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The dollar was lifted along safe-haven bids as China’s economic slowdown paints a gloomy future ahead. Investors are keenly waiting for the Fed meeting minutes due this week including inflation data for Canada, UK, and Japan. Commodity-backed currencies slumped as China’s rate cut indicated an alarming slowdown in demand. The US Congressional visit to Taiwan worsens geopolitical tensions between Washington and Beijing.
USDCAD rallied by +1.00% on Monday ahead of Fed meeting minutes due on Wednesday. The US NY Empire State Manufacturing Index will be released for August and TIC Net Long-term transactions in the New York session. The Canadian dollar slumped as oil markets suffered serious losses after Chinese production data triggered growth concerns. The pair bounced off a 1.2750 support and gains are capped by the 1.2900 psychological resistance. A break above that level could extend the rally towards the 1.3075 level.
NZDJPY plummeted by -1.26% from a monthly high weighed down by better-than-expected Japanese Industrial Production data. The Japanese data rose to 9.2% from a -7.5% expected in June while Business activity in New Zealand missed expectations. The business NZ PMI shrank to 51.2 from a previous reading of 54.7. The pair retraced from the 86.00 level and bears could target the 84.50 level. Investors shift their focus to the RBNZ interest rate decision on Wednesday morning.
GBPCHF was up +0.06% as bulls got a lift from negative PPI data from Switzerland. The PPI data MoM was down at -0.1% from a previous reading of 0.4% in July while YoY data came out at 6.3% from 6.9%. The pair maintains a bearish weakness as markets eye UK’s inflation data this week. The bulls bounced off a 1.1400 level, a 29-month low and upside gains are capped by the 1.1470 level. Downside targets are at the 1.1250 level in the near term.
European stocks edged lower early Monday morning ahead of an eventful week. The FTSE 100 was down -0.71% as bulls lost steam at the 7550 level and the price could retrace towards the 7450 a 6-day low. Upside targets are capped by the 7600 level. CAC40 plunged by -0.72% from a 6600 psychological resistance and sellers could target a 12-day low at 6400. A failure to break below that level could trigger a bullish appetite toward the 6700 psychological level. DAX remained resilient at -0.08% and critical levels to watch for are the 14000 resistance and 13450 support.
US stock futures leans back as Chinese data triggers growth fears. The S&P 500 futures were down by -0.51% and critical support is at the 4200 level. Upside gains are capped by the 4300 and 4400 psychological levels. Nasdaq 100 futures trimmed Friday gains by -0.52% and upside gains are capped by the 13550 level a 4-months high. A break below the 13300 could trigger selling pressure towards the 13000 psychological support. DJIA index plunged by -0.41% from 33700 and critical levels are the 34000 resistance and 33500 support.
Oil extended losses as Traders weigh China’s economic outlook and Iran’s supply. USWTI crude oil futures plunged by -4.40% from 92.00 to the 87.00 level and a break below that level could reinforce selling pressure towards the 85.00 level. Brent crude oil futures tanked by -4.43% from 98.00 level and the next critical levels are at 93.00 and 90.00 levels.
