Dollar Drives to Yearly High

The US dollar has driven to a yearly high after notching up its fourth straight positive trading day after last week’s hawkish Fed update. Concern in the market that higher Oil prices will push inflation higher and further away from the Fed’s target 2% has led to a charge higher in the greenback. Fixed income markets have also continued to push treasury yields north with the benchmark 10-year now trading up at 4.53% and stock markets remain choppy and vulnerable as the market continues to digest the potential for rates remaining higher for longer. Investors are now preparing for more of the same as the trading week progress with any rallies in risk likely to be hit hard.

JPY Hits 10 Month Low

The Japanese Yen has hit a 10-month low in trading today after the Bank of Japan advised markets that it will continue with its ultra-easy rate policy. Both the Governor and his deputy spoke on separate occasions and the message was the same – rates will remain accommodative for the foreseeable future. Traders had been looking for a change of policy after the bank had hinted that it was imminent just a few months ago but now BOJ policy could be at odds with the government which does not want to see excessive moves in the currency market – in reality, further Yen weakness. Be prepared to hear more about potential intervention again and for action to occur as one policy does not necessarily support the other. It could be a bumpy ride ahead for Yen traders in the next few weeks.

Momentum to Continue to Dictate Markets

There is little on the event calendar in the first two sessions of Tuesday’s trading day to excite investors and therefore the downwards momentum that markets have experienced over the last few days is likely to continue. There are some tier 1 releases due out in the New York session and this could see some further volatility. US Consumer Confidence, New Home Sales and Richmond Manufacturing Index numbers are all out at the same time and lower prints could ironically help the risk sentiment, however many feel that with the current conditions they could just be providing better levels to sell.

DXY:

The chart for DXY (US Dollar Index) currently exhibits a bearish overall momentum. In this context, there’s a potential scenario where the price could encounter a bearish reaction upon reaching the 1st resistance level at 105.68, possibly leading to a decline towards the 1st support level at 104.34.

The 1st support level at 104.34 is identified as an overlap support level, suggesting that it may serve as a critical support zone where buyers could potentially step in to prevent further downward movement.

On the resistance side, the 1st resistance level at 105.68 is characterized as an overlap resistance level. Additionally, it coincides with the 127.20% Fibonacci Extension, making it a significant potential barrier for any bullish attempts.

 Furthermore, the 2nd resistance level at 107.83 is marked as another overlap resistance level, further reinforcing its potential importance as a point of resistance.

EUR/USD:

The EUR/USD chart is currently exhibiting a bullish overall momentum. In this context, there is a potential scenario where the price may experience a short-term drop towards the 1st support level at 1.0512 before potentially bouncing from this level and rising towards the 1st resistance at 1.0765.

The 1st support level at 1.0512 holds significance as it is identified as a multi-swing low support. This suggests that it could potentially act as a strong support zone where buying interest may emerge, preventing further downside movement.

Additionally, there is an intermediate support level at 1.0640, which is characterized by the 38.20% Fibonacci Retracement. While this level is not the primary support, it may come into play if the price retraces and provides an additional potential support zone.

On the resistance side, the 1st resistance level at 1.0765 is marked as an overlap resistance. This level could serve as a point of interest for potential bullish movements

.

EUR/JPY:

The instrument EUR/JPY currently shows a bearish overall momentum on the chart. There’s potential for a short-term rise towards the 1st resistance before reversing off it and dropping towards the 1st support.

The 1st support at 156.91 is considered good due to its nature as a multi-swing low support.

The 2nd support at 155.57 is also notable as it acts as a swing low support and is associated with the 50% Fibonacci Retracement, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 158.45, which is significant because it represents a multi-swing high resistance and is linked to the 78.60% Fibonacci Projection.

Meanwhile, the 2nd resistance at 159.32 is noteworthy as it functions as a pullback resistance and is associated with the 127.20% Fibonacci Extension, suggesting a potential point where the price may reverse its short-term rise and start to drop.

EUR/GBP:

The instrument EUR/GBP currently indicates a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance.

The 1st support at 0.8666 is considered good due to its nature as a pullback support.

The 2nd support at 0.8613 is also notable as it acts as an overlap support.

On the resistance side, we have the 1st resistance at 0.8721, which is significant because it represents an overlap resistance and is associated with the 127.20% Fibonacci Extension.

The 2nd resistance at 0.8765 is also considered good as it functions as a pullback resistance.

Additionally, there’s an intermediate resistance at 0.8699, which is noteworthy because it acts as a swing high resistance, potentially contributing to the overall resistance levels as the price moves towards the 1st resistance.

.

GBP/USD:

The GBP/USD chart currently reflects a bearish overall momentum. Given this scenario, there is potential for a bearish continuation with a focus on the 1st support level.

The 1st support level at 1.2089 holds particular significance. It is a critical support level due to the confluence of two technical factors: the 127.20% Fibonacci Extension and the 78.60% Fibonacci Retracement. This convergence suggests that 1.2089 could act as a strong support zone where price may find buying interest.

Additionally, the 2nd support level at 1.1845 is another notable area, characterized as a swing low. It signifies a historical level where price has found support in the past.

On the resistance side, the 1st resistance level at 1.2311 stands out as a significant barrier. This level is marked by pullback resistance, indicating a historical point where price retracements have encountered selling pressure. Furthermore, it coincides with the presence of the 61.80% Fibonacci Retracement, adding to its technical significance as a potential resistance zone.

GBP/JPY:

The instrument GBP/JPY currently indicates a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance.

The 1st support at 180.40 is considered good due to its nature as a swing low support and its association with the 61.80% Fibonacci Retracement.

The 2nd support at 178.32 is also notable as it acts as a swing low support and is associated with the 78.60% Fibonacci Retracement, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 183.17, which is significant because it represents an overlap resistance and is linked to the 38.20% Fibonacci Retracement.

Similarly, the 2nd resistance at 186.44 is noteworthy as it functions as a swing high resistance, suggesting potential barriers to further bullish movement at these levels.

USD/CHF:

The USD/CHF chart presently indicates a bearish overall momentum. In this context, potential price developments may entail a bearish response upon approaching the 1st resistance level.

The 1st support level at 0.8858 is a crucial support level, characterized as a pullback support. This level could play a significant role in providing support to the price in the event of a bearish move.

On the resistance side, the 1st resistance level at 0.9096 stands out as a notable resistance point. It is marked by the presence of an overlap resistance, which often carries significance in technical analysis. Additionally, this level coincides with the 38.20% Fibonacci Retracement, adding to its potential importance as a barrier to further upward price movement.

Furthermore, the 2nd resistance level at 0.9424 is another noteworthy resistance level, characterized by an overlap resistance. 

.

USD/JPY:

The USD/JPY chart currently reflects a bearish overall momentum. In this bearish scenario, the potential price action suggests a bearish reaction as it approaches the 1st resistance level.

The 1st support level at 145.17 holds significant importance, characterized as an overlap support. This level may play a crucial role in providing support to the price in case of a bearish move.

On the resistance side, the 1st resistance at 148.17 is a notable level to watch. It is marked by the presence of swing high resistance, and it also exhibits a confluence of technical factors, including the 100% Fibonacci Projection and the 61.80% Fibonacci Projection. This suggests that the 148.17 level may act as a strong barrier to further upward price movements.

Additionally, the 2nd resistance level at 151.84 represents another notable resistance point, characterized by swing high resistance. 

USD/CAD:

The chart for USD/CAD is currently indicating an overall bearish momentum. In this scenario, there is a potential setup for a bearish reaction off the 1st resistance level and drop towards the 1st support level.

The 1st resistance level at 1.3499 is identified as an overlap resistance that aligns with the 38.20% Fibonacci retracement level. Further up, the 2nd resistance level at 1.3679 is also marked as an overlap resistance level, further indicating its potential significance as a point of resistance.

