President Trump has been released from the hospital and there have been new hopes of the additional economic stimulus package. As a result, US equities, Crude and EURUSD have rallied and Japanese Yen has continued to slide. Additionally, EURUSD gained on the release of much better than expected retail sales numbers (4.4% MoM vs. 2.4% expected). News and rumours helped EURUSD to move outside the descending regression channel and CADJPY to our target two. RBA kept the rates unchanged and has sent the AUDUSD towards our target.  By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

In Friday’s Price Action Analysis video we provided two updated target ranges and yesterday we said that the willingness to buy CADJPY on Friday suggests that there’s more upside to come. Now CADJPY has hit both targets. If you would like to know how to better take advantage of our analysis, you might want to consider joining our live workshop today. I will be there answering your questions and helping you to grow as a trader. You can register your seat here

We said yesterday that the 1.1753 – 1.1786 range is a key resistance zone, and if EURUSD pushes above this range, it moves outside the descending regression channel. This has now happened and EURUSD has bounced higher from 1.1769 level that used to be a resistance. EURUSD is trending higher but there is some loss of momentum at the time of writing this report. Fed Meeting Minutes due to be published tomorrow is a likely focus on top of any news on stimulus negotiations. The pair is now trading at the upper end of the recent channel. The key S&R zones for EURUSD are here:

  • 1.1752 – 1.1769, support (two S&R levels with a 38.2% Fibo-level and SMA(10) in between)
  • 1.1811 – 1.1824, resistance (50% Fibonacci retracement and an S&R level)
  • 1.1858 – 1.1872, resistance (61.8% Fibonacci retracement and an S&R level)
  • 1.1917 – 1.1926, resistance (78.6% Fibonacci retracement and an S&R level)

Fibonacci levels are drawn from September 1st high to September 25th low. For clarity, these points are marked on the chart with blue arrows. 

The Australian central bank RBA, left the rates unchanged as expected. Both the cash rate and their target yield for bonds with 3-year maturity were left unchanged (0.25%). This announcement was met with some buying that was, however, soon thwarted by institutional sellers stepping in and driving the AUDUSD rate lower and all the way to our target 1. If the pair, for whatever reason, moves into the resistance area again, we will not be looking for sell signals any longer.  For more analysis on this and other markets, go to tiomarkets.com/analysis and subscribe to TIOmarkets YouTube channel.

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Recent macroeconomic data releases

  • Canada Manufacturing PMI, 56
  • US ISM Manufacturing PMI, 55.4, 56 expected
  • US Average Hourly Earnings, 0.1%, 0.5% expected
  • US Non-Farm Employment Change, 661K, 900K expected
  • US Unemployment rate, 7.9%, 8.2% expected
  • Australia NAB Business Confidence, -4, -8 previous
  • EU Retail Sales,4.4%, 2.4% expected
  • US ISM Non-Manufacturing PMI, 57.8, 56.3 expected

Macroeconomic data releases today

  • Australian Cash Rate, 0.25%, 0.25% expected
  • Australia Annual Budget Release
  • ECB Presiden Lagarde Speaks
  • Canadian Trade Balance, -2.1B expected
  • Fed Chair Powell Speaks

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and it’s affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions.

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Janne Muta
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