US 30-year inflation-adjusted Treasury yield turns positive for first since June 2020 NEWS | 2/23/2021 1:12:49 AM GMT | By Omkar Godbole

 

According to data provided by the Department of the Treasury, the US 30-year real or inflation-adjusted Treasury yield has risen above zero for the first time in eight months.

The 10-year real yield has also risen by 20 basis points to -0.80%

That weakens the case for investing in store of value assets such as gold. The yellow metal is currently trading near $1,806 per ounce, representing a 0.11% drop on the day. Prices rose more than 1.4% to levels above $1,800 on Monday. 

Source from https://www.fxstreet.com/news/us-30-year-inflation-adjusted-treasury-yield-turns-positive-for-first-since-june-2020-202102230112

AUD/USD: Positive China PPI fails to put a bid under the Aussie dollar NEWS | 2/10/2021 1:50:00 AM GMT | By Omkar Godbole Share on Twitter Share on Facebook Share on Linkedin

 

• AUD/USD trades in the red below 0.7730 after rising for the third straight day on Tuesday. 
• China's PPI turns positive for the first time since January 2020. 
• The PPI, however missed estimates and consumer prices contracted in January.

AUD/USD trades weak despite China reporting an increase in factory-gate prices for the first time in 12 months. 

The Producer Price Index, or factory-gate inflation, rose 0.3% year-on-year in January, ending an 11-month deflationary trend and pointing to a recovery in the world's second-largest economy. The data, therefore, is positive for the commodity-sensitive Aussie dollar. 

So far, however, the bulls have remained on the sidelines. The AUD/USD pair trades below 0.7730, representing marginal losses on the day. 

While the PPI turned positive, the actual reading missed the expected growth of 0.4%. That could be the reason for the AUD's muted reaction to the data. Further, the Consumer Price Index contracted 0.3% year-on-year in January, following December's 0.2% growth. 

That said, the overall bias remains bullish, with markets expecting an aggressive US fiscal spending package. Friday's dismal Nonfarm Payrolls report crystallized support for President Joe Biden's $1.9 trillion spending plan. The USD has been losing ground across the board ever since. 

Meanwhile, supporting the AUD is the reflation trade and the rally in commodities. According to Financial Times, Wall Street banks are telling their clients to increase their exposure to raw materials, which are poised to benefit from a vaccine-driven global economic recovery, aided by fiscal stimulus. 

The currency pair may decline if the rising bond yields weigh over the stock markets, boosting demand for the greenback.

Source from https://www.fxstreet.com/news/aud-usd-positive-china-ppi-fails-to-put-a-bid-under-the-aussie-dollar-202102100150

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GBP/USD Price Analysis: Refreshes multi-day high above 1.3700 as bulls battle key resistance line NEWS | 2/9/2021 1:44:26 AM GMT | By Anil Panchal Share on Twitter Share on Facebook Share on Linkedin

 

• GBP/USD rises to the fresh high since May 2018.
• Key trend line hurdle from March 2020 probes the bulls.
• 21-day SMA offers immediate support inside 11-month-old ascending triangle.

Following its recent uptick to 1.3760, the fresh high since May 2018, GBP/USD eases to 1.3752 during Tuesday’s Asian trading session.

While normal RSI conditions and sustained trading beyond 21-day SMA favor the cable bulls, the resistance line of a rising triangle formation established since March 2020 challenge the immediate upside.

Hence, GBP/USD buyers targeting the 1.3800 round-figure seem to wait for a daily closing beyond the key resistance line, currently around 1.3750.

Following that, the early April 2018 low near 1.3965 and the 1.4000 round-figure will gain the market’s attention.

Alternatively, 21-day SMA and support line of the stated triangle, respectively around 1.3680 and 1.3500, become the key for GBP/USD traders.

Should the quote drops below 1.3500 on a daily closing, a downward trajectory towards the 200-day SMA level of 1.3018 can’t be ruled out.

