Editor
EUR/USD
In case of breakdown of the important resistance level 1.1825, further growth towards the key resistance levels 1.1885, 1.1905 can be expected. Breakdown of the long-term resistance level of 1.2065 will return EUR/USD to the bull market zone with the prospect of its further growth to the resistance levels of 1.2180 (50% Fibonacci level of the upward correction in the wave of the pair’s decline from the level of 1.3870, which began in May 2014, and the highs of 2018), 1.2260, 1.2340, 1.2450, 1.2500, 1.2580 (Fibonacci level 61.8%), 1.2600.
In an alternative scenario and after the breakdown of the support levels 1.1792, 1.1780 (Fibonacci level 38.2%), EUR/USD will go deep into the descending channel on the daily chart, and the breakdown of the support level 1.1754 will signal the resumption of the EUR/USD downward dynamics.
A break of the long-term support level of 1.1625 will finally return the pair to the long-term bear market zone.
Trading Recommendations
Sell Stop 1.1770. Stop-Loss 1.1815. Take-Profit 1.1754, 1.1710, 1.1665, 1.1625
Buy Stop 1.1815. Stop-Loss 1.1770. Take-Profit 1.1825, 1.1885, 1.1905, 1.1950, 1.2065, 1.2180, 1.2260, 1.2340, 1.2450, 1.2580, 1.2600
EU-Daily
USD/JPY
The main trend is up according to the daily swing chart, however, momentum has shifted to the downside.
A trade through 110.266 will signal a resumption of the uptrend. The main trend will change to down on a trade through 109.114.
The minor trend is also up. A trade through 109.414 will change the minor trend to down. This will confirm the shift in momentum.
On the upside, resistance levels are lined up at 109.957, 110.191 and 110.537. On the downside, the nearest support is the 50% level at 109.569, followed by the Fibonacci level at 109.076
Daily Swing Chart Technical Forecast
The direction of the USD/JPY on Monday is likely to be determined by trader reaction to 109.957.
Bearish Scenario
A sustained move under 109.957 will indicate the presence of sellers. The first downside target is 109.569, followed by the minor bottom at 109.414.
A trade through 109.414 will change the minor trend to down. This will indicate the selling is getting stronger with the next target area 109.114 to 109.076.
Bullish Scenario
A sustained move over 109.957 will signal the presence of buyers. If momentum picks up on this move then look for a potential surge into 110.191 to 110.266.
Taking out 110.266 will negate the closing price reversal top. This could possibly extend the rally into 110.537.
USD/CAD
A modest pullback in oil prices undermined the loonie and extended support to USD/CAD.
Fading hopes for an earlier Fed rate hike move weighed on the USD and capped the upside.
The USD/CAD pair bounced around 30 pips from the Asian session lows, albeit lacked any follow-through buying and was last seen trading near the 1.2620-25 area.
The pair managed to defend and attract some buying near the 1.2600 mark on Monday amid a modest pullback in crude oil prices, which tend to undermine the commodity-linked loonie. Despite the near-term disruption caused by an extremely dangerous Category 4 hurricane in the Gulf of Mexico, the black gold struggled to capitalize on the early uptick to more than three-week highs. Renewed worries about fuel demand – amid rising COVID-19 infections – seemed to be the only factor that weighed on the commodity and acted as a tailwind for the USD/CAD pair.
The supporting factor, to a larger extent, was offset by a softer tone surrounding the US dollar, which held bulls from placing aggressive bets and capped the upside for the USD/CAD pair. The Fed Chair Jerome Powell on Friday warned of the downside risks posed by the rapid spread of the delta variant and reassured that the US central bank was in no hurry to raise rates. This dashed hopes for an earlier move by the Fed and contributed to the ongoing slide in US Treasury bond yields. This, along with the risk-on mood, undermined the safe-haven USD.
This, in turn, warrants some caution for bullish traders and before positioning for any meaningful appreciating move. Market participants now look forward to the release of Pending Home Sales data from the US for some impetus later during the early North American session. The key focus, however, will remain on this week’s other important macro data scheduled at the beginning of a new month, especially the closely-watched US monthly jobs report (NFP) on Friday. In the meantime, the US bond yields and the broader market risk sentiment might influence the USD. Apart from this, oil price dynamics might produce some opportunities around the USD/CAD pair.
General Market
Futures tracking the S&P 500 and Nasdaq hit all-time highs on Monday as dovish remarks from the Federal Reserve last week bolstered optimism in an economic rebound and eased fears of a sudden tapering in monetary stimulus.
Technology-related stocks including Apple Inc (NASDAQ:AAPL), Microsoft Corp (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Google-owner Alphabet (NASDAQ:GOOGL) Inc and Tesla (NASDAQ:TSLA) Inc were among the biggest gainers in premarket trading.
Wall Street’s main indexes have consistently hit record highs this month, putting the benchmark index on course for its seventh monthly gain in a row, even as U.S. economic growth showed signs of slowing and rising cases of the Delta variant raised fears of more lockdowns.
Fed Chair Jerome Powell on Friday reaffirmed a steady economic recovery and explained why there was no rush to tighten policy as the central bank tries to nurse the economy to full employment.
All eyes this week will be on the Labor Department’s monthly jobs report, which could set the stage for the Fed’s Sept. 21-22 policy meeting.
At 7:17 a.m. ET, Dow e-minis were up 16 points, or 0.05%, S&P 500 e-minis were up 4.25 points, or 0.09%, and Nasdaq 100 e-minis were up 20 points, or 0.13%.
Economically sensitive energy stocks shrugged off a slip in oil prices, with Chevron Corp (NYSE:CVX), Exxon Mobil (NYSE:XOM) and Halliburton (NYSE:HAL) rising between 0.3% and 0.8% after leading sectoral gains last week.
Schlumberger NV (NYSE:SLB) and Occidental Petroleum (NYSE:OXY), however, slipped between 0.1% and 0.3%.
U.S.-listed shares of Chinese gaming firm NetEase (NASDAQ:NTES) Inc slumped 7.8% as Chinese regulators slashed the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays.
Shares of satellite transporter startup Astra Space Inc plummeted 24.6% after the test launch of its rocket LV0006 ended prematurely about two-and-a-half minutes after liftoff.
