ข่าวสารตลาด & มุมมองเชิงลึก

The DAX cooled off in yesterday’s session off the back of higher-than-expected German inflation data. With analysis expecting the Year-on-Year rate to fall to 6%, the actual number was higher at 6.2%. This has raised some concerns over the fight against inflation in Germany, putting an end to the three-day green streak for the DAX.

Technically, price bounced nicely off the support zone around 15,500-15,600. This level has acted as both a key area of resistance and support in the past 6 months. Since the first breakout above that zone in March, price has been ranging sideways ever since.

Multiple attempts to break and hold above the January 2022 high have failed, and the recent sell-off coincided nicely at the mid-range level. From a purely support and resistance technical view, there are two scenarios that could occur. The first would be a fall back down to the key support level around 15,600.

The second could be a positive catalyst news even that kicks price through the mid-range resistance level and back up towards the January 2022 high for a 4th attempt at breaking through. Since the recent low 2 weeks ago, the price action formed a more bullish market structure on the lower timeframes. We’ve seen a clean higher high and higher low.

While this bullish structure holds, bulls could remain in control.

In June, the Reserve Bank of Australia (RBA) surprised markets with a decision to hike rates by 25bps, taking the Australian cash rate to 4.10%. This was decided on the basis that further increases were required to provide greater confidence that inflation would return to the target range within a reasonable timeframe. This decision led to the AUDUSD climbing steadily from the 0.6650 price level up toward the 0.69 round number resistance area.

Currently, the AUDUSD is trading along the 0.6670 price level, just below the 23.60% Fibonacci retracement level, in the lead-up to the RBA decision on 4th July. While markets anticipate that the RBA could hold rates at 4.10%, given that the consumer price index (CPI) has fallen significantly from 6.8% to 5.6%, another surprise hike from the RBA could still be possible as inflation is still well above the target range. As the AUDUSD found relative support along the 0.6595 price level and with the Relative Strength Index (RSI) trending to the upside, a decision from the RBA to hike rates to 4.35% could lead the AUDUSD to climb steadily toward the immediate resistance level of 0.69.

Watch for the price to break above the 0.67 round number level, to signal a confirmation of the upside, with the 0.68 price level coinciding with the 61.8% Fibonacci retracement level providing brief resistance on the path up to the 0.69 resistance area.

Since March 2023, the GBPUSD had been trading higher as the US Federal Reserve and the Bank of England (BoE) maintained along their path to continue raising rates, as they battled to bring inflation down to their 2-3% target level. As the DXY recovered in strength, this led the GBPUSD to reverse from the high of 1.3130, trading down toward the lower bound of the bullish channel, along the 1.28 price level. Although the Consumer Price Index (CPI) data in July had a signaled a slowdown of inflation growth to 7.9%, this is still well above the BoE’s target level and significantly higher, compared to the other major economies.

At the upcoming meeting on 3rd August, the BoE is expected to raise rates by 25bps, a fourteenth successive tightening, taking rates to 5.25% the highest since December 2007. However, it cannot be ruled out that the BoE could further surprise markets with a 50bps rate hike, similar to its actions in June. At the upcoming meeting on 3rd August, the BoE is expected to raise rates by 25bps, a fourteenth successive tightening, taking rates to 5.25% the highest since December 2007.

However, it cannot be ruled out that the BoE could further surprise markets with a 50bps rate hike, similar to its actions in June.

Australian CPI figures today see a rapid cooling in Aussie inflation, coming in at 5.6% y/y against an expected 6.1% and a big drop from April’s 6.8% shock to the upside. This saw a rapid re-pricing of rate hike odds at the next RBA meeting on July 4 th, with interbank futures signaling odds have dropped to 17% of a 25bp move, from 25% pre-CPI. Unsurprisingly a rapid fall in AUDUSD was also a consequence of this market repricing, after finding some support at the 50% retracement level of the June low to highs this week, AUDUSD pushed lower to test the 618% Fibonacci level before finding some buyers.

These two levels will be worth watching, whether AUDUSD can regain and again find support at the 50% retracement or that level now becomes resistance and puts the 61.8% retracement level in danger of giving way.

USD was firmly in the red in Tuesdays session, with the US Dollar Index (DXY) having it’s largest drop since mid-July. A rally in DXY during the Asian and early European session dramatically reversed after big misses on the JOLTS report and consumer confidence saw a dovish repricing in rates markets and a risk-on back in charge. Stocks rallied and the Dollar tumbled throughout the rest of the session.

DXY hitting lows of 103.36, breaking through the minor R/S level of 103.60 after testing the major resistance zone of the May/June/August highs. DXY now sitting on its upward trendline which has been in play since mid-July, which so far has lent some support. Looking ahead today there will be more jobs data (ADP) and Prelim GDP for USD traders to navigate.

AUD, NZD and EUR were all firmer against the USD. High beta AUD and NZD were the clear outperformers while EUR saw similar gains, all benefitting from USD weakness and a risk-on environment as opposed to anything currency specific. AUD was also given an extra boost by gains in iron ore.

AUDUSD hit a high of 0.6487, testing last week’s highs and the resistance just below the psychological 0.6500 level. NZDUSD up to 0.5977 also pushing to the highs of its recent range. Ahead today a pivotal CPI figure out of Australia may see some of these levels tested.

EURUSD hit highs of 1.0891, retaking the support level at 1.0840 and looking to test the big figure at 1.09 to the upside. Eurozone inflation figures out of Germany and Spain released later today will be the main risk events for EUR traders. JPY rallied against the USD later in the session on the retreat of US Treasury yields after weak US data.

Earlier in the session though USDJPY breached the August highs resistance level to trade up to a high of 147.38 (which was its highest level since November) before the aforementioned weak US data and move lower in UST yields saw a dramatic reversal. BoJ intervention on the Yen still on the back of JPY traders’ minds. Today’s calendar has some decent risk events likely to cause volatility in FX markets, starting with Aussie CPI, then CPI readings from the Eurozone and topped off with GDP and more jobs data out of the US.

Despite runaway US treasury yields which saw 10-year yields hit their highest level since 2007, the USD was flat in Monday’s session as it seems improved risk sentiment and a technically overbought Dollar Index (DXY)held it in check. DXY traded within a tight range with a low of 103.13 and a high of 103.50, where it was again rejected at the major resistance set at the July and August to date highs. USD traders focus today will be on FedSpeak from Bowman, Goolsbee, and Barkin whose comments will be closely watched ahead of Jackson Hole later in the week.

EUR was the outperforming major currency, with EURUSD pushing hard to reclaim the psychological 1.09 level but failing to hold convincingly above. Another headline to hit the wires was HSBC giving a bullish take on the EUR "in part built on the idea of upside for the EUR from overly dovish rate expectations for the ECB". They noted that while headline inflation figures are cooling, core inflation is proving stickier.

JPY resumed its march lower on Monday, reversing its 2-day rally from late last week. The jump higher in US yields saw carry traders back in action taking the USDJPY back above 146.00 from lows of 145.15. A note from JP Morgan stated that they believe the MoF will not intervene in the FX market at around 145 level as they did previously, with JPM analysts believing the threshold level for BoJ intervention being around 150 level.

AUD and NZD saw marginal gains vs the USD with the Kiwi the lagging vs the Aussie after New Zealand trade figures showed a deficit of 1.1bln in July, vs the prior surplus of 9mln. AUDUSD reclaimed the big figure at 0.6400, AUDNZD holding above the key 1.0800 level. A quiet calendar ahead today for both AUD and NZD, with general market sentiment likely to be the main drivers in price action for the rest of the week.