Daily Market Analysis By FXOpen

Central Bank Week Shakes Up Gold Market



Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this week related to central banks:
→ today at 10:30, a meeting of the Swiss National Bank took place. The interest rate remained at 1.75%, although there was a significant possibility of its increase to 2%.
→ today at 14:00 GMT+3, a decision on the Bank of England interest rate is expected;
→ news from the Central Bank of Japan is planned for tomorrow morning — there may be surprises.




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Oil Analysis: Finally, A Bearish Reversal?



The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use the phrase “correction is overdue.”
So a decline from the week's high above USD 92 to current levels seems natural. Note that the reversal began with the appearance of extremely high trading volumes in oil futures on the NYMEX exchange on Tuesday — but what if capital associated with governments of countries that do not benefit from high oil prices, which are fueling already high inflation, entered the market? If so, then WTI oil prices above 90-91 can be considered a “red line” for them.

Bearish arguments:

→ the price increase B→C is near the Fibonacci level of 31.8% of the decrease A→B, which is acceptable for a natural rollback;
→ the psychological level of USD 90 (above which the rate of price growth has slowed down) can now act as resistance;
→ the price has broken through the median line of the uptrend — now resistance can be expected from it;
→ the level of USD 89 has also been broken by the bears — it is possible that it, in turn, will slow down the bulls’ attempts to win back, if any, occur. The rate of decline is being recorded too rapidly this week.




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nice analysis

AUD/USD and NZD/USD Could Start Fresh Increase



AUD/USD declined below 0.6430 before it found support. NZD/USD is now recovering and eyeing an upside break above the 0.5950 resistance zone.
Important Takeaways for AUD/USD and NZD/USD Analysis Today

1. The Aussie Dollar started a fresh decline from well above the 0.6450 level against the US Dollar.
2. There is a key rising channel forming with resistance near 0.6450 on the hourly chart of AUD/USD at FXOpen.
3. NZD/USD is attempting a recovery wave above the 0.5920 resistance.
4. There is a major contracting triangle forming with resistance near 0.5940 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair recovered above the 0.6450 resistance. However, the Aussie Dollar failed to clear 0.6500 and started a fresh decline against the US Dollar.
The pair declined below the 0.6450 support. It even settled below 0.6430 and the 50-hour simple moving average. Finally, the bulls appeared near the 0.6385 zone. A low was formed near 0.6385 and the pair is now correcting losses.
There was a move above the 23.6% Fib retracement level of the downward move from the 0.6511 swing high to the 0.6385 low. On the upside, an immediate resistance is near the 50-hour simple moving average at 0.6430.
The first major resistance is near a rising channel at 0.6450. It coincides with the 50% Fib retracement level of the downward move from the 0.6511 swing high to the 0.6385 low.
A clear upside break above 0.6450 could send the pair toward 0.6510. The next major resistance on the AUD/USD chart is near 0.6540, above which the price could rise toward 0.6585. Any more gains might send the pair toward 0.6600.
On the downside, initial support is near the channel trend line at 0.6415. The next support could be 0.6385. Any more losses might send the pair toward 0.6350.

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USD/JPY Analysis: Rate Reaches Maximum of the Year



This morning, the Bank of Japan's decision on the interest rate, which has been kept at -0.1% since 2016, became known. The rate size remained unchanged.
Although surprises could occur due to the fact that inflation is still above the central bank's target of 2% for the 17th month in a row. So a tightening of policy is becoming more and more likely. CNBC writes that the Bank of Japan may be prompted to take this step by the weakness of the national currency.
This morning, as the chart shows, the rate has risen very close to the highs of the year. It is possible that it will be updated during the day today.

Bullish arguments:
The continuing difference in the monetary policies of the United States and Japan contributes to the growth of the exchange rate even higher.
The border of the current bullish channel has not been reached, the potential for growth remains.
Rising lows this week indicate stronger demand.
Even if the yen strengthens, the trend can be supported by both the median and the lower border of the ascending channel.




