News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/L3LPCph2ST
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/ysxKO30ZWw
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/5nHxtlZ7nn
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/lqpXwWjVFt
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/CrpXuYgfRO
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/VzEbQn8blk
  • Brush up your knowledge on trade-wars with this tool from DailyFX research briefly outlining trade-war history dating back to the early 1900s here: https://t.co/bZEFtp8kFe https://t.co/ETF52Q2sLz
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/AXZxK8Abrh
  • Global stock markets may see turbulent volatility if darkening clouds over Washington’s relations with Beijing turn into a geopolitical storm. Which assets will be the lifeboat? Find out here:https://t.co/RkFI6qAyik https://t.co/9Ppa4d48Ql
  • The Dow Jones and S&P 500 outlook appears bleak in the near term as retail traders increase their upside exposure. At the same time, these indices confirmed bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/fKCHELbOxo https://t.co/e0liqVDzw6
Copper, Oil Hit by Demand Concerns Amid Renminbi Devaluation

Copper, Oil Hit by Demand Concerns Amid Renminbi Devaluation

Nathalie Huynh,

Talking Points:

  • Copper remained vulnerable after a plunge due to RMB devaluation
  • Gold held gains amid talks of wide-spread currency devaluations
  • Oil weighed by OPEC’s output increase

People’s Bank of China (PBoC), the Chinese central bank, delivered a second bearish fixing on their currency today. The USDCNY pair was set at 6.3306, 1.62 percent higher than a two-year high yesterday. China’s currency is known as yuan (CNY) inside the country and renminbi (RMB) outside of it.

This immediately put more pressure on commodity prices due to both China demand concerns and a higher US dollar. Gold, WTI oil, Brent oil, and copper dropped after the fix came out as they did yesterday. A weaker CNY also boosts the USD as investors rush out of renminbi and into US dollar assets.

In the long term, however, this could be a positive step in how China governs its economy and currency. As usual, any good news to the Chinese economy is good news for commodities demand. Firstly, the PBoC announced yesterday that it would take RMB ‘fair price’ from market makers into consideration, putting it another step closer to a free-market exchange rate. Secondly, a low currency tends to boost exports, a welcome development after Saturday’s negative data. Thirdly, this may signal other stimulus measures to follow.

Copper and industrial metals were hit the hardest by today’s low renminbi fix. It fell over 1 percent to a new six-year low of 2.2930, although followed by early signs of a rebound. Given high intraday volatility, it is hard to gauge how high copper may bounce back. Resistance levels are at 2.3190, 2.3350, and 2.3470.

WTI and Brent oil remained above their overnight lows that were brought on by an OPEC’s report of July output increase. Production rose by 100,700 barrels a day, the most since 2012. Today price swings may hold up above their previous lows and support levels at 42.68 in WTI and 48.60 in Brent.

Gold quickly pared its post-RMB losses to reach current daily high at 1113.15 after it scored a three-week high at 1119.31 yesterday. The devaluation in renminbi could induce similar actions from China’s trade partners and exporting competitors, which would benefit gold as an alternative form of storage for currency value. Gold prices today likely stick within a range formed by pre and post-RMB swings at 1101.61-1113.15, although higher moves towards yesterday high at 1119.31 are not ruled out.

GOLD TECHNICAL ANALYSIS – Gold established an intraday range of 1101.72-1113.15 as the swings faded on another day of China’s renminbi devaluation. Volatility remains high so day traders had better take caution, especially with regard to upside extensions. Yesterday high of 1119.31 is a strong resistance level for the gold bears to watch.

Copper, Oil Hit by Demand Concerns Amid Renminbi Devaluation

Daily Chart - Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Downward momentum has waned after copper plunged to 2.2930. Therefore today’s prices will likely linger near this support level. The daily chart shows early signs of downtrend resumption. The copper bears may consider selling at rallies with tight stops.

Copper, Oil Hit by Demand Concerns Amid Renminbi Devaluation

Daily Chart - Created Using FXCM Marketscope

CRUDE OIL TECHNICAL ANALYSIS Downtrend signals remained firm in the daily charts of WTI and Brent oil, despite recent volatility. Today’s lows have been established at 42.68 in WTI and 48.60 in Brent. Intraday prices will likely hover near these support levels with no upside potential.

Copper, Oil Hit by Demand Concerns Amid Renminbi Devaluation

Daily Chart - Created Using FXCM Marketscope

--- Written by Nathalie Huynh, Currency Strategist for DailyFX.com

Contact and follow Nathalie on Twitter: @nathuynh

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES