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The Dollar Continues to Correct in Anticipation of the FOMC Minutes Publication
https://i.imgur.com/Y2xJsD7.jpg
In the middle of this week, the main currency pairs continued their upward correction against the US dollar. Buyers of the EUR/USD pair managed to pass the level of 1.0600, the GBP/USD currency pair tested the important level of 1.2300, and sellers of USD/JPY yesterday tried to break through the support level at 148.00. However, the current market situation may change at any time, as very important macroeconomic data is expected to be published in the coming trading sessions.
USD/JPY
https://i.imgur.com/rsqBFyX.jpg
The USD/JPY currency pair is trading in a narrow sideways range between 148.20 and 149.50. Investors are wary of currency interventions by the Bank of Japan, which may become relevant if the price passes the level of 150.00. However, sellers are in no hurry to enter into transactions since the Fed most likely does not plan to change monetary policy in the coming months. The large gap between yen and dollar interest rates makes this pair very attractive to buy and prevents it from falling below 148.00-147.00. Any hints of a change in monetary policy by the American regulator or disappointment in the fundamental indicators of the dollar could cause a sharp decline in the pair.
Today at 15:30 GMT+3, the publication of data on producer prices (PPI) in the United States for September is expected. At 21:00 GMT+3, the minutes of the last Fed meeting will be published. Alsoб early the next morning, it is worth paying attention to the speech of a member of the board of directors of the Bank of Japan, Asahi Noguchi.
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E-mini S&P 500 Positive Ahead of Earnings Season
https://i.imgur.com/xIozxAA.jpg
As we wrote in our October 8 market analysis, the S&P 500 chart made bullish arguments, including:
→ the S&P 500 price has reached the lower boundary of the ascending channel (shown in blue);
→ RSI fell to its minimum in 12 months.
Technically, these factors were justified, because today, the S&P 500 has strengthened, the price is near the psychological level of 4,400. Yesterday’s news also contributed to this:
→ inflation suddenly accelerated. The Producer Price Index (PPI) was 0.5%, although 0.3% was expected. The acceleration of inflation was influenced by the September peak in the oil market. But with the price of oil already back more than 10% from its peak, traders are not expected to be too worried about the PPI rise;
→ a "majority" of Fed officials thought another rate hike would "likely be appropriate" to help cool demand and bring inflation closer to its 2% inflation target over the next two years, while "some" said “no". “Participants generally noted that it was important to balance the risk of overtightening against the risk of insufficient tightening,” the minutes said.
https://i.imgur.com/OIYubqY.jpg
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Markets Awaiting US Inflation Data
https://i.imgur.com/Eiw7clH.jpg
Yesterday, the major currency pairs were trading in fairly narrow ranges. Positive data on the US producer price index for September and the publication of the latest Fed minutes did not contribute to increased volatility in the market. Most likely, investors are expecting today's inflation data in the US. If the indicator is at the forecast level or even lower, this could lead to a change in the Fed's monetary policy, which in turn could contribute to the start of a medium-term downward impulse for the US dollar. Conversely, high inflation could force officials to keep rates high for a long time, which could trigger a new wave of greenback growth.
USD/CAD
After a sharp decline last week, the USD/CAD pair found strong support in the 1.3600-1.3570 range. At these marks, there are alligator lines on the daily timeframe. Price behaviour at a given location can provide more clues as to the future direction of the pair. A sharp rebound from current levels could return the price back to 1.3700-1.3780. But a move below 1.3520 may contribute to a renewed decline in the direction of lower fractals at 1.3415 and 1.3370.
In addition to inflation data, today at 15:30 GMT+3, it is worth paying attention to the weekly data on applications for unemployment benefits in the United States. Also, at 18:00 GMT+3, weekly data on crude oil inventories will be released.
https://i.imgur.com/WqY2ciX.jpg
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The Price of Gold Rises More Than 5% Since Last Friday
https://i.imgur.com/rgPnHR6.jpg
The rise in the price of the (considered a safe haven) asset was driven by:
→ escalation of geopolitical conflicts;
→ increasing US government debt and rising bond prices make gold a more attractive option for a defensive portfolio.
Also, according to Business Insider, global central banks are buying gold in an effort to diversify reserves away from the dollar.
https://i.imgur.com/9YUSNQP.png
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GBP/USD Analysis: The Rate Is Near October Highs
https://i.imgur.com/A5UN9mC.jpg
In early October, the GBP/USD decline exceeded 10% from its summer high, which was very worrying. However, the weakening of the US dollar and changes in sentiment in the US government bond market allowed the pound to strengthen.
Important news about UK GDP was published this morning:
→ The Office for National Statistics estimates that real gross domestic product (GDP) rose 0.2% in August 2023, after falling 0.6% in July 2023;
→ production of services grew by 0.4% in August 2023 and became the main driver of GDP growth;
→ the construction sector performed worse than others, falling 0.5% in August 2023 after falling 0.4% in July 2023.
In general, although the UK GDP picture gives reason for some optimism, the GBP/USD rate today reacted with a decline to the publication of this news. Perhaps influencing factors that are noticeable to technical analysis are coming into play?
https://i.imgur.com/mciYu4s.png
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Gold Price Surges While Crude Oil Price Dips Amid Israel-Hamas War
https://i.imgur.com/b3cN62x.jpg
Gold price surged above the $1,848 resistance after the Israel-Hamas war escalated. Crude oil price saw swing moves and is now trading below the $83.70 resistance.
