Daily Market Review August 25



There is an 18 percent chance that the Fed will announce a probable hike in interest rates in next month’s policy meeting. This explains the tumultuous market ahead of Fed chairperson Janet Yellen’s speech tomorrow after the U.S. GDP data release. Also, the US dollar was seen rising slightly higher against a basket of major currencies, but its ascent is being retained on the USDJPY chart, at the Japanese Yen is still a little stronger here. Elsewhere, the EURUSD dipped while the GBPUSD pair hovers around resistance.

Most central banks will hold policy meetings next month, including the Federal Reserve and the Bank of Japan. The BoJ signaled that it could decide to take further actions regarding stimulus in its next meeting and this could also weigh on the Yen. Moving on, crude prices fell again as the global oversupply matter worsens and crude price-rally was cut short. Brent futures are also being forced to stay below the $50 a barrel.

OPEC members do not seem to be volunteer enough reduce their output which was instead seen growing, while this also dampened views that a deal could be reached with them to curb output. The situation in the crude market is getting nasty and on the Wall-Street, things are not looking nice either. After a super rally of most stocks this week, bearish data from health care stocks pulled stocks down again. Stocks are going to drag U.S. indices down today, therefore keep an eye on this market.

Technical Analysis:
The Euro stepped down from earlier gains against the USD, ahead of important data releases expected today and tomorrow. However, the US dollar is not at bay from risks, as the market watched its trends closely. Yesterday, the EURUSD pair initiated the session around 1.130 level and fell initially to the 1.128 level. After edging slightly higher, the pair fell down again being hit by several pullbacks and ended the session down at the 1.124 level. The pair is currently consolidating around the same level for the moment and looks likely to be bearish. Therefore, keep an eye on this pair.

The US dollar remains a weak target for the Japanese Yen today as the pair was seen mostly consolidating after hitting lows yesterday. Yes! The pair USDJPY navigated in the lows again, starting to trade around the 100.2 level and climbing slightly higher to the 100.4 level. In the initial hours of trading, the pair was dragged down by some pullbacks and fell to the 101.15 level. Later, the pair tried to pick up some momentum to reach around the 100.6 level while the Ichimoku cloud signals a change awaited today with an intersection of the lines at the 100.3 level. The pair could move higher, thus keep an eye here.
The pair GBPUSD hovers around resistance level of 1.326 level and might hold on to previous gains around the same level. Yesterday, the session of this pair began around the 1.319 level and fell slightly to the 1.316 level in the initial hours of trading. Later, the pair edged higher to the 1.3257 level being helped by several momentary jumps. Afterwards, the pair consolidated and closed the session around the same level. Important data is lining up for the UK and is awaited tomorrow, while until then this pair is expected to consolidate around the same vicinity until further action. Keep trading safely here.

 

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