Forex and Currency News

Archive for Forex and Currency News – Page 32

Currency Speculators continue to shed Euro bets for 5th week

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday October 29th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by US Dollar Index & Mexican Peso

The COT currency market speculator bets were overall lower this week as just two out of the eleven currency markets we cover had higher positioning while the other nine markets had lower speculator contracts.

Leading the gains for the currency markets was the Mexican Peso (11,148 contracts) with the US Dollar Index (773 contracts) also coming through with a positive week.

The currencies seeing declines in speculator bets on the week were the Japanese Yen (-37,588 contracts), the EuroFX (-21,780 contracts), the Canadian Dollar (-26,868 contracts), the British Pound (-8,220 contracts), the New Zealand Dollar (-1,844 contracts), the Brazilian Real (-1,464 contracts), the Swiss Franc (-1,344 contracts), Bitcoin (-224 contracts) and with the Australian Dollar (-163 contracts) also registering lower bets on the week.

Currency Speculators continue to shed Euro bets for 5th week

Highlighting the COT currency’s data this week is sharp decrease in bets for the Euro currency speculators. Large speculators have dropped their Euro positions for a fifth consecutive week and for the seventh time in the past eight weeks through Tuesday.

The Euro spec positions have fallen by -122,002 net contracts in just these last five weeks. This weakness has brought the overall positioning from +71,698 contracts on September 24th to this week’s standing of -50,304 contracts and the lowest level for Euro bets since March 3rd of 2020, a span of 243 weeks.

Helping to dampen the Euro’s appeal is the recent rate reduction by the European Central Bank (ECB). Citing a decline in inflation, the ECB trimmed the benchmark interest rate by 25 basis points from 3.50 percent to 3.26 percent on October 17th and believes the “disinflationary process is well on track“.

The Euro exchange rate versus the US Dollar had touched a yearly high in September at the 1.1249 exchange level. Since then, however, the Euro declined for four straight weeks and fell through the major support/resistance level of 1.10 and then through the 1.09 threshold as well. Currently, the Euro currency is trading right around the 1.0857 level with historical support sitting below at 1.08.

More Speculator positions:

Elsewhere, the US Dollar Index speculator positions perked up a bit this week by +773 contracts and rose for a second straight week. The USD standing is in a small bullish position after falling into a bearish level on October 8th and 15th.

The Japanese yen speculator bets dropped sharply for a second straight week and have now fallen for five straight weeks overall. This has brought the yen positioning back into a bearish level after bets had been in a bullish standing for eleven consecutive weeks.

Canadian dollar speculator positions also continued to drop and fell for the fifth consecutive week. The CAD speculator bets have decreased by a total of -101,910 contracts in just these last five weeks and brings the current position (at a total of -167,499 contracts) to the fourth most bearish standing on record.

Currencies Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Australian Dollar

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Australian Dollar (96 percent) and the leads the currency markets this week. The British Pound (66 percent) and the Japanese Yen (64 percent) come in as the next highest in the weekly strength scores.

On the downside, the EuroFX (0 percent), the US Dollar Index (8 percent), Bitcoin (11 percent) and the Canadian Dollar (13 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are .

3-Year Strength Statistics:
US Dollar Index (8.0 percent) vs US Dollar Index previous week (6.4 percent)
EuroFX (0.0 percent) vs EuroFX previous week (9.2 percent)
British Pound Sterling (65.9 percent) vs British Pound Sterling previous week (69.6 percent)
Japanese Yen (63.7 percent) vs Japanese Yen previous week (78.7 percent)
Swiss Franc (32.0 percent) vs Swiss Franc previous week (34.7 percent)
Canadian Dollar (12.9 percent) vs Canadian Dollar previous week (24.9 percent)
Australian Dollar (95.8 percent) vs Australian Dollar previous week (95.9 percent)
New Zealand Dollar (36.7 percent) vs New Zealand Dollar previous week (40.3 percent)
Mexican Peso (48.7 percent) vs Mexican Peso previous week (43.2 percent)
Brazilian Real (48.0 percent) vs Brazilian Real previous week (49.4 percent)
Bitcoin (10.5 percent) vs Bitcoin previous week (15.4 percent)

Australian Dollar & Brazilian Real top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Australian Dollar (48 percent) and the Brazilian Real (27 percent) lead the past six weeks trends for the currencies. The Mexican Peso (13 percent) and the British Pound (2 percent) are the next highest positive movers in the 3-Year trends data.

