the 1800 (R1) resistance line and aim for the 1835 (R2) level.

Other economic highlights today and the following Asian session:

On a slow Monday we note Turkey’s current account balance, while during tomorrow’s Asian session we note Australia’s Home Price index for Q2 and NAB indicators for August, as well as RBA Lowe’s speech.

As for the rest of the week

On Tuesday we get the UK employment data for July while we highlight the US CPI rates for August. On Wednesday we get China’s industrial output for August and UK’s, Frances’ and Canada’s CPI rates for August, while the US industrial production growth rate for August should not be underestimated. On Thursday we note New Zealand’s GDP rate for Q2, Australia’s employment data for August and in the American session, we get the weekly initial jobless claims figure, the Philly Fed Business index for September and the retail sales for August. On Friday we note UK’s retail sales for August, Eurozone’s final HICP rate for August and the US preliminary University of Michigan consumer sentiment for September.

USD Index H4 Chart

Support: 92.30 (S1), 91.75 (S2), 91.30 (S3)

Resistance: 92.75 (R1), 93.20 (R2), 93.70 (R3)

XAU/USD H4 Chart

Support: 1760 (S1), 1725 (S2), 1680 (S3)

Resistance: 1800 (R1), 1835 (R2), 1875 (R3)

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