To the downside, the 1st support level at 1.3365 is identified as an overlap support that coincides with the 50.00% Fibonacci Retracement level, offering a strong level of potential support.

AUD/USD:

The AUD/USD chart is currently displaying an overall neutral momentum, suggesting that price may range-bound or oscillate between the 1st support and the1st resistance levels. 

The 1st support level at 0.6357 is identified as a pullback support while the 2nd support level at 0.6204 is noted as a swing-low support, suggesting a potential strong support level in the past.

To the upside, the 1st resistance level at 0.6494 is identified as an overlap resistance that aligns with the 23.60% Fibonacci retracement level. Further up, the 2nd resistance level at 0.6575 is also marked as an overlap resistance that coincides with the 38.20% Fibonacci retracement level.

NZD/USD

The NZD/USD chart is currently showing an overall neutral momentum, suggesting that the price may consolidate or move within the 1st support and the 1st resistance levels.

The 1st support level at 0.5861 is identified as a pullback support, where price found strong support in early September.

To the upside, the 1st resistance level at 0.5997 is identified as an overlap resistance that aligns with the 23.60% Fibonacci retracement level. Further up, the 2nd resistance level at 0.6084 is also marked as an overlap resistance that coincides with the 38.20% Fibonacci retracement level.

DJ30:

The instrument DJ30 currently exhibits a bearish overall momentum on the chart, and this bearish momentum has been triggered by the price breaking below an ascending support line. There’s potential for a bearish continuation towards the 1st support at 33612.93.

The 1st support at 33612.93 is considered strong due to its nature as an overlap support, and it’s associated with the 61.80% Fibonacci Retracement, indicating a robust level of potential support.

The 2nd support at 32731.51 is also notable as it acts as a multi-swing low support, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 34420.14, which is significant because it represents a pullback resistance.

Similarly, the 2nd resistance at 35066.13 is also an overlap resistance, suggesting potential barriers to further bullish movement at these levels.

GER30:

The instrument GER30 currently suggests a bullish overall momentum on the chart. There’s potential for a bullish bounce off the 1st support at 15498.10 and a move towards the 1st resistance.

The 1st support at 15498.10 is considered strong due to its nature as a multi-swing low support.

The 2nd support at 14697.93 is also notable as it acts as an overlap support and is associated with the 161.80% Fibonacci Extension, providing another layer of potential support.

On the resistance side, we have the 1st resistance at 16012.50, which is significant because it represents an overlap resistance and is linked to the 50% Fibonacci Retracement.

Similarly, the 2nd resistance at 16500.68 is noteworthy as it functions as a swing high resistance, suggesting potential barriers to further bullish movement at these levels.

`US500

The instrument US500 currently indicates a bullish overall momentum on the chart, and this momentum is supported by the fact that the price is in a bullish ascending channel. There’s potential for a bullish bounce off the 1st support at 4325.3 and a move towards the 1st resistance.

The 1st support at 4325.3 is considered strong due to its nature as an overlap support and its association with the 38.20% Fibonacci Retracement.

The 2nd support at 4205.1 is also notable as it acts as a pullback support and is associated with the 50% Fibonacci Retracement, providing an additional layer of potential support.

On the resistance side, we have the 1st resistance at 4457.3, which is significant because it represents a pullback resistance, suggesting a potential barrier to further bullish movement at this level.

BTC/USD:

The instrument BTC/USD currently has a bearish overall momentum on the chart, and factors contributing to this bearish momentum include the potential for a bearish continuation towards the 1st support at 25416.

The 1st support at 25416 is considered strong due to its nature as an overlap support and its association with the 61.80% Fibonacci Projection, indicating a solid level of potential support.

The 2nd support at 22851 is also noteworthy as it is associated with the 127.20% Fibonacci Extension, providing another layer of potential support.

On the resistance side, we have the 1st resistance at 28115, which is significant because it represents an overlap resistance.

Similarly, the 2nd resistance at 29859 is also an overlap resistance, suggesting potential barriers to further bullish movement at these levels.

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ETH/USD: 

The instrument ETH/USD currently exhibits a bearish overall momentum on the chart, and there’s potential for a bearish continuation towards the 1st support at 1538.01.

The 1st support at 1538.01 is considered strong due to its nature as a multi-swing low support, and it’s associated with the 78.60% Fibonacci Retracement, indicating a robust level of potential support.

The 2nd support at 1370.57 is also notable as it acts as a swing low support, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 1628.12, which is significant because it represents an overlap resistance.

Meanwhile, the 2nd resistance at 1817.39 is noteworthy as it functions as a pullback resistance and is associated with the 61.80% Fibonacci Retracement, suggesting potential barriers to further bullish movement at this level.

WTI/USD:

The WTI (West Texas Intermediate) chart currently exhibits a weak bearish momentum with low confidence with price potentially making a bearish reaction off the 1st resistance level.

The 1st resistance level at 92.28 is identified as an overlap resistance that aligns with the 78.60% Fibonacci projection level while the 2nd resistance level at 96.94 is marked as a pullback resistance; this level may act as a significant barrier to any potential upward movements.

To the downside, the 1st support level at 84.52 is identified as a pullback support that coincides with the 50.0% Fibonacci retracement level, a level where price could potentially find strong support.

XAU/USD (GOLD):

The XAU/USD chart is currently showing a bearish overall momentum. This bearish sentiment is influenced by the fact that the price is below the bearish Ichimoku cloud and is also trading beneath a major descending trend line, indicating a prevailing bearish trend.

Looking ahead, there is a potential scenario where the price could experience a short-term rise towards the 1st resistance level before eventually reversing and moving towards the 1st support.

The 1st support level at 1892.36 is significant and can be described as an overlap support. It is an important level to watch for potential bullish reversals or increased buying interest.

On the resistance side, the 1st resistance at 1942.40 is noteworthy due to its characterization as an overlap resistance. This level may act as a barrier to further price increases.

Additionally, the 2nd resistance at 1979.68 is another notable resistance level, also marked as an overlap resistance.

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IC Markets Asia Fundamental Forecast | 25 September 2023

What happened in the US session?

The flash Composite PMI for the US showed a further loss of service sector momentum in September. Although the Composite reading of 50.1 still points to an overall expansion of the US economy, this flash estimate was a 7-month low as new orders, a sign of future demand, fell at the fastest pace this year.

Meanwhile, hawkish comments by several Federal Reserve officials who signalled higher interest rates for longer caused the dollar index (DXY) to climb as high as 105.65 during the US session. Fed Governor Michelle Bowman favours more than one further rate hike to ensure ‘timely’ control of inflation while Boston Fed President Collins and San Francisco Fed President Daly also chimed in with the “higher for longer” mantra.

What does it mean for the Asia Session?

After registering 10 consecutive weeks of closing in the green, the DXY gapped slightly lower at 105.57 this morning’s open but managed to stay above 105.50 and then proceeded to rise towards 105.70. Demand for the greenback remains strong but DIET could find resistance around the 105.90-level.

The Dollar Index (DXY)

Key news events today

FOMC Member Kashkari Speaks (10:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Bank of Minneapolis President Neel Kashkari is due to speak at the University of Pennsylvania’s Wharton School where audience questions are expected. He too could sing a hawkish tune as per his fellow FOMC members which would potentially drive DXY higher later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50%.
• The Committee is strongly committed to returning inflation to its 2.0% target.
• The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
• Various factors will be considered, including labour market conditions, inflation pressures, inflation expectations, and international and financial developments.
• Next meeting runs from 31 October to 1 November 2023.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

FOMC Member Kashkari Speaks (10:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Bank of Minneapolis President Neel Kashkari is due to speak at the University of Pennsylvania’s Wharton School where audience questions are expected. He too could sing a hawkish tune as per his fellow FOMC members which would potentially drive DXY higher later today and add further downward pressure on gold prices.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie was one of the weakest currencies at today’s open as it fell as low as 0.6425 at the beginning of the Asia session. Expect pressures to remain for this currency today.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.10% for the third consecutive meeting.
• Inflation in Australia has passed its peak and is trending lower but needs to return to the target range.
• Further tightening of monetary policy may be necessary.
• Next meeting is on 3 October 2023.

