Plenty of room for volatility today

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 1.3266 – 27 August/2024 high – Strong
• R1 1.3239 – 6 September high – Medium
• S1 1.3115 – 13 September low – Medium
• S2 1.3002 – 11 September low – Strong

GBPUSD – fundamental overview

Most of the price action around the Pound this week has been about positioning into today's UK inflation data and tomorrow's BOE policy decision. Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, Eurozone construction output, US housing starts, US building permits, the Bank of Canada Minutes, and the Fed policy decision.

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 – 13 September low – Medium
• S2 139.58 – 16 September/2024 low – Strong

USDJPY – fundamental overview

The Yen continues to find demand into dips against the US Dollar as monetary policy divergence continues to be a major theme. Today's bout of Yen weakness was said to come from the weaker than expected Japan trade data. But speculative positioning long Yen isn't all that high despite recent Yen strength which warns there could still be quite a bit more upside for the Yen between now and year end. Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, Eurozone construction output, US housing starts, US building permits, the Bank of Canada Minutes, and the Fed policy decision.

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 0.6800 – Figure– Medium
• S1 0.6671 – 12 September low– Medium
• S2 0.6622 – 11 September low – Strong

AUDUSD – fundamental overview

Most of the latest gains in the Australian Dollar come from pricing into today's Fed decision in which the market has been selling the US Dollar on expectation for a 50 basis point rate cut. We have seen some mild Aussie selling early Wednesday after the Westpac-MI Leading Index showed the six-month annualized growth rate dropping modestly into negative territory in August. Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, Eurozone construction output, US housing starts, US building permits, the Bank of Canada Minutes, and the Fed policy decision.

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

Canada housing starts plunged while Canada inflation data cooled off, both of which opened the door for renewed selling of the Canadian Dollar. The only saving grace was a higher oil price. The local rate market is now pricing three 25 basis point rate cuts over the two remaining meetings in 2024. Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, Eurozone construction output, US housing starts, US building permits, the Bank of Canada Minutes, and the Fed policy decision.

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 propped up on healthy investor risk appetite and well bid commodities prices. We've also seen added demand from better local data in the form of the Westpac consumer confidence report and GDT auction results. Key standouts on Wednesday’s calendar come from UK inflation, Eurozone inflation, Eurozone construction output, US housing starts, US building permits, the Bank of Canada Minutes, and the Fed policy decision.

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 continued push to fresh record highs.

• R2 5680 – 17 September/Record high – Strong
• R1 5660 – 3 September high – Medium
• S1 5540 – 12 September low – Medium
• S2 5386 – 6 September low – Strong

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 2590 – 16 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.