Today's Economic Spotlight

MARKET ANALYSIS

GOLD - GOLD has consolidated and remains trading above its previous highest point, supported by 2487.026. With that in mind, we continue to see the possibility of an extended bullish trend in GOLD. However, we may see further selling in the market as prospects of a positive economic outlook for the U.S. remain as we approach the rate cuts. We continue to keep our systems in check to allow for high-probability entry setups.

SILVER - SILVER has progressed well with its recent downturn, showing a price drop. Given the recent developments and the positivity surrounding the new trade deal in Africa, the outlook for SILVER may remain bearish, pushing prices down. However, we should note the possibility that this outlook could change if the situation in the Middle East escalates.

Thus, we continue to look into the technical aspects as a viable source of trading bias—currently favoring the sellers’ market as prices show an SHS formation on a key structure. However, it is important to note that while the structures may seem clear, this is based on the 1H chart, meaning the trend may only last as long as a 1H chart allows and may not follow through on the higher timeframe market.

DXY - The dollar has rebounded, possibly finding its bottom near a key structure at 100.443. The failure to reach this structure is evidence of the lack of momentum to push prices lower. However, we continue to weigh what will happen with the rate cuts. We can also see investors doing the same, as prices have stagnated since the start of Monday trading.

Some data is coming this week to help us navigate expectations, mainly the U.S. payrolls data due on Friday after Fed Chair Jerome Powell last month endorsed an imminent start to interest rate cuts in response to concerns over the labor market.

Before that, job openings data on Wednesday, along with the jobless claims report on Thursday, will be in the spotlight.

Markets are pricing in a 69% chance of a 25 basis points (bps) cut when the Fed meets Sept. 17-18, with a 31% probability of a 50 bps cut, according to the CME FedWatch tool.

This week’s overload of labor data will be crucial in determining whether a 25 or 50 bps cut occurs in September, said Charu Chanana, head of currency strategy at Saxo.

"If the data remains robust, a 25 bps cut is more likely. However, weak non-farm payrolls, particularly if they fall below 130k with another jump in the unemployment rate, could push the rates market closer to pricing a 50 bps cut."

Economists surveyed by Reuters expect the addition of 165,000 U.S. jobs in August, up from an increase of 114,000 in the previous month.

GBPUSD - The Pound shares the same sentiment, with prices on standby, waiting for further data to move the market. We anticipate further weakness in the U.S. dollar but see evidence of possible strengthening—similar to the behavior shown by the Kiwi—after cutting rates due to heightened market expectations of a better economy in the coming days. This will remain true if the cut boosts business activity and manages yields and inflation expectations.

AUDUSD - The Aussie dollar remains steady, with not much action. It has been swinging steadily between two price levels, 0.67985 and 0.67531. We watch and wait for the development of this market. However, currently, prices show the possibility of a completed SHS formation.

NZDUSD - Current prices show a stagnant Kiwi as it moves more aggressively toward the U.S. dollar recovery—showing a weakening in the currency versus the Pound and the Euro. With that said, we continue to wait for what will happen next after data releases. Prices are currently between major structures at 0.62898 and 0.62086.

EURUSD - The Euro is currently gaining against the strengthening dollar but has held prices with little development from Monday trading—all in anticipation of upcoming data releases this week. We wait for further price action before making any calls.

USDJPY - The Yen has lost significantly against the dollar, showcasing its weakness. However, a sudden candle showing slight movement into the Asian range extended a single candle down. Despite this, overall trading shows prices returning to trading above 146.512. We continue to read the bottom found on Aug 26 as the lowest point until the final quarter of this year.

USDCHF - The Franc has lost ground over the past couple of days, showing no signs of recovery yet. There is a significant possibility of it regaining strength to push prices lower, but in the near term, we could see prices possibly pushing up to 0.85541. We wait to see how this market will develop.

USDCAD - The Loonie is still trading near 1.34803, with chances of trading under this structure or returning to 1.35762. We wait to see how this consolidated price run will develop as we approach data releases for both the U.S. dollar and the CAD.