Analysis | September 10, 2021

The Week Ahead 📈 13th – 17th September

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  • Currency Pair Performance
  • 10 Big Stories Last Week
  • Chart of the Week
  • Economic Calendar Highlights
  • 5 Things to Watch this Week
  • Technical Analysis: EUR/USD | GBP/USD | USD/JPY | AUD/USD | Gold | Oil | S&P 500 | DAX

Currency Pair Performance

5-day performance as of September 9th, 2021. 20:00 GMT


10 Big Stories Last Week

In case you missed it….

ECB Tapers: The European Central Bank said it will buy ‘moderately’ less bonds as parts of its Pandemic-era bond buying program.

Euro shrugs: EUR/USD dropped ahead of the ECB tapering decision and bounced slightly off the lows after.

USD short covering: The US dollar lifted off a near 1-month low help by a modest risk-off mood.

BOJ is LONG: x\

Gold ebbs: Strength of the dollar and rising Treasury yields send XAU to a 2-week low.

Aluminium 13-year high: The metal that makes Coke cans has hits its highest price since 2008 amid supply concerns in Guinea.

5% Pullback MIA: The S&P 500 index went 307 days without a 5% pullback.

TOPIX like its 1991: Japan’s 2nd stock index to the Nikkei 225 struck a fresh 30-year high ahead of important elections in Japan.

DAX 30 to DAX 40: Deutsche Börse confirmed it will add 10 new stocks to the German index on September 20th.

El Salvador adopts: The South American country becomes the first to adopt a digital currency as legal tender.

Chart of the Week

Source: Bloomberg

What is the ‘credit impulse’? It is the 2nd-derivative of the stock of credit, meaning the change in  credit growth. This chart shows governments and companies are reducing borrowing at a rapid rate and that could badly affect global growth 12 months later. If the correlation holds up, the reflation trade may unravel further, dragging down ‘value stocks’ and possibly supporting the US dollar.

Economic Calendar Highlights

Source: FX Street

5 Things to Watch This Week

1)     iPhone 13

The latest Apple product launch day is set for Tuesday September 14th. Avid Apple fans will be able to tune in live to the event by streaming. It is widely expected that Apple will release the new iPhone 13 as well as variations like the Mini, Pro and Pro Max. In the past, AAPL shares have rallied into the event on high expectations and then dropped afterwards when they were dashed.

2)      End of DAX 30

The end of an era for German stock index trading. The DAX 30 will convert to the DAX 40 on September 20th in what is being dubbed the biggest reform in its 33-year history. Dax-owner Deutsche Börse will add 10 more stocks from the mid-cap MDAX index. The result should be higher trading volumes, greater diversification, and a shift in emphasis from cyclical to growth stocks.

3)     US CPI

US consumer prices rose 5.4% in both June and July and economists expect it to remain at lofty levels in August. Jerome Powell’s Fed are still waving their hands at inflation data calling it transitory, but they can only do that for so long. For now, the hugely disappointing August NFP means there is less pressure on them to rush their tapering plan for this year.

4)     US Retail Sales

There are signs that stimulus checks running dry, higher food prices as well as shortages of some luxury goods is putting off US consumers. US retail sales are expected to slide month-over-month for a third time in four months in August in what is starting to become a big overhang on the US economy and a threat to the dollar.

5)     China data

China’s economy led the way out of the pandemic but there are concerns it could be leading the way back down again according to PMI data. However, investors might be able to take heart from the ‘hard data’ including an expected 11.5% year-over-year rise in retail sales. Expect good data to be healthy for risky assets including AUD/USD & NZD/USD.

Technical Analysis

Here you can find analysis of the major asset classes including the major forex pairs, gold, oil, and the S&P 500.

EUR/USD (H4 Candlestick Chart)

EUR/USD pulled back from 1.19 and the July peak down to 1.18. Sideways conditions remain while capped by 1.17 and 1.19.

GBP/USD (H4 Candlestick Chart)

GBP/USD remains capped by 1.388 resistance but a sharp reversal including long hammer pattern off 1.373 suggests an upside break towards 1.398.

USD/JPY (H4 Candlestick Chart)

USD/JPY is still rangebound, caught between 109.6 and 110.4. Watch false breakouts as low-risk ways to trade an eventual breakout of the other side of the range.

AUD/USD (H4 Candlestick Chart)

AUD/USD broke 0.74/742 resistance but fell back beneath it after a made a short term double top. A dip to 0.73 could provide a buying opportunity.

USD/CAD (H4 Candlestick Chart)

USD/CAD snapped back higher, rendering the broken rising trendline useless as a signal. The 61.8% retracement of the August decline still implies a drop back under 1.25.

Gold (H4 Candlestick Chart)

XAU/USD could not overcome 1830 resistance and momentum has turned bearish. 1770 is near term support before 1750.

Brent Oil (H4 Candlestick Chart)

BRENT is still capped at 73.0, meaning a break back under 70.0 in rangebound conditions looks likely.

US 500 (H4 Candlestick Chart)

US500 tested the 20-day moving average after breaking the uptrend line through recent peaks. 4400 is possible support for a steeper pullback.

Thank you very much for reading – and have a great week trading!

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