1. Forex Market Insight
The European Central Bank said last week that it will begin to taper the size of its emergency bond purchases. By the same token, the U.S. will release a series of economic data this week, starting with the Consumer Price Index (CPI) on Tuesday, 14th September 2021, which will provide the latest clues about the inflationary fever ahead of next week’s Federal Reserve meeting.
According to agency surveys, the CPI is likely to rise by 5.3% year-over-year in August, after rising by 5.4% in July. In addition to inflation, the U.S. will also release the retail sales and industrial production data this week. Thus, this has led to the euro bottoming out of yesterday.
(EUR/USD 1-hour chart)
Today, the euro pays attention to its strength to break the 1.1820-line. Once the strength breaks through the 1.1820-line, it will open up a greater upside potential. At that time, pay attention to the suppression of the 1.1836 and 1.1853 positions. If the euro falls under the 1.1820-line, it will enter a wide range. During the consolidation phase, focus on the direction of the breakthrough from 1.1820 to 1.1779.
GBP Intraday Trend Analysis
The U.K. fired back at the European Union (EU) officials over their remarks on Northern Ireland, warning the EU to take the British government’s threat “seriously” in suspending part of the Brexit deal. In this regard, the U.K. and the EU remain at odds over the future of Northern Ireland.
After Brexit, Northern Ireland remains within the EU’s single market and customs union to avoid establishing a trade border on the island of Ireland. Instead, the border is placed in the Irish Sea, disrupting the flow of goods between Northern Ireland and the rest of the UK. Considering this, the British government hopes to rework the solution and said the current trade situation makes it reasonable to unilaterally suspend part of the agreement.
Lord David Frost, the British Secretary of State for Exiting the European Union, told the House of Lords on Monday, 13th September 2021, that there must be real negotiations between us and the EU. The negotiation does not mean that the EU proposes its own solution within the framework of the existing agreement and offers it in the form of “take it or leave it”.
The Vice-President of the European Commission for Interinstitutional Relations, Maroš Šefčovič, said in a speech in Northern Ireland last week that he was committed to making the flow of goods easier and solving the problems caused by Brexit. However, the EU would not seek a full renegotiation.
(GBP/USD 1-hour chart)
The pound has formed a wide range at 1.3798 to 1.3890 on a high level. Today, we will pay attention to the suppression of the pressure range from 1.3878 to 1.3890 during this range. If the pound is under pressure again in this range, the bottom will be followed by the support at 1.3817 and 1.3798. Once the strength drops below 1.3798, it will open up a greater downside potential. If the strength of the pound breaks above the 1.3890-line, it will open up a greater upside potential for the pound.
2. Precious Metals Market Insight
Gold prices rose yesterday as the U.S. is set to release key economic data, including inflation, which may determine the direction of the Federal Reserve’s monetary policy.
Spot gold was up by 0.33% at $1,793.42 per ounce while the U.S. futures closed with a rise of 0.1% at $1,794.4 per ounce. The focus will be on Tuesday’s release of the monthly U.S. Consumer Price Index (CPI), the Federal Reserve’s preferred measure of inflation. Plus, the August retail and industrial production data will also be released this week.
(Gold 1-hour chart)
Gold is still focused on the direction of the breakthrough in the range between 1782 and 1801. If it breaks through 1801 and sits above 1805, it will open up a greater upside potential. At that time, pay attention to the suppression of the 1819-line. If it falls below 1782, it will open a greater downside potential. By then, pay attention to the support of the two positions of 1774 and 1768.
3. Commodities Market Insight
WTI Crude Oil
On Monday, 13th September 2021, the Organization of the Petroleum Exporting Countries (OPEC), lowered its global oil demand forecast for the final quarter of 2021.
As the Covid-19 Delta variant virus continues its rage, the OPEC said that further recovery will be delayed until next year, when crude consumption will exceed the pre-pandemic levels.
OPEC also said in the report that, “The increased risk of the Covid-19, mainly caused by the Delta variant, has overshadowed the outlook for oil demand in the final quarter of the year. As a result, oil demand for the second half of 2021 has been revised slightly downward, partially postponing the recovery in oil demand to the first half of 2022.”
Thus, governments, companies and traders are closely monitoring how quickly the oil demand will recover from last year’s collapse. If the recovery picks up more quickly, as OPEC predicts, it could push oil prices higher and challenge the view that the impact of the pandemic could dampen consumption in the long term or permanently.
Against this background, the oil prices traded above $73 a barrel after the report was released. In fact, oil prices have risen more than 40% this year, driven by hopes of an economic recovery and OPEC+ production cuts, although concerns about the Delta variant are weighing on prices.
Despite the downward revision to the fourth-quarter data, OPEC said global oil demand for all of 2021 will increase by 5.96 million barrels per day, or 6.6%, essentially unchanged from last month’s estimate.
(Crude oil 1-hour chart)
The oil price is currently at the upper boundary under the wide range of fluctuations. Today, we will pay attention to the breakthrough strength of the 70.49-line. If the oil price rises to the 70.49-line, it will open up a greater upside potential. On the lower end, pay attention to the support of the Bollinger Band Middle Rail. As long as the oil price runs stably above the Bollinger Band middle rail, maintain the idea of taking advantage of the trend.
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