The EuroFX (-51 percent) leads the downside trend scores currently with the Canadian Dollar (-42 percent), Swiss Franc (-34 percent) and the Japanese Yen (-33 percent) following next with lower trend scores.

3-Year Strength Trends:
US Dollar Index (-0.2 percent) vs US Dollar Index previous week (-41.0 percent)
EuroFX (-50.5 percent) vs EuroFX previous week (-46.3 percent)
British Pound Sterling (1.5 percent) vs British Pound Sterling previous week (-7.1 percent)
Japanese Yen (-32.6 percent) vs Japanese Yen previous week (-17.2 percent)
Swiss Franc (-34.2 percent) vs Swiss Franc previous week (-23.0 percent)
Canadian Dollar (-42.3 percent) vs Canadian Dollar previous week (-32.1 percent)
Australian Dollar (48.0 percent) vs Australian Dollar previous week (29.6 percent)
New Zealand Dollar (-0.5 percent) vs New Zealand Dollar previous week (5.8 percent)
Mexican Peso (13.4 percent) vs Mexican Peso previous week (-1.5 percent)
Brazilian Real (26.6 percent) vs Brazilian Real previous week (26.2 percent)
Bitcoin (-19.6 percent) vs Bitcoin previous week (-28.2 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week recorded a net position of 1,684 contracts in the data reported through Tuesday. This was a weekly lift of 773 contracts from the previous week which had a total of 911 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.0 percent. The commercials are Bullish-Extreme with a score of 91.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.7 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	67.1	18.8	9.5
– Percent of Open Interest Shorts:	61.9	22.9	10.6
– Net Position:	1,684	-1,329	-355
– Gross Longs:	21,825	6,126	3,093
– Gross Shorts:	20,141	7,455	3,448
– Long to Short Ratio:	1.1 to 1	0.8 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	8.0	91.4	19.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.2	-2.8	16.0

Euro Currency Futures:

The Euro Currency large speculator standing this week recorded a net position of -50,304 contracts in the data reported through Tuesday. This was a weekly fall of -21,780 contracts from the previous week which had a total of -28,524 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.1	60.7	11.2
– Percent of Open Interest Shorts:	31.7	56.0	8.3
– Net Position:	-50,304	31,448	18,856
– Gross Longs:	159,313	401,671	73,780
– Gross Shorts:	209,617	370,223	54,924
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	13.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-50.5	54.1	-59.0

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week recorded a net position of 66,356 contracts in the data reported through Tuesday. This was a weekly fall of -8,220 contracts from the previous week which had a total of 74,576 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.9 percent. The commercials are Bearish with a score of 31.8 percent and the small traders (not shown in chart) are Bullish with a score of 78.9 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	59.9	21.9	14.7
– Percent of Open Interest Shorts:	29.9	55.5	11.1
– Net Position:	66,356	-74,301	7,945
– Gross Longs:	132,636	48,596	32,508
– Gross Shorts:	66,280	122,897	24,563
– Long to Short Ratio:	2.0 to 1	0.4 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.9	31.8	78.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.5	2.2	-18.6

Japanese Yen Futures:

The Japanese Yen large speculator standing this week recorded a net position of -24,817 contracts in the data reported through Tuesday. This was a weekly lowering of -37,588 contracts from the previous week which had a total of 12,771 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 63.7 percent. The commercials are Bearish with a score of 38.8 percent and the small traders (not shown in chart) are Bullish with a score of 55.8 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.7	53.6	16.1
– Percent of Open Interest Shorts:	39.7	41.2	17.5
– Net Position:	-24,817	28,082	-3,265
– Gross Longs:	64,925	121,136	36,292
– Gross Shorts:	89,742	93,054	39,557
– Long to Short Ratio:	0.7 to 1	1.3 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	63.7	38.8	55.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-32.6	36.7	-44.2

Swiss Franc Futures:

