The last week of the month is often packed with data that ties up a few loose ends. Whilst this is true on the economic calendar this week, there is still much to keep traders on their toes. US Consumer Confidence, the Core Personal Consumption Expenditure and Eurozone HICP inflation can all move markets.

Watch for: 

  • North America – US Consumer Confidence and core PCE, and Canadian GDP for July
  • Europe – Eurozone sentiment gauges and HICP inflation
  • Asia – Japanese sector data and Chinese official PMIs
  • LatAm – Interest rates for Mexico and Colombia, plus unemployment across the region

North America

N.B. Forecasts are the latest available consensus 

US dollar (USD)

The USD is seen as a key outperformer on major forex as major central banks continue to hike into recessionary trends. Bad news is good for the USD (as a safe haven), but equally the good news that is expected (such as the forecast improvement in Consumer Confidence) will likely also boost the USD (as it only helps to embolden the Fed). This all adds up to continued USD outperformance in the near to medium term.

Canadian dollar (CAD)

A falling oil price, negative risk appetite and the huge strength of the US dollar have all hit the outlook for the CAD. Traders will be watching Canadian July GDP with interest as it is the first hard data for how growth Q3 is progressing. A drop to negative may hit broad risk appetite and the CAD.

  • USD/CAD – The breakout is through historic resistance at 1.3470 to levels not seen in over 2 years. However, momentum is more overbought on the RSI than at any time since March 2020. The potential for a technical correction is high this week. The next resistance is 1.3650/1.3700. Breakout support is at 1.3230.


Recession signals continue to weigh on the outlook for commodities. The negative implications for oil demand are subsequently a drag on the price. Even if supplies are being restricted, the oil price is a demand story for now. If this continues, oil will continue to post lower highs and lower lows. Precious metals have shown signs of encouragement in the past week. Perhaps taking some safe haven flow has helped gold to at least stem the tide of selling. However, real US bond yields moving decisively higher will weigh on gold (both have a negative correlation). It is though interesting to see a much better performance from silver. Could silver be leading for a recovery? 

  • Brent Crude Oil – reaction to the support of the September low at $88.25 will be key this week. The downtrend channel continues to post lower highs and lower lows. This leaves the resistance at $93.25/$96.40 increasingly key. Below $88.25 the next support is at $85.00.
  • Gold – The overhead supply between $1680/$1697 is growing. Although the market spent the past week in consolidation, we still look to use near-term strength as a chance to sell. The next band of support is around $1610 and then $1560.
  • Silver – Two key trends converge this week. A four-month downtrend hits a three-week recovery uptrend. There is still a bias toward selling into the recovery, but if the price can hold a break above $20.00 this strategy may need to be reviewed. 

Wall Street

With little other than negative macro news to drive equity markets, the path of least resistance is lower. The Fed tightening aggressively into deteriorating economic outlook, in addition to negative geopolitical newsflow leaves Wall Street vulnerable to a retest of the June lows. 

  • S&P 500 futures – with downside momentum growing, a test of not only the July low at 3723 but also the key June low at 3639 could be seen. Near-term rallies remain a chance to sell. Key resistance is now overhead between 3885/3950.
  • NASDAQ 100 futures – a retest of the June low at 11070 is growing increasingly likely now. Downside momentum remains negative and we look to sell into strength. Any rebound towards initial resistance at 11775/11920 looks to be a chance to sell.
  • Dow futures – A test of the June low at 29635 is increasingly likely. However, with the RSI around 30, the potential for a near-term technical rally is growing. We look to use a rebound towards 30600/30970 as a chance to sell. 


N.B. Forecasts are the latest available consensus 

Euro (EUR)

The European Central Bank is having to tighten aggressively in the face of rising inflation. However, deteriorating economic trends mean this is not seen as a positive for the EUR. Inflation is forecast to jump again in September and this will only add further problems to the task of the ECB to tame inflation in the face of negative growth trends. 

  • EUR/USD – the downside break of support at 0.9865/0.9900 leaves the pair at 20-year lows. Downside projection targets open 0.9600/0.9650. There is strong negative momentum but is approaching oversold on the RSI. This may induce a technical rally but any move towards overhead supply 0.9865/0.9900 is a chance to sell.