Source from https://www.fxstreet.com/news/gbp-usd-price-analysis-refreshes-multi-day-high-above-13700-as-bulls-battle-key-resistance-line-202102090144

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AUD/USD Price Analysis: Key SMAs test bullish commitments below 0.7700 NEWS | 2/8/2021 1:58:02 AM GMT | By Anil Panchal Share on Twitter Share on Facebook Share on Linkedin

 

• AUD/USD fades Friday’s upside momentum while easing from intraday high.
• Bullish MACD, recovery above 50% and 61.8% Fibonacci retracement levels favor buyers.
• Multiple trend line from January raise bars for the bulls’ entry.

Following its pullback from an intraday high of 0.7681, AUD/USD seesaws around 0.7670 during early Monday. As a result, the 100-bar SMA emerges as a strong immediate resistance that reversed early Asian gains.

Not only the 100-bar SMA level of 0.7680 but 200-bar SMA near 0.7690 also acts as a strong hurdle to cheer bullish MACD.

Should the quote manages to cross 0.7690, a downward sloping trend line from January 14, at 0.7725 now, followed by a one-month-old resistance line near 0.7770 lure the AUD/USD buyers.

In a case where the AUD/USD bulls dominate past-0.7770, January’s top near 0.7820, also the highest since early 2018, will be in the spotlight.

On the flip side, 50% and 61.8% Fibonacci retracement of the pair’s December 21 to January 06 upside, respectively near 0.7640 and the 0.7600 round-figure, will lure the AUD/USD sellers during further weakness.

Overall, the AUD/USD prices are firmer but need to cross tough resistances to convince the buyers.

Source from https://www.fxstreet.com/news/aud-usd-price-analysis-key-smas-test-bullish-commitments-below-07700-202102080158

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USD/JPY bull's last breaths before the big slump? NEWS | 1 minutes ago | By Ross J Burland

 

• 
  USD/JPY is running deeper into resistance territory and would be expected to correct deeply soon.
• US dollar is struggling at resistance but markets are hunting yield, pressuring the yen. 

USD/JPY has been in a sideways range between 104.92 and 105.11 between the European and US range, 

In Asia, the price has is even tighter between the 104.97 and 105.06 as the market lacks a catalyst ahead of the economic data showdown in the US Nonfarm Payrolls at the end of the week. 

The risk-on sentiment was underpinned in overnight trade with positive political news in the ex-governor of the European Central Bank accepting the invite to become Italy's Prime Minister. Further economic data has given hopes of a faster recovery in both the eurozone and US.

The eurozone Consumer Price Index was higher than expected in January, +0.9%YoY (est. +0.6%YoY), with core CPI rising +1.4% (est. +0.9%YoY).

''However, the bulk of the rise was due to government actions (withdrawal of temporary sales tax cuts, Germany’s initial emissions charges, and other Covid-related actions),'' analysts at Westpac argued. 

Meanwhile, in the US, the political environment has also made some progress in a recent vote whereby  ''the Democratic-controlled US House of Representatives approved a budget outline on Wednesday that would allow them to pass President Joe Biden's proposed $1.9 trillion coronavirus aid plan without Republican support,'' Reuters reported. 

Then, in economic data from the nation, as a potential prelude to the jobs data on Friday,  the US ADP private-sector employment was stronger than expected, rising by 174k in January.

This data beat expectations of an estimated +50k outcome, with the December change revised to -78k from -123k.

The service sector was the bulk of the improvement whereby the US ISM services survey was also stronger than expected rising to 58.7 (est. 56.7, prior 57.7) - the highest level since February 2019.

Overall, the greenback is firm and trading near its strongest in more than two months against the euro and the yen on Thursday.

Sentiment for the dollar has improved recently as progress in coronavirus vaccinations has seen shorts reduce.

At the same time, the yen's net position has also declined after their recent push to the highest levels since October 2016.

The unwind in the yen could be related to a behind the scenes reflation trade as outflows head into to higher-yielding foreign assets.

USD/JPY technical analysis

Meanwhile, there is plenty of resistance up ahead for both the US dollar and USD/JPY.