The Swiss Franc large speculator standing this week recorded a net position of -33,998 contracts in the data reported through Tuesday. This was a weekly reduction of -1,344 contracts from the previous week which had a total of -32,654 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 32.0 percent. The commercials are Bullish with a score of 67.4 percent and the small traders (not shown in chart) are Bearish with a score of 41.7 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.0	77.2	13.7
– Percent of Open Interest Shorts:	52.0	24.4	23.5
– Net Position:	-33,998	41,676	-7,678
– Gross Longs:	7,092	60,942	10,855
– Gross Shorts:	41,090	19,266	18,533
– Long to Short Ratio:	0.2 to 1	3.2 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.0	67.4	41.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-34.2	39.0	-32.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week recorded a net position of -167,499 contracts in the data reported through Tuesday. This was a weekly reduction of -26,868 contracts from the previous week which had a total of -140,631 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.9 percent. The commercials are Bullish-Extreme with a score of 87.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.3	80.7	8.5
– Percent of Open Interest Shorts:	59.1	27.9	10.6
– Net Position:	-167,499	174,266	-6,767
– Gross Longs:	27,399	266,311	28,068
– Gross Shorts:	194,898	92,045	34,835
– Long to Short Ratio:	0.1 to 1	2.9 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	12.9	87.9	10.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.3	43.7	-34.9

Australian Dollar Futures:

The Australian Dollar large speculator standing this week recorded a net position of 27,516 contracts in the data reported through Tuesday. This was a weekly lowering of -163 contracts from the previous week which had a total of 27,679 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 95.8 percent. The commercials are Bearish-Extreme with a score of 7.4 percent and the small traders (not shown in chart) are Bullish with a score of 76.9 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	50.9	31.4	16.7
– Percent of Open Interest Shorts:	36.0	52.0	11.0
– Net Position:	27,516	-37,858	10,342
– Gross Longs:	93,677	57,807	30,644
– Gross Shorts:	66,161	95,665	20,302
– Long to Short Ratio:	1.4 to 1	0.6 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	95.8	7.4	76.9
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	48.0	-41.6	5.7

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week recorded a net position of -2,167 contracts in the data reported through Tuesday. This was a weekly decline of -1,844 contracts from the previous week which had a total of -323 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 36.7 percent. The commercials are Bullish with a score of 62.2 percent and the small traders (not shown in chart) are Bearish with a score of 35.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.9	48.0	6.3
– Percent of Open Interest Shorts:	48.7	41.8	8.8
– Net Position:	-2,167	3,607	-1,440
– Gross Longs:	26,077	27,850	3,672
– Gross Shorts:	28,244	24,243	5,112
– Long to Short Ratio:	0.9 to 1	1.1 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	36.7	62.2	35.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.5	7.1	-45.7

Mexican Peso Futures:

The Mexican Peso large speculator standing this week recorded a net position of 35,045 contracts in the data reported through Tuesday. This was a weekly boost of 11,148 contracts from the previous week which had a total of 23,897 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 48.7 percent. The commercials are Bullish with a score of 53.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	48.2	46.3	2.4
– Percent of Open Interest Shorts:	24.5	67.7	4.7
– Net Position:	35,045	-31,575	-3,470
– Gross Longs:	71,127	68,246	3,511
– Gross Shorts:	36,082	99,821	6,981
– Long to Short Ratio:	2.0 to 1	0.7 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.7	53.8	0.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.4	-12.0	-12.1

Brazilian Real Futures:

The Brazilian Real large speculator standing this week recorded a net position of -4,269 contracts in the data reported through Tuesday. This was a weekly fall of -1,464 contracts from the previous week which had a total of -2,805 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 48.0 percent. The commercials are Bullish with a score of 53.3 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	42.2	48.3	5.5
– Percent of Open Interest Shorts:	49.5	40.8	5.7
– Net Position:	-4,269	4,392	-123
– Gross Longs:	24,784	28,361	3,205
– Gross Shorts:	29,053	23,969	3,328
– Long to Short Ratio:	0.9 to 1	1.2 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.0	53.3	20.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	26.6	-26.2	-0.6

Bitcoin Futures:

The Bitcoin large speculator standing this week recorded a net position of -1,869 contracts in the data reported through Tuesday. This was a weekly fall of -224 contracts from the previous week which had a total of -1,645 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 10.5 percent. The commercials are Bullish-Extreme with a score of 94.4 percent and the small traders (not shown in chart) are Bullish with a score of 66.0 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	83.3	6.0	4.3
– Percent of Open Interest Shorts:	88.9	2.3	2.4
– Net Position:	-1,869	1,242	627
– Gross Longs:	28,156	2,019	1,441
– Gross Shorts:	30,025	777	814
– Long to Short Ratio:	0.9 to 1	2.6 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	10.5	94.4	66.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.6	16.1	13.8

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

01 Nov

AUDUSD holds near August lows: US dollar pressure remains strong

By RoboForex Analytical Department

The AUD/USD pair fell to 0.6566 on Friday, marking its lowest since early August. The US dollar continued to strengthen last night, bolstered by signs of resilience in the US economy. Additionally, investors hold significant expectations for Donald Trump’s success in the upcoming presidential election next week.

