1. Forex Market Insight
The U.S. dollar index fell by 0.31% to 92.22. The U.S. initial jobless claims fell last week while layoffs fell to their lowest in 24 years. However, the rising Covid-19 cases have threatened the economic recovery in recent weeks, preventing the Federal Reserve from withdrawing its massive stimulus program. Meanwhile, eurozone inflation rose to 3% in August, pushing the euro to its highest level since 4th August 2021.
Data released yesterday showed that manufacturing in the region remains strong, but supply chain issues are pushing up prices. Recent comments from ECB hawks, including Austrian Central Bank President Holtzmann and German Central Bank President Weidmann, have also supported the euro. European Central Bank President Lagarde said the region is recovering from the epidemic and only needs “surgical” support.
(EUR/USD 1-hour chart)
Yesterday, the euro pulled up strongly and rose to the target level of 1.1880. Today, the euro is within the ascending channel. Therefore, the bullish trend above the middle of the Bollinger Band is maintained. When the strength of the euro falls below the middle of the Bollinger Band, it is possible to open up further room for correction. At that time, pay attention to the 1.1820-line. Once the euro falls below 1.1820, it will open up further downside potential.
GBP Intraday Trend Analysis
British Prime Minister Boris Johnson is expected to announce a tax increase next week to fund the biggest overhaul for Social Care. In addition, Johnson is planning to reveal an increase in National Insurance and approximately 25 million people will be paying additional taxes.
(GBP/USD 1-hour chart)
The pound is still paying attention to the 1.3798 line today. If the pound steadily runs above the 1.3798-line, it will form a bullish trend. At that time, the main idea will be taking advantage of the maintained trend. If the strength of the pound falls below the 1.3798-line, it could possibly open up further room for correction. On the lower end, pay attention to the 1.3771-line of support. Once it breaks below 1.3771, it will open up a greater downside potential.
2. Precious Metals Market Insight
Last week, gold held steady. Meanwhile, investors await today’s U.S. jobs data to provide more clues about the strength of the labor market, which could hint at when the Fed will begin tapering its bond purchases. The market is looking for signs of a pullback in the massive stimulus program, and such a pullback would put pressure on gold.
U.S. economic data on Wednesday, 1st September 2021, was mixed. The manufacturing sector expanded at a stronger-than-expected pace in August, while the U.S. companies added fewer jobs than expected. Prior to the release of the non-farm payrolls report, gold prices have been fluctuating within a narrow range this week.
(Gold 1-hour chart)
The price of gold was still at a high and weak sideways fluctuation yesterday. The shock range is from 1808 to 1819. Today, we continue to pay attention to the direction of the breakthrough of this interval. If it breaks through the 1819-line, it will open up further upside potential. At that time, we will pay attention to the suppression of the 1831-line. If it falls below the 1808-line, it will open up a further downside potential. At that time, we will pay attention to the support of the 1798 and 1790 positions.
3. Commodities Market Insight
WTI Crude Oil
Crude oil prices rallied sharply yesterday as investors bet that the market could absorb additional OPEC+ supply due to the Hurricane Ida hit in the U.S. Gulf of Mexico region.
Although Hurricane Ida has left, nearly 94% of the crude oil production capacity in the Gulf of Mexico remains closed. At the same time, the weaker U.S. dollar also supported oil prices.
(Crude oil 1-hour chart)
Yesterday, oil prices rose sharply as expected, rising to the target level near the 70.49-line. Today, focus on the 68.57-line. If the oil price can run stably above the 68.57-line, it will still maintain the bullish trend. If the oil price falls below the 68.57-line, it could possibly open up room for further correction. At that time, pay attention to the 66.83 first-line of support again.
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