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August 9 2021 Daily Forex Analysis Daily News

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August 9 2021 Daily Forex Analysis Daily News August 9 2021 Daily Forex Analysis Daily News • Against a background of a resurgence of the coronavirus pandemic the main U.S. economic data in the coming week will be the reports on consumer and producer price inflation. Investors are watching closely for clues on how soon the Federal Reserve may start scaling back stimulus. There are also several Fed officials slated to speak during the coming week and their comments could help clarify the Fed’s position on tapering. Earnings will continue but will be fewer in number as earnings season winds down. • The U.S. consumer price index and the producer price index released Wednesday and Thursday, respectively will provide an insight into the current pace of inflation, one of the key factors along with the labor market, that the Fed looks at when making its monetary policy decisions. CPI is expected to moderate slightly after last month’s jump of 0.9%, the strongest gain since June 2008. The Fed has said the current surge in inflation is just temporary, but market sentiment has been hit by fears of higher inflation resulting in a sudden tapering. • Several Fed officials are due to make appearances in the coming week including Atlanta Fed President Raphael Bostic and Richmond Fed head Thomas Barkin on Monday, Chicago Fed President Charles Evans on Tuesday and Kansas City Fed President Esther George on Wednesday. Several Fed officials are due to make appearances in the coming week including Atlanta Fed President Raphael Bostic and Richmond Fed head Thomas Barkin on Monday, Chicago Fed President Charles Evans on Tuesday and Kansas City Fed President Esther George on Wednesday. It has been a stellar earnings season – out of the 427 companies in the S&P 500 that have reported earnings so far, 87.6% beat analyst expectations, the highest on record according to data. • The UK is to release figures on June GDP growth on Thursday. The June numbers will add to data already released, giving a full picture of how the economy performed in the second quarter. With restrictions easing economists expect the economy to have rebounded around 5% after a contraction at the start of the year. • EUR/USD is trading on the backfoot above 1.1750, licking its wounds after Friday’s US NFP jobs blowout induced sell-off. Stronger U.S. jobs data ramped up calls for Fed’s tightening sooner-than-expected. The rally in Treasury yields is limiting the EUR/USD pair’s upside attempts ahead of Eurozone Sentix data. EUR/USD takes offers around 1.1755, teasing the previous month’s low flashed on Friday, amid the initial Asian session on Monday. The major currency pair dropped heavily the previous day after breaking a nine-month-long support line, now resistance, amid broad US Dollar strength. The pair bears gain support from a downtick the Momentum line as they battle an upward sloping support line from March-end near July’s low. Hence, a daily closing below 1.1750 becomes necessary for the EUR/USD sellers to challenge the yearly low surrounding 1.1700. • Resistance: 1,1780– 1,1812- 1,1835 • Support: 1,1741 – 1,1720 - 1,1704 • GBP/USD extends the bounce towards 1.3900 amid a broad retreat in the US dollar. UK PM Johnson warned over plotting Chancellor Sunak’s demotion, British Business Chief urges for help over Brexit. Covid updates, stimulus news in focus amid a light docket. Economists at ING expect the cable to stay under the 1.40 level as the dollar enjoys bullish momentum. The GBP/USD week ahead sees the release of the UK growth numbers for 2Q. Economist expects to see a strong 5.0% QoQ read. Despite the high probability that the rebound in activity has paused in the summer months, the release should fuel expectations that the British economy will be back to pre-pandemic levels by year-end. • Resistance: 1,3910 – 1,3940 - 1,3984 • Support: 1,3855 – 1,3835 - 1,3780 • Gold prices fell to a 4-month low as investors focused on a rapid recovery in the US after strong jobs data and on expectations that monetary support could be withdrawn faster than expected. Dallas Fed President Robert Kaplan said the Fed should begin reducing our asset purchases earlier and gradually. In the statements made by the Fed, it was emphasized that the XAU/USD employment market would be one of the main factors that would affect the decision to reduce asset purchases. On Friday, nonfarm payrolls data came in stronger-than-expected, with the ounce gold price falling more than 7 %. Dallas Fed President Robert Kaplan said the Fed should start reducing our asset purchases earlier and gradually. Ounce