Meanwhile, an unexpected improvement in Chinese manufacturing activity provided noticeable support for the Aussie. Given that China is Australia’s key trade and economic partner, the Australian dollar is highly responsive to developments in China.

Annual inflation in Australia eased to 3.5% in Q3 but remains above the Reserve Bank of Australia’s target range of 2.0-3.0%. Producer prices rose more than expected in the third quarter, while retail sales declined in September. These mixed signals are keeping the Aussie under pressure.

Baseline expectations suggest the Reserve Bank of Australia will leave the interest rate unchanged at 4.35% at its meeting next week.

Technical analysis of AUD/USD

On the H4 chart, the AUD/USD market completed a wave of decline to 0.6536. Today, the market is forming a consolidation range above this level. An upward breakout would signal the development of a growth wave towards 0.6656, viewed as a correction to the previous downtrend. Once this correction is completed, we may see a new decline towards 0.6492. Technically, this scenario is supported by the MACD indicator, with its signal line below zero near the lows and preparing to turn upwards.

On the H1 chart, the AUD/USD market has formed a consolidation range around 0.6561, with a potential extension towards 0.6530. After this, we may see the beginning of an upward wave targeting 0.6655 as the first objective. This growth structure is expected to be part of a broader correction. Technically, this scenario is also confirmed by the Stochastic oscillator, with its signal line below the 20 mark and preparing to rise towards 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News

30 Oct

AUD/USD Continues Downward Spiral Amid Economic Concerns

By RoboForex Analytical Department

The Australian dollar remains under significant pressure, with AUD/USD extending its downtrend mid-week to reach 0.6539, the lowest since August. The decline, which began on 1 October, has been relentless, with the pair experiencing little to no respite from its downward trajectory.

Recent data indicating that Australia’s annual inflation cooled to 2.8% in Q3 from 3.8% in Q2, falling just below the expected 2.9%, has contributed to the accelerated sell-off. Although this brings inflation within the Reserve Bank of Australia’s (RBA) target range of 2-3%, the core inflation gauge closely monitored by the RBA remains elevated at 3.5% year-on-year in Q3. Given the persistent core inflation, the RBA has no immediate impetus to lower interest rates.

The central bank maintains that inflation needs to stabilise before considering monetary easing. With the RBA’s next meeting scheduled for next week, market consensus does not anticipate a change in the current interest rate of 4.35% per annum. Rate cuts are not expected until at least May 2025.

Technical analysis of AUD/USD

The AUD/USD is persisting in its downward wave, targeting 0.6533. If this level is reached, a corrective phase towards 0.6613 may follow, and the downward trend is expected to resume towards 0.6491. The MACD indicator supports this bearish outlook, as its signal line is well below zero, indicating a continuation of the downward momentum.

On the hourly chart, AUD/USD has established a consolidation range around 0.6570, breaking downwards to continue towards 0.6533. Once this level is achieved, a corrective move to 0.6613 may begin, with an intermediate target at 0.6570. This potential upward correction is confirmed by the Stochastic oscillator, whose signal line is below 20 but poised to rise towards 80, suggesting a brief respite from the selling pressure.

Disclaimer

Financial News Forex and Currency News

30 Oct

GBPUSD could be in for mid-week “sneaky surprise”

By ForexTime

GBPUSD’s forecasted volatility jumps 24% over past week

UK government set to issue most debt since 2020

US Treasury refunding announcement in focus

Friday’s US NFP triggered GBPUSD moves of ↑ 0.5% & ↓ 0.6% over past year

Bloomberg FX model: GBPUSD has 73% of trading within1.2836 – 1.3126 this week

Here’s something GBPUSD traders may not be aware of this week.

The UK and US governments are due to make twin announcements on Wednesday, October 30th that could translate into big moves for this FX pair.