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Market Analysis: EUR/USD, GBP/USD, and USD/JPY



At the US Federal Reserve meeting, officials expectedly kept the interest rate at 5.25–5.50%. According to the head of the regulator, Jerome Powell, tightening monetary policy is still possible if indicators begin to show negative dynamics again. At the same time, the US Federal Reserve aims to implement a program of gradually reducing the rate to 2.90% by 2026. Officials also intend to begin the gradual sale of bonds from their balance sheet, which are currently being purchased in the amount of USD 95.0 billion, of which USD 60.0 billion are government bonds, and another USD 35.0 billion are mortgage debt securities.

EUR/USD

The euro fell on Thursday but recovered slightly at the start of today's session. The US dollar weakened a day after the Federal Reserve signalled that US monetary policy would remain accommodative even longer. The Fed kept interest rates on hold Wednesday, in line with market expectations, but signalling that its officials are increasingly confident that aggressive policies can succeed in reducing inflation without crushing the economy or leading to large job losses. Along with another possible rate hike this year, the Fed's updated forecasts show significantly tighter rates through 2024 than previously expected. The US dollar index, which measures the currency against a basket of peers, was down 0.10% at 105.33 after rising to 105.74, its highest level since March. The immediate resistance of the EUR/USD pair can be seen at 1.0663, a breakout to the upside could trigger a rise towards 1.0702. On the downside, immediate support is seen at 1.0616, a break below could take the pair towards the 1.0584 direction.
At the lows of the week, a new downward channel has formed. Now, the price has moved away from the lower border of the channel and may continue to rise.

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EUR/USD Analysis: Key Support Zone Resists Selling Pressure



Today, fresh monthly values of the PMI index, which is considered a leading indicator of the state of the economy, have become known:

1. France: actual 43.6, expected 46.2. This is the worst economic contraction since the coronavirus.
2. Germany: actual 39.8, expected 39.5.

As a reminder, values below 50 indicate a slowing economy.
Thus, the PMI witnessed the worsening economic problems in the European Union. And not only. The PMI indicator for the UK also published today was 44.2, which, although higher than the previous value 42.5, is still below 50.
The euro immediately reacted to the disappointing news. The exchange rate against the dollar fell to its lowest level in six months. However, then an encouraging recovery followed — apparently, the proximity of the rate to the key support zone had an effect.

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thanks for sharing

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Weekly Market Wrap With Gary Thomson: UK STOCK MARKET RISES, S&P 500 FALLS, OIL ANALYSIS, EUR/GBP

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

 

1. UK stock market rises amid inflation news #UKStockMarket #UKinflation
2. S&P 500 falls amid news from the Fed S&P500 #Fed
3. Oil analysis: Finally, a bearish reversal? #Oil
4. Will stagflation persist in the UK? EUR/GBP volatility may be an indicator #EURGBP #stagflation

Stay in the know and empower yourself with our short, yet power-packed video. Watch it now and stay updated with FXOpen.

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GBP/USD Nosedives While USD/CAD Aims Higher



GBP/USD is gaining pace below 1.2300. USD/CAD is rising and might aim for a move above the 1.3520 resistance zone.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

1. The British Pound started a fresh decline below the 1.2500 support zone.
2. There is a key bearish trend line forming with resistance near 1.2260 on the hourly chart of GBP/USD at FXOpen.
3. USD/CAD is showing positive signs above the 1.3400 support zone.
4. There is a major bullish trend line forming with support near 1.3450 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.2500 zone. The British Pound traded below the 1.2325 support to move into further a bearish zone against the US Dollar, as mentioned in the previous analysis.
The pair even traded below 1.2275 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2230 level. A low was formed near 1.2230 and the pair is now consolidating losses with bearish signs.

Immediate resistance on the upside is near a key bearish trend line at 1.2260. The first major resistance on the GBP/USD chart is near the 23.6% Fib retracement level of the downward move from the 1.2421 swing high to the 1.2230 low at 1.2275 and the 50-hour simple moving average.
A close above the 1.2275 resistance might spark a decent recovery wave. The next major resistance is near the 50% Fib retracement level of the downward move from the 1.2421 swing high to the 1.2230 low at 1.2325. Any more gains could lead the pair toward the 1.2375 resistance in the near term.
Initial support sits near 1.2230. The next major support sits at 1.2200, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2120.

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Economic calendar: NASDAQ 100 May Keep Falling, High Volatility in Oil Markets, Potential Appreciation of the US Dollar



The US, Japan and the UK may have kept interest rates on hold last week, but with the Federal Reserve indicating that rates will stay higher for longer, there is turmoil in the equity markets. The NASDAQ 100 fell 500 points last week, and with weakness continuing into this morning's trading session, the volatility looks like it will continue throughout the week.

