The daily reports for important events that affects the forex, stocks and commodities markets.

13/10/2022 Daily Reports

Support Level: 0.9670 - 0.9630 - 0.9530 Resistance Level: 0.9820 - 0.9920 - 1.0000

EUR/USD

  • The common currency remains on the back foot on Wednesday and is on track to complete a six-day reversal against the US dollar. The pair has turned lower from the 0.9700 area despite ECB Lagarde’s comments.
  • The President of the European Central Bank, Cristine Lagarde, has reaffirmed the importance of interest rate hikes to fight inflation in the Eurozone and announced that the Governing Council has started discussions on quantitative tightening, according to a Reuters report.
  • The pair, however, seems to be losing momentum, as the US dollar picks up with the market awaiting the release of the minutes of the Federal Reserve’s September meeting. These minutes will be carefully watched to assess the reasons for the central bank to raise interest rates by 75 basis points for the third consecutive time and, more importantly, to find signals to anticipate the size of November’s move.
  • The EUR/USD pair is trading near the 0.9705, unchanged for the day with the bearish stance in daily chart. The pair stabilized below 20 and 50 SMA, indicates bearish strength. Meanwhile, the 20 SMA continued developing far below longer ones despite it started turning flat, suggests bears not exhausted yet. On upside, the immediate resistance is 0.9820, break above this level will extend the advance to 1.0000.
  • Technical readings in the daily chart support the bearish stances. The RSI indicators hovering below the midlines and stabilized around 40. The Momentum indicator stabilized in the negative territory, indicating downward potentials. On downside, the immediate support is 0.9670 and below this level will open the gate to 0.9630.

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    Support Level: 1.0920 - 1.0760 - 1.0540 Resistance Level: 1.1220 - 1.1380 - 1.1500

    GBP/USD

    • The pound is trying to resume the upside trend shown during Wednesday’s Asian and early European sessions. The pair has found buyers at the 1.1020 area on its reversal from 1.1100, to return towards 1.1100 so far.
    • A Financial Times report suggested earlier on Wednesday that the Bank of England would have signaled private lenders that it would be prepared to extend bond purchases. This has eased concerns triggered by Governor Bailey, who pointed out next Friday as the deadline for the emergency program and urged.
    • This news and additional rumors suggesting that the British Government could be contemplating a U-turn on the mini-Budget that rattled financial markets have eased negative pressure on the sterling. The GBP/USD has bounced about 1.3% higher on the day, to regain some of the ground lost on Tuesday.
    • The GBP/USD offers bearish stance in daily chart, it maintains the downward slope after hit 1.1133 high. Cable now is stabilizing below 20 and 50 SMA, indicating bearish strength in short term. Meanwhile, the 20 SMA continued developing below longer ones despite it started turning flat, suggesting bears not exhausted yet. On upside, The immediate resistance is 1.1220 with a break above it exposing to 1.1380.
    • Technical readings in the daily chart support bearish stances. RSI indicator stabilized around 43, while the Momentum indicator stabilized below the midline, suggesting downward potentials. On downside, the immediate support is 1.0920, unable to defend this level will resume the decline to 1.0760.

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    Support Level: 1660 - 1641- 1615 Resistance Level: 1684 - 1700 - 1730

    XAU/USD

    • Gold futures spiked up to session highs at $1,677, with the US dollar turning lower as the minutes of September’s Fed meeting have been considered as tilted to the dovish side. The yellow metal, however, has given away gains shortly afterward, with the US dollar retracing lost ground. XAU/USD is practically back at pre-Minutes levels to ended Wednesday.
    • The Federal Reserve has shown its surprise at the pace of inflation and has confirmed that the officials maintain their commitment to continue hiking interest rates until the problem shows signs of resolving.
    • The market, however, has analyzed one comment as a potential sign of moderation on the monetary tightening cycle: “Several participants noted that (…) it would be important to calibrate the pace of further policy tightening with the aim of mitigating the risk of significant adverse effects on the economic outlook.” These comments have been taken as a hint that the bank might be considering smaller rate hikes in the next months. This has had a negative impact on the USD, which sent gold futures higher.
    • Gold price stabilized around 1674, up for the day and bearish in the daily chart. The gold price stabilized below 20 and 50 SMA, suggesting bearish strength. Meanwhile, the 20 SMA continued developing far below longer ones despite it started turning flat, indicating bears not exhausted yet. On upside, the immediate resistance is 1684, break above this level will open the gate to extend the advance to 1700 area.
    • From a technical perspective, the RSI indicator hold below the midline and stabilized around 45, suggesting bearish strength. The Momentum indicator struggled below the midline, suggests downward potentials. On downside, the immediate support is 1660, below this area may resume the decline to 1641.