Leading up to these announcements, the forecasted volatility for GBPUSD a.k.a “cable” has already risen by 24%, even though the period also covers the upcoming US presidential elections (but that’s a story for a not-too-distant article).

gbpusd w1

1) UK Autumn Budget 2024

Chancellor of the Exchequer Rachel Reeves is set to deliver the new Labour government’s first annual budget on Wednesday at 12:30pm UK time.

Reeves is expected to announce a package of tax hikes and increased borrowing plans that will push UK debt sales to £293 billion – the highest since the response to Covid-19.

Investors will also keep an eye on any major updates on the country’s finances and the government’s plan for public spending.

This event will likely influence sentiment towards, not just the UK economy in the medium to longer term, but also GBPUSD in the immediate aftermath

The bigger picture…

Well, much attention will be on the debt sales worth the forecasted £293 billion.

This figure sets the market’s expectations for this pivotal announcement.

What does this mean?

Large debt sales may fuel concerns about inflation if they are seen as a sign of increased government spending.

High inflation expectations could even prevent the Bank of England from cutting rates as the expected pace.

Slower-than-expected BOE rate cuts could then lead to Sterling strength.

At the time of writing, traders have priced in a 25-basis point BoE cut in November with the probability of another 25 basis point cut by December at 60%.

How might this impact the GBPUSD?

The GBPUSD could jump if total debt sales surpass the £293 billion estimate as investors push back bets around faster BoE rate cuts.

Should total UK government debt sales announced below the $293 billion figure, this may weaken the GBPUSD as BoE rate cut expectations remain intact.

2) US Treasury quarterly refunding

On the other side of the Atlantic, the dollar could be rocked by heavy hitting reports on Wednesday including the Q3 GDP and ADP employment data.

The US economy is expected to remain resilient, with a forecasted 3% growth in Q3 along with 110,000 jobs added in October, according to the Automatic Data Processing Inc. ADP).

But there’s another event you may not spot on most economic calendars that could serve a “sneaky surprise” for broader markets as well.

The US Treasury quarterly refunding, which is perhaps the focus of most bond traders, could have a major impact on the USD-side of GBPUSD on Wednesday.

The bigger picture…

This is where the US government announces how much new debt needs to be sold to markets to keep financing its budget for the quarter.

This event has sparked some action in the bond markets in the past, influencing the US dollar as result.

According to Bloomberg, bond dealers widely expect that the refunding auctions will total $125 billion for the third straight quarter.

How might this impact the GBPUSD?

As an oversimplification:

Falling Bond Prices –> Rising Yields –> Stronger Dollar (and vice versa)

With the above logic in mind …

A higher-than-$125 billion figure suggests that the US Treasury plans to sell more bonds to markets.
If this weakens Treasury prices, yields could push higher, boosting the USD. A stronger USD is seen dragging the GBPUSD lower.

A lower-than- $125 billion figure may boost bond prices, pulling yields lower and weakening the USD. Dollar weakness could see the GBPUSD jump.

But wait, there’s more!

3) US October nonfarm payrolls (NFP) report

Friday’s US jobs report, due at 12:30PM GMT on November 1st, will then come at the tail end of a busy and potentially volatile trading week for the GBPUSD.

This will be the final jobs report before the US election and something that could shape expectations around what action the Fed takes for the rest of 2024.

The US economy is expected to have created 110,000 jobs in October, a major drop from the 254,000 jobs seen in the previous month.

The also crucial unemployment rate is forecasted to remain unchanged at 4.1%.

Ultimately, a disappointing report may fuel speculation around Fed rate cuts, despite potential distortions in the NFP data from the effects of recent Hurricanes and industrial strikes.

Traders are currently pricing in a 96% probability of a 25-basis point Fed cut by November with the odds of another 25 basis point rate cut by December at 70%.

Over the past year, the US NFP report has triggered upside moves of as much as 0.5% or declines of 0.6% in a 6-hour window post-release for GBPUSD.

4) Technical forces

This currency pair nicknamed “cable” has shed almost 3% month-to-date, pressured by a dovish Bank of England (BoE) and recent dollar rebound.

Although prices are bearish on the daily charts, the upcoming events could determine whether GBPUSD enters the new month above or below the psychological 1.30 level.

A solid daily close below the 100-day SMA may open the doors toward the 200-day SMA at 1.2800.