Next 24 Hours Bias

Strong Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Along with the Aussie, the Kiwi was also another weak performing currency this morning with price tumbling as low as 0.5957 at the open this morning. Downward pressures are likely to remain for the Kiwi today.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the third meeting in a row.
• The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the 1% to 3% target range while supporting maximum sustainable employment.
• Headline inflation and inflation expectations have declined but the core reading remains too high.
• Next meeting is on 4 October 2023.

Next 24 Hours Bias

Strong Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Following last week’s dovish monetary policy decision by the Bank of Japan (BoJ), the Japanese yen remains relatively weak versus its peers. USD/JPY gapped lower this morning to open at 148.20 but quickly filled this gap to bounce as high as 148.50. With demand for the greenback remaining strong, this currency pair is likely to remain elevated today but the 148.50-level has acted as a relatively strong resistance area in recent weeks.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2.0%.
• The Bank of Japan decided on the following measures:
• Yield curve control: Negative interest rate of -0.1% on policy-rate balances and purchase of Japanese government bonds to keep 10-year JGB yields around +0.5% and -0.5% from the target level.
• Inflation expectations have shown some upward movements against medium- to long-term inflation expectations and wage growth rise, accompanied by changes in factors such as firms’ wage- and price-setting behaviour.
• Japan’s economy is likely to continue recovering moderately for the time being.
• Next meeting is on 31 October 2023.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

German ifo Business Climate (8:00 am GMT)

ECB President Lagarde Speaks (1:00 pm GMT)

What can we expect from EUR today?

The German ifo Business Climate index fell for the fourth time in a row in August as companies are increasingly becoming more pessimistic about the months ahead as the German economy cools notably. The estimate for September points to another month of decline which does not bode well for the wider European economy. The Euro could come under pressure once more during the Europe session. Meanwhile, ECB President Christine Lagarde is due to testify before the Committee on Economic and Monetary Affairs in Brussels and her remarks are likely to impact the Euro.

Central Bank Notes:

• The ECB raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will ensure interest rates are sufficiently restrictive to achieve the inflation target and keep them at those levels as long as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• Next meeting is on 26 October 2023.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Following the unexpected decision by the Swiss National Bank (SNB) to keep the policy rate unchanged at 1.75% last week, the Swiss franc has weakened considerably. USD/CHF broke above 0.9000 for the first time since mid-June as a hawkish Federal Reserve keeps this currency pair elevated.

Central Bank Notes:

• The SNB unexpectedly kept the policy rate unchanged at 1.75% in September.
• Inflation forecasts remain unchanged at 2.2% for both 2023 and 2024 while it was lowered from 2.1% to 1.9% for 2025.
• SNB predicts modest growth for the rest of the year due to subdued foreign demand, loss of purchasing power from inflation, and stricter financial conditions.
• The projection for GDP growth this year remained unchanged at 1.0%.
• Next meeting is on 14 December 2023.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Following the unexpected decision by the Bank of England (BoE) to keep the official bank rate unchanged at 5.25% last week, the Pound has weakened considerably versus its peers. GBP/USD broke below 1.2250 for the first time since the end of March as a hawkish Federal Reserve keeps driving this currency pair lower.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25%.
• Four members preferred to increase the Bank Rate by 0.25 percentage points, to 5.5%.
• CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices, and further declines in food and core goods price inflation. Services price inflation, however, is projected to remain elevated in the near term.
• The mean projection for CPI inflation remained unchanged and is expected to decline to 2.0% and 1.9% at the two and three-year horizons, respectively.
• Next meeting is on 2 November 2023.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Last Friday’s retail sales in Canada were mixed as core sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, rose 1.0% MoM versus the estimate of 0.5% while headline sales increased by 0.3% MoM versus the estimate of 0.4%. Food and beverage retailers led the sales for the month of July. With oil prices remaining elevated over recent weeks, the Canadian dollar has strengthened considerably with USD/CAD breaking below 1.3500. This currency pair could climb higher as the rise in crude prices appears to be stalling for now while overall retail sales figures were somewhat disappointing.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0%.
• Canada’s economy was more substantial than expected in the second quarter of 2023, with GDP growth of 3.3%.
• The Bank expects CPI inflation to ease to around 3.0% in the summer, but concerns have increased about inflation staying above the 2.0% target.
• Next meeting is on 25 October 2023.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude prices suffered its first close in the red after three weeks of strong gains where WTI oil gained 13% over this period. However, prices failed to stay above $92 per barrel last week and have now dropped under the $90 as a hawkish Federal Reserve raises concerns that higher rates could stifle demand for crude despite the tighter supply going into the last quarter of 2023.

Next 24 Hours Bias

Weak Bearish

IC Markets Europe Fundamental Forecast | 22 September 2023

What happened in the Asia session?

The Bank of Japan (BoJ) released their monetary policy statement this morning which stated that by a unanimous vote, the BoJ will apply a negative interest rate of -0.1% to the policy rate, will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around 0% while conducting yield curve control (YCC). They will continue to allow 10-year JGB yields to fluctuate in the range of around ±0.5% from the target level, while it will conduct YCC with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits. USD/JPY climbed above 148.00 upon the release of this statement.

What does it mean for the Europe & US sessions?

The Composite PMI has contracted for the past three months in the Eurozone as a broad-based decline in the manufacturing and services sectors caused this index to fall to 47 in August – services contracting for the first time in 2023. The flash reading for September points to a fourth consecutive month of contraction.

Although still above the key 50-level expansion threshold, the US Composite PMI reading has been expanding at an increasingly slower rate over the last three months. A weaker expansion in the service sector combined with a renewed decline in manufacturing output led to the marginal decrease in total new business in August. The flash readings for September point to a slight improvement and the relatively stronger economy of the United States could cause the Euro to fall further during the US session.

The Dollar Index (DXY)

Key news events today

Flash Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Although still above the key 50-level expansion threshold, the Composite PMI reading has been expanding at an increasingly slower rate over the last three months. A weaker expansion in the service sector combined with a renewed decline in manufacturing output led to the marginal decrease in total new business in August. The flash readings for September point to a slight improvement. Despite any slowdown in economic activity, the DXY is on track to notch a tenth consecutive week of gains.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50%.
• The Committee is strongly committed to returning inflation to its 2.0% target.
• The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
• Various factors will be considered, including labour market conditions, inflation pressures, inflation expectations, and international and financial developments.
• Next meeting runs from 31 October to 1 November 2023.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Flash Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Although still above the key 50-level expansion threshold, the Composite PMI reading has been expanding at an increasingly slower rate over the last three months. A weaker expansion in the service sector combined with a renewed decline in manufacturing output led to the marginal decrease in total new business in August. The flash readings for September point to a slight improvement. The ongoing strength of the DXY is adding further downward pressure on gold price but this precious metal has managed to stay above the key $1,900/oz threshold thus far.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The flash Composite PMI reading in Australia showed a return to expansion after contracting over the past two months. The reading of 50.2 was the highest in four months as growth was driven primarily by improvements in the service sector while the manufacturing sector output fell at a faster rate in September. After tumbling hard following the FOMC meeting, the Aussie has found support around the 0.6400-level but risks to the downside remain.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.10% for the third consecutive meeting.
• Inflation in Australia has passed its peak and is trending lower but needs to return to the target range.
• Further tightening of monetary policy may be necessary.
• Next meeting is on 3 October 2023.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Just like its Pacific neighbour, the Kiwi dived sharply following the FOMC meeting but it found support around the 0.5900-mark and has managed to stay above this level thus far. However, risks to the downside for this currency remain.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the third meeting in a row.
• The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the 1% to 3% target range while supporting maximum sustainable employment.
• Headline inflation and inflation expectations have declined but the core reading remains too high.
• Next meeting is on 4 October 2023.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Monetary Policy Statement (Tentative)

BoJ Press Conference (Tentative)

What can we expect from JPY today?

