22/09/2022 Daily Reports
EUR/USD
- The EUR/USD collapsed to fresh multi-year lows as the US Federal Reserve hiked rates by 75 bps, and anticipated ongoing increases to the Federal fund’s rates (FFR) will be appropriate. The pair oscillates around the 0.9840 area, due to increased volatility, bearish in the daily chart.
- Policymakers reiterated the Fed’s commitment to return inflation to its 2% objective and would assess incoming data, including readings on public health, labor market conditions, inflation pressures, and inflation expectations.
- Regarding the Summary of Economic Projections, FOMC members estimate the Federal funds rate (FFR) at 4.4% by the end of 2022, according to the median, while growth in the US for the same period is estimated to finish at 0.2%.
- The EUR/USD pair is trading near the 0.9840, down for the day with the neutral to bearish stance in daily chart. The pair stabilized below 20 and 50 SMA, indicates bearish strength in short term. Meanwhile, 20 SMA started turning flat but continued developing below longer ones, suggests bears not exhausted yet. On upside, the immediate resistance is 1.0000, break above this level will extend the advance to 1.0200.
- Techinical readings in the daily chart support the bearish stances. The RSI indicators hovering below the midlines and stabilized around 37, shows bearish strength. The Momentum indicator stabilized below the midline, indicating downward potentials. On downside, the immediate support is 0.9810 and below this level will open the gate to 0.9700.
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GBP/USD
- The GBP/USD sank and refreshed 37-year lows, sliding below the 1.1300 figure, hitting a 2022 YTD low at 1.1236 after the US Federal Reserve hiked rates by 75 bps in the September meeting. The pair recovered modestly and ended Wednesday around 1.1275, down for the day and still bearish in the daily chart.
- According to its mandate, the US Federal Reserve decided to hike rates to the 3-3.25% range on Wednesday, bringing inflation towards its 2% target. In the monetary policy statement, the FOMC reiterated that it’s strongly committed to reaching the Fed’s goal and mentioned that further rate hikes are needed.
- Aside from this, the Summary of Economic Projections (SEP) policymakers expects the Federal funds rate to increase to 4.4% by the year’s end, as reported by the median. Meanwhile, as reported by the PCE, inflation is estimated to reach 5.4%, while the core PCE figure, which is the benchmark for Fed members, is estimated to end at 4.5%. The unemployment rate is calculated to uptick to 3.8%.
- The GBP/USD offers bearish stance in daily chart, it maintains the downward slope and now is stabilized below all main SMAs, indicating bearish strength. Meanwhile, the 20 SMA continued accelerating south and developing far below longer ones, suggesting bears not exhausted yet. On upside, The immediate resistance is 1.1400 with a break above it exposing to 1.1550.
- Techinical readings in the daily chart support the bearish stances. RSI indicator stabilized around 28, while the Momentum indicator stabilized below the midline, suggesting downward potentials. On downside, the immediate support is 1.1230, unable to defend this level will resume the decline to 1.11500.
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XAU/USD
- Gold fall to a fresh low below $1,660 after Fed rate decision to lift rate by 75 bps, but recovered all losses and turned to upside, surged to intraday high 1688. It ended Wednesday around 1674, still bearish in the daily chart.
- The expectations for higher rates while at the same time, investors fled for safety after a decision by Russian President Vladimir Putin to mobilize more troops for the conflict in Ukraine had already pushed the dollar to a two-decade high. The DXY index that measures the US dollar against a basket of currencies was breaching into the 111 area before the Fed. It has now gone on to print a post-Fed announcement high of 111.578 so far.
- At the same time, the Fed upwardly reviewed its inflation projections, with the PCE price index now seen at 5.4% this year and at 2.8% in 2023. It won’t be until 2024 when it will reach the 2% target. Growth suffered downward revisions, the steeper one in the near term. For this year, the Gross Domestic Product is now seen at 0.2%, down from 1.7%, but for the upcoming years, it is seen above 1%. Finally, the median expectation for the federal funds rate at the end of 2023 is 4.6% from 3.8%.
- Gold price stabilized around 1675, up for the day and bearish in the daily chart. The gold price stabilized below all main SMAs, suggesting bearish strength in short term. Meanwhile, the 20 SMA continued accelerating south and developing below longer ones, indicating bears not exhausted yet. On upside, the immediate resistance is 1688, break above this level will open the gate to extend the advance to 1735 area.
- From a technical perspective, the RSI indicator holds below the midline and stabilized around 39, suggesting bearish strength. The Momentum indicator struggled below the midline, suggests bearish potentials. On downside, the immediate support is 1654, below this area may resume the decline to 1610 level.
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USD/JPY
- The USD/JPY slightly advances for the third consecutive day, hitting a fresh weekly high at around 144.70. It then retreated to 144.00 area to ended Tuesday, bullish in the daily chart.
- The American central bank hiked the benchmark rate by 75 bps to 3.25% as expected, while policymakers maintain their determination to bring inflation down to target. However, there was no innovation in monetary policy and generally speaking, they are confident about economic progress.
- The Fed upwardly reviewed its inflation projections, with the PCE price index now seen at 5.4% this year and at 2.8% in 2023. It won’t be until 2024 when it will reach the 2% target. Growth suffered downward revisions, the steeper one in the near term. For this year, the Gross Domestic Product growth is now seen at 0.2%, down from 1.7%, but for the upcoming years, it is seen above 1%. Finally, the median expectation for the federal funds rate at the end of 2023 is 4.6% from 3.8% previously.
- The USD/JPY pair stabilized around 144.00, 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 145.00 may encourage bulls to challenge 146.00, break above that level will open the gate to 147.00.
- Technical indicators suggest the bullish strength. RSI stabilized around 66, while the Momentum indicator continued developing above the midline, suggests upward potentials. On downside, the immediate support is 143.30, break below this level will open the gate to 141.50 area.
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DJI
DJI under the strong sell pressure, tumbled to intraday low 30200 area post Fed interest rate decision. It hold near the bottom and ended Wednesday around 30240, bearish in the hourly chart. It stabilized below 20 and 50 SMA, suggests bearish strength. Meanwhile, the 20 SMA started turning south and heading towards longer ones, suggesting bears not exhausted yet. On upside, overcome 30500 may encourage bulls to challenge 30800, break above that level will open the gate to 31000.
Technical indicators suggest the bearish strength, developing below the midline. RSI stabilized around 24, while the Momentum indicator stabilized in negative territory, suggests downward potentials. On downside, the immediate support is 30200, break below this level will open the gate for more decline to 30000 area.
Brent
Brent surged to intraday high 93.50 area but failed to hold the gains, trimmed all losses and back to 90.10 area to ended Tuesday, bearish in the hourly chart. The price stabilized below 20 and 50 SMAs, suggests bearish strength in short term. Meanwhile, the 20 SMA started turning south and heading towards longer ones, indicating bears not exhausted yet. On upside, overcome 91.20 may encourage bulls to challenge 93.00, break above this level will open the gate to 94.70.
Technical indicators suggest the bearish movement, hovering below the midline. RSI stabilized around 41, while the Momentum indicator continued developing in negative territory, suggests downward potentials. On downside, the immediate support is 89.300, break below this level will open the gate for more decline to 87.30 area.
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