The Week Ahead 4th – 8th September: Focus on Chinese data after first signs of weakness in real estate

<p>Welcome to Key to Markets preview of the Week Ahead.</p>
<h2>Currency Pair Performance</h2>
<p>5-day performance as of <strong>August 31, 2023. 11:30 GMT.</strong></p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25344 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1.png" alt="" width="594" height="281" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1.png 594w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1-300×142.png 300w" sizes="(max-width: 594px) 100vw, 594px" /></p>
<p>Source: finviz.com</p>
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<h2>10 Big Stories Last Week</h2>
<p>In case you missed it…</p>
<p><strong>The US labour market cooled.</strong> JOLTS job openings fell below 9 million for the first time since July 2021, and ADP private payrolls rose at the slowest pace in 5 months.</p>
<p><strong>UBS posted record Q2 profits.</strong> The Swiss banking giant posted a pre-tax profit of $29.2 billion after a $29bn accounting gain from Credit Suisse.</p>
<p><strong>Eurozone inflation remained unchanged.</strong> Consumer prices remained at 5.3% YoY in August, defying expectations of a fall to 5.3%. Core inflation eased to 5.3% from 5.5%.</p>
<p><strong>Vinfast valuation hit $191 billion before plunging.</strong> The Vietnamese EV maker rose almost 700% to become the world’s third most valuable carmaker before the share price crashed over 50% in 2 days.</p>
<p><strong>US GDP was downwardly revised.</strong> The US economy grew at a slightly slower pace of 2.1% in the April to June quarter, revised lower from 2.4%.</p>
<p><strong>Apple announced its September event.</strong> Apple announced September 12 as its next launch event when it will unveil the iPhone 15.</p>
<p><strong>HP tumbled on concerns over the outlook.</strong> The computer manufacturer posted mixed results but warned over the outlook amid slowing PC demand. The share price fell 6%.</p>
<p><strong>China’s Country Garden posted $6.7 billion loss.</strong> The group warns that its performance continues to deteriorate and faces a possible default after a huge half-year loss.</p>
<p><strong>Bitcoin ETF is a step closer.</strong> The US Court of Appeal ruled in favour of Grayscale over the SEC in a move that paved the way for a bitcoin ETF.</p>
<p><strong>Nvidia posted a record closing high.</strong> The AI chip maker posted a 4.2% gain on Tuesday, booking a closing record high after announcing a partnership with Google.</p>
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<h2>Chart of the Week</h2>
<p><img decoding="async" class="alignnone wp-image-25347 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2.png" alt="" width="602" height="344" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2-300×171.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>The outlook for the euro is deteriorating amid growing speculation that the ECB could struggle to tighten monetary policy much further, despite inflation still running 2.5 times the ECB’s target.</p>
<p>Data this week showed that inflation stopped cooling in July. However, after a string of poor economic data and a warning from ECB’s Isabel Schnabel over the dire outlook for the region, traders are starting to favour a pause at the next meeting.</p>
<p>Stagflation fears are back and analysts at the top banks are cutting their median forecasts for the EUR for the first time in 6 months. Bank of America and JP Morgan, for example, see EUR/USD heading to 1.05, while BNP Paribas see 1.02 as a possibility.</p>
<p>While the US is looking towards a possible soft landing, the outlook in Europe is much gloomier, which could drag the pair lower.</p>
<p>Even HSBC’s Dominic Bunning, one of the most bullish analysts towards EURUSD with a year end target of 1.15, said, “it&#8217;s becoming harder to remain bullish after recent data”.</p>
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<h2>5 Things to Watch This Week</h2>
<p><strong>1. RBA rate decision</strong><br />
The RBA is widely expected to leave interest rates unchanged at 4.1% for a third straight meeting on Tuesday, 5th September, RBA Governor Philip Lowe’s final board meeting. Easing inflation has cemented rate pause expectations after inflation cooled by more than expected to a 17-month low of 4.9% YoY in July, down from 5.4% in June. Deputy governor Michelle Bullock will take over as RBA governor from mid-September.</p>
<p><strong>2. BoC rate decision</strong><br />
The BoC hiked interest rates by 25 basis points at the last meeting to 4.75% amid concerns over inflation persistently above 2%. However, the central bank removed language pointing to additional hikes in its statement. Since the last meeting, inflation has ticked higher, but economic growth is expected to slow considerably, meaning that policymakers could swing either way at the meeting on Wednesday 6th, September.</p>