Should the 100-day SMA prove to be reliable support, this may send prices toward 1.3070 and the 50-day SMA at 1.3140.

GBPUSD--

Bloomberg’s FX model forecasts a 74% chance that GBPUSD will trade within the 1.2836 – 1.3126 range, using current levels as a base, over the next one-week period.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Forex and Currency News

28 Oct

EUR/USD Weakens Amid Global Economic Uncertainty and Strong US Dollar

By RoboForex Analytical Department

The EUR/USD pair began the week around 1.0789, reflecting heightened global economic uncertainties and a strong inclination towards safe-haven assets. The appeal of the US dollar is bolstered by rising US government bond yields and positive consumer confidence indicators from the University of Michigan, which reported a rise to 70.5 points in October, surpassing expectations.

The preference for the US dollar as a safe haven was notably evident over the weekend during Japan’s general election, underscoring the currency’s reliability in times of political and economic uncertainty.

Looking ahead, the EUR/USD pair faces a critical week with upcoming releases of October’s labor market data from the US. These figures are crucial as they could influence the Federal Reserve’s cautious stance on interest rate adjustments. Current market expectations lean towards two rate cuts by the end of the year, each by 25 basis points. However, upcoming employment data could potentially recalibrate these expectations, impacting the EUR/USD trajectory.

Technical Analysis of EUR/USD

H4 Chart Analysis: The EUR/USD has recently completed an upward wave reaching towards 1.0838 and is now undergoing a correction towards 1.0780. Should this correction complete, anticipation for a new growth wave towards 1.0850 will increase, potentially leading to the formation of a consolidation range around this level. A break above this range could extend the upward momentum towards 1.0944. The MACD indicator supports this potential, with its signal line positioned below zero but pointing upwards, suggesting an impending positive shift in momentum.

H1 Chart Analysis: On the hourly chart, the EUR/USD has stretched a growth structure to 1.0838 and is currently correcting towards 1.0780. Once this correction target is met, a new upward movement is expected to commence towards 1.0815, with potential to continue towards 1.0850. This forecast is backed by the Stochastic oscillator, whose signal line is rising from above 20 towards 80, indicating the likelihood of continued upward price action.

Disclaimer

Financial News Forex and Currency News

25 Oct

NZD/USD Hits Four-Week Low Amid US Dollar Strength

By RoboForex Analytical Department

The NZD/USD pair dropped to 0.5988 this Friday, marking a potential close lower for the fourth consecutive week. The strength of the US dollar continues to dominate the currency pair, fuelled by expectations of a moderate interest rate cut by the Federal Reserve and persistent demand for the USD amid geopolitical tensions in the Middle East and the lead-up to the US presidential election.

Reserve Bank of New Zealand Governor Adrian Orr recently reaffirmed the central bank’s capability to maintain low and stable inflation, noting that the bank is vigilant and ready to act should market conditions necessitate intervention. These comments have solidified market expectations of a potential RBNZ rate cut in November, with a 50-basis-point reduction widely anticipated. Some speculate that a more aggressive cut of 75 basis points could be on the table if conditions worsen.

Recent data indicating a drop in consumer confidence in New Zealand after three months of gains has added to the bearish sentiment surrounding the NZD.

NZD/USD technical analysis

The NZD/USD pair is extending its downward trajectory towards 0.5983. Following the achievement of this level, a corrective move towards 0.6182 could be in the offing, with an intermediate target at 0.6119. This potential rebound is supported by the MACD indicator, whose signal line remains below zero but is trending upwards, suggesting a possible easing of downward pressure.

On the hourly chart, NZD/USD has established a consolidation pattern around the 0.6000 level and has since dipped to a local low of 0.5987. A brief recovery to 0.6000 may occur as a test from below before another possible descent to 0.5983. Should this level be reached, it would likely mark the exhaustion of the current downward wave. The Stochastic oscillator reinforces this outlook, with its signal line positioned below 20 but curving upwards, indicating the potential for a short-term upward correction.

Disclaimer

Financial News Forex and Currency News

24 Oct

EUR/USD Dips to Three-Month Low Amid Strong Dollar Demand

By RoboForex Analytical Department

EUR/USD has tumbled to 1.0789, marking a near three-month low as market sentiment heavily favours the US dollar. The dollar’s strength is driven by expectations of a gradual and limited interest rate cut by the US Federal Reserve and solid prospects for Donald Trump’s re-election, which appears increasingly likely.

