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Key releases

The USD today is moderately strengthening against the pound and the euro, but weakening against the yen.

Investors continue to prepare for the symposium in Jackson Hole and expect today's publication of data from the US construction market. On Friday, the chairman of the US Fed is to comment on the current situation in the economy and further actions of the regulator in the field of monetary policy. Most experts believe that despite the slowdown in inflation in July from 9.1% to 8.5%, Powell will confirm the need for further interest rate hikes until prices slow to 2.0%. He is likely to oppose slowing down the current rate of adjustment in value, as the problem of high retail prices has not yet been resolved and is considered by officials to be the most serious in the US economy. Also today, July data on new home sales in the USA will be released, which may add anxiety to investors: it is expected that the figure will decrease from 590.0K to 575.0K. Recall that other results of the sector last month turned out to be weak: the number of permits issued for construction decreased by 1.3%, the volume of construction of new houses – by 9.6%, sales in the secondary housing market – by 5.9%. The implementation of the forecast may put pressure on the dollar, as it will confirm the deterioration of the US construction industry.

The euro is weakening today against its main competitors – the yen, the pound and the USD.

The focus of investors is the publication of preliminary August data on business activity in the eurozone countries, which turned out to be weak: the index in the manufacturing sector and the composite index are in the stagnation zone for the second month, while growth continues only in the service sector, but it is also very insignificant. The index of business activity in manufacturing decreased from 49.8 points to 49.7 points, the composite index – from 49.9 points to 49.2 points, and in the service sector – from 51.2 points to 50.2 points. For the economic leader of the eurozone, Germany, the indicator in the service sector decreased from 49.7 points to 48.2 points, the composite indicator – from 48.1 points to 47.6 points, and in manufacturing increased slightly – from 49.3 points to 49. 8 points, but still remained in the slowdown zone. Overall, the stats continue to deteriorate as the high cost of living reduces consumer demand and disruptions in the supply of energy and components slow down production. According to experts, the continuation of the current dynamics makes a recession in the winter months more likely.

The pound is weakening against the USD today, strengthening against the euro and has ambiguous dynamics paired with the yen.

The pressure on the pound is exerted by weak preliminary data on business activity in the British economy: in the industrial sector, the indicator corrected from 52.1 points to 46.0 points and found itself in a stagnation zone for the first time since May 2020 against the backdrop of lower consumer demand, a shortage of personnel and instability since supplies of components and energy carriers. According to experts, these reasons will lead to a further slowdown in the sector in the coming months. Services are also slowing down, dropping from 52.6 points to 52.5 points as inflation continues to rise sharply, forcing citizens to lower spending levels, while the composite business activity index reached 50.9 points from 52.1 points earlier, which increases the risks of a recession, the onset of which the Bank of England predicts by the end of this year.

The yen is weakening against the USD, strengthening against the euro and has ambiguous dynamics paired with the pound.

Today, preliminary July data on business activity in the Japanese economy were published: the index in industry fell from 52.1 points to 51.0 points, and in the service sector – from 50.3 points to 49.2 points and for the first time since April of this year was in the zone of stagnation. In general, Japanese businesses are also under pressure from high fuel and electricity prices and weak demand. On the positive side, it is worth noting that, according to local media, the government is discussing the possibility of easing quarantine requirements for citizens. In particular, testing at the border of vaccinated travelers should be canceled, as well as the daily limit of those entering the country should be increased from 20.0K to 50.0K. These decisions will increase the influx of tourists and have a beneficial effect on the state of the national economy.

The Australian dollar has ambiguous dynamics paired with its main competitors – the euro, the pound, the yen and the USD.

Today, preliminary July data on business activity in the Australian economy were published: the index in the industrial sector fell from 55.7 points to 54.5 points, and in the service sector – from 50.9 points to 49.6 points and ended up in a stagnation zone. In general, the dynamics repeats those in other developed economies. The service sector is shrinking due to high inflation and reduced spending by citizens, and the industry is supported by high prices for coal and other raw materials exported from Australia, but it could come under pressure in the event of a serious downturn in the global economy.

Oil quotes are trying to grow today.

The rise in oil prices was supported by fears of a new production cut by the OPEC cartel and its allies. The day before, Saudi Arabia's energy minister told the national SPA news agency that the organization has the means to deal with the current downturn, including cutbacks in production. This comment made investors suggest that a decision on this issue could be discussed at the next meeting of the countries participating in the OPEC + agreement. During the day, investors are also waiting for the publication of a weekly report from the American Petroleum Institute (API). The last time oil reserves in the USA fell by 0.448M barrels. The continuation of this trend may put additional pressure on quotes.

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XRPUSD - Murray analysis

The price left the mid-term ascending channel and tested the 0.3296 mark (Murray [3/8]), however, it was not possible to consolidate below it, and currently quotes have formed a narrow side channel of 0.3418-0.3296. A breakdown of its lower boundary may cause a further decline to the levels of 0.3174 (Murray [2/8]), 0.3052 (Murray [1/8]). To resume serious growth, quotes will need to consolidate above the level of 0.3662 (Murray [6/8]), supported by the middle line of the Bollinger Bands. In this case, the targets of the increase will be 0.3906 (Murray [8/8]) and 0.4028 (Murray [+1/8]).