of gold, which has been on the rise since April with increasing inflation and the Fed's still sending pigeon messages in its monetary policy, reached the highest level since January by exceeding $ 1,900 at the beginning of June. • Resistance: 1755$ - 1774$ - 1794$ • Support: 1723$ - 1702$ - 1683$ • Oil prices sustained their losses on concerns that the Covid-19 outbreak would rise again, posting its biggest weekly loss since October. Goldman Sachs lowered its 2021 growth forecast for China from 8.6 % to 8.3 %, assuming that the government can bring the epidemic back under control within a month. The strengthening of the dollar after the better-than-expected U.S. BRENTOIL non-farm employment data in the USA also put pressure on commodities priced in dollar terms, and was effective in the decline in oil prices. Markets will follow this week's monthly energy market report from the International Energy Agency, which will be released on Thursday. Brent oil for October delivery fell 1.8 % to $69.45 a barrel on the London ICE Futures Europe market. • Resistance: 70,29$ - 71,37$ -72,47$ • Support: 68,30$ - 67,32$ - 66,31$ Daily Pivot Level 71.81 71.55 71.40 71.25 70.99 70.73 70.57 • A large swath of S&P 500 companies surpassed Wall Street profit estimates, but their shares barely budged. It’s the second consecutive quarter of a lackluster response to earnings beats, fueling the case that U.S. stocks are due for a pullback after an 18% rally this year. The tepid response comes as cases of the delta variant are on the rise and Wall Street banks S&P500 themselves scale back return-to-office plans. With results in from most of the S&P 500 Index, 85% of companies have exceeded profit estimates, according to data compiled by Bloomberg. On average, their stocks have advanced 0.2% the day after earnings. That echoes a similar trend in the first quarter, when stocks declined an average of 0.1% following good results. • Resistance: 4,431 – 4,445– 4,461 • Support: 4,405– 4,392– 4,378 Daily Stock News • Berkshire Hathaway (NYSE: BRKb ), led by legendary CEO Warren Buffett, will be in focus this week as investors react to its latest financial results released over the weekend. Berkshire said Saturday that operating earnings jumped 21% to $6.69 billion in the second quarter—a figure of $5.51 billion in the same period a year ago, as the reopening of the economy ushered in a recovery in rail, utilities and energy activities. Revenue jumped 22% year-over-year to $69.1 billion, easily surpassing analysts' expectations of $64.6 billion. (Positive) • Alibaba Group Holdings Ltd ADR (NYSE: BABA ) announced on Sunday that it was cooperating with a police investigation into sexual assault charges against a female employee. Jinan police said they were investigating the allegation after the female employee's post came to the fore on Saturday evening and received great reactions on the country's (Twitter-like) social media site Weibo. (Negative) • Veoneer Inc (NYSE:VNE), said on Sunday it would start talks with chipmaker Qualcomm (NASDAQ:QCOM) Inc after its offer for the Swedish auto parts maker last week topped a rival bid by Magna International (NYSE:MGA) Inc. Qualcomm's offer could "reasonably be expected to result in a 'Superior Proposal', as defined under the terms of Veoneer (NYSE:VNE)'s merger agreement with Magna," the board said in a statement. Magna said it does not have any comment on the new bid. Magna's bid was worth around $3.8 billion. (Neutral) • Airbus Group SE (PARIS:AIR), has warned employees of hundreds of possible job losses at its small-parts manufacturing business in Germany if the unit is not hived off in line with a cost-cutting strategy set out in April, a source familiar with the plan told. The group sees 1,000 of its 2,500 small-parts manufacturing jobs in Germany at risk if it continues to manufacture parts within the group rather than spinning off the activities, said the source who is familiar with plans presented to its works council and trade unions. Airbus asked about the numbers of jobs at risk under the restructuring. (Negative) Currency Last Daily Change (%) Weekly Change (%) YTD Change (%) EURUSD 1,1764 0,03 0,03 -3,69 GBPUSD 1,3888 0,09 0,09 1,57 USDJPY 110,11 0,13 0,13 -6,23 USDCHF 0,9148 0,01 0,01 -3,23 EURGBP 0,8471 0,07 0,07 5,48 INDEX FUTURE Last Daily Change (%) Weekly Change (%) YTD Change (%) SPA INDEX 4429,4 0,18 -0,22 18,76 GXA INDEX 15713 -0,25 -0,25 14,40 DMA INDEX 35014 -0,23 -0,23 15,42 Commodities Last Daily Change (%) Weekly Change (%) YTD Change (%) GC1 Comdty 1741,8 -1,03 -1,03 -8,09 XAUUSD Curncy 1746,3 -0,96 -0,96 -8,02 CLA Comdty 66,67 -2,34 -2,34 38,37 CO1 Comdty 69,14 -2,22 -2,22 33,46 Time Cur.
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