Yoast SEO

The 1.1804 support bounced the EURUS higher after the ECB announced that it would keep the rates untouched. The central bank did something very similar to their QE program as the RBA earlier this week. In the case of the ECB, this something was moderately lower pace in PEPP purchases. However, there will be another, more generous, buying program (APP) kicking off once the current program ends. The idea seems to be that the central banks need to appear to do something but in fact they refrain from any meaningful action. By reading further you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.

This image has an empty alt attribute; its file name is 728x90-1-2-9.gif
FX Sept 10

The CAD (0.60%) has been the strongest currency since London open yesterday, while the USD (-0.19%) has been the weakest. Look for added volatility in the USDCAD pair today as the Canadian employment numbers are released. The benchmark US 10 yr. Treasuries yielded 1.30% at the end of the trading yesterday. Previous close: 1.35%.

Commodities Sept 10

The news about China releasing oil from its strategic reserve weighed on the price of oil yesterday making USOIL (-0.82%) much weaker than the precious metals.  The slight positive upside tilt in precious metals was most likely related to the drop in yields and USD weakness in yesterday’s trading.

Stocks Sept 10

The S&P 500 (-0.46%), the DJIA (-0.43%) and the Nasdaq (-0.25%) finished in the red yesterday. Traders were buying bonds and selling stocks as VIX kept on moving higher. This should only be another dip in the uptrend but as always we only believe what we see. If you want to learn how to trade the markets, this is rule number one: if price action argues against your views you are always to believe what the market is telling via price action, not the preconceived ideas and theories traders so often have.

Out of eleven S&P 500 sectors only the financial (0.29%), the energy (0.21%) and the basic materials (0.04%) sectors gained. The real estate sector (-2.12%) and the health care (-1.15%) were the biggest losers. The best-performing stocks on our watchlist were AAL, BMRN, BKR, KLAC and BB while BIIB, LLY, REGN, NUS and EMR lost the most. Our readers might remember how we gave heads up for LLY and suggested it as a short candidate. Traders sometimes ask how to trade stocks. Reading this report daily and studying the stocks we highlight in this section is a great starting point. These big movers provide multiple intraday trading opportunities day in day out! At the end of the day, you can be only as good as the stocks you trade (Mike Bellafiore).

The above chart shows the % performance of each stock. Stocks are presented here with the S&P 500 tracking ETF (SPY, red line) to illustrate the performance of each stock relative to the benchmark index. This allows our readers to see the potential for intraday trading opportunities in these stocks. Often the sudden increase in volatility continues on the second day. You should, therefore, keep monitoring these stocks to see if they will satisfy your criteria for a trade. All % performance charts in this report are courtesy of Tradingview.com.

The main risk event today is the release of Canadian employment numbers. For details on other important macroeconomic releases, see the TIOmarkets economic calendar here.

EURUSDDaily 09 10

The ECB kept the rates untouched and did something very similar to their QE program as the RBA earlier The ECB kept the rates untouched and did something very similar to their QE program as the RBA earlier this week. The idea seems to be that the central banks need to appear to do something but in fact they refrain from any meaningful action. In the case of the ECB, this something was moderately lower pace in PEPP purchases. However, it seems that there will be another, more generous, buying program (APP) kicking off once the current program ends. This is planned to take place towards the end of Q3 2022. This announcement dropped EURUSD from the daily high of 1.1841 back to the 1.1804 support but this move was quickly rejected and now the pair seems likely to have another go on the resistance level at 1.1841.

So, EURUSD bounced higher from the 1.1804 support we identified (here) but remained in a relatively tight range (1.1804 – 1.1841). What’s next? If we get a decisive break above 1.1841 resistance the next significant resistance area is at 1.1892 – 1.1908 (38.2% retracement level and a weekly resistance level) and one after this at 1.1965 – 1.1975 (the 50% retracement level and a daily swing point). On the other hand, if the 1.1841 can’t be penetrated look for further consolidation in the 1.1775 – 1.1841 range. If you want to learn how to trade EURUSD, join me on my next free trading strategy webinar at TIOmarkets.com/webinars.

USDCADDaily 09 10

The BOC left rates at a record low at 0.25%, as expected. The bank believed the economy would be strengthening in Q3 and Q4 2021 after shrinking in Q2 2021, As a result, USDCAD rallied but failed to stay above the 1.2707 resistance level. Since then the pair has been losing momentum (bearish divergence in Stochastics) and could retrace back to SMA(50) at 1.2570. The bearish indications would be negated if the pair started to attract buyers above 1.2665 support (yesterday’s low) and started to rally higher. The key price levels in USDCAD are 1.2422, 1.2493, 1.2655, 1.2761 and 1.2948. Heads up for the Canadian employment numbers that are released today an hour before equities trading starts in New York.

