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“China will promote the integrated development of high-end manufacturing and modern service industries,” said Chinese President Xi Jinping while speaking via video at the China International Fair for Trade in Services (CIFTIS) in Beijing on Saturday per Reuters.

The policymaker also said to promote widening the market access in the service industry and promote cross-border services trade after US Commerce Secretary Gina Raimondo highlighted a lack of positive environment for the US businesses in China.

Also read: US Commerce Secretary Raimondo: Patience of US business is wearing thin, China is making it more difficult

Fears of slowing economic recovery also seemed to have pushed China’s Xi towards the announcements as he added, “China would focus on expanding the domestic market, increasing imports of high-quality services and reforming the country's basic data system.”

AUD/USD lacks clear directions

The news fails to move a need on the AUD/USD as it stays mostly unchanged around 0.6450 after posting the first weekly gain in seven.

Also read: AUD/USD ignores Aussie government’s push for more wages near 0.6450, focus on RBA, Australia GDP

• GBP/USD stays pressured towards the key support line after unimpressive rebound.
• Downbeat oscillators, sustained trading below 100-EMA keep Cable bears hopeful.
• Pound Sterling buyers need validation from five-week-old falling resistance line.

GBP/USD remains on the back foot around 1.2590-85 as it struggles to defend the weekly gain during the early hours of Monday’s Asian session. In doing so, the Cable pair remains below the 100-bar Exponential Moving Average (EMA).

Adding strength to the downside bias are the bearish MACD signals and a downbeat RSI (14) line, not oversold.

However, the Pound Sterling sellers need validation from an upward-sloping support line from late May, around 1.2570 by the press time.

Also acting as the downside filter is the previous monthly low of around 1.2550 and the 200-EMA level of 1.2490.

In a case where the GBP/USD bears keep the reins past 1.2490, the odds of witnessing a slump toward May’s low of around 1.2310 can’t be ruled out.

On the flip side, a daily closing beyond the 100-EMA level of 1.2625 isn’t enough to recall the GBP/USD buyers as a downward-sloping resistance line from late July, close to the 1.2700 round figure by the press time, holds the key for the fresh long positions. Following that, June’s high of around 1.2850 will be in the spotlight.

Apart from the stated support line, the Bank of England’s (BoE) Monetary Policy Report Hearings will also be important to watch for the GBP/USD pair traders for clear directions.

Also read: GBP/USD Weekly Forecast: Technical setup favors Pound Sterling sellers

GBP/USD: Daily chart

Trend: Further downside expected

• Gold price remains flat around $1,940 following the volatility session.
• The US Unemployment Rate rose to 3.8%; Nonfarm payrolls were 187k, better than expected.
• The US Manufacturing PMI came in at 47.6 versus 46.4 prior and higher than anticipated at 47.0.

Gold price (XAU/USD) is currently in consolidation mode around $1,940 during the early Asian session on Monday. The US market is closed for the Labor Day holiday and gold price is expected to remain under pressure amid the thin trading volume. Later this week, the US ISM Services PMI for August will be released and the data will likely ramp up volatility.

On Friday, gold price surged above the key resistance level of $1,950 and then reversed its direction to $1,934 after the release of US ISM Manufacturing PMI data for August. The US Bureau of Labor Statistics revealed that Nonfarm Payrolls (NFP) for August came in at 187,000, better than expected at 170,000 and July's reading of 157,000.

The Unemployment Rate improved sharply to 3.8% versus the market consensus and the previous reading of 3.5%. The Average Hourly Earning rose by 0.2% MoM, worse than expectations of 0.3%. Additionally, the Institute for Supply Management (ISM) showed on Friday that the US Manufacturing PMI came in at 47.6 versus 46.4 prior and higher than anticipated at 47.0.

Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against a basket of currencies used by US trade partners, gains traction above 104.25 after bouncing off the low of 103.27. The US bond yields have a volatile session following the US economic data. The 2-year yield currently trades around 4.87% after falling to a three-week low of 4.76% while the 10-year bonds trades near 4.18%. According to the CME FedWatch tool, markets have priced in that the Federal Reverse will not hike rates in its September meeting and the odds of raising rates in November and December have declined to around 35%.

Looking ahead, gold traders will keep an eye on the US ISM Services PMI for August and the US ADP Employment Change due later on Wednesday for fresh impetus. These figures could give a clear direction to gold price.

