With the month ending next Thursday, what moves did we see in August?
The USD moved higher versus all the major currencies:
- DXY: Looking at the dollar index (weighted dollar index), it moved up 2.28% this month. Looking at the daily chart, the price started the month trading above and below the 100-day moving average 102.434. By mid-month, the price had crossed over the 200-day moving average 103.126 and although there were a couple of dips below that moving average level intraday, there were no closes below that moving average since August 16. The next target would be the end of May high at 104.699. Move above that and traders will start to target the 38.2% retracement of the move down from the September 22 high at 105.384. Going forward it would take a move back below the 200-day moving average at 103.126, to tilt the bias back to the downside on the daily chart.
The dollar index is up 2.29% this month
- EURUSD: The EURUSD is down -1.83% in August (USD higher). Looking at the daily chart, the price is trading just below its 200 day moving average at 1.0802. A close below that level today would be the 1st time since November 29, 2022. The low price reached today was the lowest since June 13. Next week the 200-day moving average will be the key barometer for both buyers and sellers. Stay below is more bearish. Move above is more bullish. The next downside target would have traders looking toward the end of May low at 1.0635. The 38.2% retracement of the move up from the September 2022 low comes in at 1.0611.
EURUSD trades above and below its 200 day moving average
- USDJPY. The USDJPY is trading up 2.83% in August. Today the price traded to a new high going back to November 2022, but only barely. The high praise from August 17 reached 146.56. The high price it today reached 146.63. It is currently trading at 146.30. On the downside, the end of June high price reached 145.07. The price would have to move below that level II probably worried that buyers going forward in the short term. Getting below the low price from Wednesday at 144.53 would help to confirm the high is in place. Traders who want to sell the USDJPY, sell against the highs, but don’t tempt fate if the price moves above each. The price of the USDJPY has been above its 100 day moving average since April 13, 2023.
USDJPY makes new high for 2023 but backs off
- GBPUSD. The GBPUSD is down -1.96% this month (higher USD). The move lower has now taken the price below its 100-day moving average of 1.2638. Yesterday the price closed below that moving average for the 1st time since March 2023. Today the price is currently below that level at 1.2582. The price traded to the lowest level since June 13 today. Going forward, it would take a move back above the 100-day moving average to tilt the bias back to the upside. Stay below, and traders will start to look toward the 200-day moving average at 1.2397.
GBPUSD is closing below it 100 day moving average
- USDCAD: The USDCAD is up 3.25% in August. Looking at the daily chart, there has been a number of updated and very few down days this month. The price is moving toward swing highs from April, May and early June between 1.3651 and 1.3667. Move above and it should open the door for more upside momentum close. Looking at the daily chart, close support is at 1.3568 that was near highs from last week, and on Monday and Tuesday, and near the low for today’s trading too. Will below that level and there could be a rotation back down toward the 50% midpoint of the 2023 trading range at 1.3477.
- AUDUSD: The AUDUSD is trading down -4.64% in August. That is equal to the February decline. The high for the month was on the 1st trading day of the month. On that day, the high price stayed below the 200-day moving average (green line in the chart below). Bearish. The price also moved below its 100-day moving average (blue line) on the same day and ran to the downside. The 100-day moving average is up at 0.66536. More recently, the price on Wednesday and Thursday traded above and below the end-of-May low at 0.64582. In trading today, the high price stayed below that level. The level will be a short-term barometer for buyers and sellers going into the new trading week. Move above, and the 0.6488 high from this week will be targeted followed by the 61.8% of the move up from the October 2022 low at 0.6547. On the downside, the low for 2023 is at 0.6363. Will below and the pair is trading at the lowest level going back to November 2022
AUDUSD looks toward the low for the year
Major global STOCK INDICES are lower:
The major US stock indices are lower in August. The declines were led by Hong Kong’s Hang Seng index and China’s Shanghai composite index. In the US the NASDAQ index is the worst performer.
- Dow industrial average is down -3.75%
- S&P index is down by -4.48%. The decline was the largest in 2023
- NASDAQ index is down by -6.05%. The decline was the largest in 2023
- German DAX is down by -4.96% which is the largest decline since September 2022
- France’s CAC is down -3.58%
- UK’s FTSE 100 is down -4.69%
- Spain’s Ibex is down -3.14% which is the largest decline since September 2022
- Japan’s Nikkei 225 is down -4.67%, the largest decline since December 2022
- China’s Shanghai Composite index tumbled -6.89% which is the largest decline since January 2022
- Hong Kong’s Hang Sang index is down -10.57%, the largest decline since October 2022
- Australia’s S&P/ASX index is down -4.0% which is the largest decline since September 2022
In the US debt market, yields are higher:
- 2-year yield 5.05%, up 17.1 basis points
- 5 year yield 4.429%, up 25.0 basis points
- 10 year yield 4.239%, up 27.4 basis points
- 30-year yield 4.286%, up 27.5 basis points
The 30 year mortgage rate in the US is up 42 basis points