The Bank of Japan (BoJ) released their monetary policy statement this morning which stated that by a unanimous vote, the BoJ will apply a negative interest rate of -0.1% to the policy rate,  will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around 0% while conducting yield curve control (YCC). They will continue to allow 10-year JGB yields to fluctuate in the range of around ±0.5% from the target level, while it will conduct YCC with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits. USD/JPY climbed above 148.00 upon the release of this statement.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2.0%.
• The Bank of Japan decided on the following measures:
• Yield curve control: Negative interest rate of -0.1% on policy-rate balances and purchase of Japanese government bonds to keep 10-year JGB yields around +0.5% and -0.5% from the target level.
• Inflation expectations have shown some upward movements against medium- to long-term inflation expectations and wage growth rise, accompanied by changes in factors such as firms’ wage- and price-setting behaviour .
• Japan’s economy is likely to continue recovering moderately for the time being.
• Next meeting is on 31 October 2023.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Flash Composite PMI (8:00 am GMT)

What can we expect from EUR today?

The Composite PMI has contracted for the past three months in the Eurozone as a broad-based decline in the manufacturing and services sectors caused this index to fall to 47 in August – services contracting for the first time in 2023. The flash reading for September points to a fourth consecutive month of contraction. Following the FOMC meeting, the Euro tumbled hard to slide down towards 1.0630 and could break below this level by the end of today.

Central Bank Notes:

• The ECB raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will ensure interest rates are sufficiently restrictive to achieve the inflation target and keep them at those levels as long as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• Next meeting is on 26 October 2023.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Swiss National Bank (SNB) unexpectedly kept the policy rate unchanged at 1.75% at yesterday’s monetary policy assessment announcement, stating that the significant tightening of monetary policy over the recent quarters is countering remaining inflationary pressures. This caused USD/CHF to spike as high as 0.9080, gaining 90 pips in the process. Combined with a hawkish Federal Reserve, this currency pair is likely to remain elevated today.

Central Bank Notes:

• The SNB unexpectedly kept the policy rate unchanged at 1.75% in September.
• Inflation forecasts remain unchanged at 2.2% for both 2023 and 2024 while it was lowered from 2.1% to 1.9% for 2025.
• SNB predicts modest growth for the rest of the year due to subdued foreign demand, loss of purchasing power from inflation, and stricter financial conditions.
• The projection for GDP growth this year remained unchanged at 1.0%.
• Next meeting is on 14 December 2023.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Flash Composite PMI (8:30 am GMT)

What can we expect from GBP today?

The Bank of England’s Monetary Policy Committee voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25% and also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes – both actions acting as a significant bearish catalyst for the Pound.

The Composite PMI contracted for the first time in seven months in August as business activity reduced in the manufacturing and service sectors, with the former posting a much faster rate of decline. The flash reading for September points to another month of contraction, highlighting the ongoing slowdown in the British economy. The Pound is expected to remain under heavy downward pressure today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25%.
• Four members preferred to increase the Bank Rate by 0.25 percentage points, to 5.5%.
• CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices, and further declines in food and core goods price inflation. Services price inflation, however, is projected to remain elevated in the near term.
• The mean projection for CPI inflation remained unchanged and is expected to decline to 2.0% and 1.9% at the two and three-year horizons, respectively.
• Next meeting is on 2 November 2023.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

Retail sales in Canada are expected to increase by 0.4% MoM in August from the previous month while the core reading is anticipated to increase by 0.5% MoM. However, sales declined 0.6% on an annualised basis, which was the first time since the pandemic lockdowns in 2020. Declining sales are signs of weaker consumer spending which does not bode well for the overall economy but higher crude prices have strengthened the Canadian dollar in recent weeks causing USD/CAD to drop as low as 1.3380 this week.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0%.
• Canada’s economy was more substantial than expected in the second quarter of 2023, with GDP growth of 3.3%.
• The Bank expects CPI inflation to ease to around 3.0% in the summer, but concerns have increased about inflation staying above the 2.0% target.
• Next meeting is on 25 October 2023.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After the sharp pullback in crude oil prices since Tuesday, this commodity is climbing higher once more as concerns surrounding a Russian ban on fuel exports could further tighten the global oil supply. WTI oil found relatively strong support around the $89 per barrel mark and is likely to close in the green today. Despite this, crude prices are all but certain to notch a first loss in four weeks.

Next 24 Hours Bias

Weak Bullish

DXY:

The DXY (US Dollar Index) chart currently shows a bullish overall momentum, supported by several technical factors. This bullish sentiment indicates a potential scenario where the price could continue its upward movement towards the 1st resistance level.

The 1st support level at 105.09 is considered a strong potential support zone, with an overlapping support and the presence of the 61.80% Fibonacci Retracement, suggesting its significance as a potential area where price might find support. Additionally, the 2nd support at 104.66 is identified as a swing low support, further reinforcing its importance as a potential support level.

On the resistance side, the 1st resistance level at 105.89 is characterized as a swing high resistance. Traders and investors should closely monitor this level, as it may act as a point of resistance in the ongoing bullish trend. Furthermore, the intermediate resistance at 105.64 is marked as a swing high resistance, emphasizing its potential significance.

EUR/USD:

The EUR/USD chart currently exhibits a bearish overall momentum, and several factors contribute to this bearish sentiment. Price is notably below the bearish Ichimoku cloud, indicating a strong bearish bias. In this context, there is a potential scenario where the price could continue its bearish movement towards the 1st support level.

The 1st support at 1.0617 is considered a significant support zone, marked as a swing low support. This level is reinforced by the presence of the 127.20% Fibonacci Extension and the 61.80% Fibonacci Projection, indicating Fibonacci confluence and further highlighting its potential importance.

The 2nd support at 1.0604 is another notable level, as it coincides with the 127.20% Fibonacci Extension and the 61.80% Fibonacci Projection, suggesting additional confluence and potential support.

On the resistance side, the 1st resistance at 1.0672 is characterized as an overlap resistance with the presence of the 50% Fibonacci Retracement, signifying its potential significance. The 2nd resistance at 1.0692 is identified as a pullback resistance, with the 61.80% Fibonacci Retracement, further reinforcing its potential as a resistance point. Additionally, the intermediate resistance at 1.0656 is marked as an overlap resistance.

.

EUR/JPY:

The instrument EUR/JPY currently suggests a bearish overall momentum on the chart, and there’s potential for a short-term rise towards the 1st resistance before reversing off it and dropping towards the 1st support.

The 1st support at 157.39 is considered good due to its nature as a pullback support.

The 2nd support at 157.03 is also notable as it acts as a swing low support and is associated with the 78.60% Fibonacci Retracement, providing an additional layer of potential support.

On the resistance side, we have the 1st resistance at 157.94, which is significant because it represents an overlap resistance and is linked to the 61.80% Fibonacci Retracement.

Meanwhile, the 2nd resistance at 158.42 is noteworthy as it functions as a swing high resistance, suggesting a potential point where the price may reverse its short-term rise and start to drop.

EUR/GBP:

The instrument EUR/GBP currently indicates a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance at 0.8695.

