29/09/2022 Daily Reports
The shared currency began trading nearby the day’s lows, just below the 0.9600 figure, and dived towards a fresh two-decade low at around 0.9535 before rallying sharply towards the daily high at 0.9751 before settling around 0.9730, bearish in the daily chart.
The energy crisis keeps the Eurozone under pressure. On Tuesday, news that the Nord Stream pipelines 1 and 2 showed leaks sent energy prices higher. Some countries’ officials said it could be sabotage, and even Danish PM Frederiksen said it was “hard to imagine that these are coincidences.” German officials expressed concern that a “targeted attack” had caused a sudden pressure loss.
Earlier, the EU’s economic calendar featured the GfK Consumer confidence, which tumbled to -42.5 heading into October, from a -36.8 September reading, well below analysts’ estimates. According to the GfK institute, improvement in consumer morale is closely tied to lowering inflation.
The EUR/USD pair is trading near the 0.9730, up for the day with the bearish stance in daily chart. The pair still stabilized below 20 and 50 SMA, indicates bearish strength. Meanwhile, 20 SMA continued accelerating south and developing below longer ones, suggests bears not exhausted yet. On upside, the immediate resistance is 0.9750, break above this level will extend the advance to 0.9840.
Technical readings in the daily chart support the bearish stances. The RSI indicators hovering below the midlines and stabilized around 38, shows bearish strength. The Momentum indicator stabilized below the midline, indicating downward potentials. On downside, the immediate support is 0.9600 and below this level will open the gate to 0.9535.
- The GBP/USD recovered some ground as the North American session progressed, switching to positive territory, the pair is trading at 1.0880, above its opening price amidst a volatile trading session, after hitting a daily high/low of 1.0916/1.0539 as concerns over the UK economy increased.
- The Bank of England entered the bond market on Wednesday to calm the markets, committing to buy GBP 65 Billion of long-dated gilts following the new Primer Minister Liz Truss’s “mini-budget” release, plagued with substantial tax cuts, aimed to stimulate the economy. At the same time, the BoE postponed the beginning of the Quantitative Tightening program for the end of October.
- Elsewhere, the International Monetary Fund (IMF) expressed that the new UK government plan would likely increase inequality in the UK and could undermine the current monetary policy. Due to large inflationary readings, the IMF expressed that “we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy.”
- 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 1.0930 with a break above it exposing to 1.1100.
- Technical 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 1.0730, unable to defend this level will resume the decline to 1.0530.