Hi Traders!
Forex Weekly Recap for 11–15 September, 2023:
Fundamentals
Bank of Japan's (BoJ) Governor Ueda stated that his focus is on a "quiet exit" to avoid significant impacts on the market. Other key mentions from him were:
They could have enough data by year's end to determine whether they can end negative rates.
The BOJ will patiently maintain an ultra-loose policy.
Wage increases are beginning to push up service prices. The key is whether wages will keep rising next year.
Bank of England’s Mann noted that she prefers to use Economic Rates of Return (ERR) on the side of overtightening; other key mentions from her were:
If she is wrong and inflation and the economy drop more significantly, she wouldn't hesitate to cut rates.
We all need to prepare for a world where inflation is more likely to be volatile.
The European Central Bank (ECB) hiked interest rates by 25 basis points as expected, bringing the interest rate to 4.00% vs. 3.75% prior. At the press conference, President Lagarde highlighted the slowing of the Eurozone economy. Other key mentions from her were:
Rates will remain at sufficiently restrictive levels for as long as necessary.
Rates were hiked to 'reinforce commitment to our target'.
The economy is likely to remain subdued in the coming months.
In the coming months, inflation will fall.
Key Data
The UK August Payroll came in worse at -1K vs. 30K expected and -4K prior (revised from 97K):
The July unemployment rate came in as expected at 4.3%, up from 4.2% prior.
July employment change came in worse at -207k vs. -185k expected and -66k prior.
The German September ZEW survey came in worse at -79.4 vs. -75.0 expected and -71.3 prior.
The Japanese PPI came in better month over month and came in as expected year over year.
PPI M/M came in better at 0.3% vs. 0.1% expected and 0.1% prior.
PPI Y/Y came in as expected at 3.2% and 3.4% prior (revised from 3.6%).
The UK monthly GDP came in worse at -0.5% vs. -0.2% expected and 0.5% prior.
The US CPI came in better year on year and came in as expected month on month:
CPI Y/Y came in better at 3.7% vs. 3.6% expected and 3.2% prior.
CPI M/M came in expected at 0.6% and 0.2% prior.
The Australian August Jobs Report came in better across the board.
Employment change came in better at 64.9K vs. 23.0K expected and -14.6K prior.
Full-time employment came in better at 2.8K vs. -24.2K prior.
Part-time employment came in better at 62.1K vs. 9.6K prior.
The unemployment rate came in as expected at 3.7% (same as prior).
The US jobless claims beat expectations across the board.
Initial Claims: 220K vs. 225K expected and 217K prior (revised from 216K).
Continuing Claims: 1688K vs. 1695K expected and 1684K prior (revised from 1679K).
The US retail sales came in mixed across the board:
Retail sales M/M came in better at 0.6% vs. 0.2% expected and 0.5% prior (revised from 0.7%).
Retail sales Y/Y came in worse at 2.5% vs. 2.6% prior (revised from 3.2%).
The US August PPI came in better across the board:
PPI Y/Y came in better at 1.6% vs. 1.2% expected and 0.8% prior.
PPI M/M came in better at 0.7% vs. 0.4% expected and 0.4% prior (revised from 0.3%).
The New Zealand Manufacturing PMI came in worse at 46.1 vs. 46.6 prior.
Technicals
There was a strong end to the week for the US dollar after a slow start to the week against its major counterparts.
AUDUSD 1W Chart
AUDUSD again tested the 2023 low at 0.63646 and found support there. There was more bullish momentum at the support level this week to take the market near the 0.65000 level, which the market has not seen in a couple of weeks. The outlook on this pair is bullish, as it looks to be oversold.
USDJPY 1W Chart
USDJPY is quickly approaching 150. The market is now trading just under the 148 level. The 150 level lines up perfectly with the top of the ascending channel.
EURUSD 1W Chart
EURUSD is still continuing to head downwards after the support break of the rising wedge. The market has now broken below the 1.07000 handle, and there is an area of support around the 1.06000 level.
GBPUSD 1W Chart
GBPUSD is continuing its bearish momentum after the wedge support break. There is an area of support near the 1.23805 level.
The key focus for the upcoming trading week will be:
Monday: New Zealand Services PMI,
Tuesday: Reserve Bank of Australia Meeting Minutes, US Building Permits, and Housing Starts
Wednesday: UK CPI, FOMC Policy Decision
Thursday: New Zealand GDP, Swiss National Bank Policy Decision, BoE Policy Decision, US Jobless Claims
Friday: Japan CPI, Bank of Japan Policy Decision, UK Retail Sales, Flash PMIs for Australia, Japan, UK, Eurozone, US
We will be back with another Forex Weekly Recap report next week.