The 1st support at 0.8649 is considered strong due to its nature as a pullback support, and it’s associated with both the 61.80% Fibonacci Retracement and the 23.60% Fibonacci Retracement, indicating a Fibonacci confluence. This makes it a robust level of potential support.

The 2nd support at 0.8613 is also notable as it acts as another pullback support, and it’s linked to the 50% Fibonacci Retracement, offering an additional layer of potential support.

On the resistance side, we have the 2nd resistance at 0.8729, which is significant because it represents an overlap resistance.

The 1st resistance at 0.8695 is also considered good as it represents a multi-swing high resistance, suggesting potential barriers to further bullish movement at these levels.

.

GBP/USD:

The GBP/USD chart currently maintains a bearish overall momentum, with several factors contributing to this bearish sentiment. One significant factor is that the price is trading below a major descending trend line, which acts as a resistance level and suggests the presence of bearish momentum.

In this context, there is a potential scenario where the price could continue its bearish movement towards the 1st support level, which is marked at 1.219. This support level is considered significant, as it coincides with the 100% Fibonacci Projection, indicating its potential importance as a support zone.

The 2nd support at 1.2126 is another notable level, marked as an overlap support, further reinforcing its potential as a support zone.

On the resistance side, the 1st resistance at 1.2308 is characterized as an overlap resistance, which may act as a barrier to any potential upward movements. The 2nd resistance at 1.2378 is identified as a pullback resistance, signifying its potential significance as a point of reversal or resistance.

GBP/JPY:

The instrument GBP/JPY currently has a bearish overall momentum on the chart, with the price being in a bearish descending channel. There’s potential for a short-term rise towards the 1st resistance before reversing off it and dropping towards the 1st support.

The 1st support at 180.58 is considered good due to its nature as a multi-swing low support, providing a solid level of potential support.

The 2nd support at 179.70 is also noteworthy as it acts as a pullback support, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 181.71, which is significant because it represents a pullback resistance and is associated with the 38.20% Fibonacci Retracement.

Similarly, the 2nd resistance at 182.66 is also a pullback resistance, suggesting potential barriers to further bullish movement at these levels.

USD/CHF:

The USD/CHF chart currently exhibits a bullish overall momentum, with the following factors contributing to this bullish sentiment: the price is trading above the bullish Ichimoku cloud, suggesting a favorable environment for further bullish movements.

In this context, there is a potential scenario where the price could continue its bullish trajectory towards the 1st resistance level at 0.9072. This resistance level is characterized as a swing high resistance, which may act as a barrier to any potential upward movements.

On the support side, the 1st support at 0.9005 is identified as a pullback support and is marked at the 50% Fibonacci Retracement level, indicating its potential significance as a support zone. The 2nd support at 0.8939 is marked as an overlap support, further reinforcing its importance as a potential support level.

.

USD/JPY:

The USD/JPY chart currently exhibits a bullish overall momentum, and this bullish sentiment is attributed to the price trading above a major ascending trend line, suggesting the potential for further bullish movements.

In this context, there’s a potential scenario where the price could continue its bullish trajectory towards the 1st resistance level at 148.41. This resistance level is characterized as a swing high resistance, which may act as a barrier to any potential upward movements.

On the support side, the 1st support at 147.45 is identified as an overlap support and is marked at the 38.20% Fibonacci Retracement level, indicating its potential significance as a support zone. The 2nd support at 146.91 is marked as an overlap support and is significant due to the confluence of the 61.80% Fibonacci Retracement and the 161.80% Fibonacci Extension.

USD/CAD:

The USD/CAD chart is currently exhibiting an overall bearish momentum, indicating an downward trend with price making a bearish continuation towards the 1st support level should price break below the intermediate support at 1.3459 which is identified as a pullback support that aligns with the 50.00% Fibonacci retracement level.

The 1st support level at 1.3387 is identified as an overlap support, holding significance as a potential support zone.

To the upside, the 1st resistance level at 1.3507 is identified as an overlap resistance that aligns with the 38.20% Fibonacci retracement level. Furthermore, the 2nd resistance level at 1.3549 is marked as a pullback resistance that aligns with a confluence of  Fibonacci levels i.e. the 50.00% retracement and the 78.60% projection levels.

AUD/USD:

The AUD/USD chart is currently displaying an overall bullish momentum, suggesting a bullish continuation towards the 1st resistance level should price break above the intermediate resistance at 0.6429 which is identified as an overlap resistance that aligns with the 38.20% Fibonacci retracement level.

The 1st resistance level at 0.6472 is noted as a pullback resistance, representing a potential area where price might encounter resistance.

To the downside, the 1st support level at 0.6402 is identified as an overlap support that aligns with the 127.20% Fibonacci extension level. Furthermore, the 2nd support level at 0.6365 is marked as a pullback support that coincides with the 161.80% Fibonacci extension level.

NZD/USD

The NZD/USD chart is currently displaying an overall bullish momentum, suggesting a bullish continuation towards the 1st resistance level.

The 1st resistance level at 0.5936 is identified as an overlap resistance that aligns with the 50.00% Fibonacci retracement level while the 2nd resistance level at 0.5984 is marked as a swing-high resistance that aligns with the 78.60% Fibonacci retracement level.

To the downside, the 1st support level at 0.5891 is identified as an overlap support that aligns with the 61.80% Fibonacci projection level. Additionally, the 2nd support level at 0.5859 is noted as a pullback support that coincides with the 127.20% Fibonacci extension level.

DJ30:

The instrument DJ30 currently shows a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance at 34316.34. This resistance level is considered strong due to its nature as a pullback resistance and its association with both the 61.80% Fibonacci Projection and the 38.20% Fibonacci Retracement, indicating a Fibonacci confluence.

The 1st support at 34036.64 is also noteworthy as it acts as a multi-swing low support and is associated with the 161.80% Fibonacci Extension, providing a strong level of potential support.

The 2nd support at 33650.95 is considered good as well, as it represents another multi-swing low support, offering an additional layer of potential support.

On the resistance side, we have the 2nd resistance at 34765.18, which is significant because it represents an overlap resistance, indicating a potential barrier to further bullish movement at this level.

GER30:

The instrument GER30 currently indicates a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance at 15562.21.

The 1st support at 15444.66 is considered strong due to its status as a multi-swing low support and its association with the 127.20% Fibonacci Extension, as well as the 100% Fibonacci Projection, indicating a Fibonacci confluence. This makes it a robust level of potential support.

The 2nd support at 15306.65 is also notable as it acts as a pullback support and is associated with the 161.80% Fibonacci Extension, providing an additional layer of potential support.

On the resistance side, we have the 1st resistance at 15562.21, which is significant because it represents a pullback resistance.

Meanwhile, the 2nd resistance at 15829.92 is also a pullback resistance, suggesting potential barriers to further bullish movement at these levels.

`US500

The instrument US500 currently indicates a bullish overall momentum on the chart, and there’s potential for a bullish continuation towards the 1st resistance at 4369.5.

The 1st support at 4320.8 is considered strong due to its status as an overlap support, providing a solid level of potential support.

The 2nd support at 4256.1 is also notable as it acts as a swing low support, offering an additional layer of potential support.

On the resistance side, we have the 1st resistance at 4369.5, which is significant because it represents a pullback resistance.

Similarly, the 2nd resistance at 4418.3 is also a pullback resistance, suggesting potential barriers to further bullish movement at these levels.

BTC/USD:

The instrument BTC/USD currently displays a bearish overall momentum on the chart. Factors contributing to this momentum include the expectation that the price could potentially rise towards the 1st resistance in the short term before reversing off it and dropping towards the 1st support.

The 1st support at 26283 is considered a good level of potential support due to its status as an overlap support and its association with the 50% Fibonacci Retracement.

The 2nd support at 25542 is also notable as it acts as a pullback support and is associated with the 78.60% Fibonacci Retracement, indicating another layer of potential support.

