Today’s macro agenda (GMT 3)
11:10 Australia: RBA Assistant Governor Guy Debell speech
17:00 Bank of Canada interest rate decision, post-meeting statement
17:00 US: JOLTS job openings, July
17:00 US: IBD/TIPP economic optimism (September)
18:00 UK: BoE Governor Andrey Bailey, Ben Broadbent, Sir David Ramsden, Silvana Tenreyro speeches
20:10 FOMC member John Williams speech
21:00 US: Fed Beige Book
22:00 US: consumer credit change (July)
Current outlook
The dollar is stable, while Treasury bonds remain under pressure. The 10-year US Treasury yield remained at 1.365%. The dollar is likely to remain resilient amid calls from FOMC members to taper its bond buying program, despite a soft NFP report released on September 3. Profit-taking on stocks could trigger a move into defensive assets, from which the dollar would stand to gain.
Technical analysis
From a technical standpoint, bearish risks prevail. The EURUSD pair declined to 1.1829 during the Asian session. Price action technically dropped to the lower line of the channel which was supported by the 67-degree angle. Ahead of tomorrow’s ECB meeting, investors are treading cautiously amid optimistic Eurozone GDP and Delta Covid flareups. In case the 1.1827 support line is breached, the pullback will pick up to 1.1800.
Buyers bounced off the 67-degree angle and are attempting to strengthen the emerging momentum on the 5-minute chart. The US 10-year Treasury yield has started to decline. If buyers manage to raise the price to 1.1860, then we can say that the flight from risk assets is over.
Bottom line: By Tuesday’s close the single currency fell against the US dollar. The market saw a flight from risk-sensitive assets (oil, gold, crypto, AUD, NZD). Speculators have stopped buying the greenback as the UST yields are in decline. There is hope for recovery of the EURUSD pair to 1.1855/60. If the 1.1827 support line is breached, the pullback will accelerate to 1.1800.
