Dollar Falls against the Currencies and Turkish Lira is falling again and the markets are waiting for heavy economic events this week

The Dollar fell across the board as speculative long bets headed for the exits. Emerging market currencies ended mixed with the Turkish Lira weaker and the Chinese Yuan stronger.

Dollar Falls against the Currencies and Turkish Lira is falling again and the markets are waiting for heavy economic events this week

dollar and turkish lira falling

The Dollar fell across the board as speculative long bets headed for the exits. Market positioning from the latest CFTC/Reuters report saw net total long US Dollar bets at their largest since Q1 2017. Optimism on US-China trade talks proved the catalyst for the Greenback’s reversal. Emerging market currencies ended mixed with the Turkish Lira weaker and the Chinese Yuan stronger.

Outlook: While today’s data calendar is light, the week ahead sees monetary policy meeting minutes from the RBA (tomorrow), the Fed (Wednesday) and ECB (Thursday). The week culminates with the Fed’s annual Jackson Hole conference on Friday. Against the backdrop of the calm and majestic Wyoming mountains, the world’s top central bankers and finance ministers attempt to fix the globe’s rocky setting and Emerging market turmoil. This year’s conference could be huge for the markets amid the current background. I’ve enclosed below a brief on what Jackson Hole is

What is the Jackson Hole Symposium ?-The Jackson Hole Economic Symposium is an annual symposium, sponsored by the Federal Reserve Bank of Kansas City since 1978, and held in Jackson Hole, Wyoming, since 1981. The symposium focuses on an important economic issue that faces the U.S. and world economies. Participants include prominent central bankers and finance ministers, as well as academic luminaries and leading financial market players from around the world.

The symposium proceedings are closely followed by market participants, as unexpected remarks emanating from the heavyweights at the Symposium have the potential to affect global stock and currency markets.

Start Trading Today

Trading View: The Dollar’s reversal which began Friday has further to go. The latest CFTC/Reuters report (week ended 14 August) showed that total net speculative Dollar longs are at their largest since early 2017. Speculators were long of the Greenback against every individual major currency on the report (EUR, JPY, AUD, GBP, CAD, CHF, NZD).

The data calendar is light today. Data released on Friday saw New Zealand Producer Prices and Canada’s inflation numbers beat forecasts. While the US University of Michigan Consumer Sentiment Index came in weaker than expected.

USD/DXY – The Dollar Index closed 0.53% lower at 96.132 (96.587 Friday). After trading to 96.984 on Thursday, the weight of long Dollar bets pushed the Index lower. Overnight low traded was 96.092. We can find immediate support at 96.00 and then 95.75. Immediate resistance lies at 96.20/30. The reversal from the high just under 97.00 could see the Dollar Index correct further to 95.50 where the topside break-out began. Likely range today 95.85-96.35. Prefer to sell rallies.

AUD/USD – Aussie shorts chased the Battler higher to an NY close of 0.7315, up 0.67 % from 0.7263 Friday. Commodity prices extended their rally with Copper gaining a further 0.3%. AUD/USD traded to an overnight high of 0.73193 overnight. The immediate resistance can be found at 0.7320, followed by 0.7350. Immediate support lies at 0.7290 and then 0.7260. The latest CFTC/Reuters report saw net speculative Aussie shorts pared to -AUD 51,783 contracts from -AUD 54,540. The total number of short bets are still the largest since November 2015. That’s huge and we could potentially see further short-covering back to 0.7450/0.7500. Today should see a likely range of 0.7285-0.7345 with the preference to buy on dips. RBA meeting minutes from their last meet are due tomorrow.

AUD/USD

EUR/USD – had a good bounce back to 1.14448 overnight from 1.1378 Friday. EUR/USD closed at 1.1442 in New York, not far from its highs. Euro Zone CPI data released Friday were exactly as forecast. The weaker trend of Euro Area data has stopped for the time being… Tomorrow sees French, German and Euro area Manufacturing PMI’s as well as the ECB Meeting minutes on Thursday. EUR/USD has immediate resistance at 1.1450 and then 1.1480 followed by 1.1500. A corrective move back to 1.1500 cannot be ruled out. The first break lower from 1.1500 ended briefly at today’s current rate of 1.1445. Immediate support can be found at 1.1400 and then 1.1380. Look for consolidation with today’s likely range 1.1390-1.1460. Prefer to buy dips.

EUR/USD

Start Trading Today

USD/JPY – slip-sliding away. The Dollar closed at 110.53 in New York, down 0.49% from Friday’s 110.92. Overnight low traded for USD/JPY was 110.315. Immediate support can be found at 110.30 and then 110.10. Immediate resistance lies at 110.70 and then 111.00. The Japanese will have much on their minds as they prepare for Jackson Hole. Japan’s exports to the US slumped 5.2% in July. Trump’s best friend today remains Japanese PM Shinzo Abe. Car exports to the US plummeted over 12 % even before Trump’s 25% tariffs have been enacted. With that kind of numbers on the trade front, Japan will not want to see its currency depreciate any further. Likely range today 110.00-110.70. Look to sell rallies.

USD/JPY

GBP/USD – Brexit headwinds continue to dog the Pound which managed a mild rally against the overall weaker Dollar to 1.2752 from 1.2717 Friday. GBP/USD traded to an overnight high of 1.27527 which is not far from current levels. Immediate resistance can be found at 1.2760 and then 1.2790. Immediate support lies at 1.2725 followed by 1.2705. Latest UK retail sales data has shown some momentum come back to the British economy. Look for a likely range today of 1.2710-1.2810. Prefer to buy dips, with a bigger squeeze of shorts closer to reality.

GBP/USD

Start Trading Today

USD/ZAR – The rand remained volatile on Friday morning, first strengthening by 0.75% before weakening by 1.7% to briefly trade under R15/$.  

The local currency, which has been experiencing large swings in recent days on the back of broad emerging market weakness and local economic concerns, opened at R14.73/$ and strengthened to R14.62/$ before falling back to change hands at R14.80/$ at 10:54. In then quickly lost 20c to the dollar to fall under R15/$ before pulling back to trade at R14.94 at 11:29.

USD/ZAR

Events and economic data releases for the week ahead: Tuesday: RBA Meeting Minutes; UK Public Sector Net Borrowing. Wednesday: NZD Headline and Core Retail Sales (July); Canadian Headline and Core Retail Sales for July; US Existing Home Sales; FOMC Meeting Minutes. Thursday: French, German Manufacturing and Services PMI, Euro Zone Services PMI; ECB Monetary Policy Meeting Accounts; US Flash Manufacturing and Services PMI and New Home Sales. Friday: Jackson Hole Symposium starts; NZ Trade Balance, US Headline and Core Durable Goods Orders. Fed Chair Jerome Powell to speak at the Jackson Hole conference.

 

Now is your chance to make a profit!

Open an account here!

 

***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.

 

HIGH-RISK WARNING:

Trading Forex (Foreign Exchange) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

© Copyright 2015 – CM Trading – All rights reserved

 

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on email
Email

Recent .

Stock of the Week: Apple in huge demand, beats estimates by billions.

Stock of the Week: Apple in huge demand, beats estimates by billions. Apple beat estimates for quarterly earnings by billions of dollars. We look at …

Read More →
Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
Dollar still on ten month lows while AUD gains
Stock Market Forecast: S&P 500, Dow Jones, NASDAQ Predictions and Analysis for 2021

With 2021 just around the corner, financial analysts are offering their outlook on where the stock market is headed in the coming year — and many of these experts are hoping for a bullish outcome. Read on.

Read More →
˄