On the resistance side, we have the 1st resistance at 26755, which is significant because it represents a pullback resistance and is linked to the 38.20% Fibonacci Retracement.

Meanwhile, the 2nd resistance at 27471 is noteworthy as it functions as a swing high resistance, suggesting a potential point where the price may reverse its short-term rise and start to drop.

.

ETH/USD: 

The instrument ETH/USD currently indicates a bullish overall momentum on the chart. There’s potential for a bullish continuation towards the 1st resistance at 1608.46, which is considered good due to its nature as a pullback resistance and its association with the 38.20% Fibonacci Retracement.

The 1st support at 1577.71 is also notable as it acts as an overlap support and is linked to the 61.80% Fibonacci Retracement, providing a strong level of potential support.

The 2nd support at 1528.30 is considered good as well, as it represents a multi-swing low support, offering an additional layer of potential support.

On the resistance side, we have the 2nd resistance at 1659.52, which is significant because it functions as a multi-swing high resistance and is associated with the 61.80% Fibonacci Retracement, indicating a potential barrier to further bullish movement at this level.

WTI/USD:

The WTI (West Texas Intermediate) chart currently exhibits an overall bullish momentum, suggesting the potential for a bullish continuation towards the 1st resistance level should price break above the intermediate resistance which is identified as pullback resistance that aligns with the 61.80% Fibonacci retracement level.

The 1st resistance level at 92.09 is identified as a multi-swing-high resistance while the 2nd resistance level at 94.51 is marked as a resistance level that aligns with the 100.00% Fibonacci projection level. 

To the downside, the 1st support level at 88.46 is identified as a pullback support that aligns with 61.80% Fibonacci projection level. Additionally, the 2nd support level at 87.49 is also identified as a pullback support that aligns with a confluence of Fibonacci levels i.e. the 78.60% projection and the -27% expansion levels.

XAU/USD (GOLD):

The USD/JPY chart currently exhibits a bullish overall momentum, and this bullish sentiment is attributed to the price trading above a major ascending trend line, suggesting the potential for further bullish movements.

In this context, there’s a potential scenario where the price could continue its bullish trajectory towards the 1st resistance level at 148.41. This resistance level is characterized as a swing high resistance, which may act as a barrier to any potential upward movements.

On the support side, the 1st support at 147.45 is identified as an overlap support and is marked at the 38.20% Fibonacci Retracement level, indicating its potential significance as a support zone. The 2nd support at 146.91 is marked as an overlap support and is significant due to the confluence of the 61.80% Fibonacci Retracement and the 161.80% Fibonacci Extension.

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IC Markets Asia Fundamental Forecast | 22 September 2023

What happened in the US session?

In an unexpected turn of events, the Swiss National Bank (SNB) and the Bank of England (BoE) did not raise their respective policy rates. Market expectations were for both these central banks to raise their interest rates by 25 basis points but they paused and caught many traders off guard.

The SNB kept their policy rate unchanged at 1.75% at yesterday’s monetary policy assessment announcement, stating that the significant tightening of monetary policy over the recent quarters is countering remaining inflationary pressures.

Meanwhile, the BoE’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25% and also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes – both actions acting as a significant bearish catalyst for the Pound.

Unemployment claims in the US printed lower than expected for the fifth month in a row as the latest claims of 201k came in much lower than the forecast of 224k – lower claims usually function as a bullish catalyst for the US dollar. The dollar index (DXY) spiked as high as 105.75 in the aftermath of the claims data but the move was short-lived. The DXY proceeded to fall as low as 105.30 by the end of the US session.

What does it mean for the Asia Session?

The Bank of Japan (BoJ) will be the last and final major central bank that will announce its monetary policy decision this week. Although they are widely expected to maintain their interest rate at -0.1%, all eyes will be on Governor Kazuo Ueda and whether he will tweak the BoJ’s yield curve control (YCC) policy yet again. Any increase to the YCC ceiling could cause the Japanese yen to strengthen significantly despite rates remaining unchanged. High volatility is all but certain for USD/JPY today.

The Dollar Index (DXY)

Key news events today

Flash Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Although still above the key 50-level expansion threshold, the Composite PMI reading has been expanding at an increasingly slower rate over the last three months. A weaker expansion in the service sector combined with a renewed decline in manufacturing output led to the marginal decrease in total new business in August. The flash readings for September point to a slight improvement. Despite any slowdown in economic activity, the DXY is on track to notch a tenth consecutive week of gains.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50%.
• The Committee is strongly committed to returning inflation to its 2.0% target.
• The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
• Various factors will be considered, including labour market conditions, inflation pressures, inflation expectations, and international and financial developments.
• Next meeting runs from 31 October to 1 November 2023.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Flash Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Although still above the key 50-level expansion threshold, the Composite PMI reading has been expanding at an increasingly slower rate over the last three months. A weaker expansion in the service sector combined with a renewed decline in manufacturing output led to the marginal decrease in total new business in August. The flash readings for September point to a slight improvement. The ongoing strength of the DXY is adding further downward pressure on gold price but this precious metal has managed to stay above the key $1,900/oz threshold thus far.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The flash Composite PMI reading in Australia showed a return to expansion after contracting over the past two months. The reading of 50.2 was the highest in four months as growth was driven primarily by improvements in the service sector while the manufacturing sector output fell at a faster rate in September. After tumbling hard following the FOMC meeting, the Aussie has found support around the 0.6400-level but risks to the downside remain.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.10% for the third consecutive meeting.
• Inflation in Australia has passed its peak and is trending lower but needs to return to the target range.
• Further tightening of monetary policy may be necessary.
• Next meeting is on 3 October 2023.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Just like its Pacific neighbour, the Kiwi dived sharply following the FOMC meeting but it found support around the 0.5900-mark and has managed to stay above this level thus far. However, risks to the downside for this currency remain.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the third meeting in a row.
• The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the 1% to 3% target range while supporting maximum sustainable employment.
• Headline inflation and inflation expectations have declined but the core reading remains too high.
• Next meeting is on 4 October 2023.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

BoJ Monetary Policy Statement (Tentative)

BoJ Press Conference (Tentative)

What can we expect from JPY today?

The Bank of Japan (BoJ) will be the last and final major central bank that will announce its monetary policy decision this week. Although they are widely expected to maintain their interest rate at -0.1%, all eyes will be on Governor Kazuo Ueda and whether he will tweak the BoJ’s yield curve control (YCC) policy yet again. Any increase to the YCC ceiling could cause the Japanese yen to strengthen significantly despite rates remaining unchanged. High volatility is all but certain for USD/JPY today.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2.0%.
• The Bank of Japan decided on the following measures:
• Yield curve control: Negative interest rate of -0.1% on policy-rate balances and purchase of Japanese government bonds to keep 10-year JGB yields around +0.5%.
• Inflation is expected to decelerate temporarily but is projected to accelerate moderately later, supported by improvements in the output gap and inflation expectations.
• Japan’s economy is expected to recover gradually.
• Next meeting is on 22 September 2023.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Flash Composite PMI (8:00 am GMT)

What can we expect from EUR today?

The Composite PMI has contracted for the past three months in the Eurozone as a broad-based decline in the manufacturing and services sectors caused this index to fall to 47 in August – services contracting for the first time in 2023. The flash reading for September points to a fourth consecutive month of contraction. Following the FOMC meeting, the Euro tumbled hard to slide down towards 1.0630 and could break below this level by the end of today.

Central Bank Notes:

• The ECB raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will ensure interest rates are sufficiently restrictive to achieve the inflation target and keep them at those levels as long as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• Next meeting is on 26 October 2023.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Swiss National Bank (SNB) unexpectedly kept the policy rate unchanged at 1.75% at yesterday’s monetary policy assessment announcement, stating that the significant tightening of monetary policy over the recent quarters is countering remaining inflationary pressures. This caused USD/CHF to spike as high as 0.9080, gaining 90 pips in the process. Combined with a hawkish Federal Reserve, this currency pair is likely to remain elevated today.