In general, the XRPUSD pair continues to form a new downward trend, as evidenced by the downward reversal of the Bollinger Bands and the increase in the MACD histogram in the negative zone, and the exit of the Stochastic from the oversold zone does not exclude short-term growth, but its potential is seen to be limited.      

Resistance levels: 0.3418, 0.3662, 0.3906, 0.4028 | Support levels: 0.3296, 0.3174, 0.3052

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Morning Market Review

EURUSD
The European currency shows weak growth, trying to recover from updating record lows on Tuesday and testing 0.9990 for a breakout. At the same time, activity on the market remains subdued, as market participants prefer to wait for the appearance of additional instrument movement drivers. In particular, today Germany has published revised data on the dynamics of Gross Domestic Product (GDP) for the second quarter, as well as a block of statistics on the level of Business Confidence from the Institute for Economic Research (IFO) for August. In addition, during the day the European Central Bank (ECB) will release the Monetary Policy Meeting Accounts, in which traders expect to find forecasts for further rate hikes in the autumn. With the opening of the US session, investors' attention will switch to US GDP statistics for the second quarter. Also starting today is the two-day annual symposium of world central bankers at Jackson Hole, which is scheduled to feature US Federal Reserve Chairman Jerome Powell on Friday.

GBPUSD
The British pound is trading with an uptrend, retreating from record lows updated on Tuesday. At the moment, the growth of the instrument is due to technical factors, as well as a drop in market activity ahead of the start of the annual symposium of central bankers in Jackson Hole. Meanwhile, investors remain worried about rising inflation in the UK, fearing that the energy crisis will only get worse as the cold weather approaches. At the beginning of the week, investment bank Citi published a forecast that assumes inflation in the country will rise to a record high of 18.6% in January, which will force the Bank of England and the new Prime Minister to urgently look for ways to save the economy. Meanwhile, official London continues its course towards a decisive refusal to supply energy from Russia: experts note that their imports in July fell to zero for the first time since 1997.

AUDUSD
The AUDUSD pair shows a short-term uptrend against the background of the closing of part of long positions on the US currency, as traders prepare for the start of the annual symposium of central banks representatives in Jackson Hole and the speech of the Chair of the US Federal Reserve, Jerome Powell, in particular. In addition, today the markets are waiting for the publication of updated data on the dynamics of the US Gross Domestic Product (GDP) for the second quarter. Forecasts suggest some improvement compared to the previous estimate from –0.9% to –0.8%, which, however, is unlikely to noticeably affect the upcoming decision of the US Federal Reserve on interest rates in September. The American economy shows resilience, and also does not suffer from interruptions in energy supplies as much as the European one. It is possible that this will allow the regulator to maintain a record pace of 75 basis points of rate hikes to further combat high inflation.

USDJPY
The US dollar is declining, retreating from local highs, updated earlier in the week. Investors are in no hurry to open new trading positions in anticipation of the speech of US Federal Reserve Chairman Jerome Powell as part of the symposium starting today in Jackson Hole, hoping to get hints on further actions of the regulator in the field of monetary policy. To date, analysts estimate the likelihood of an interest rate hike in September by 50 basis points and by 75 basis points about the same. In addition, market participants hope that the Fed Chairman will comment on the prospects for tightening the existing parameters in the face of worsening forecasts for the energy crisis. Macroeconomic statistics from Japan published today does not have a significant impact on the dynamics of the instrument. Meanwhile, Corporate Service Price Index corrected from 2.0% to 2.1% in July from a forecast of 2.2%, Foreign Bond Investment fell by 79.2 billion yen for the week ended August 19 after a record increase of 1154.7 billion yen over the previous period, and Foreign Investment in Japan Stocks for the same period fell from 45.3 billion yen to 28.5 billion yen.

XAUUSD
Gold prices show a weak growth, testing the level of 1755.00. Activity on the instrument remains quite low, as market participants are waiting for comments from the Chair of the US Federal Reserve, Jerome Powell, regarding monetary policy. In addition, investors would like to hear updated agency forecasts regarding the economic outlook, as the situation with inflation remains quite difficult. Moreover, the energy crisis, which is particularly visible in Europe, seems to be getting worse. With the approach of cold weather, it becomes obvious that the price of energy is unlikely to start to decline, which will cause increased consumer dissatisfaction. In turn, gold is gaining support in the market as a safe asset.

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ADAUSD - Price decline may resume

As an additional driver for the asset movement, new challenges are seen with testing a key update of the Cardano Vasil network, which should lead to a significant increase in network performance through the launch of a data pipeline function, expand the use of smart contracts and optimize processes for the growing volume of applications in the DeFi market. Cardano lead developer Adam Dean said on Friday that a serious bug has occurred on the testnet, and nodes 1.35.2 and 1.35.3 are out of sync. He also accused the project management of the extreme rush to launch the fork, which is why the failures occurred. These comments raised concerns among investors that the timeline could be revised again, but on Monday, Ding said the bugs had been consolidated, and the outlook for the update is "better than ever," which supports the ADA/USD pair.

