In this article, we have covered the highlights of global market news about the USD/JPY, Natural Gas, USD/CAD and NZD/USD.
USD/JPY is set to continue consolidating, according to UOB
Lee Sue Ann and Quek Ser Leang, FX Strategists at UOB Group, believe that the USD/JPY will continue to trade in a sideways fashion between 141.00 and 145.00.
View for the next 24 hours: “We said last Friday that “the price actions seem to be part of a consolidation” and that we anticipated the USD to “trade sideways within a band of 142.60/143.70.” Despite the fact that our prediction of sideways trading was not incorrect, USD traded inside a smaller range than anticipated (142.82/1.43.68). The US Dollar has a negative bias today due to the weakening of the underlying tone. Any weakness, however, is most likely restricted to a test of 142.20. (minor support is at 142.50). Resistance is found at 143.30, then 143.60.
The next 1-3 weeks: “Our most recent analysis from last Thursday (15 September, position at 143.10) remains true. As said, the US Dollar doesn’t seem prepared to rise beyond 145.00 steadily. From here, USD is probably going to fluctuate for a while between 141.00 and 145.00.”
Natural Gas Futures: A deeper retracement looks to be out of favor.
According to early CME Group readings for the natural gas futures markets, open interest decreased on Friday for the second session in a row, this time by around 8.7K contracts. Volume on the same line decreased for the second session in a row, falling by around 34.7K contracts.
Natural gas prices had a sharp decrease on Friday despite declining open interest and volume, suggesting that the slump is unlikely to continue, at least in the very near future. The $7.50 per MMBtu area continues to provide strong support for the commodity in the interim.
USD/CAD reclaims 1.3300, the highest level since November 2020, as oil prices fall and the USD strengthens.
The USD/CAD pair finds some follow-through strength on Monday after last week’s bullish breach over the 1.3210-1.3220 resistance zone. The momentum, which is supported by a number of reasons, pushes spot prices over the 1.3300 barrier during the early European session to the highest level since November 2020.
Crude oil prices have reached a more than one-week low because to worries that a worsening of the global economic slowdown and China’s zero-covid policy would reduce fuel consumption. As a result, the commodity-linked loonie is weaker, which boosts the USD/CAD pair. In addition to this, the development of new US dollar purchases, encouraged by aggressive Fed views, gives the major an extra boost and keeps the current upward trend strong.
Despite concerns that the sharp increase in borrowing prices could cause a worse global economic collapse, market morale is still shaky. Additionally, the worsening US-China relationship restrains investor interest in supposedly riskier assets, as can be seen by the generally softer tone in the equities markets. In the most recent development, US President Joe Biden said that in the case of a Chinese assault, the US would support Taiwan.
The USD/CAD pair’s upward movement seems to be the route of least resistance given the fundamental environment, which supports the USD bulls. Acceptance over the 1.3300 level boosts possibilities for a further advancing trend, even from a technical standpoint. However, in the absence of pertinent market-moving economic data and ahead of the eagerly anticipated FOMC policy decision on Wednesday, traders may choose to hold off on making risky bets.
NZD/USD falls to mid-0.5900s, returning to Friday’s almost two-year low.
The NZD/USD pair encounters new supply on Monday at the psychological level of 0.6000 as it fails to take advantage of its little advance. The intraday decline pushes spot prices back toward the lowest level seen since May 2020, which was hit on Friday, mid-0.5900s during the early European session.
On the opening day of a new week, a number of variables help the US dollar recover bullish momentum, which is perceived as imposing pressure on the NZD/USD pair. The dollar continues to benefit from growing agreement that the Fed will raise interest rates more quickly in order to control inflation. In addition, the pervasive risk-off climate supports the safe-haven buck even more and helps divert flows away from the risk-sensitive kiwi.
Please click here for the Market News Updates from 17 September 2022.