Central Bank Notes:

• The SNB unexpectedly kept the policy rate unchanged at 1.75% in September.
• Inflation forecasts remain unchanged at 2.2% for both 2023 and 2024 while it was lowered from 2.1% to 1.9% for 2025.
• SNB predicts modest growth for the rest of the year due to subdued foreign demand, loss of purchasing power from inflation, and stricter financial conditions.
• The projection for GDP growth this year remained unchanged at 1.0%.
• Next meeting is on 14 December 2023.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Flash Composite PMI (8:30 am GMT)

What can we expect from GBP today?

The Bank of England’s Monetary Policy Committee voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25% and also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes – both actions acting as a significant bearish catalyst for the Pound.

The Composite PMI contracted for the first time in seven months in August as business activity reduced in the manufacturing and service sectors, with the former posting a much faster rate of decline. The flash reading for September points to another month of contraction, highlighting the ongoing slowdown in the British economy. The Pound is expected to remain under heavy downward pressure today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to maintain its Official Bank Rate at 5.25%.
• Four members preferred to increase the Bank Rate by 0.25 percentage points, to 5.5%.
• CPI inflation is expected to fall significantly further in the near term, reflecting lower annual energy inflation, despite the renewed upward pressure from oil prices, and further declines in food and core goods price inflation. Services price inflation, however, is projected to remain elevated in the near term.
• The mean projection for CPI inflation remained unchanged and is expected to decline to 2.0% and 1.9% at the two and three-year horizons, respectively.
• Next meeting is on 2 November 2023.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

Retail sales in Canada are expected to increase by 0.4% MoM in August from the previous month while the core reading is anticipated to increase by 0.5% MoM. However, sales declined 0.6% on an annualised basis, which was the first time since the pandemic lockdowns in 2020. Declining sales are signs of weaker consumer spending which does not bode well for the overall economy but higher crude prices have strengthened the Canadian dollar in recent weeks causing USD/CAD to drop as low as 1.3380 this week.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0%.
• Canada’s economy was more substantial than expected in the second quarter of 2023, with GDP growth of 3.3%.
• The Bank expects CPI inflation to ease to around 3.0% in the summer, but concerns have increased about inflation staying above the 2.0% target.
• Next meeting is on 25 October 2023.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After the sharp pullback in crude oil prices since Tuesday, this commodity is climbing higher once more as concerns surrounding a Russian ban on fuel exports could further tighten the global oil supply. WTI oil found relatively strong support around the $89 per barrel mark and is likely to close in the green today. Despite this, crude prices are all but certain to notch a first loss in four weeks.

Next 24 Hours Bias

Weak Bullish

IC Markets Europe Fundamental Forecast | 21 September 2023

What happened in the Asia session?

The dollar index (DXY) hit a high of 105.70 this morning as Asian markets digested the latest FOMC statement as well as Federal Reserve Chairman Jerome Powell’s hawkish press conference overnight. With another two major central bank announcements on monetary policy coming up during the Europe session, markets remain on edge.

What does it mean for the Europe & US sessions?

The Swiss National Bank (SNB) will release the outcome of their monetary policy assessment where they are widely expected to increase interest rates from 1.75% to 2.00%. With inflation projections for 2024 raised due to elevated electricity prices and increased rents, the SNB could be the second hawkish central bank this week. Combined with a hawkish Federal Reserve following yesterday’s FOMC meeting, higher volatility for USD/CHF can most definitely be expected today.

The Bank of England (BoE) will be the third major central bank this week to release its monetary policy statement and adjust its official bank rate. With inflation remaining stubbornly high in the UK, the BoE is expected to raise its rates by 25 basis points, bringing it up to 5.50%. Following yesterday’s hawkish FOMC statement release and press conference, this latest move could provide some much-needed support for the Pound.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

Unemployment claims in the US have printed lower than the forecast over the past four weeks which signal a resilient labour market despite higher interest rates. Should claims print lower than the forecast again, demand for the US dollar should pick up once more following yesterday’s hawkish rhetoric from Federal Reserve Chairman Jerome Powell during his FOMC press conference.

Central Bank Notes:

• The Federal Funds Rate target range remained at 5.25% to 5.50%.
• The Committee is strongly committed to returning inflation to its 2.0% target.
• The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
• Various factors will be considered, including labour market conditions, inflation pressures, inflation expectations, and international and financial developments.
• Next meeting runs from 31 October to 1 November 2023.

Next 24 Hours Bias

Strong Bullish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

Unemployment claims in the US have printed lower than the forecast over the past four weeks which signal a resilient labour market despite higher interest rates. Should claims print lower than the forecast again, demand for the US dollar should pick up once more following yesterday’s hawkish rhetoric from Federal Reserve Chairman Jerome Powell during his FOMC press conference and thus add further downward pressure on gold.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

Flash Composite PMI (11:00 pm GMT)

What can we expect from AUD today?

The Composite PMI reading in Australia has contracted over the past two months as services activity again fell at a faster pace than manufacturing output along with new orders. Combined with a hawkish Federal Reserve following yesterday’s FOMC meeting, the Aussie could remain under heavy pressure today.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.10% for the third consecutive meeting.
• Inflation in Australia has passed its peak and is trending lower but needs to return to the target range.
• Further tightening of monetary policy may be necessary.
• Next meeting is on 3 October 2023.

Next 24 Hours Bias

Strong Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Despite New Zealand’s economy growing 0.9% in the second quarter, which was higher than the forecast of 0.4%, the Kiwi dived sharply overnight as a hawkish Federal Reserve reignited demand for the US dollar. Further downward pressures are expected to build for the Kiwi today.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the third meeting in a row.
• The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the 1% to 3% target range while supporting maximum sustainable employment.
• Headline inflation and inflation expectations have declined but the core reading remains too high.
• Next meeting is on 4 October 2023.

Next 24 Hours Bias

Strong Bearish

The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT)

What can we expect from JPY today?

Core CPI in Japan slowed from 3.3% in June to 3.1% YoY in July. Although still higher than the 2% target, inflation in Japan is relatively tame as compared to other developed economies. Continued fall in CPI readings would allow the Bank of Japan to maintain its ultra-dovish monetary policy stance. Combined with a hawkish Federal Reserve following yesterday’s FOMC meeting, USD/JPY surged as high as 148.35 overnight and is expected to remain elevated today.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2.0%.
• The Bank of Japan decided on the following measures:
• Yield curve control: Negative interest rate of -0.1% on policy-rate balances and purchase of Japanese government bonds to keep 10-year JGB yields around +0.5%.
• Inflation is expected to decelerate temporarily but is projected to accelerate moderately later, supported by improvements in the output gap and inflation expectations.
• Japan’s economy is expected to recover gradually.
• Next meeting is on 22 September 2023.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

ECB President Lagarde Speaks (2:00 pm GMT)

What can we expect from EUR today?

ECB President Christine Lagarde is due to speak at the Mediterranean meetings in Marseille where her comments and remarks could add further volatility for the Euro. Following yesterday’s hawkish FOMC statement release and press conference, the Euro tumbled hard to slide down towards 1.0600 this morning.

Central Bank Notes:

• The ECB raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will ensure interest rates are sufficiently restrictive to achieve the inflation target and keep them at those levels as long as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• Next meeting is on 26 October 2023.

Next 24 Hours Bias

Strong Bearish

The Swiss Franc (CHF)

Key news events today

SNB Monetary Policy Assessment (7:30 am GMT)

SNB Press Conference (Tentative)

What can we expect from CHF today?

