• USD/CAD bulls are pressuring the bears at critical resistance. 
  • The loonie struggles in the face of a strong dollar.

The US dollar is firm mid-week and the commodity currencies have been under pressure. This leading to a resurgence in USD/CAD into daily resistance.

USD/CAD daily chart

The daily chart shows the price stalling on the upside but bulls have moved for another attempt which would likely see a continuation on the break of this current resistance near 1.2700. 

USD/CAD hourly chart

The price is trying to break out beyond the new counter-trendline but the price is correcting the secondary breakout impulse first.

The price is on the verge of a test of the 1.2680s ahead of the mid 1.2670s as critical support structures.

  • EUR/GBP eases from weekly top, edges higher of late.
  • Sustained bounce off 61.8% Fibonacci retracement, break of 200-SMA favor buyers.
  • UK CPI may arrive firmer for August, backing BOE tapering concerns and the GBP bulls.

EUR/GBP struggles to extend recovery moves around 0.8550 during Wednesday’s Asian session. In doing so, the cross-currency pair steps back from the 38.2% Fibonacci retracement (Fibo.) level of August-September upside.

Given the steady RSI and a pullback from the short-term key Fibo. level, EUR/GBP may retest the 200-SMA level surrounding 0.8540.

However, any further downside past 0.8540 remains doubtful as to the 61.8% Fibonacci retracement near 0.8510 and the 0.8500 threshold challenges the bears afterward.

Meanwhile, an upside clearance of 38.2% Fibo near 0.8550 will direct EUR/GBP buyers to a three-week-old horizontal resistance near 0.8565.

Also acting as an additional upside filter is the 23.6% Fibonacci retracement around 0.8575 and the monthly peak of 0.8613.

To sum up, EUR/GBP consolidates recent gains but the bears need confirmation to step in. Also, today’s UK CPI data will be important to watch given the latest chatters over the winding up of the Quantitative Easing (QE) by the BOE’s Husher, also previously backed by the other policymakers. That said, the headline CPI is likely to jump from 2.0% to 2.9% YoY.

EUR/GBP: Four-hour chart

Trend: Further upside expected

 

  • AUD/NZD is consolidated at a key area following a choppy day on Wall Street.
  • Key data is on the cards for the week.

The Kiwi is under pressure despite the US Consumer Price index data, which raises questions about when the Federal Reserve might taper. However, despite that, markets were keen to fade US dollar weakness, especially against AUD and NZD. This leaves AUD/NZD floundering after last week’s break and it is right on a key level at this juncture, as analysts at ANZ Bank noted, expecting a sustained break in due course. 

Meanwhile, US stocks were also pressured which helped to keep the pressure on the antipodeans.  The S&P 500 was down 0.57% while the Dow Jones was down 0.84% by the close. In Europe, the Euro Stoxx 50 lifted 0.1% but the FTSE 100 fell 0.5%. The US 10-year was 6bps lower at 1.27%. The CRB index was up 0.15%.

Key data events

Meanwhile, New Zealand’s Gross Domestic Product is tomorrow. ”We remain of the view that the hurdle for optimism is high given what’s priced in (in terms of RBNZ hikes) into short end interest rates and note that the Kiwi has broken lower on a number of crosses,” analysts at ANZ bank argued. For today, Aussie New Home Sales is up next ahead of Chinese Retail Sales before tomorrow’s all important Aussie Employment data. 

 

  • AUD/USD remains pressured after the heaviest daily fall in a week.
  • MACD conditions, downside break of 50-DMA favor sellers.
  • Bulls need to refresh monthly top for fresh entry.

AUD/USD stays depressed around 0.7315 after declining the most in a week the previous day. Although 20-DMA challenges the pair sellers, a clear downside break of 50-DMA, backed by downbeat MACD signals, keeps bears hopeful.

However, the 20-DMA level of 0.7315 and the 0.7300 round figure challenge the pair’s short-term declines.

Also acting as the key support is 23.6% Fibonacci retracement of AUD/USD south-run from June 25 to August 20, near 0.7225, which holds the key to the pair’s slump towards the yearly low of 0.7105.

Meanwhile, corrective pullback needs to cross the 50-DMA level of 0.7355 before directing the pair buyers to the 61.8% Fibonacci retracement level of 0.7420.

Even so, the quote remains on the bear’s radar until it stays below the monthly high of 0.7478.

Overall, AUD/USD bears are in control but may take a breather around the short-term moving average support.

AUD/USD: Daily chart

Trend: Further weakness expected

 

  • EUR/USD is under pressure near the 61.8% ratio on the daily chart.
  • The hourly W-formation’s neckline could be targeted. 

EUR/USD is resting at an hourly pivot point and the 61.8% ratio of the daily bullish impulse. A break of this level opens hourly support that could be the last defence for the 1.1750 target and daily support structure. 

EUR/USD daily chart

The bulls are holding the fort at the 61.8% ratio and a break there opens risk of a test of daily structure near 1.1750.

Hourly chart

 

From an hourly perspective, a break of the support will reveal the neckline of the W-formation, a high completion reversal chart pattern. The neckline is just below the 1.18 psychological level and current support. 

  • WTI edges higher after refreshing multi-day tops, pauses three-day uptrend.
  • API inventories dropped more than previous levels during the week ended on September 10.
  • Firmer USD challenges commodity buyers but Hurricane Ida keeps them hopeful.
  • China data dump, EIA inventories and risk catalysts eyed for fresh impulse.

WTI seesaws around $70.50 after a three-day uptrend to early August levels amid Wednesday’s Asian session. While hurricane Ida and tropical storm Nicholas pleased oil bulls to refresh multi-day top the previous day, US dollar strength challenged the energy bulls despite price-positive private inventory data.

The weekly reading of the American Petroleum Institute (API) Crude Oil Stocks dropped below -2.882M prior to -5.437M during the week ended on September 10. News sources mark hurricanes as the major blow to the latest inventory data. “Energy companies in the US Gulf of Mexico dealt with a fresh blow from Tropical Storm Nicholas that made landfall as a hurricane early on Tuesday, almost two weeks after Hurricane Ida knocked off oil and gas production in the region,” said Reuters.

On a different page, the US Dollar Index (DXY) bounced off a one-week low to regain 92.60-65 levels following the US CPI data release for August. That said, the US CPI dropped the most since January on monthly basis to 0.3% versus 0.4% expected and 0.5% prior. The CPI ex Food & Energy also dropped below 0.3% expected and previous readings to 0.1% during August, marking the biggest fall in six months.

It’s worth noting that Iran’s readiness to back the nuclear investigations and the US-China tussles are some more catalysts challenging the black gold prices, in addition to the US dollar strength.

Moving on, the official inventories from the Energy Information Administration (EIA), prior -1.529M, will be important for the WTI crude oil prices. Before that China’s Retail Sales and Industrial Production details will join the aforementioned risk catalysts for fresh impulse.

Technical analysis

The monthly resistance line near $71.05 guards WTI’s immediate upside but the bears remain out of the radar until the quote stay beyond the $69.30 support confluence including 50-DMA and previous resistance line from early July.