Wonderful introduction:
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: France's credit downgrade is ignored by the market, and Europe and the United States will not change its strength!". Hope it will be helpful to you! The original content is as follows:
Last Friday, the US dollar index was generally fluctuating, with the US dollar quoted at 97.59.
Trump: When all NATO countries stop buying Russian oil, I will be prepared to impose major sanctions on Russia.
Black Roller executive Rick Reed has become a popular candidate for Fed chairman, and Becent is optimistic about his economic forward-looking nature.
The documents show that the Federal Reserve Cook declared Atlanta property as a "vacation house" and not a "main residence".
The Polish president signed a resolution agreeing to NATO troops stationed in the country's territory.
The United Kingdom and the United States plan to sign a technology agreement to focus on key technologies such as AI and quantum stofoco.computing. The British government said that US stofoco.companies plan to invest more than 1.25 billion pounds in the UK's financial services sector.
U.S. Secretary of Energy: The EU may phase out Russian natural gas within 6 to 12 months.
The European Parliament promotes amendment to the EU-US trade agreement.
Fitch downgraded France's sovereign credit rating from AA-(high quality) to A+(middle quality).
The U.S. Congressional Budget Office lowered its U.S. economic growth forecast this year.
The new Swiss regulations are "too harsh", and UBS is considering moving to the United States.
Geopolitics:
Trump once again urged the U.S. Court of Appeal to approve the firing of Federal Reserve Director Cook. G7 Finance Minister intends to conflict with Russia and UkraineRoss supporters impose sanctions and impose tariffs. stofoco.comanyahu hinted that it would continue to "clear" Hamas leadership. Hamas confirmed that its leader Khalil Haya survived the Israeli attack.
The important day is stofoco.coming, and the market generally expects the Federal Reserve to restart the interest rate cut cycle this week. At present, the market generally expects the Fed to cut interest rates multiple times between this month and the end of next year, which also lays the foundation for the Fed's forecast to be the main driver of this meeting. But perhaps more important for the euro has emerged from some remarks by ECB President Lagarde at the ECB meeting last week. She said the deflation process was over and the eurozone economy was in good shape. This means that the ECB has stofoco.completed a rate cut, which is in sharp contrast to the Fed.
From a technical point of view, the euro also showed a similar bullish background. At the beginning of last week, the euro rose to a monthly high, and had previously broken through the bull pennant and head and shoulders bottom patterns - both of which are bullish patterns. Last week, the euro finally held the 1.1675-1.1686 support zone and the 1.1704 short-term support level, forming a short-term high and low upward trend, opening the door for bulls to break through this week.
At the daily level, the euro has formed a bullish pennant pattern, but considering that the previous trend is very strong, investors can consider light positions, and the price usually does not have obvious directionality before breaking through the pattern. Currently, the short-term resistance zone is at 1.1780-1.1789, breaking through here will hit a three-year high of 1.1830. But if the price fails to stabilize continuously, 1.1748 may soon become a potential support level for higher lows, but investors may want to see the price break through at least 1.1780 to maintain the continued bullish appeal.
The US dollar index continued to fluctuate last week, and the fluctuations converged for the sixth consecutive week. The focus is now turning to this week's Fed resolution, looking for catalysts to drive the dollar's breakthrough. The weekly support of the US dollar is at a 2021 volatility high of 96.94 and is supported by an annual low of 96.38. It should be noted that the midline of the multi-year bifurcation line converges in this area, and if the breakout/weekly line closes below it marks a recovery from a broader downward trend. The subsequent support level is at the March 2020 low/2022 decline 100% extension of 94.65/94.97, and the 2021 opening range high of 93.44.
On the upside, the U.S. dollar index needs/close above 98.75 to indicate that a more significant low has been formed, or a larger rebound is underway, with subsequent resistance at 99.58/99.83 - the area is from the 2023 low and April low weekThe closing price and the 61.8% retracement level of May decline is defined. The wider bearish failure points remain at 100.42.
In general, we expect the US dollar to break through the September opening range this week as a further guide to the next trend. If the US dollar index rebounds more significantly from this range, the decline needs to be limited to 96.94 and close above 98.75 to drive the next round of ups. This week's Federal Reserve resolution focuses on dot charts and economic forecasts.
JP Morgan said that Indonesia's central bank is likely to choose to remain cautious and wait for the volatility of the foreign exchange market to further ease, and restart the policy interest rate cut in October. The agency adjusted the originally predicted rate cut of 25 basis points to keep interest rates unchanged at Wednesday's meeting. Economist JinTikNgai pointed out in the report that due to the recent domestic political situation, the volatility of the Indonesian rupiah has increased. But he also emphasized that even if the central bank maintains policy interest rates at this meeting, considering the weak macro fundamentals of Indonesia, the easing cycle will continue. Economic data on a number of aspects such as a significant slowdown in manufacturing output confirm this view. JPMorgan Chase maintained its expected target of falling to 4.25% at the end of the year.
Bank of America said that as more and more signs show that emerging economies are resilient, emerging markets may usher in larger inflows in early next year, which will drive further transfer of funds from U.S. assets. "People will become more optimistic early next year as they will confirm that the impact of trade tensions on the economy will be limited," said David Hauner, head of fixed income strategy at Bank of America. “Even small diversified investment flows from the United States can have very significant effects.” Hauner has maintained a bullish stance on emerging markets since the first quarter. He believes that this asset class will benefit from a weaker dollar, local central banks still have room for further interest rate cuts, and global funds' historic low allocation to emerging markets. Brazil, Mexico, Colombia, Türkiye and Poland will be the main beneficiaries of foreign capital inflows, Hauner said.
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