British pound (GBP)

The Bank of England remains stuck between a rock and a hard place. Tightening monetary policy into a recession is never great. There will be little to chee this week as Q2 GDP is expected to be confirmed as being negative. Coming to the end of Q3 now, the UK may already be in a technical recession (two consecutive quarters of negative growth). We continue to favour selling GBP into strength. 

  • GBP/USD – there is no support until big round number levels, so 1.1000 is next (before parity). Momentum is strongly negative but oversold. We would look to sell any near-term rallies. There is resistance between 1.1350/1.1450.


European indices continue to track lower. The German DAX is especially suffering as a market geared towards export and economic growth. FTSE 100 is more defensive and generates around 70% of earnings from overseas. Subsequently, the weakness of the GBP is helping to support the index and outperform other major markets.

  • DAX – has broken the key long-term support of 12375/12435. A decisive move clear below 12375 would open the October 2020 low of 11320. Although there is further downside potential in the negative momentum we look to use near-term strength as another chance to sell. We believe any bull failure under 12930 is an opportunity. 
  • FTSE 100 – with such strong negative momentum, the support at 6969/7010 is under pressure. Although the RSI is around 30 and a technical rally is becoming overdue, we would look to sell any intraday strength. Initial resistance is between 7127/7172.


N.B. Forecasts are the latest available consensus 

Japanese yen (JPY)

Japan has finally intervened to restrict the losses on the yen. What the Bank of Japan Japan has chosen to do is uncertain, however, it is a huge holder of US Treasuries. There has been a significant jolt lower to XXX/JPY pairs. Intervention tends to be a short-term move unless it is a sustained procedure. Momentum for the yen may sustain into the new week. Ultimately, the Bank of Japan will need to start tightening policy for a sustainable JPY recovery.

  • USD/JPY – the near-term rally has been stopped in its tracks by the intervention. However, we would still favour buying into weakness. Support between 139.40/140/.40 is now in place. We look for a retest of the 145.00/145.90 in due course.  
  • AUD/JPY – With JPY supported by the intervention, the pair has dropped sharply in the past couple of sessions. With negative momentum building a test of the support around 93.10 could be seen. There is also resistance now 94.75/95.50.

Australian dollar (AUD)

The AUD is being hit along with other risk assets. A deteriorating outlook for Australian Retail Sales is not going to help this trend. Traders will be also watching the Chinese PMIs on Friday. An improvement may help to lift the AUD near-term.

  • AUD/USD – The decisive downside break below 0.6670 continues the run of lower highs and lower lows. We look to use any near-term technical rally as a chance to sell. Resistance is growing between 0.6670/0.6750.

New Zealand dollar (NZD)

The Kiwi is also feeling the strain of risk asset selling. Moves still tend to be thrown around with the AUD outlook. An improvement in the trend of Chinese PMIs would help for a near-term boost though.

  • NZD/USD – There is considerable downside momentum in the sell-off. However, the RSI is below 30 and a technical rally is looking overdue. Initial resistance comes in between 0.5910/0.6000.


N.B. Forecasts are the latest available consensus 

Brazilian real (BRL)

With signs of improving economic trends (inflation lower) the Brazilian Central Bank held rates steady last week. Unemployment is expected to be added to the list of improvements this week. The real has performed well in the face of significant USD strengthening but also remains positive versus Lat Am peers.  

  • USD/BRL – A stronger USD in the wake of the Fed has fought back on a slip back in USD/BRL. Near-term unwinds have been finding higher lows in the past month as the pair has tested the resistance at 5.320/5.360. Holding the support at 5.1200 will be key to this slight upside bias continuing.

Mexican peso (MXN)

Unemployment in Mexico is expected to tick a shade higher again, for a six-month high (highest since February). Furthermore, with August inflation continuing to climb (to 8.7%) and moving back above the interest rate, markets expect the central bank to respond with another +50bps increase to 9.0% this week. The peso has performed well recently despite these negative trends.

  • USD/MXN –the near to medium-term outlook on USD/MXN remains stuck in the now six-week trading range. Support at between 19.750/19.850 remains intact for now but there is the slightest negative bias to RSI momentum configuration. Last week’s lower high at 20.160 adds to the further resistance around 20.200/20.300.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.