The trading instrument is testing 0.4638 (Murrey [3/8]), the breakout of which will give the prospect of further growth to 0.4882 (Murrey [4/8]), 0.5127 (Murrey [5/8], the middle line of Bollinger bands). The key "bearish" level is 0.4394 (Murrey [2/8]), the breakdown of which allows further decline to 0.4150 (Murrey [1/8]) and 0.3906 (Murrey [0/8]).

Technical indicators reflect a downward trend: Bollinger bands reverse downwards, and the MACD histogram increases in the negative zone.

Resistance levels: 0.4638, 0.4882, 0.5127 | Support levels: 0.4394, 0.415, 0.3906

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Morning Market Review

EURUSD
The European currency shows mixed trading dynamics, consolidating near 0.9960. Market activity remains low ahead of US Federal Reserve Chairman Jerome Powell's speech at the annual symposium in Jackson Hole. It is expected that the official may speak in favor of raising the interest rate in September by another 75 basis points (for the third time in a row), which will provide moderate short-term support to the US currency. Investors have no doubt that the regulator will continue a rather tight monetary policy, so the whole question is only in the pace of this tightening. Also, traders would like to hear updated forecasts regarding the prospects for economic growth. The global economy continues to show a steady downtrend, and the widespread increase in interest rates is only exacerbating the situation caused by rising energy prices. In particular, it became known that a number of large industrial enterprises in Europe (zinc and aluminum plants) were forced to temporarily close due to a sharp increase in electricity tariffs. In turn, the euro was moderately supported yesterday by optimistic macroeconomic statistics from Germany. The revised indicator of Gross Domestic Product (GDP) reflected the growth of the German economy in the second quarter by 0.1% (previously, zero dynamics were assumed), and excluding seasonal fluctuations, GDP in annual terms grew by 1.7% against the previous estimate of 1.4%. In turn, the index of Economic Expectations from the IFO in August fell by only 0.1 points to 80.3 points, while forecasts suggested a fall to 79.0 points.

GBPUSD
The pound is trading with a downtrend, testing the level of 1.18 for a breakdown. The British currency slightly strengthened the day before, which, however, was caused only by technical factors, as well as expectations that the Bank of England will continue to tighten its monetary policy. The Governor of the regulator, Andrew Bailey, announced his readiness to adjust the interest rate to fight inflation, despite the fact that as early as the fourth quarter, the national economy could enter a recession, the risks of which increase against the backdrop of an intensifying energy crisis, which could turn into a full-fledged industrial one. Due to high prices, many enterprises are forced to reduce production rates or temporarily close, while with the onset of cold weather, conditions can worsen even more. The situation is aggravated by the uncertainty brought about by the forthcoming elections of the British Prime Minister scheduled for autumn.

NZDUSD
The New Zealand dollar shows a moderate decline, correcting after an attempt to grow the day before, which led to a short-term update of local highs from August 19. The uptrend was not hindered by weak macroeconomic data from New Zealand, released yesterday. Retail Sales fell 2.3% in the second quarter, after falling 0.9% in the prior period, and Retail Sales excluding Autos fell 1.6% after falling 0.3% a quarter earlier. At the same time, the statistical picture from the USA turned out to be mixed. Revised annual data on Gross Domestic Product (GDP) in the second quarter showed a decline of 0.6%, which was significantly better than the previous estimate of –0.9%. At the same time, the Gross Domestic Product Price Index for the same period was revised upward from 8.9% to 9.0%, while the forecast was for a decrease to 8.7%. This means that inflationary risks in the country remain high, and therefore the US Federal Reserve may continue to tighten monetary policy at a record pace. The instrument is slightly supported today by the statistics from New Zealand: the ANZ Roy Morgan Consumer Confidence in August rose noticeably from 81.9 points to 85.4 points, which turned out to be better than the average analysts' expectations.

USDJPY
The US dollar shows weak growth, consolidating above 136.8. The American currency is trying to win back the corrective losses incurred the day before; however, investors are in no hurry to open new positions ahead of the speech of US Federal Reserve Chairman Jerome Powell at the annual symposium of representatives of leading central banks in Jackson Hole. Moderate support for the yen today is provided by optimistic macroeconomic statistics from Japan. Tokyo Consumer Price Index in August accelerated from 2.5% to 2.9%, while analysts expected the same growth rates to be maintained. CPI excluding Fresh Food accelerated from 2.3% to 2.6%, 0.1% ahead of market forecasts. Excluding Food and Energy prices, the index rose from 1.2% to 1.4%, falling short of the expected 1.5%. Thus, the situation in a country accustomed to deflationary phenomena in the economy may soon change. Rising consumer prices potentially mean that the Bank of Japan may reduce the pace of stimulus, and in the longer term, even decide to raise interest rates.