Concurrently, the Euro is under pressure due to a significant rate cut by the European Central Bank. This cut has set a clear downward trend for the EUR exchange rate, offering little room for recovery. This week, Fed officials advocated caution in monetary easing, suggesting that while a 50-basis-point cut by year-end is plausible, more aggressive cuts are unlikely.

The combination of Fed caution, rising US government bond yields, and the anticipated political stability under a potential second Trump term are contributing factors to the strengthening US dollar.

Today, the focus will be on key economic indicators, including Markit’s October business activity in services and industry. Additionally, data on new home sales and the weekly unemployment benefits report will be closely monitored, especially considering their importance to the Fed’s assessment of the employment landscape.

Technical analysis of EUR/USD

The EUR/USD pair has completed a downward wave to 1.0760 and is now rebounding towards 1.0880. After reaching this level, a pullback to 1.0820 is anticipated. The market may form a consolidation range at these lows, with a potential breakout upwards towards 1.0900 and possibly extending to 1.0990. The MACD indicator, currently below zero but pointing upwards, supports the possibility of a corrective rally.

On the hourly chart, EUR/USD is developing a second growth impulse towards 1.0824. Once this level is achieved, a corrective phase will be initiated, targeting 1.0790. The Stochastic oscillator, with its signal line moving towards 80 from above 50, supports this short-term bullish correction within the broader bearish context.

Disclaimer

Financial News Forex and Currency News

23 Oct

USD/JPY Climbs to Three-Month Peak Amid US Dollar Strength

By RoboForex Analytical Department

The USD/JPY currency pair surged to near three-month highs, hitting 151.79, driven by the strengthening US dollar and rising US government bond yields. The appreciation of the US dollar was supported by favourable macroeconomic data from the US and ongoing demand for safe-haven assets in anticipation of the upcoming US elections.

Japan’s political landscape is uncertain as it approaches its general elections this weekend. Preliminary polls indicate that the ruling Liberal Democratic Party could potentially lose its majority, intensifying concerns over political stability and the future direction of the Bank of Japan’s monetary policy. Such political uncertainties further diminish the prospects of the Japanese yen regaining strength against a robust US dollar.

The current environment suggests that the Bank of Japan is unlikely to intervene effectively under these conditions. Market expectations are that any attempts at intervention would be futile against the prevailing strong demand for the dollar. The yen’s fate now heavily depends on the outcome of Japan’s elections and the subsequent actions of the Bank of Japan, particularly regarding interest rate decisions.

Technical analysis of USD/JPY

The USD/JPY has established a narrow consolidation range around 150.85 and has broken upwards, continuing its ascent towards the 152.52 target. Once this level is reached, a potential corrective move back down to 150.85 may occur, testing this level from above before another likely ascent to 152.72. The MACD indicator supports this bullish pattern, with its signal line well above zero and sharply upwards, indicating strong upward momentum.

On the hourly chart, USD/JPY has developed a growth structure towards 152.85. Following the achievement of this level, a corrective phase towards 150.85 is anticipated, with an initial correction target set at 151.70. The Stochastic oscillator further underscores this potential pullback, with its signal line positioned above 80 but poised to descend towards 20, suggesting an imminent downward adjustment before further gains.

Disclaimer

Financial News Forex and Currency News

22 Oct

USDCAD: Waits on BoC rate decision

By ForexTime

BoC decision & Fed speeches/Beige book in focus

Trader’s see 88% probability of BoC 50bp cut on Wednesday.

Over past year BoC decision triggered moves of ↑ 0.3% & ↓ 0.2%

Bloomberg FX model – 80% – (1.3719 – 1.3940)

Technical levels – 1.3880 and 1.3750

The USDCAD has rallied over 2.2% this month, recently touching its highest level since early August 2024.

Prices are certainly bullish with the upside powered by a broadly stronger dollar. This can be seen in the Canadian Dollar’s performance against other G10 currencies month-to-date.

USDCAD1

More volatility could be on the cards this week due to the incoming BoC rate decision and speeches by numerous Fed officials.

Taking a quick look at the technical picture, prices are approaching weekly resistance at 1.3880. However, the Relative Strength Index (RSI) is approaching 70 – signalling that prices may be overbought.