Important Takeaways for Gold and Oil Prices Analysis Today
- Gold price started a steady increase from the $1,810 zone against the US Dollar.
- A key rising channel is forming with support near $1,868 on the hourly chart of gold at FXOpen.
- Crude oil prices failed to clear the $86.00 region and corrected gains.
- There is a connecting bearish trend line forming with resistance near $83.00 on the hourly chart of XTI/USD at FXOpen.
Gold Price Technical Analysis
https://i.imgur.com/OtTGpzq.jpg
On the hourly chart of Gold at FXOpen, the price found support near the $1,810 zone. The price started a steady increase after the Israel-Hamas war.
There was a decent move above the 50-hour simple moving average. The bulls pushed the price above the $1,848 and $1,868 resistance levels. Finally, the price tested the $1,885 zone before the bears appeared.
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The Probability of Oil Prices Rising to $100 Is Increasing
https://i.imgur.com/JojtFaD.jpg
This week, Saudi energy minister Prince Abdulaziz bin Salman visited Moscow to discuss plans for oil production in the context of the Israeli-Palestinian conflict. The Russian president announced that Saudi Arabia and Russia's production cuts are "likely" to continue.
Meanwhile, Magid Shenouda, deputy chief executive of commodities trading giant Mercuria, told the industry conference in the UAE that oil prices could reach USD 100 a barrel if the situation in the Middle East worsens.
https://i.imgur.com/zNzXun9.jpg
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EURUSD Analysis: New Test for Support Level of 1.0500
https://i.imgur.com/tJHXmDf.jpg
Yesterday, another indicator of inflation in the United States was published — the CPI (Consumer Price Index). Like the PPI (Producer Price Index), the values of which were published on Wednesday, the CPI index indicated that inflation in the US remains stable (actual = 3.7%, forecast = 3.6%, a month earlier = 3.7%, two months earlier = 3.2%), however, this time, the reaction of market participants was sharper:
→ the stock market declined;
→ gold fell in price (although buyers in the Asian session on Friday contributed to the recovery);
→ the dollar index rose sharply.
Before the publication of news about inflation, the probability of a rate hike at the December Fed meeting was at 28%, but now it is 40%. The thesis “higher rates for a longer time” has returned to relevance.
For a technical analyst, changes in sentiment and spikes in volatility provide a new piece of valuable information. Let's take the EUR/USD chart for example.
https://i.imgur.com/tp4sAdf.jpg
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Watch FXOpen's 9 - 13 October Weekly Market Wrap Video
Weekly Market Wrap With Gary Thomson: OIL & ISRAEL-GAZA CONFLICT , S&P 500 POSITIVE, GOLD RISEN.
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.
- Geopolitical Tensions Rattle Markets: US Stocks Decline, Oil Surges Amid Israel-Gaza Conflict #Oil
- E-mini S&P 500 Positive Ahead of Earnings Season #eminiS&P500 #earningsseason
- Markets awaiting US inflation data #USinflation
- The price of gold has risen more than 5% since last Friday #Gold
Stay in the know and empower yourself with our short, yet power-packed video. Watch it now and stay updated with FXOpen.
Don't miss out on this invaluable opportunity to sharpen your trading skills and make informed decisions.
https://www.youtube.com/watch?v=rIkNgNe3Nls
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GBP/USD Restarts Decrease, EUR/GBP Aims Higher
https://i.imgur.com/7znnS17.jpg
GBP/USD started a fresh decline from the 1.2335 resistance zone. EUR/GBP is rising and might climb above the 0.8665 resistance.
Important Takeaways for GBP/USD and EUR/GBP Analysis Today
- The British Pound is again declining and trading below the 1.2200 support.
- There was a break below a key bullish trend line with support near 1.2220 on the hourly chart of GBP/USD at FXOpen.
- EUR/GBP is rising and trading above the 0.8650 zone.
- There was a break above a major bearish trend line with resistance near 0.8635 on the hourly chart at FXOpen.
GBP/USD Technical Analysis
https://i.imgur.com/Z5npDYn.jpg
On the hourly chart of GBP/USD at FXOpen, the pair attempted a fresh increase above 1.2200. However, the British Pound failed above 1.2320 and started a fresh decline against the US Dollar.
There was a clear move below 1.2250 and the 50-hour simple moving average. The bears pushed the pair below a key bullish trend line with support near 1.2220. It opened the doors for a move toward the 1.2120 level.
A low is formed near 1.2122 and the pair is now consolidating losses. On the upside, the GBP/USD chart indicates that the pair is facing resistance near the 23.6% Fib retracement level of the downward move from the 1.2337 swing high to the 1.2122 low at 1.2175.
The next major resistance is near the 50-hour simple moving average at 1.2200. The main resistance could be the 50% Fib retracement level of the downward move from the 1.2337 swing high to the 1.2122 low at 1.2220.
A close above the 1.2220 resistance zone could open the doors for a move toward 1.2335. Any more gains might send GBP/USD toward 1.2450.
On the downside, there is a key support forming near 1.2120. If there is a downside break below the 1.2120 support, the pair could accelerate lower. The next major support is near the 1.2040 zone, below which the pair could test 1.2020. Any more losses could lead the pair toward the 1.2000 support.
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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
