By Deepta Bolaky
The US financial markets were closed for Labor Day. The immediate attention was on President Donald Trump who raises the idea of decoupling the US and Chinese economies. Ahead of the US election, markets are expecting the Trump Administration to ramp up the rhetoric to curb the relationship between the US and China.
After last week’s sell-off, European stocks rallied on Monday:
In the FX space, major currencies were generally weaker than the US dollar. It was a relatively subdued data with major pairs trading in familiar ranges. The focus was on the Pound Sterling ahead of the 8th round of negotiations between the European Union and the United Kingdom which is scheduled to take place from Tuesday 8 September to Thursday 10 September 2020 in London.
For the chart of the day, Adam Taylor CTEe takes a look at the NZDJPY pair.
As we start a fresh new trading week, NZDJPY has made our Chart of The Day on the four-hour time frame. We’ll be examining the pair using the Ichimoku Cloud method.
Despite the bearish tones presented in the shorter-term time frames, including the drop of almost 100 pips since the beginning of September, the Kiwi Yen cross remains subtly bullish as we check out the various indicators shown above.
Firstly, note the lagging span (purple line) sits way above the cloud, and price action currently sits well above the 200 Day moving average line. Both of these highlights the overall bullish sentiment longer-term for the pair.
You can also clearly see how innately price action is respecting the cloud level of 71.11 as support. Should this move continue to appreciate these elements, we may witness a re-test of the 72.00 regions before shifting higher during the upcoming sessions.
On the other hand, if sellers regain some ground in the short-term, then the missed weekly pivot level of 70.50 may become a primary downside target. It’s also coupled with the 200-day moving average line nearby, so theoretically, it should hold as a substantial area of support for NZDJPY.
On the economic front, China’s exports grew by 9.5% in August, while imports shrank by 2.1%, as the country’s overall trade surplus narrowed.
Crude oil prices fell the most in over a month last week over fears on the demand outlook. Larger-than-expected draw in inventories reported by the EIA and API failed to lift crude oil prices as it coincided with the decrease in output production related to Hurricane Laura. Amid a lack of drivers and a public holiday in the US on Monday, crude oil prices remained range-bound. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $39.21 and $42.01 respectively.
It was a pretty dull day for gold traders. The precious metal was confined to tight intraday ranges. As of writing, the XAUUSD pair has consolidated around $1,930.
Source: GO MT4
By Deepta Bolaky
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|Wednesday, 09 September 2020
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