US durable goods orders (15:30 Wednesday) is the first meaningful economic release of the week. After a terrible -5.2% in July, analysts are expecting a modest decline of -0.4% for August. The final reading of US Q2 GDP is expected to show an increase to 2.2% when it is released on Thursday (15:30), as the US economy continues to tick over at a steady rate. This could give the US dollar a further boost.




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Financial Markets Waking Up after a Turbulent Week: Important News



The main event of last week was information from the Fed. Jerome Powell once again demonstrated his determination to maintain a tough political stance, which caused:
→ increase in bond yields. Yields on 10-year securities reached their highest since 2009;
→ the dollar index jumped to its highs of the year;
→ stock markets fell — especially NASDAQ. This increases the belief that the AI boom has run its course. The resilience of the Dow Jones index indicates that investors are preferring more defensive assets;
→ fall of cryptocurrencies. At the same time, the price of bitcoin returned to the flat range in which it was at the end of August. Thus, the wave of positivity associated, among other things, with rumours that the head of the SEC wants to approve applications from funds to launch a crypto ETF, has exhausted itself.




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US Dollar On the Rise Despite Weak PMI Data



EUR/USD

The euro fell against the US dollar on Friday as economic data showed a contraction in economic activity, which could prompt European Central Bank hawks to soften their policy stance. Preliminary data indicates a contraction in economic activity in the eurozone's two largest economies, France and Germany. France's HCOB purchasing managers' index (PMI) for the services sector fell to a 34-month low in September, well below forecast, while Germany's PMI rose to 46.2 but below economists' forecast of 47.2. With inflation still high in the eurozone and at risk of rising, the ECB's next move could be to raise rates before rate cuts are on the agenda, several policymakers said on Thursday. The immediate resistance can be seen at 1.0663, a breakout to the upside could trigger a rise towards 1.0702. Immediate support is seen at 1.0623, a break below could take the pair towards 1.0579.
The previous ascending channel remains. Now, the price is in the middle of the channel and can continue its horizontal movement.




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Rising Bond Yields Are Driving Down Price of Gold



The yield on 10-year bonds exceeded 4.5% per annum – a 16-year high. The demand for them was promoted by:
→ tough statements from the Fed last week that the high base interest rate will remain as long as necessary. Moreover, Minneapolis Fed President Neel Kashkari said he expects another increase;
→ concerns related to the likelihood of a US government shutdown on October 1. At the same time, Moody's issued a stern warning, jeopardizing the country's triple-A rating.
It can be assumed that investors choose bonds when forming a portfolio of protective assets. This puts pressure on the gold, which “loses its shine” in their eyes.



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USD/JPY Analysis: For the First Time This Year, the Rate Exceeds 149 Yen Per Dollar



The reason for the stable trend, as we have repeatedly pointed out, is the difference in the monetary policy of the USA and Japan. Inflation in Japan has been above 2% for more than a year, and the media are increasingly publishing expert opinions that the Bank of Japan will raise short-term interest rates from the current -0.1% at the end of this year. However, today Reuters published the opinion of Mr. Makoto Sakurai, the former head of the Bank of Japan. According to him:
→ the Bank of Japan may delay ending negative interest rates until around April next year;
→ the abolition of negative rates, which have been in place since 2016, will not harm the economy;
→ uncertainty about the economic prospects of the United States and China also gives the Bank of Japan a reason to delay raising rates, Sakurai added.
That is, the existing gap in monetary policy may continue for another six months, which will push the USD/JPY rate higher and higher. And it is not surprising that, as the chart shows, today the rate exceeded 149 yen per US dollar for the first time in a year, further increasing the likelihood of reaching the psychological level of 150 yen.