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    Support Level: 146.00 - 144.80 - 143.50 Resistance Level: 147.00 - 148.00 - 149.00

    USD/JPY

    • The USD/JPY extends its rally above the 146.00 mark, courtesy of BoJ’s Governor Kuroda, giving the green light to continue weakening the Japanese yen. Hence, USD/JPY traders opened fresh longs, lifting the pair toward the 147.00 level. The pair ended Wednesday at around  146.85, up for the day and bullish in the daily chart.
    • A combination of factors continues to weigh on the Japanese yen and act as a tailwind for spot prices amid the underlying bullish sentiment surrounding the US dollar. The Bank of Japan (BoJ), so far, has shown no inclination to hike interest rates, marking a big divergence in comparison to a more hawkish stance adopted by other major central banks. Apart from this, Wednesday’s domestic data, showing that machinery orders fell more than expected in August, is seen undermining the JPY.
    • The US dollar, on the other hand, remains well supported by the prospects for a more aggressive policy tightening by the Fed and provides an additional lift to the USD/JPY pair. In fact, the markets have been pricing in another supersized 75 bps Fed rate hike move in November. The bets were reaffirmed by the release of the US Producer Price Index, which came in stronger-than-estimated and might have lifted expectations from the US consumer inflation figures, due on Thursday.
    • The USD/JPY pair stabilized around 146.85, up for the day and bullish in the daily chart. The price still maintains the upward slope and stabilized above all main SMAs, suggests bullish strength. Meanwhile, 20 SMA continued accelerating north and developing above longer ones, indicating bulls not exhausted in the long term. On upside, overcome 146.00 may encourage bulls to challenge 147.00, break above that level will open the gate to 148.00.
    • Technical indicators suggest the bullish strength. RSI stabilized around 74, while the Momentum indicator continued developing above the midline, suggests upward potentials. On downside, the immediate support is 146.00, break below this level will open the gate to 144.80 area.

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    Support Level: 29100 - 28950 - 28600 Resistance Level: 29650 - 29850 - 30100

    DJI

    • DJI consolidated in the familiar range between the intraday top 29525 area to intraday low 29177 region. It ended the day at around 29290, unchanged for the day and neutral to bearish in the hourly chart. It stabilized between 20 and 50 SMA, suggests neutral strength. However, 20 SMA continued developing below longer ones despite it started turning flat, suggesting bears not exhausted yet. On upside, overcome 29650 may encourage bulls to challenge 29850, break above this level will open the gate to 30100.
    • Technical indicators suggest the neutral to bearish strength. RSI stabilized around 46, while the Momentum indicator stabilized below the midline, suggests downward potentials. On downside, the immediate support is 29100, break below this level will open the gate for more decline to 28950 area.

    Support Level: 91.50 - 90.00 - 88.50 Resistance Level: 93.30 - 95.20 - 96.60

    BRENT

    • Brent still under the sell pressure, retreated from intraday high 95.16 to 91.60 region. It bounced modestly and ended Wednesday at around 92.40, bearish in the hourly chart. The price stabilized below 20 and 50 SMAs, suggests bearish strength in short term. Meanwhile, the 20 SMA continued accelerating south and heading towards longer ones, indicating bears not exhausted yet. On upside, overcome 93.30 may encourage bulls to challenge 95.20, break above this level will open the gate to 96.60.
    • Technical indicators suggest the bearish movement, hovering below the midline. RSI stabilized around 33, while the Momentum indicator stabilized in negative territory, suggests downward potentials. On downside, the immediate support is 91.50, break below this level will open the gate for more decline to 90.00 area.

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