50 basis point Fed cut on the table

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Any setbacks should be well supported ahead of 1.2500.

• R2 1.3239 – 6 September high – Strong
• R1 1.3200 – Figure – Medium
• S1 1.3032 – 12 September low – Medium
• S2 1.3002 – 11 September low – Strong

GBPUSD – fundamental overview

Odds for a BOE rate cut this week have moved up to about 25%, which has weighed on the Pound into the latest rally. Key standouts on Monday’s calendar come from Eurozone trade and wage growth, some ECB speak, and Canada manufacturing sales.

USDJPY – technical overview

The market has entered a period of correction after extending the uptrend to a multi-year high through 160.00. Critical support comes in around 140.00, with only a monthly close below the barrier to compromise the bullish outlook. A higher low is ideally sought out above 140.00 in favor of a bullish continuation.

• R2 144.24 – 5 September high – Strong
• R1 141.73 – 12 September high – Medium
• S1 140.28 – 15 September/2024 low – Medium
• S2 140.00 – Psychological – Medium

USDJPY – fundamental overview

The Yen has extended its run of 2024 as yield differentials continue to narrow in favor of the currency. Japan industrial production was revised higher, further contributing to the flow. There are also many who suspect we could see more Yen demand with speculative positioning still barely long Yen. Key standouts on Monday’s calendar come from Eurozone trade and wage growth, some ECB speak, and Canada manufacturing sales.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6824– 29 August high – Strong
• R2 0.6768 – 6 September high– Medium
• S1 0.6671 – 12 September low– Medium
• S2 0.6622 – 11 September low – Strong

AUDUSD – fundamental overview

The Australian Dollar stalled out into the end of last week as worry around the outlook for the China economy ramped up. Key standouts on Monday’s calendar come from Eurozone trade and wage growth, some ECB speak, and Canada manufacturing sales.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area, with a break to open a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3642 – 20 August high –Strong
• R1 1.3624 –11 September high – Medium
• S1 1.3546 – 9 September low – Medium
• S2 1.3500 – Round Number – Medium

USDCAD – fundamental overview

Trading has been mostly quiet in the Canadian Dollar, though we did see the Loonie hold up better than its peers to close out the week after taking in above forecast Canada wholesale sales and capacity utilization. Key standouts on Monday’s calendar come from Eurozone trade and wage growth, some ECB speak, and Canada manufacturing sales.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6299 – 29 August/2024 high – Strong
• R1 0.6255 – 6 September – Medium
• S1 0.6106 – 11 September low – Medium
• S2 0.6084 – 14 August high –Medium

NZDUSD – fundamental overview

The New Zealand Dollar has been dragged down by the latest decline in New Zealand home sales. Odds for a larger 50 basis point rate cut from the RBNZ next month have also jumped to about 50%. Key standouts on Monday’s calendar come from Eurozone trade and wage growth, some ECB speak, and Canada manufacturing sales.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5093, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a retest and break back above the record high.

• R2 5679 – 16 July/Record high – Strong
• R1 5642 – 13 September high – Medium
• S1 5386 – 6 September low – Medium
• S2 5346 – 13 August low – Medium

US SPX 500 – fundamental overview

The US equities market remains exceptionally well supported in 2024 on the back of an ongoing expectation for more rate cuts than less going forward. Investors are feeling better about a soft landing in the US economy and this has also been accompanied by an accommodative adjustment of Fed policy. It will however be important to keep an eye on inflation, bigger picture economic data and geopolitical risk in the months ahead.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 2500-3000 area. Setbacks should now be well supported above 2300 on a monthly close basis.

• R2 2600 – Psychological– Strong
• R1 2587 – 13 September/Record high – Medium
• S1 2472 – 4 September low – Medium
• S2 2432– 15 August low – Medium

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.