XAUUSD
Gold prices practically do not change, consolidating near 1755. The day before, the instrument made an attempt to grow, and the XAUUSD pair managed to update local highs from August 18, but failed to consolidate at new levels. Investors tend to stay out of the market until comments from US Federal Reserve Chairman Jerome Powell, who will give a speech at the annual symposium in Jackson Hole today. The official is expected to confirm a further increase in the interest rate by 75 basis points. If the pace of monetary tightening is reduced to 50 basis points, this may put short-term pressure on the positions of the US currency, and will also mean that the regulator is concerned about the risks of a recession in the national economy, which could provoke an increase in alarming sentiment across the entire spectrum of the market.

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Morning Market Review

EURUSD
The European currency is falling, again testing the level of 0.9900 for a breakdown and returning to the previous local lows, updated at the beginning of last week. The euro is again under pressure from the rising dollar, which received an impetus to grow on Friday after the speech of the Chair of the US Federal Reserve, Jerome Powell. The official emphasized the regulator's resolute readiness to continue the policy of high interest rates, even if this leads to a slowdown in the national economy. Thus, the majority of analysts (approximately 75%) are again counting on a correction of the value by 75 basis points during the September meeting of the Fed. In turn, the euro reacts negatively to the prospects for the European economy in the face of a sharp rise in energy costs. Natural gas quotes are once again updating record highs, and electricity suppliers are warning consumers about higher prices for their services. In Germany, the basic electricity tariff for 2023 exceeded 800 euros per MWh, a new record high. In addition, the country is still experiencing a sharp drop in consumer confidence: the September Gfk Consumer Confidence index fell from –30.9 points to –36.5 points, while analysts had expected a decline to –31.8 points.

GBPUSD
The British pound is trading down, building on the "bearish" momentum that was formed last Friday. The GBP/USD pair is making new 40-year lows, testing 1.1650 for a breakdown, below which the instrument last traded in March 2020. The pound, like many other risky assets, is reacting to a noticeable strengthening of the US currency after the "hawkish" comments of the Chair of the US Federal Reserve, Jerome Powell, who spoke in favor of further raising interest rates at a record pace. The official urged to maintain a tight monetary policy, seeking to bring under control the high inflation rates that are still observed in the US economy. Thus, traders have revised their forecasts for the September meeting of the regulator: at the moment, most analysts expect a 75 basis point increase in interest rates, while earlier the chances of adjusting the value by 50 basis points and 75 basis points were estimated to be about the same. Meanwhile, the pound remains under pressure amid record inflation in the EU and the UK due to a sharp rise in energy prices. Ahead of the cold weather and the beginning of the heating season, politicians are trying to prepare their voters for an increase in tariffs for heat and electricity, which leads to a noticeable decrease in consumer activity and the level of confidence.

AUDUSD
The Australian dollar is noticeably declining, developing the downward momentum formed at the end of last week. The instrument showed active negative trend, having reacted to the speech of the Chair of the US Federal Reserve Jerome Powell at the annual symposium in Jackson Hole. As expected, the official advocated further tightening of monetary policy in order to control the inflation rate in the country. In addition, despite receiving the first evidence of some slowdown in consumer prices in the US, the Fed is clearly concerned about the current situation. This is an extremely negative signal for the entire global economy, as the overall picture is complicated by a further rise in energy prices and the onset of cold weather in the northern hemisphere. Today, the instrument practically does not react to the publication of optimistic macroeconomic statistics from Australia. Thus, Retail Sales in July increased by 1.3% after an increase of 0.2% a month earlier, although analysts' forecasts suggested a slight correction of the indicator by 0.3%.

USDJPY
The US dollar is actively adding in value during morning trading, testing the level of 138.80 for a breakout. The USD/JPY pair is approaching its previous record highs, updated in mid-July, while the US currency received a new impetus, reacting to the comments of US Federal Reserve Chairman Jerome Powell on the need to maintain a "hawkish" monetary policy. The official is convinced that raising interest rates will help bring record inflation under control, even if it means sacrificing economic growth. In turn, macroeconomic statistics from the US, published on Friday, put some pressure on the dollar. In particular, the Personal Income in July slowed down from 0.7% to 0.2%, which turned out to be noticeably worse than market expectations at the level of 0.6%, and Personal Spending decreased from 1.0% to 0.1%, with the forecast at 0.4%. Additional pressure on the position of the yen today is exerted by statistics from Japan: the Coincident Index in June fell from 99.0 points to 98.6 points, and the Leading Economic Index for the same period fell from 101.2 points to 100.9 points, while forecasts assumed a fall to 100.6 points.

XAUUSD
Gold prices are noticeably declining, developing a "bearish" trend of the end of last week. On Friday, the US dollar received a powerful impetus to growth, reacting to statements by the Chair of the US Federal Reserve, Jerome Powell, about the need to continue high interest rates. In fact, the official confirmed the possibility of an additional 75 basis points correction in the value, which would negatively affect non-interest bearing gold. Recall that the target inflation rate is still at 2.0%. In turn, in July, consumer price growth in the US slowed down somewhat and receded from the record high at around 9.1% to 8.5%, which is still well above the target levels.