Source from https://www.fxstreet.com/news/usd-jpy-bulls-last-breaths-before-the-big-slump-202102040144

AUD/USD refreshes intraday high above 0.7600 amid fresh risk-on mood, RBA in focus NEWS | 10 minutes ago | By Anil Panchal

 

• AUD/USD picks up bids to piece the intraday top.
• US President Biden told GOP senators hope rescue plan can pass with bipartisan support.
• Risks earlier dwindled on Republican Senator Collins’ downbeat comments, GME drop and further restrictions on Silver.
• RBA is expected to keep the interest rates unchanged, tone on price pressure, QE will be the key.

AUD/USD rises to 0.7648, currently up 0.32% near 0.7644, during early Tuesday. The pair traders recently cheered upbeat comments from US President Joe Biden after he met the Republicans (GOP) members of the Senate. Further, upbeat comments from China also favor AUD/USD buyers. Even so, the bulls are cautious ahead of the Reserve Bank of Australia’s (RBA) meeting.

Following Republican Party Senator Susan Collins’ comments suggesting no agreement on the package, US President Joe Biden cited “substantive and productive” discussions while signaling hopes to pass the much-awaited aid package with bipartisan support. The Democratic leader also said, there are many areas where the Republican coronavirus relief proposal does not address urgent issues, which in turn increases the urgency of the relief package.

Furthermore, Boston Fed Bank President Eric Rosengren and Atlanta Fed President Raphael Bostic reiterated the need for further stimulus amid economic uncertainty.

Also favoring the mood could be the latest comments from a Senior Chinese diplomat Yang Jiechi who said, per Reuters, that China is prepared to work with the US to move the relationship forward along the track of no conflict, no confrontation, mutual respect and win-win cooperation.

Elsewhere, CME hikes margin requirements for silver trading by 17.8% whereas Gamestop prints a three-day losing streak while directing the consolidative moves toward the $200 threshold.

Amid these plays, S&P 500 Futures reverse early-day losses while printing 0.40% intraday gains by press time. Also, the US 10-year treasury yields part ways from the previous day’s downbeat momentum while rising to 1.08%.

Looking forward, the RBA rate decision will be the key as Aussie fundamentals have been mixed off-late. While the employment strength battles with inflation weakness, RBA’s likely extension, or addition, to the Quantitative Easing (QE), can’t be ruled out. However, no rate change is expected to take place in today’s meeting.

Should the RBA surprises markets by being optimistic, despite the latest virus woes and mixed data, AUD/USD is likely to regain 0.7700 mark.

Read: Reserve Bank of Australia Preview: Policy on hold, improved economic outlook

Technical analysis

50-day SMA near 0.7600 helps AUD/USD buyers to attack a one-week-old resistance line around the mid-0.7600s. 21-day SMA near 0.7720 offers key resistance.

Source from https://www.fxstreet.com/news/aud-usd-refreshes-intraday-high-above-07600-amid-fresh-risk-on-mood-rba-in-focus-202102020140

Japan seen extending COVID-19 state of emergency this week – NHK NEWS | 2 minutes ago | By Dhwani Mehta Share on Twitter Share on Facebook Share on Linkedin

 

The Japanese government is expected to hold a meeting of its experts this week to announce an extension to the coronavirus induced state of emergency for Tokyo and other prefectures, public broadcaster NHK said on Monday.

Source from https://www.fxstreet.com/news/japan-seen-extending-covid-19-state-of-emergency-this-week-nhk-202102010233

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USD/JPY Price Analysis: Bulls throwing in the towel? 103.50 is the big test NEWS | 8 minutes ago | By Ross J Burland

 

USD/JPY bears in control below critical daily resistance.

• Bulls need to guard the mid-point of 103 on the next test.

In the prior analysis, USD/JPY bulls pressure a critical resistance in 103.90 but lack conviction, it was noted that there were little prospects of a break beyond resistance. 

In the 4-hour chart below, it was illustrated that there was a strong level of resistance for which the bulls will need to conquer to open prospects for an upside continuation:

That being said, in the original technical analysis, USD/JPY Price Analysis: Bulls taking charge from 61.8% Fibo, the price action is yet to fully invalidate the bullish bias.

The following is an up to date illustration of where the bias lies, so long as 103.50 holds. 

As can be seen, the price is trapped between both dynamic short term support and the longer-term downtrend resistance. 

Zooming in, staying on the daily chart, the price is holding above the presumed low. 