Best of luck for the upcoming trading week ahead. Trade safely and responsibly.
BluetonaFX
Forex Weekly Recap for 11–15 September, 2023:
Fundamentals
Bank of Japan's (BoJ) Governor Ueda stated that his focus is on a "quiet exit" to avoid significant impacts on the market. Other key mentions from him were:
They could have enough data by year's end to determine whether they can end negative rates.
The BOJ will patiently maintain an ultra-loose policy.
Wage increases are beginning to push up service prices. The key is whether wages will keep rising next year.
Bank of England’s Mann noted that she prefers to use Economic Rates of Return (ERR) on the side of overtightening; other key mentions from her were:
If she is wrong and inflation and the economy drop more significantly, she wouldn't hesitate to cut rates.
We all need to prepare for a world where inflation is more likely to be volatile.
The European Central Bank (ECB) hiked interest rates by 25 basis points as expected, bringing the interest rate to 4.00% vs. 3.75% prior. At the press conference, President Lagarde highlighted the slowing of the Eurozone economy. Other key mentions from her were:
Rates will remain at sufficiently restrictive levels for as long as necessary.
Rates were hiked to 'reinforce commitment to our target'.
The economy is likely to remain subdued in the coming months.
In the coming months, inflation will fall.
Key Data
The UK August Payroll came in worse at -1K vs. 30K expected and -4K prior (revised from 97K):
The July unemployment rate came in as expected at 4.3%, up from 4.2% prior.
July employment change came in worse at -207k vs. -185k expected and -66k prior.
The German September ZEW survey came in worse at -79.4 vs. -75.0 expected and -71.3 prior.
The Japanese PPI came in better month over month and came in as expected year over year.
PPI M/M came in better at 0.3% vs. 0.1% expected and 0.1% prior.
PPI Y/Y came in as expected at 3.2% and 3.4% prior (revised from 3.6%).
The UK monthly GDP came in worse at -0.5% vs. -0.2% expected and 0.5% prior.
The US CPI came in better year on year and came in as expected month on month:
CPI Y/Y came in better at 3.7% vs. 3.6% expected and 3.2% prior.
CPI M/M came in expected at 0.6% and 0.2% prior.
The Australian August Jobs Report came in better across the board.
Employment change came in better at 64.9K vs. 23.0K expected and -14.6K prior.
Full-time employment came in better at 2.8K vs. -24.2K prior.
Part-time employment came in better at 62.1K vs. 9.6K prior.
The unemployment rate came in as expected at 3.7% (same as prior).
The US jobless claims beat expectations across the board.
Initial Claims: 220K vs. 225K expected and 217K prior (revised from 216K).
Continuing Claims: 1688K vs. 1695K expected and 1684K prior (revised from 1679K).
The US retail sales came in mixed across the board:
Retail sales M/M came in better at 0.6% vs. 0.2% expected and 0.5% prior (revised from 0.7%).
Retail sales Y/Y came in worse at 2.5% vs. 2.6% prior (revised from 3.2%).
The US August PPI came in better across the board:
PPI Y/Y came in better at 1.6% vs. 1.2% expected and 0.8% prior.
PPI M/M came in better at 0.7% vs. 0.4% expected and 0.4% prior (revised from 0.3%).
The New Zealand Manufacturing PMI came in worse at 46.1 vs. 46.6 prior.
Technicals
There was a strong end to the week for the US dollar after a slow start to the week against its major counterparts.
AUDUSD 1W Chart
USDJPY 1W Chart
EURUSD 1W Chart
GBPUSD 1W Chart
The key focus for the upcoming trading week will be:
Monday: New Zealand Services PMI,
Tuesday: Reserve Bank of Australia Meeting Minutes, US Building Permits, and Housing Starts
Wednesday: UK CPI, FOMC Policy Decision
Thursday: New Zealand GDP, Swiss National Bank Policy Decision, BoE Policy Decision, US Jobless Claims
Friday: Japan CPI, Bank of Japan Policy Decision, UK Retail Sales, Flash PMIs for Australia, Japan, UK, Eurozone, US
We will be back with another Forex Weekly Recap report next week.
Best of luck for the upcoming trading week ahead. Trade safely and responsibly.
BluetonaFX