SP500Daily 09 10

VIX gained 4.67% again yesterday sending the S&P 500 index lower. The slide was stopped by the SMA(20) and today the S&P 500 index future (and the CFD) has bounced a bit. The market is trending higher and it’s only natural that these retracements occur from time to time. Eventually one of them will turn into a deeper decline but until then the strategy of buying dips fattens the equity bulls. Therefore we, as always, pay attention to where the key price levels and confluence zones are. The next support level is at 4465.85 and the one after this is an area (4412 – 4430) where the 23.6% retracement level and the channel low coincide. The latest high at 4550.50 is the ATH and thus a resistance level.

Macro Drivers for the USD 
As the most followed, invested and traded markets for risky assets are priced in the USD it is helpful to understand what macroeconomic factors impact the other side of the equation, the USD. Whether we are trading EURUSD, XAUUSD or US equity CFDs the factors impacting the dollar, the nominator in the equation, have a significant role in the formation of all medium to long-term price action. The following table summarises the most important fundamentals.

The FEDFed Chair Powell said on Friday (August 27th) in Jackson Hole Symposium that tapering could begin in  2021 but also voiced concerns about the spread of delta variant.
StimulusThe US lawmakers have authorised approximately five trillion dollars of economic stimulus since the beginning of the pandemic. Now, US lawmakers have agreed to a  $1.2 trillion infrastructure spending plan. The Fed officials consider ending the asset purchases in the middle of 2022.
YieldsApart from the recent pickup (that started in August 2021), the Treasury yields have been moving lower since March 2021. All in all, the yields and interest rates are extremely low on both nominal and real basis.
EmploymentAfter two highly positive employment reports (+938K and +943K) the August number (+235K) was a big disappointment but in fact at a level that used to be the norm in the years before the pandemic. This number could delay the Fed taper but isn’t likely to reverse their decision to taper.
InflationThe month on month Core CPI (excluding food and energy) for July came in at 0.3% (0.4% expected) which indicated a big drop in the rate of inflation from the month before (0.9%). The Fed has earlier taken a view that inflation is transitory and will be therefore likely to fade away. Even though one data point doesn’t make a trend it seems that the Fed has been correct in their inflation projections. The lumber futures for instance are once again trading at October 2020 levels and down over 70% from their May highs. 

Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here.

 The Next Main Risk Events

  • EUR – Speech by ECB President Lagarde 
  • CAD – Employment Change
  • CAD – Unemployment Rate
  • USD – PPI m/m
  • USD – Core PPI m/m

For more information and details see the TIOmarkets economic calendar here.

 Market News & Facts 

  • China released some of its strategic oil reserves
  • US weekly claims 310K (344K expected)
  • ECB leaves the rates untouched but tapers a bit
  • BOC left rates and QE unchanged
  • US JOLTS job openings 10.934M (10.03M expected)
  • Fed’s Williams: appropriate to start taper in 2021
  • No chance expected from BOC today 
  • Japan GDP for Q2 +0.5% (+0.3% prelim.)
  • Federal Reserve Beige Book to be released today
  • RBA kept rates at 0.10% and cut but extended QE 
  • Australian consumer confidence 100 (101.8 prior)
  • German factory orders +3.4% (-1.0% expected)
  • Saudi Arabia cuts oil prices for Asia
  • New Zealand ANZ Commodity Price index -1.6% (-1.4% prior)
  • Mercedes: chip shortage to stay in 2022
  • China Services PMI 46.7 (52.6 expected)
  • Gazprom to switch all settlements from USD to CNY

Quick Links to Recent Analysis

EURUSD, AUDUSD

EURUSD, USDCAD, GOLD, BITCOIN, VIX

EURUSD, GOLD, USOIL

ROKU, AUDCAD, GBPAUD, GBPUSD

The above analysis links are provided to help new readers to verify the effectiveness of our analysis. While all our analysis publications are time-sensitive they also help traders to understand how to learn forex trading and how to analyse the markets effectively. By reading past articles traders can see how to identify support and resistance levels or how to catch big market moves.

Quick links to our ‘How to’ articles

How to trade the stock market effectively and with lower risk?

How to trade with RSI?

How to trade with moving averages?

How to trade breakouts?

Our How to articles help especially new traders to grasp the basics and teaches them how to use technical tools in trading forex.

This image has an empty alt attribute; its file name is 728x90-1-2-9.gif

Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here. For more analysis and commentary, visit our YouTube channel where you can find market commentary videos to support your learning and growth as a trader. 

DISCLAIMER 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 its 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. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with any legal requirements for financial analyzes and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval. FX and CFDs are leveraged products. They are not suitable for every investor, as they carry a high risk of losing your capital. Please ensure you fully understand the risks involved. All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated. 

Best pair to trade today Best stocks to trade right now Best time to trade Best time to enter a trad

Author

Write A Comment

X

Get our latest market analysis by email, daily

en_USEnglish (United States)