14/10/2022 Daily Reports
- The EUR/USD is recovering from earlier losses as inflation in the United States rose above estimates, continuing to test Fed members’ patience. Core CPI in the US jumped to a four-decade high, exceeding forecasts, cementing the case for further Fed tightening at November’s meeting. Hence, the EUR/USD is trading at 0.9775, after sliding to 0.9631 daily low, as traders reacted to US data.
- US equities are trading in the green as sentiment shifted positively. The US Department of Labor reported that inflation in the US, mainly core CPI, jumped more than estimated by 6.6% YoY, topping August 6.3%. Contrarily, headline inflation edged lower from the previous month’s 8.3% to 8.2%, almost 1% lower than June’s 2022 peak.
- At the same time, US jobs data was released. Unemployment claims for the past week ending on October 8 rose by 228K, higher than the 225K foreseen by street’s analyst, though US inflation figures overshadowed data.
- The EUR/USD pair is trading near the 0.9775, up for the day with the bearish stance in daily chart. The pair still 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 45. The Momentum indicator stabilized in the negative territory, indicating downward potentials. On downside, the immediate support is 0.9630 and below this level will open the gate to 0.9530.
- The pound seems to be taking a breather as the impressive 300-pip rally from the 1.1060 area has found sellers at 1.1380 before pulling back to the lower range of 1.1300. The pound remains positive on daily charts after having appreciated beyond 3% over the last two days.
- News reporting that the UK Government might be discussing increasing corporation tax next year, thus reversing the mini-Budget that roiled markets last month has been welcomed by investors.
- Furthermore, the Financial Times reported on Wednesday that the Bank of England might have agreed privately with lenders on the possibility of extending bond purchases beyond Friday, the day announced as the deadline for the emergency plan. This has contributed to ease negative pressure on the cable.
- The GBP/USD offers neutral stance in daily chart and maintains the downward slope after hit 1.1380 high. Cable now is stabilizing between 20 and 50 SMA, indicating neutral 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 1.1380 with a break above it exposing to 1.1500.
- Technical readings in the daily chart support neutral stances. RSI indicator stabilized around 50, while the Momentum indicator stabilized below the midline, suggesting downward potentials. On downside, the immediate support is 1.1220, unable to defend this level will resume the decline to 1.1060.
- Gold futures are retracing previous losses during Thursday’s US trading session, favored by a broad-based USD pullback. The yellow metal has bottomed at a two-week low of $1,642 before returning to $1,665, still bearish in the daily chart.
- The greenback is losing ground after the bullish reaction triggered by the release of US CPI data. Consumer prices increased at a 0.4% pace in September, beating expectations of a 0.2% rise, which boosted hopes of a 100 basis point rate hike by the Federal Reserve in November.
- Federal Fund Futures priced in a 13% chance that the Federal Reserve could accelerate its hiking pace at the next month’s meeting. The Dollar Index (DXY) rushed higher, to hit a session high right below 114.00, nearing the recent 20-year high of 114.70. The US dollar seems to have lost steam, as the market confronts the data with the slight dovish tilt observed in September’s FOMC minutes released on Wednesday.
- Gold price stabilized around 1665, down 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 43, suggesting bearish strength. The Momentum indicator struggled below the midline, suggests downward potentials. On downside, the immediate support is 1642, below this area may resume the decline to 1615.
- The USD/JPY pair attracts fresh buying during the early North American session and spikes to a new 24-year peak, closer to mid-147.00s in reaction to hotter US consumer inflation figures.
- On Thursday’s session, the USD/JPY surprisingly edged higher despite verbal interventions by Japanese authorities. In the Asian session, Japanese Finance Minister Shunichi Suzuki commented that he’s worried about recent forex volatility involving the JPY while saying that authorities are focused on FX volatility rather than the USD/JPY exchange rate.
- The US Bureau of Labor Statistics reported that the headline CPI rose 0.4% in September and the yearly rate eased to 8.2% from 8.3% in August. Adding to this, core inflation, which excludes food and energy prices, held steady at 0.6% during the reported month and the yearly rate accelerated to 6.6% from 6.3% previous. The readings were higher than consensus estimates and reaffirms market bets for another supersized 75 bps Fed rate hike move in November.
- The USD/JPY pair stabilized around 147.25, 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 148.00 may encourage bulls to challenge 149.00, break above that level will open the gate to 150.00.
- Technical indicators suggest the bullish strength. RSI stabilized around 72, 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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- DJI made a sharp U turn, jumped from the intraday low 28670 area to intraday high 30230 region. It ended the day at around 30100, up for the day and bullish in the hourly chart. It stabilized above all main SMAs, suggests bullish strength. Meanwhile, 20 SMA started turning north and heading towards longer one, suggesting bulls not exhausted yet. On upside, overcome 30230 may encourage bulls to challenge 30500, break above this level will open the gate to 31000.
- Technical indicators suggest the bullish strength. RSI stabilized around 66, while the Momentum indicator stabilized above the midline, suggests upward potentials. On downside, the immediate support is 29850, break below this level will open the gate for more decline to 29600 area.
- Brent made a strong rally, climbed from intraday low 91.10 to 94.90 high. It settled near the top and ended Wednesday at around 94.80, bullish in the hourly chart. The price stabilized above 20 and 50 SMAs, suggests bullish strength in short term. Meanwhile, the 20 SMA started turning north and heading towards longer ones, indicating bulls not exhausted yet. On upside, overcome 95.20 may encourage bulls to challenge 96.50, break above this level will open the gate to 97.60.
- Technical indicators suggest the bullish movement, hovering above the midline. RSI stabilized around 64, while the Momentum indicator stabilized in positive territory, suggests downward potentials. On downside, the immediate support is 93.30, break below this level will open the gate for more decline to 91.00 area.
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