Bulls need to break the daily resistance of prior highs, yet there is little to suggest that this will occur anytime soon as the price moves deeper into the descending channel. 

Source from https://www.fxstreet.com/news/usd-jpy-price-analysis-bulls-throwing-in-the-towel-10350-is-the-big-test-202101270131

GBP/JPY Price Analysis: Bears in control towards daily 61.8% Fib target, 141.57 NEWS | 3 minutes ago | By Ross J Burland

• GBP/JPY is melting to the downside to form new resistance structure.
• Bears looking for a lower close at the top of the hour on the hourly time frame.  

Further to the prior analysis in the New York session, GBP/JPY Price Analysis: Bears to restest the daily W-formation's neckline, the price has indeed moved lower.

Bears can move their stop loss to breakeven for a 0:2.3 risk to reward probability position. 

As can be seen, the market has melted and formed a new resistance structure in breaking the lows.

This area would be expected to hold on a restest and subsequently pressure the price to the 61.8% Fibonacci daily target of 141.57.

Source from https://www.fxstreet.com/news/gbp-jpy-price-analysis-bears-in-control-towards-daily-618-fib-target-14157-202101260154

WTI: Mildly bid above $52 as risks battle hopes of output cut NEWS | 12 minutes ago | By Anil Panchal

 

• WTI wavers around intraday high amid a quiet session.
• Iraq is up for production cut to compensate for breach of the OPEC quota.
• Fears of virus variant, doubts over US fiscal stimulus challenge the risks.

WTI prints 0.30% intraday gains while taking rounds to $52.30 amid Monday’s Asian session. While weekend news suggesting output cut from Iraq favor the oil bulls, doubts over the US coronavirus (COVID-19) stimulus and the worsening virus conditions cap the upside moves.

Bloomberg came out with the news suggesting Iraq’s planned oil output cut in January and February by around 0.25 million barrels per day of production to 3.6 million barrels. While Baghdad’s slowing down of oil flow is mainly due to its inability to respect the OPEC’s targets, Kurdistan’s action will be the key to follow.

Read: Iraq will cut oil output to compensate for breach of OPEC+ quota - Bloomberg

Other than the weekend news, risk consolidation also backs the energy buyers by press time. The S&P 500 Futures gain 0.30% and stocks in Asia-Pacific also print mild gains during early Monday.

Although fears of the quickly spreading virus strain weigh on risk-tone, recently positive signs over the looming US fiscal package seem to have favored the latest optimism. It should, however, be noted that the gridlock over the US aid package hasn’t been solved yet, which in turn keeps the risks pressured while the virus variant suggests more lockdowns from the key economies in the West.

Read: US Senator Sanders: Democrats will use reconciliation to pass Covid-19 relief package – CNN

Looking forward, a light calendar before the US session keeps WTI prices at the mercy of risk catalysts. Though, cautious optimism for the American covid aid package, backed by improving conditions in China, favors the commodities.

Technical analysis

Although sustained trading beyond 21-day SMA, at $51.00 now, keeps WTI buyers hopeful, a downward sloping trend line from Wednesday, currently around $52.85, guards the quote’s short-term upside moves.

Source from https://www.fxstreet.com/news/wti-mildly-bid-above-52-as-risks-battle-hopes-of-output-cut-202101250136

WTI to average $56 in Q1 2021 – EIA NEWS | 8 minutes ago | By Omkar Godbole

 

The US Energy Information Administration (EIA) has revised the first-quarter price forecast for West Texas Intermediate (WTI) crude, the North American oil benchmark, higher to $56 from $50. 

The bullish forecast is mainly based on expectations for a rebound in the global demand for petroleum liquids, according to oilprice.com. 

Key points

EIA expects global inventory draws will contribute to forecast rising crude oil prices in the first quarter of 2021. 

While the EIA expects oil demand to rise in Q1, the recent rise in COVID-19 cases will continue to limit global oil demand in the first half of 2021.

The US GDP to grow by 5.4% in 2021, leading to energy consumption growth. Global consumption of liquid fuels in 2021

Source from https://www.fxstreet.com/news/wti-to-average-56-in-q1-2021-eia-202101220349