In this article, we have covered the highlights of global market news about the USD, Gold price, Natural Gas, and EUR/CHF.
The USD is more likely to retest its highs than to fall much lower, according to ING.
Some are speculating if the dollar has peaked after it corrected 3% lower. The dollar is more likely to retest its highs, according to ING economists, than to drop far lower.
“While many trade partners would wish that to be the case, the Fed is likely to continue tightening as planned. The dollar is more likely to drop significantly lower, in our opinion, than to test its highs again.
“Our view has been driven by the Fed’s constant language that it won’t be blown off course by any lower activity or pricing data,” the author writes.
“It now seems like US activity is increasing once again as decreased petrol costs put more money in US consumers’ wallets. Near-term sales of the 2023 US recession tale seem to be difficult.
Gold price forecast: Gold is unlikely to rise further ahead of the FOMC minutes.
Just before the $1,770 level, gold’s intraday slide came to an end, and it slightly increased throughout Tuesday’s Asian session. According to Hareesh Menghani of FXStreet, any major rise seems difficult ahead of the FOMC minutes on Wednesday.
The likelihood of at least a 50 bps rate increase at the September FOMC meeting is now higher than what the markets are pricing in. Therefore, the minutes would be scrutinized for any indications of the potential for a greater 75 bps shift. This would have a significant impact on the near-term USD price dynamics and provide non-yielding gold a new directional impulse.
For optimistic traders, repeated failures to gain acceptance over the $1,800 level call for some caution. Any additional ascent, however, may now encounter resistance close to the $1,788–$1,789 range. The handle indicated earlier and last week’s swing high, located around $1,808, are the next two levels. Gold would go towards the next significant obstacle in the $1,824–$1,825 area if any follow-through buying signaled a breakthrough.
“The overnight swing bottom seems to be protecting the immediate downside at roughly $1,772 right now. The $1,754–$1,752 strong resistance breakpoint, which is now support, would be exposed below with further weakening. A decisive defeat of the latter would tip the scales in favor of bearish traders and push gold in the direction of the $1,728 intermediate support area on its way to the $1,715 area.
Natural Gas Futures: More consolidation anticipated before possible gains?
Open interest increased for the third straight session on Monday, currently up only 230 contracts, according to early data from CME Group for the natural gas futures markets. The volume increased by around 4.5K contracts and followed suit.
In spite of increased open interest and volume, natural gas prices had a non-productive session at the start of the week. Despite this, the commodity has chances for further consolidation before the $9.00 per MMBtu barrier. Further gains should make a test of the July 26 high at $9.75 in 2022 more likely to occur sooner rather than later.
EUR/CHF: New SNB intervention approach might easily lead to franc appreciation – Commerzbank
The Swiss National Bank (SNB) reversed course with its judgement on June 16. The Swiss franc has subsequently increased by a respectable 6% against the euro. And according to Commerzbank analysts, that must be the precise objective if the SNB intends to combat inflation by strengthening the CHF.
“The new intervention strategy of the SNB is now impeding any meaningful EUR/CHF recovery phase. It is expected that the Swiss franc will appreciate more quickly since an exchange rate that cannot increase considerably will collapse with increasing rapidity.
However, if the market perceives the SNB’s threats as “leaning against the wind,” they are unlikely to stop a major CHF appreciation in the medium term.
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