• AUD/USD remains defensive after the first weekly gain in seven.
• China stimulus, hopes of more wages in Australia help Aussie buyers to remain optimistic.
• Recently upbeat US data cap recovery moves amid anxiety ahead of top-tier data/events.
• RBA, Australia Q2 GDP and US USM Services PMI will provide fresh impulse, US holiday may restrict immediate moves.

AUD/USD struggles to extend the first weekly gain in seven as it stays pressured around 0.6450 during the early hours of Monday’s Asian session. The pair’s latest weakness could be linked to Friday’s upbeat US jobs report and the weekend headlines suggesting the US-China jitters. However, expectations of witnessing an upbeat employment bill from the Government and China stimulus keep the buyers hopeful.

That said, Australia's Labor government will introduce legislation to close "loopholes" in workplace law, a move opposed by employer groups fearing higher costs, when parliament returns on Monday per Reuters. The bill will push employers toward paying more and can help fuel inflation, which in turn may keep the Reserve Bank of Australia (RBA) hawks on the positive side.

Elsewhere, China President Xi Jinping showed readiness for more collaboration with the international players of the services industry.

On the other hand, US Commerce Secretary Gina Raimondo warned China as she returned from her trip to Beijing while stating that patience is wearing thin among the US business in China. Furthermore, US President Joe Biden also crossed wires during the weekend while showing his disappointment with Chinese President Xi Jinping’s decision to remain absent from the summit of G20 leaders in India.

During the last week, China’s Caixin Manufacturing PMI for August rose to 51.0 versus 49.3 market forecasts and 49.2 previous readings. On the same line, China’s official NBS Manufacturing PMI for August rose to 49.7 versus 49.4 expected and 49.3 previous readings. However, the Non-Manufacturing PMI came in as 51.0 compared to 51.5 prior readouts and market forecasts of 51.1.

On a different page, China's central bank, namely the People's Bank of China (PBoC), announced a heavy cut to its foreign exchange reserve requirement ratio (FX RRR) to 4% from 6.0% effective from September 15.

That said, a slew of China banks cut interest rates on Yuan deposits to ease the pressure from lower mortgage rates announced previously. Among them, ICBC, China Industrial Bank, Agricultural Bank of China and Bank of China (BoC) gained major attention. Additionally, Reuters cited four people familiar with the matter to report that China is likely to step up action to revive the country’s property sector.

On Friday, the headline US Nonfarm Payrolls (NFP) rose to 187K in August versus 170K expected and 157K prior (revised) even as the Unemployment Rate marked an uptick to 3.8% from 3.5% market forecasts and previous readings. Further, the Average Hourly Earnings also eased to 0.2% and 4.3% compared to 0.4% and 4.4% respective priors. Additionally, the US ISM Manufacturing PMI also impressed the US Dollar buyers with the 47.6 figures versus analysts’ estimation of 47.0 versus 46.4 previous readings.

Following the data, Federal Reserve Bank of Cleveland President Loretta J. Mester downplayed the increase in the Unemployment Rate to 3.8% by stating that the level "is still low." The policymaker termed the US job market as strong despite recent rebalancing as she spoke at an event in Germany. About inflation, Fed’s Mester acknowledged that progress has been made but noted it remains elevated.

Amid these plays, the benchmark US 10-year Treasury bond yields have been declining in the last two consecutive weeks after rising to the highest levels since 2007, to 4.18% at the latest. Further, the Wall Street benchmarks also improved in the recent few days, despite Friday’s sluggish closing.

Looking forward, today’s Australian government’s push for more wages will entertain the AUD/USD traders amid the US holiday. However, major attention will be given to this week’s monetary policy meeting of the Reserve Bank of Australia (RBA) and the second-quarter Gross Domestic Product (GDP) for clear directions, not to forget the US ISM Services PMI for August.

Technical analysis

A failure to cross a horizontal resistance surrounding the 0.6500 round figure, comprising levels marked during late May and early June, keeps the AUD/USD bears hopeful.

"China is making it more difficult," Raimondo told CBS's Face the Nation per Reuters. The policymaker also added that she was very clear with China that they need it as patience is wearing thin among American businesses.

US Commerce Secretary Raimondo cited a lack of a predictable environment and a level playing field as the key catalysts hurting the US business in China. Also acting as the key challenges are unexplained large fines, raids on businesses and changes to a counterespionage law per the news.