USDCAD - w1

Here are 3 reasons why the USDCAD could see big price swings:

1) Bank of Canada rate decision

The Bank of Canada is expected to move ahead with a jumbo 50 bp rate cut on Wednesday.

In fact, traders are currently pricing in an 88% probability that rates will be cut by 50 basis points. Traders are also pricing in a 33% probability of another 50 bp cut by December!

However, the downside surprise in September’s inflation report could prompt the BoC to opt for a 25bp move instead. Inflation in Canada fell to 1.6% in September from 2% in the previous month – the lowest since February 2021.

Golden nugget: Over the past 12 months, the BoC rate decision has triggered upside moves as much as 0.3% or declines of 0.2 % in the 6 hours after the data release.

Should the BoC move ahead with a 50bp cut and signal further cuts down the road, this may weaken the CAD. Such could propel prices toward 1.3880 and 1.3940 – the upper limit of Bloomberg’s FX model.

A less dovish than expected BoC may boost the Canadian Dollar. This could trigger a selloff toward 1.3720.

2) Fed speeches & Beige book

A host of Fed speeches this week may provide fresh insight into the Fed’s stance on future policy moves. It will also be wise to keep an eye on the Fed’s Beige book published on Wednesday 23rd October which could provide insight into the health of the US economy.

Traders are currently pricing in a 90% probability of a 25-basis point cut by November and 60% probability of another cut by December.

Any major shifts to these expectations could translate to dollar volatility, influencing the USDCAD as a result.

3) Technical forces

The USDCAD is firmly bullish on the daily charts as there have been consistently higher highs and higher lows. However, the Relative Strength Index (RSI) in the daily timeframe is touching 70 -signalling that prices are heavily overbought.

If the upside momentum holds, this may push prices towards 1.3880 and 1.3940.

If bears return to the scene, this may drag prices toward 1.3750 and 1.3720.

usdcad 1

According to Bloomberg’s FX forecast model, there’s an 80% chance that USDCAD will trade within the 1.3719 – 1.3940 range over the next one week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Forex and Currency News

22 Oct

AUD/USD Struggles for Stability: Chances are Slim

By RoboForex Analytical Department

The AUD/USD pair is attempting a recovery toward 0.6681, though the prospects seem uncertain as the pair remains near a six-week low. The strengthening of the US dollar and the rise in US Treasury yields, driven by expectations of a confident victory for Donald Trump in the upcoming US presidential election, are weighing heavily on the Australian dollar.

Despite ongoing expectations for interest rate cuts by the US Federal Reserve in November and December, signs of stability in the US economy further bolster the US dollar. However, the market is tempering its expectations for further monetary easing next year.

On the domestic front, Australia’s recent labour market data was positive. September figures showed a job increase of 64.1k, significantly above the forecasted 25.0k. The unemployment rate held steady at 4.1%. Investors are now looking forward to upcoming PMI data, which could provide further insights into the health of Australia’s economy.

Despite these positive domestic indicators, China’s influence remains a critical factor for the Australian dollar, given its role as Australia’s primary trading partner. The market has deemed recent stimulus measures in China insufficient, adding to the challenges for the AUD.

Technical analysis of AUD/USD

The AUD/USD is downward towards the target level of 0.6636. Upon reaching this target, the market may form a new consolidation range at these lows. If an upward breakout occurs, a correction towards 0.6790 might be considered. The MACD indicator supports this scenario, with its signal line below zero and poised for potential growth, suggesting a possible shift in momentum.

On the hourly chart, AUD/USD has completed a downward wave to 0.6650, followed by a correction to 0.6690. Another downward movement towards 0.6636 is anticipated today. A subsequent growth wave towards 0.6722 may develop if this level is reached. The Stochastic oscillator backs this outlook, with its signal line currently above 80 but expected to descend sharply towards 20, indicating the potential for further downward movement before any recovery.

Disclaimer

Financial News Forex and Currency News

Risk Disclosure: Foreign Currency trading and trading on margin carries a high level of risk and can result in loss of part or all of your investment. Due to the level of risk and market volatility, Foreign Currency trading may not be suitable for all investors and you should not invest money you cannot afford to lose. Before deciding to invest in the foreign currency exchange market you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading, and seek advice from an independent financial advisor should you have any doubts.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.