Forecasts & Analysis | Fundamental, Page

It’s been very quiet in Asian trade, with the Aussie, New Zealand dollar and the Chinese yuan barely showing a pulse. We could see some movement during the day, with RBA Governor Lowe delivering a speech and New Zealand releasing trade balance and GDP.

Europe is headed toward a recession as the DAX and CAC tumble

Despite a rebound in prices, momentum has turned negative

Gold prices rose for a second consecutive trading session, following worse than expected flash Eurozone PMI data. While the data for the entire Eurozone remained in expansion territory German fare worse than the continent falling into contraction territory below the 50, boom-bust level. It appears that the ECB was too

It has been a calm start to the trading week in North America as well as in the U.K. The Mexican, Canadian and British currencies are all showing limited movement on Monday. With little for the markets to digest on the fundamental front, traders can expect a quiet Monday session.

Crude oil has started the week quietly. Will this trend continue during the week? We could have some action in mid-week, with the release of EIA Crude Inventories and U.S. GDP.

The main trend is down according to the daily swing chart. The trend turned down when sellers took out the last main bottom at $2.551.

A lower than expected U.S. Flash Manufacturing PMI number could further boost gold prices since it will likely increase the chances of a Fed rate cut in October. Currently, the market is expecting the Fed to skip October and cut rates in December instead.

Silver has stormed out of the gates on Monday, and has tested the tough $18.00 level. Can silver consolidate and continue to move higher? If so, the psychologically significant $20.00 could be vulnerable.

U.S. Flash Manufacturing PMI could also influence the price action later in the day. Traders are looking for a reading of 50.3. A lower than expected number could put further pressure on crude oil prices. A better than expected number could help erase current losses and turn prices higher.

Today’s price action is primarily being driven by a stock market sell-off in Europe. In addition to flight to safety buying of the Japanese Yen, investors are also seeking protection in U.S. Treasury bonds and gold, which means the safe-haven buying is real.

GBP/USD under a bit of pressure in early trading on Monday as the dollar is gaining upward momentum. The pair failed to sustain a bullish breakout last week which sets a bearish tone for the week ahead.

EUR/USD extended lower below the 1.1000 level in early trading on Monday after PMI data from France and Germany fell short of expectations.

It’s a sleepy start in the Asian session on Monday, with the Chinese, Australian and New Zealand currencies showing little movement. With no key U.S. data on Monday, I expect the calmness to continue.

The short-term range is $2.135 to $2.745. If sellers can take out $2.532 this week with conviction then look for a two to three week break with $2.440 to $2.368 the next likely downside target.

The primary concerns for traders this week will be whether Saudi Arabia will be able to repair its damaged oil production facilities in a timely manner and whether they can protect their production facilities and oil fields from further attacks.

The news from Friday that Chinese officials went home without visiting U.S. Farms was not a major event. So prices could retreat early in the week since this is what triggered Friday’s late short-covering rally in gold.

Both the Aussie and the Kiwi are likely to start the week under pressure as investors continue to price in future rate cuts by the RBA and the RBNZ. The big event this week will be the RBNZ interest rate decision and policy statement on September 25.

The Japanese Yen was one of two currencies to close higher against the U.S. Dollar last week. This trend is likely to continue because of uncertainties over U.S.-China trade relations, a potential escalation of tensions in the Middle East, the U.S. money market squeeze and the Fed’s rate cut.

After surprising traders with a 50 basis point rate cut in August, many traders thought the RBNZ would pass on a September 24 rate cut and trim on November 12 instead. However, this week’s price action indicates that traders aren’t taking any chances with another surprise and have already begun