Market Update - 07 September  2023

USD/JPY retraces from the yearly high amid the stronger Dollar. Japanese government is likely to implement new economic stimulus measures in October. Markets anticipate that the Federal Reserve (Fed) will hold rates above 5% for a longer period. Japanese Gross Domestic Product (GDP) for Q2 will be a closely watched event. (FXStreet)

EUR/USD fades bounce off three-month low, renews intraday bottom of late. Divergence between Eurozone and US data joins stark difference of ECB vs. Fed talks to weigh on Euro pair. German Industrial Production, Final readings of EU Q2 GDP and mid-tier US employment data will decorate calendar. Fed talks will be in the spotlight as ECB policymakers’ ‘quiet’ period begins, US soft landing concerns gain acceptance. (FXStreet)

AUD/USD reverses the previous day’s corrective bounce off yearly low despite lacking momentum of late. Six-month-old descending trend line challenges Aussie bears amid oversold RSI. Recovery remains elusive below 0.6460 resistance confluence; 0.6500 adds to the upside filters. (FXStreet)

EUR/JPY remains on the back foot around intraday low while snapping three-day winning streak. German Industrial Production for July slides to -2.1% YoY versus -1.5% prior. Sluggish yields, ECB blackout join hawkish BoJ concerns to lure sellers. Eurozone Q2 GDP, risk catalysts eyed for clear directions. (FXStreet)

EUR/GBP trades within a descending trend channel on the four-hour chart. The key resistance level is seen at 0.8600; the initial support level is located at 0.8563. Relative Strength Index (RSI) and MACD stand in bullish territory. (FXStreet)

The index extends the march north and targets 105.00. Usual weekly Initial Claims next on tap in the docket. Fed’s Harker, Williams, Bostic and Bowman speak later. The USD Index (DXY), which tracks the greenback vs. a bundle of its main competitors, keeps the buying pressure well in place and approaches the 105.00 region on Thursday. (FXStreet)

NZD/USD struggles to recover from its lowest since November 2022. Fed is expected to adopt a hawkish stance; contributing to the strength of the US Dollar (USD). Higher US Treasury yields reinforce the Greenback’s winning streak. China-related concerns are weighing on the Kiwi pair. (FXStreet)

USD/CAD regains positive traction on Thursday and is supported by a bullish USD. The prospects for more Fed rate hikes and a softer risk tone benefit the Greenback. Retreating Oil prices undermines the Loonie and supports prospects for further gains. (FXStreet)

USD/CHF bulls struggle to keep the reins at two-month high. Overbought RSI (14) line joins three-week-old ascending trend line to challenge buyers. Swiss Franc pair sellers need validation from 0.8780 support confluence, previous resistance line to retake control. (FXStreet)

USD/MXN scales higher for the sixth straight day and touches a three-month high on Thursday. The recent breakout through the 100-day SMA and the 17.40-45 hurdle favour bullish traders. The slightly overbought RSI on the daily chart is seen as the only factor capping further gains. (FXStreet)

WTI prices trade lower ahead of the EIA Crude Oil stockpiles report. API US crude oil inventories declined notably higher than expectations. Saudi Arabia's crude output will be closer to 9 million (bpd) through the year 2023. China’s gloomy economic situation could limit the upside potential of black gold. (FXStreet)

Gold Price portrays corrective bounce at one-week low amid lackluster markets. Broad US Dollar strength, risk aversion prod XAU/USD rebound from key support confluence. Hawkish Fed talks, concerns about US economic strength keep Gold sellers hopeful of breaking immediate support. (FXStreet)

Source: FXStreet

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