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Digital gold under pressure after Jerome Powell's speech

The reason for the weakening of "digital gold" and, with it, the majority of alternative digital assets was the Friday comments of the head of the US Federal Reserve, Jerome Powell. At the Jackson Hole symposium, the official said the regulator would continue to adjust interest rates even as they put pressure on economic growth. At the same time, he noted that the increase cycle could not be stopped or slowed down, although inflation could already have reached its peak. After the indicator approaches the level necessary for a sustained downward movement in consumer prices, it will linger in this area for a while and not go down. Powell's position did not live up to the expectations of investors who were counting on the possibility of a slowdown in the pace of monetary tightening in the US after the July rollback of inflation from 9.1% to 8.5%. The US Federal Reserve will continue raising rates, and the US currency will continue to receive serious support, strengthening against its main competitors.

In general, the forecast of Galaxy Digital founder Mike Novogratz, who previously noted that the cryptocurrency market would remain under pressure for the entire period of tightening monetary policy in the United States, is justified.

Currently, the trading instrument is close to 19531 (Murrey [1/8]), a downward breakdown of which will give the prospect of further decline to 18750 (Murrey [0/8]) and 17800 (the area of June lows). Bollinger bands downward reversal and MACD histogram increase in the negative zone indicate the continuation of the short-term downward trend, while Stochastic reversal in the oversold zone does not rule out corrective growth to 21093 (Murrey [3/8]), although its potential is seen as limited.

Resistance levels: 20312, 21093, 21875 | Support levels: 19531, 18750, 17800

 

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ETHUSD - Price increase may be temporary

The ETHUSD pair started the current week with growth and regained some of the losses incurred after the statement of the head of the US Fed Jerome Powell on Friday. Against the background of confirmation of the regulator's determination to continue tightening monetary policy and keep interest rates high for a long time, the price of the cryptocurrency has adjusted to the area of 1423.2, but has now returned to the level of 1590.

The traditional support for the asset is provided by the expectation of the transition of the Ethereum network to the Proof-of-Stake (PoS) proof algorithm, which should significantly increase its throughput and create new opportunities for using smart contracts. According to the roadmap published by the Ethereum Foundation, the Bellatrix update is scheduled to be released on September 6 and will be the beginning of the process of merging the Ethereum and Ethereum 2.0 networks, which will be finally completed in the period from September 10 to September 20. Most experts are confident that switching to PoS will lead to an increase in the value of ETH, however, some believe that on the eve of this important event, the price will remain under pressure. For example, Bank of America analysts note that investors can switch to a wait-and-see position or temporarily start moving to other blockchains, such as BSC, Tron, Avalanche and Solana, in order to wait out technical instability, but so far this skepticism is not justified, and the price continues to rise. 

Technically, a short-term downward trend remains in the ETHUSD pair, as evidenced by the downward reversal of the Bollinger Bands and the stabilization of the MACD histogram in the negative zone. The key for the "bulls" is the level of 1750 (Murray [6/8]), supported by the middle line of the Bollinger Bands, the breakout of which will give the prospect of continued growth to the levels of 1895 (Fibo retracement 38.2%, Murray [7/8]), 2030 (the area of August highs). With a breakdown of the level of 1500 (Fibo retracement 23.6%, Murray [4/8]), the decline will be able to resume to the levels of 1375 (Murray [3/8]), 1250 (Murray [2/8]), 1125 (Murray [1/8]).

Resistance levels: 1750, 1895., 2030 | Support levels: 1500, 1375, 1250, 1125

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Morning Market Review

EURUSD
The European currency shows moderate growth, developing a weak "bullish" signal formed at the beginning of the week. The EURUSD pair is again trying to consolidate above the psychological level of 1.0000, taking advantage of some weakening of the positions in the US currency. Quotations are also supported by expectations of an imminent tightening of monetary policy by the European Central Bank (ECB), and the rate of increase in interest rates may be higher than planned, given the record level of inflation in the countries of the region. The next meeting of the regulator is scheduled for September 8 and at the moment analysts expect a correction in the value in the range of 25 basis points to 50 basis points. In July, the ECB raised rates by 50 basis points for the first time since 2011. Meanwhile, inflation in Germany, according to data released yesterday, accelerated from 7.5% to 7.9% in annual terms, while the monthly rate slowed down from 0.9% to 0.3%. The Harmonized CPI for the same period increased from 8.5% to 8.8%, which coincided with analysts' forecasts. Some of the decline was due to cheaper gasoline, while food and energy prices continue to rise. Today, investors expect the publication of August statistics on consumer inflation in the eurozone. The annual rate is expected to rise to a new all-time high of 9.0%.

GBPUSD
The British pound shows an uptrend in trading, retreating from record lows, updated the day before. The GBPUSD pair is preparing to test 1.17 for a breakout, taking advantage of the growth of corrective sentiment for the dollar. American investors temporarily cover long positions, waiting for the publication of data on the US labor market for August. On Wednesday, ADP will report on Nonfarm Payrolls, followed by the release of official statistics by the Department of Labor on Friday. The forecasts are quite strong, and therefore the US Federal Reserve is likely to keep its course for a further increase in interest rates at a record pace of 75 basis points. Macroeconomic statistics released yesterday in the UK did not provide significant support to the British currency. Consumer Credit in the country in July slowed down from 1.781 billion pounds to 1.425 billion pounds. Analysts' forecasts suggested a decline to only 1.500 billion pounds. At the same time, the number of Mortgage Approvals in July increased from 63.726 thousand to 63.77 thousand, while investors expected a decrease to 61.725 thousand.