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US Federal Reserve Contemplates Future Interest Rate Hikes Amid Economic Resilience



In an intriguing turn of events, the US Federal Reserve has hinted at the possibility of yet another interest rate hike in the near future, keeping financial markets on their toes.
During its September 2023 meeting, the Federal Reserve chose to maintain the target range for the federal funds rate at an impressive 5.25%-5.5%, a level not seen in 22 years. This decision was in line with market expectations and followed a 25 basis-point hike in July. What piqued the interest of investors and economists alike, however, was the central bank's signal that another rate increase might be in the cards before the year's end.
The Federal Reserve's projections, as revealed in the dot plot, suggest the likelihood of one more rate hike in the current year, followed by two rate cuts in 2024. This cautious approach is in response to recent economic indicators, which point to robust expansion in economic activity. While job gains have slowed in recent months, they continue to exhibit strength, and the unemployment rate remains impressively low. On the surface, this move may seem counterintuitive, especially when considering that inflation in the United States has been well-contained for over a year and stands at less than half the levels witnessed in certain parts of the European Union.

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The Yen and European Currencies Headed to New Lows



The main currency pairs began the last five-day trading period of September with a new wave of growth for the American currency. Changes in the Fed's point forecast for next year provided powerful support to the dollar, which, in turn, contributed to the search for the bottom in the euro, yen and pound.
The GBP/USD currency pair is testing support at a significant level of 1.2200, the EUR/USD pair is heading towards the January extremes of this year, and the USD/JPY pair has resumed growth in the direction of 150. Apparently, in the coming trading sessions, we can expect another upward impulse on the greenback. At the same time, we must take into account that these pairs are very close to important ranges, the test of which may end in a corrective rollback or reversal.

GBP/USD

The pound turned out to be quite susceptible to the outcome of the recent Bank of England meeting. The regulator left the rate at the same level, while analysts predicted a rate increase of another 0.25%. Add to this a number of weak macroeconomic indicators from the UK, published last week, and we get a stable downward trend for GBP. The price has already dropped below 1.2200, and since there are no reversal combinations, a test of 1.2100-1.2000 may happen.
From the fundamental analysis point of view, today, we are waiting for data on the number of building permits issued in the United States. The US Consumer Confidence Index for September will also be published (17:00 GMT+3).




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AMZN Stock Analysis: 4 Reasons to Doubt the Bullish Outlook



After the Fed signaled last week that rates may be higher for longer than expected, the US stock market has received a strong bearish boost. And among the most vulnerable assets were technology stocks (considered risky). The NASDAQ index has already fallen by about 6% since last Wednesday (when the FOMC meeting took place). And the negative backdrop from the Fed is one of the 4 issues that give reason to doubt the bullish outlook for AMZN stock.

The second reason is that AMZN has fallen 9% in value since last Wednesday. That is, AMZN is falling faster than the overall market. And this problem is not new. Compare the dynamics of the index and Amazon shares on a weekly timeframe and you will see that the shares have been performing weaker than the index since the summer of 2020. That is, the leadership status that was held for many years has been lost.




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EUR/USD Takes Hit While USD/CHF Surges



EUR/USD started a fresh decline below the 1.0615 support. USD/CHF is rising and might aim a move toward the 0.9220 resistance.

Important Takeaways for EUR/USD and USD/CHF Analysis Today

 

1. The Euro struggled to clear the 1.0670 resistance and declined against the US Dollar.
2. There is a major bearish trend line forming with resistance near 1.0585 on the hourly chart of EUR/USD at FXOpen.
3. USD/CHF is gaining pace above the 0.9135 resistance zone.
4. There is a key bullish trend line forming with support near 0.9150 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair failed to clear the 1.0670 resistance. The Euro started a fresh decline below the 1.0615 support against the US Dollar, as mentioned in the previous analysis.

There was a move below the 50-hour simple moving average and 1.0600. The bears were able to push the pair below the 1.0585 pivot level. The pair traded as low as 1.0556 and is currently showing a lot of bearish signs.

Immediate resistance on the upside is near the 23.6% Fib retracement level of the downward move from the 1.0671 swing high to the 1.0556 low. There is also a major bearish trend line forming with resistance near 1.0585 and the 50-hour simple moving average.

The first major resistance is near the 50% Fib retracement level of the downward move from the 1.0671 swing high to the 1.0556 low at 1.0615. An upside break above the 1.0615 level might send the pair toward the 1.0670 resistance. Any more gains might open the doors for a move toward the 1.0720 level.

On the downside, immediate support on the EUR/USD chart is seen near 1.0555. The next major support is near the 1.0540 level. A downside break below the 1.0540 support could send the pair toward the 1.0500 level.

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