<p><strong>3. China data</strong><br />
Concerns over the health of the Chinese economy have been gaining traction in recent weeks as data worsens and as the property sector shows more signs of weakness. This week sees the release of Chinese PMI data, as well as trade data and inflation figures, at the end of the week. More signs of a faltering economic recovery could drag on risk sentiment, particularly if Chinese authorities hold back from releasing aggressive stimulus measures.</p>
<p><strong>4. BoE MPC hearing</strong><br />
BoE Governor Andrew Bailey will testify before the Treasury Select Committee at a time when inflation remains elevated at 6.8% YoY and as interest rates have been hiked to 5.25%, a 15-year high, after 14 straight hikes. The market will be watching closely for any clues over where the BoE sees peak rates, with economists seeing rates rising to 5.5%.</p>
<p><strong>5. September seasonality</strong><br />
As the new month gets underway, investors could brace themselves for a potentially rocky ride in September. Since 1945, the S&amp;P 500 has declined on average 0.7% in September, the worst performance of any month, according to CFRA. .</p>
<p><strong>Economic Calendar Highlights</strong></p>
<p><img decoding="async" class="alignnone wp-image-25350 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3.png" alt="" width="602" height="469" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3-300×234.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: FXStreet.com</p>
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<h2>Technical Analysis:</h2>
<p>TA of the major asset classes (Forex &#8211; Commodities &#8211; Indices…).</p>
<p><strong>EUR/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25353 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/EURUSD-11-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>EUR/USD is in a downtrend, making lower highs and lows below the 50 SMA. RSI is in a bearish position but not oversold. After a 3-day rebound, the price rolled over with a bearish engulfing candlestick (unconfirmed) at the previous swing high (1.093).</p>
<p><strong>GBP/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25356 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-11-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>GBP/USD is in a downtrend, forming lower lows and lower highs beneath the 50 SMA.RSI just made a bearish rejection underneath the 50-level. Price action is rangebound in the short term with a bearish bent.</p>
<p><strong>USD/JPY (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25362 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-11-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>USD/JPY is in an uptrend making higher highs and lows above the 50 SMA. RSI has come out of overbought and been rejected at the 65-level. There was a bearish engulfing pattern with a long upper wick after a failed break of the prior high (146.6).</p>
<p><strong>Gold (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25365 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-11-1-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XAU/USD is in a retracement of a downtrend, making lower lows and lower highs but back over the 50 SMA. RSI is bullish and not yet overbought. 8 of the last 10 days closed higher in strongly bullish price action.</p>
<p><strong>Brent Oil (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25368 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-11-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XBRENT is in a sideways trend, matching highs and lows above the 50 SMA. RSI made a false break under the 50 level and turned bullish. A false breakdown from the head and shoulders pattern has setup bullish price action and a possible re-test of the August high (87.6).</p>
<p><strong>US500 (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25371 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-11-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XUS500 is in an uptrend making higher highs and lows above the 50 SMA. RSI flashed a bullish divergence signal after coming out of oversold territory. Support at 4350 held despite a bearish engulfing candle and setup a 4-day win streak.</p>
<p>Thank you very much for reading – and have a great week trading!</p>
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<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/the-week-ahead-4th-8th-september-focus-on-chinese-data-after-first-signs-of-weakness-in-real-estate-25343/">The Week Ahead 4th &#8211; 8th September: Focus on Chinese data after first signs of weakness in real estate</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>