NZDUSD
The New Zealand dollar shows weak growth, recovering from another decline the day before. At the moment, the NZDUSD pair is again testing 0.615 for a breakout, receiving extremely weak support from the macroeconomic background from New Zealand and China. ANZ Business Confidence rose from -56.7 points to -47.8 points in August, with a forecast of only -55.0 points. ANZ Activity Outlook for the same period corrected from -8.7% to -4.0%, while analysts expected the indicator to worsen to -8.9%. The number of Building Permits issued in New Zealand increased by 5.0% in July after falling by 2.2% a month earlier. The real dynamics turned out to be much better than the average forecasts of analysts. In turn, Chinese data reflected a weak increase in NBS Manufacturing PMI in August from 49.0 points to 49.4 points, while the forecast was at 49.2 points. Non-Manufacturing PMI for the same period fell from 53.8 points to 52.6 points, which was only slightly better than the expected 52.2 points.

USDJPY
The US dollar shows a slight decline, retreating from local highs, updated the day before. The USDJPY pair is testing 138.4 for a breakdown, reacting to the publication of relatively optimistic macroeconomic statistics from Japan. Retail Sales in July showed a moderate increase of 0.8% after falling by 1.4% a month earlier, while analysts had expected a contraction of 0.5%. In annual terms, sales accelerated from 1.5% to 2.4%, beating market forecasts at 1.9%. At the same time, Industrial Production in July slowed down from 9.2% to 1.0%, while analysts expected a reduction of 0.5%. In annual terms, the dynamics of Industrial Production improved from -2.8% to -1.8%, while the forecast was -2.6%. In turn, the Consumer Confidence index in August strengthened from 30.2 points to 32.5 points, which was slightly better than the expected 31 points.

XAUUSD
Gold prices continue a moderate decline since the end of the last trading week, updating new local lows from July 27. Quotes are testing the level of 1720 for a breakdown, retreating amid expectations of further tightening of monetary policy from leading central banks. First of all, the pressure is exerted by the "hawkish" comments of the US Federal Reserve; however, both the European Central Bank (ECB) and the Bank of England are also preparing to raise interest rates at the next meetings in September. The fight against inflation remains a key issue for leading regulators, while the threat of a recession in the economy is still in the background. This week, macroeconomic statistics on the US labor market for August is expected to be released. The forecasts of analysts and the US Federal Reserve are quite optimistic and assume that the indicators will remain stable. If expectations come true, this will allow the regulator to concentrate on fighting inflation by all available means.

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ADAUSD - The pair may continue to decline

Last week, the ADAUSD pair rose to 0.4785, but after the “hawkish” comments of US Federal Reserve Chairman Jerome Powell about the need for further interest rate hikes, it corrected down along with the entire market and is now testing 0.4394 (Murrey [2/8]) but until it can break below it.

Quotes are in a state of uncertainty due to the latest statements by Cardano founder and IOHK CEO Charles Hoskinson, who said that the preparation of the Vasil fork should increase network speed, reduce transaction costs and improve the conditions for using smart contracts and decentralized applications, is proceeding at a rapid pace, and the detected errors are not critical. On the other hand, Hoskinson could not give an exact date for the update launch, saying that it will happen “sometime in September” after most network participants and several large cryptocurrency exchanges update their software to the required level. Experts fear that the key fork of Cardano may coincide in time or come out very close to the transition of the main competitor, the Ethereum network, to the Proof-of-Stake (PoS) algorithm, and then investor interest in the Vasil fork will be reduced, which will not allow the pair ADA/USD to strengthen significantly.

The trading instrument is testing 0.4394 (Murrey [2/8]), the breakdown of which will give the prospect of further decline to 0.4150 (Murrey [1/8]), 0.3906 (Murrey [0/8]). The key “bullish” level is 0.4882 (Murrey [4/8]), supported by the middle line of Bollinger bands. Its breakout allows growth to 0.5371 (Murrey [6/8]) and 0.5615 (Murrey [7/8]).

The readings of technical indicators are contradictory: the downward reversal of Stochastic and the stabilization of the MACD histogram in the negative zone indicates the continuation of the downward trend, but the upward reversal of Bollinger bands does not exclude growth, the potential of which is seen as limited.

Resistance levels: 0.4882, 0.5371, 0.5615 | Support levels: 0.4394, 0.4150, 0.3906

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Morning Market Review

EURUSD
The European currency shows a slight decrease, testing the level of 0.99 for a breakdown. The EURUSD pair is holding near record lows, updated on August 23, and remains under pressure from pessimistic economic forecasts for the region. Inflation in the EU is held at record levels, while decisive action by the European Central Bank (ECB), aimed at tightening monetary policy, is leading to a recession in individual economies of the eurozone. However, the monetary policy of the European regulator can hardly be called aggressive so far, because interest rates have been raised only once. The next meeting of the ECB will be held on September 8 and it is expected that the regulator will adjust the value by another 50 basis points to 1.00%. Meanwhile, European countries are also forced to look for a solution to the energy problem. Gas prices remain at record levels, and given disruptions in supplies from Russia, they may increase in the near future. At present, the bloc members have agreed on the introduction of a ceiling on prices for oil and oil products from December, but the supply of "blue fuel" remains a more painful issue. In early September, PJSC Gazprom suspended the operation of the only turbine on the Nord Stream gas pipeline for technical reasons. There was no further information about the timing of the possible resumption of work.

GBPUSD
The British pound is trading with a downtrend, developing a strong "bearish" momentum, formed at the end of August. The GBP/USD pair is testing the level of 1.1450, continuing to update record lows of March 2020, when the UK economy faced the challenges of the COVID-19 pandemic. The depreciation of the British currency is due to increased inflation with a simultaneous deterioration in economic forecasts. The UK, like the EU, is facing a sharp increase in the cost of living amid rising prices for gasoline, gas, electricity and food. The Bank of England is trying to curb inflation and hastily raises interest rates, but so far the trend has not been reversed. In addition, investors are waiting for the announcement of the results of the election of the head of the Conservative Party of Great Britain and the new Prime Minister, who will have to look for ways to resolve the difficult economic situation. Specifically, Liz Truss is promising to freeze electricity prices, which could ease the burden on consumers but would require an additional 100.0 billion pounds to be found.

NZDUSD
The New Zealand dollar shows a weak growth, keeping close to the local lows of July 15. NZD/USD is testing 0.6100 for a breakout. At the beginning of the week, trading activity remains restrained, due to closed markets in the US and Canada due to the Labor Day. Meanwhile, investors are evaluating the report on the US labor market for August published at the end of last week. The statistics showed an increase in the Nonfarm Payrolls by 315.0 thousand, which turned out to be 15.0 thousand better than market expectations. In July, the increase in new jobs amounted to 526.0 thousand. At the same time, Average Hourly Earnings in August slowed down from 0.5% to 0.3%, while the forecast was 0.4%. The Unemployment Rate for the same period unexpectedly accelerated sharply from 3.5% to 3.7%, although analysts did not expect any changes. The released report cannot be called unambiguously strong, but it is unlikely to influence the decision of the US Federal Reserve on the interest rate. The next meeting of the regulator will be held on September 21, and it is expected that the value will be adjusted by another 75 basis points.

USDJPY
The US dollar shows weak growth, holding above the psychological level of 140. The positions of the American currency are still supported by the expectations of further tightening of monetary policy by the US Federal Reserve, while the Bank of Japan is forced to keep rates unchanged, trying to accelerate its deflationary economy. The next meeting of the American regulator will be held on September 21 and it is expected that the interest rate will be increased in the range from 50 basis points to 75 basis points. In the meantime, investors are analyzing macroeconomic statistics published in the US. Published on Friday, the August report on the US labor market reflected an increase in Nonfarm Payrolls by another 315.0 thousand after an increase of 526.0 thousand a month earlier; however, statistics also recorded acceleration in the Unemployment Rate from 3.5% to 3.7% with a neutral forecast of analysts. The yen is now slightly supported by statistics from Japan: Jibun Bank Manufacturing PMI strengthened from 49.2 points to 49.5 points in August, while experts did not expect any changes at all.

XAUUSD
Gold prices show mixed dynamics, holding around 1700.00. At the end of last week, the quotations of the instrument managed to show weak growth and retreated from local lows of July 21, reacting to the publication of not the strongest report on the US labor market for August, which reflected an increase in Nonfarm Payrolls by 315.0 thousand after increase by 526.0 thousand a month earlier. At the same time, the released data indicated a slowdown in the Average Hourly Earnings, and also reflected an increase in the Unemployment Rate from 3.5% to 3.7%. All this somewhat reduced the likelihood of an interest rate hike by the US Federal Reserve by 75 basis points at the September meeting, but so far it is premature to draw unambiguous conclusions. Markets in the US are closed today for Labor Day, so noteworthy data is expected on Tuesday, when S&P and ISM business data for August are released.

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The second largest cryptocurrency by capitalization, ETH, is trading within a correction to the recent significant decline, consolidating around 1644.

 

ETHUSD, H4

The four-hour chart of the asset shows that the downward movement is developing within the framework of a possible Step pattern, where the second and last step has almost completed their formation. According to the implementation theory, in this case, the current global trend will continue, and the key support for the price will be the initial Fibonacci 23.6% correction at 1517, the breakdown of which will open the way for quotes to the 1252 area.

 

 

ETHUSD, D1

On the daily chart, a corrective upward wave is forming, which has recently consolidated below the support line of the local Flag pattern around 1660. The key support at the initial correction of 23.6% Fibonacci around 1517 has not yet been broken, which allows traders to hope to hold their positions at the current values for some time.

 

Technical indicators maintain a global sell signal, ignoring the local correction: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram is in the negative zone.