The US Diplomat was on a trip to Beijing last week and raised concerns about the American businesses operating in China as she told CNN, "I was very clear, direct and firm in all of my conversations with my Chinese counterparts.”

The policymaker also cited China’s closing down the economy and being more arbitrary in the way they administer regulations as the reasons for the challenging performance of late.

Biden’s Comments

US President Joe Biden also crossed wires during the weekend while showing his disappointment with Chinese President Xi Jinping’s decision to remain absent from he summit of G20 leaders in India.

"I am disappointed ... but I am going to get to see him," Biden told reporters in Rehoboth Beach, Delaware, without elaborating per Reuters.

AUD/USD remains pressured

The news exerts downside pressure on the AUD/USD, around 0.6450 by the press time, probing the bulls even after the first weekly gains in seven.

“We are on track to halve inflation this year and by sticking to our plan we will ease the pressure on families and businesses alike," said UK Finance Minister Jeremy Hunt during the weekend per Reuters.

The policymaker also told the BBC that he thinks of witnessing a blip in inflation in September but after that the Bank of England is saying it will fall down to around 5%.

More to come

• EUR/USD holds lower grounds after seven-week losing streak that broke a key technical support.
• Mostly upbeat US jobs report underpin US Dollar strength despite mixed data flashed previously.
• Unimpressive Eurozone data, slightly dovish ECB talks weigh on Euro.
• US holiday may restrict moves but ECB President Lagarde’s speech will be the key for fresh impulse.

EUR/USD bears keep the reins at the lowest level in a week, after falling heavily in the last two consecutive days. That said, the Euro pair remains pressured around 1.0775 during the early Monday morning in Asia.

Euro bears initially retreated in the last week amid a downward revision to the Q2 US GDP growth and softer PMIs before the upbeat prints of inflation clues and mostly impressive employment statistics weighed on the major currency pair. On the top, a softer inflation figure from the bloc and a slightly dovish comment from the European Central Bank (ECB) official also weighed on the quote.

Inflation in the Eurozone per the European Central Bank’s (ECB) favorite gauge, namely the Harmonized Index of Consumer Prices (HICP), rose to 0.6% MoM versus -0.1% expected and prior readings whereas the YoY figures remained reprinted at 5.3% figures compared to 5.1% YoY market estimations. Over the past four months, the average monthly increase in core HICP has more than halved to 0.20% MoM than 0.6% reported in the first four months of 2023.

That said, European Central Bank (ECB) policymaker, Francois Villeroy de Galhau said that the underlying inflation has peaked since April and appears to have begun its decline. Adding to this, ECB’s Villeroy also said, per Reuters, that keeping rates high long enough matters more than the level.

Talking about the US data, the headlines US Nonfarm Payrolls (NFP) rose to 187K in August versus 170K expected and 157K prior (revised) even as the Unemployment Rate marked an uptick to 3.8% from 3.5% market forecasts and previous readings. Further, the Average Hourly Earnings also eased to 0.2% and 4.3% compared to 0.4% and 4.4% respective priors. Additionally, the US ISM Manufacturing PMI also impressed the US Dollar buyers with the 47.6 figures versus analysts’ estimation of 47.0 versus 46.4 previous readings.

Following the data, Federal Reserve Bank of Cleveland President Loretta J. Mester downplayed the increase in the Unemployment Rate to 3.8% by stating that the level "is still low." The policymaker termed the US job market as strong despite recent rebalancing as she spoke at an event in Germany. About inflation, Fed’s Mester acknowledged that progress has been made but noted it remains elevated.

With this, the US Dollar managed to close on the positive side for the seventh consecutive week despite marking the lowest weekly gain since early July.

It should be observed that the decline in the benchmark US 10-year Treasury bond yields has been declining in the last two consecutive weeks after rising to the highest levels since 2007, to 4.18% at the latest. Further, the Wall Street benchmarks also improved in the recent few days, despite Friday’s sluggish closing, which in turn prod the EUR/USD traders.

Moving on, the US markets are closed for the Labor Day holiday and hence the EUR/USD traders may witness a lackluster day but ECB President Christine Lagarde might help the momentum traders. Should the policymaker manage to keep her hawkish tone, the Euro may post a corrective bounce. Additionally important will be Wednesday’s US ISM Services PMI for August.

Technical analysis

A daily closing below an ascending support line from March 15, now immediate resistance near 1.0785, directs EUR/USD toward a downward-sloping trend line from late June, close to 1.0750 at the latest.