27 August 2021 Afternoon Session Analysis
Euro slips following dovish ECB.
The Euro which traded against the dollar and other currency pairs have fell following dovish note from the ECB’s latest meeting minutes. According to the minutes, several members of the European Central Bank had expressed disapproval of the new monetary policy guidelines that were introduced last month. They noted that it does not take into account the risk of rising inflation in the EU which could affect the momentum of economic recovery in the long run. The new guidelines will allow the level of inflation to hover above the 2% level before any changes are implemented in monetary policy. It also suggests that the current inflation rate will be used as an indicator in determining monetary policy settings and is likely to disregard developments in the job market. Recent data from the EU also shows that current inflation levels are still below the expectations set out in the new guidelines. ECB also noted that it is still too early to conclude that coronavirus is nearing its end and suggest that December is a more suitable time to decide on its bond purchase program. At the time of writing, EUR/USD fell 0.03% to 1.1752.
In the commodities market, crude oil price remains steady and rose 0.07% to $67.85 per barrel as of writing following news of potential storm heading for Gulf of Mexico. Following latest development, energy companies began shutting in production in the Gulf of Mexico and affect 17% of crude production as a storm was brewing in the Caribbean Sea, forecast to barrel through the Gulf on the weekend. On the other hand, gold price edge higher 0.03% to 1797.40 a troy ounce at the time of writing following dollar retreat.
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Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded higher while currently testing near the resistance level 93.10. MACD which illustrate bullish momentum signal with the formation of golden cross suggest the dollar to extend its gains after it breaks above the resistance level 93.10.
Resistance level: 93.10, 93.70
Support level: 92.65, 92.15
GBPUSD, H4: GBPUSD was traded lower following prior retracement from the resistance level 1.3760. MACD which illustrate bearish bias signal with the formation of death cross suggest the pair to extend its losses towards the support level 1.3600.
Resistance level: 1.3760, 1.3885
Support level: 1.3600, 1.3460
EURUSD, H4: EURUSD was traded lower following prior retracement from the resistance level 1.1765. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to extend its retracement towards the support level 1.1705.
Resistance level: 1.1765, 1.1830
Support level: 1.1705, 1.1625
USDJPY, H4: USDJPY remain traded in a sideway channel following prior retracement from the resistance level 110.15. MACD which illustrate diminishing bullish momentum signal suggest the pair to extend its retracement towards the support level 109.60.
Resistance level: 110.15, 110.75
Support level: 109.60, 109.15
AUDUSD, H4: AUDUSD was traded lower following prior breakout below the previous support level 0.7250. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to extend its losses towards the support level 0.7150.
Resistance level: 0.7330, 0.7415
Support level: 0.7150, 0.7075
NZDUSD, H4: NZDUSD was traded lower while currently testing near the support level 0.6925. MACD which illustrate bearish bias signal with the formation of death cross suggest the pair to extend its losses after it breaks below the support level 0.6925.
Resistance level: 0.7000, 0.7075
Support level: 0.6925, 0.6815
USDCAD, H4: USDCAD was traded higher following prior breakout above the previous resistance level 1.2675. MACD which illustrate bullish momentum signal with the formation of golden cross suggest the pair to extend its gains towards the resistance level 1.2770.
Resistance level: 1.2770, 1.2870
Support level: 1.2675, 1.2585
USDCHF, H4: USDCHF remain traded in a sideway channel following recent retracement from its high level. However, MACD which illustrate diminishing bullish momentum signal suggest the pair to be traded lower in short term towards the support level 0.9100.
Resistance level: 0.9200, 0.9245
Support level: 0.9100, 0.9025
CrudeOIL, H4: Crude oil price was traded higher while currently testing the resistance level 68.35. However, MACD which illustrate diminishing bullish momentum signal with the formation of death cross suggest commodity to extend its retracement towards the support level 65.35.
Resistance level: 68.35, 71.00
Support level: 65.35, 61.60
GOLD, H4: Gold price was traded lower following prior rebound from the support level 1792.35. MACD which illustrate diminishing bearish momentum signal suggest the commodity to extend its gains towards the resistance level 1831.85.
Resistance level: 1831.85, 1866.85
Support level: 1792.35, 1760.35