 

 

Resistance levels: 1900, 2200 | Support levels: 1517, 1252

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Morning Market Review

EURUSD
The European currency shows weak growth, retreating from new record lows, updated at the opening of trading the day before. The EUR/USD pair is testing 0.9950 for a breakout; however, the positions of the "bulls" remain extremely vulnerable, and the growth of the instrument is mainly due to technical factors. The market is still dominated by worries about the prospects for the European economy and the energy crisis that has erupted. While the European Central Bank (ECB) is only planning a second interest rate hike to curb inflation, the region's economy is close to recession and high electricity and gas tariffs leave no doubt that households will need more bailouts and subsidies to pay their bills this winter. Macroeconomic statistics released yesterday in the EU turned out to be negative again. The S&P Global Services PMI in Germany in August fell from 48.2 points to 47.7 points with neutral forecasts, and the same index for the eurozone fell from 50.2 points to 49.8 points. Retail Sales in the euro area in July showed a weak increase of 0.3% after a sharp fall of 1.0% a month earlier. In annual terms, the rate of decline in sales slowed down from –3.2% to –0.9%, while the forecast was –0.7%.

GBPUSD
The British pound is trading with the uptrend, building on the corrective momentum formed the day before, when the GBP/USD pair again updated record lows of March 2020. At the moment, the instrument is trying to consolidate above the level of 1.1560, taking advantage of the fact that the markets in the US were closed at the beginning of the week on the occasion of Labor Day. Meanwhile, there are few real reasons for the growth of the British currency. The economic situation in the country remains difficult against the backdrop of record inflation and attempts by the Bank of England to bring price growth under control through a systematic increase in interest rates. An additional factor of uncertainty is the policy of the new British Prime Minister Liz Truss, who was previously the head of the Foreign Office. The official will have a rather tense start to her post as the national economy is in dire need of support and the population is counting on additional subsidies to pay for skyrocketing electricity and heating bills. Meanwhile, the UK Services PMI from S&P Global fell from 52.5 points to 50.9 points in August with a neutral outlook.

AUDUSD
The Australian dollar shows multidirectional dynamics, consolidating near 0.6800. The AUD/USD pair is trying to develop an upward momentum in the ultra-short term, but today the "bulls" are facing significant resistance after the publication of the decision of the Reserve Bank of Australia (RBA) to raise the interest rate. As expected, the Australian regulator decided to adjust the value by another 50 basis points to 2.35%, explaining this by the desire to return inflation to the target range of 2–3%. Representatives of the regulator, as before, noted the existing risks due to the slowdown in the global economy, the rise in energy prices and the persistence of threats from COVID-19. Current RBA forecasts suggest that by the end of 2022, inflation will be approximately 7.5%, next year it is expected to slow down sharply to 4.0%, and in 2024 prices may fall to the upper limit of the target range of 3%. Yesterday's inflation data from TD Securities showed a 0.5% decline in August after rising 1.2% a month earlier, and in annual terms, the pace slowed down from 5.4% to 4.9%. In turn, the Commonwealth Bank Services PMI in August increased from 49.6 points to 50.2 points with a neutral forecast.

USDJPY
The US dollar shows moderate growth, testing another resistance at around 141.00. Support for the US currency is still provided by the expectations of traders regarding a further increase in interest rates by the US Federal Reserve. At the same time, investors are still confident in the strength of the US economy, which can withstand such a sharp increase in the cost of borrowing. Meanwhile, the policy of the Bank of Japan remains wait-and-see: the growth rate of consumer prices still did not reach the target levels of the Bank of Japan, which has been struggling with deflationary phenomena for a long time. Macroeconomic statistics released today did not support the yen. Overall Household Spending in July slowed down from 3.5% to 3.4% while analysts had expected it to rise to 4.2%, and the Labor Cash Earnings in July fell from 2.2% to 1.8%, with an optimistic forecast about an increase of up to 2.5%.

XAUUSD
Gold prices show moderate growth, testing the level of 1720.00. Investors are in no hurry to open long positions, fearing a new cycle of tightening monetary policy by global regulators, which was launched by the Reserve Bank of Australia (RBA) on Tuesday, raising its interest rate by 50 basis points. The meeting of the European Central Bank (ECB) is also expected this week, and there is practically no doubt that the regulator will also correct the value by 0.50% to 1.00%. In addition, the Bank of Canada may raise interest rates on Wednesday by 75 basis points at once to 3.25%. In turn, the UK will hold a hearing on the inflation report this week, where representatives of the Bank of England, and, in particular, its Governor, Andrew Bailey, will speak.

Trust Pilot Score 4.9

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Trust Pilot Score 4.9

 

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Refund Policy

There is no perfection in services online, and when funding is involved, we believe that the merchant should have a transparent refund policy. Solid ECN Securities acknowledges customer rights, and for that reason, we drafted the Solid-Refund policy. 

There are circumstances when it is essential to return payment. Clients may submit a refund petition if the merchant service was not as described, or the service was not functional or if the client justifies the reason. 

We tried to make the money return policy concise, simple, and clear to give our customers a feeling of security. That is why we guarantee our services, and if it wasn’t as described the consumer has the right to apply for a money return. 

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