The Swiss National Bank (SNB) will release the outcome of their monetary policy assessment where they are widely expected to increase interest rates from 1.75% to 2.00%. With inflation projections for 2024 raised due to elevated electricity prices and increased rents, the SNB could be the second hawkish central bank this week. Combined with a hawkish Federal Reserve following yesterday’s FOMC meeting, higher volatility for USD/CHF can most definitely be expected today.

Central Bank Notes:

• SNB has tightened its monetary policy further, raising the SNB policy rate by 0.25 percentage points to 1.75%.
• The new forecast predicts average annual inflation at 2.2% for 2023 and 2024 and 2.1% for 2025. Without the rate increase, the estimates would be even higher.
• SNB predicts modest growth for the rest of the year due to subdued foreign demand, loss of purchasing power from inflation, and stricter financial conditions. The GDP is projected to grow around 1.0% this year.
• Next meeting is on 21 September 2023.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

BoE Monetary Policy Summary (11:00 am GMT)

BoE Official Bank Rate Announcement (11:00 am GMT)

What can we expect from GBP today?

The Bank of England (BoE) will be the third major central bank this week to release its monetary policy statement and adjust its official bank rate. With inflation remaining stubbornly high in the UK, the BoE is expected to raise its rates by 25 basis points, bringing it up to 5.50%. Following yesterday’s hawkish FOMC statement release and press conference, this latest move could provide some much-needed support for the Pound.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted to increase the Bank Rate by 0.25 percentage points to 5.25%.
• One member preferred to maintain the Bank Rate at 5.0% while another two preferred to increase it by 0.5 percentage points.
• CPI inflation is expected to fall significantly to around 5% by the end of the year, accounted for by lower energy prices but services price inflation is projected to remain elevated in the near term.
• The updated projections show that CPI inflation is expected to decline to 2.0% and 1.9% at the two and three-year horizons respectively.
• Next meeting is on 21 September 2023.

Next 24 Hours Bias

Strong Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

 Following yesterday’s hawkish FOMC statement release and press conference, demand for the greenback surged causing USD/CAD to jumbo as high as 1.3500 overnight. This currency pair is expected to remain elevated today.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0%.
• Canada’s economy was more substantial than expected in the second quarter of 2023, with GDP growth of 3.3%.
• The Bank expects CPI inflation to ease to around 3.0% in the summer, but concerns have increased about inflation staying above the 2.0% target.
• Next meeting is on 25 October 2023.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following the larger than expected drawdown in API stockpiles, EIA crude oil inventories also fell more than originally anticipated as 2.1M barrels were drawn compared to the estimate of a 1.3M-drawdown. Despite US inventory levels falling more than expected, crude prices continued to pull back sharply overnight as a hawkish Federal Reserve could restrict global economic activity by keeping rates higher for longer. WTI oil fell under the $89-level and could remain under pressure today.

Next 24 Hours Bias

Medium Bearish

Global Markets:

•  Asian Stock Markets : Nikkei down 1.22, Shanghai Composite down 0.74%, Hang Seng down 1.38%, ASX down 1.37%
• Commodities : Gold at $1948.45 (-0.91%), Silver at $23.49 (-1.44%), Brent Oil at $92.76 (-0.82%), WTI Oil at $88.89 (-0.85%)
• Rates : US 10-year yield at 4.429, UK 10-year yield at 4.271, Germany 10-year yield at 2.752

News & Data:

• (USD) Federal Funds Rate 5.5% vs 5.5% expected

Markets Update:

Asia-Pacific markets experienced declines across the region following the announcement by the U.S. Federal Reserve, which decided to maintain its benchmark policy rate while indicating a forthcoming interest rate hike later in the year based on the central bank’s projections.

The projections revealed that the central bank anticipates raising rates to a median of 5.6% by the conclusion of 2023, marking an increase from the current range of 5.25% to 5.5%. Moreover, the Federal Open Market Committee forecasted two rate cuts in 2024, a reduction of two compared to its earlier prediction in June, which would bring the funds rate to around 5.1%.

In Australia, the S&P/ASX 200 saw a decline of 1.37%, approaching its lowest point this month. Japan’s Nikkei 225 also experienced a decrease of 1.22% as the Bank of Japan commenced its two-day monetary policy meeting, while the Topix index fell by 0.78%.

South Korea’s Kospi recorded a 1.3% decrease, leading the losses in the Asian markets, and the Kosdaq index dropped by 1.84%. Hong Kong’s Hang Seng index exhibited a 1.3% decline, and mainland Chinese markets were also down, with the CSI 300 losing 0.55%.

In the U.S., the previous night witnessed all three major indexes undergoing declines as investors absorbed the Fed’s decisions. The Nasdaq Composite experienced the most significant losses, declining by 1.5%, driven by the performance of companies like Microsoft, Nvidia, and Google-parent Alphabet. The S&P 500 dipped by 0.94%, while the Dow Jones Industrial Average lost 0.22%.

Upcoming Events: 

• 12:30 PM GMT – USD Unemployment Claims
• 2:00 PM GMT – EUR ECB President Lagarde Speaks
• 2:00 PM GMT – USD Existing Home Sales
• 2:30 PM GMT – USD Natural Gas Storage

DXY:

The DXY (US Dollar Index) chart currently exhibits a bullish overall momentum, with several factors contributing to its upward trajectory. A significant factor in this bullish sentiment is the price’s position above the bullish Ichimoku cloud, indicating the potential for further bullish movement.

In this context, there’s a plausible scenario where the price may experience a bullish continuation towards the 1st resistance level at 105.89.

The 1st support at 104.86 is of notable importance, characterized as an overlap support, signifying its historical relevance as a potential strong support zone. Similarly, the 2nd support at 104.43 is identified as an overlap support, further reinforcing its role as a key support level.

On the resistance side, the 1st resistance at 105.89 assumes a pivotal role, categorized as a swing high resistance, and it aligns with the presence of the 161.80% Fibonacci Extension, highlighting its potential as a point of resistance. Additionally, there’s an intermediate resistance level at 105.65, marked as a swing high resistance, further emphasizing its significance.

EUR/USD:

The EUR/USD chart currently maintains a bearish overall momentum, with several factors contributing to its downward trajectory. One key factor influencing this bearish sentiment is the price’s position below the bearish Ichimoku cloud, indicating the presence of bearish market conditions.

However, there’s a potential scenario where the price may experience a short-term rise towards the 1st resistance level at 1.0694 before reversing and heading downwards towards the 1st support at 1.0634.

The 1st support at 1.0634 is of significant importance, identified as a multi-swing low support, and it aligns with the presence of the 127.20% Fibonacci Extension, underscoring its role as a strong support zone. Similarly, the 2nd support at 1.0604 is characterized as an overlap support, further emphasizing its potential as a key support level. This support level also aligns with the presence of the 161.80% Fibonacci Extension and the 100% Fibonacci Projection, indicating a high degree of Fibonacci confluence.

On the resistance side, the 1st resistance at 1.0694 plays a pivotal role, categorized as a pullback resistance, and it may serve as a point of resistance in the short term. Beyond the 1st resistance, the 2nd resistance at 1.0736 is identified as a swing high resistance, further highlighting its significance. Additionally, there’s an intermediate resistance level at 1.0673, marked as a pullback resistance.

.

EUR/JPY:

The EUR/JPY chart currently exhibits a bearish overall momentum, with several technical factors contributing to this downward sentiment. Based on the analysis, there is a potential scenario where the price could continue its bearish movement towards the 1st support level.

The 1st support level, located at 157.35, is considered a strong potential support zone. This support level is reinforced by the presence of the 61.80% Fibonacci Retracement, indicating its significance as a potential area where price might find support. Additionally, the 2nd support at 156.87 is identified as a multi-swing low support and is further supported by the 78.60% Fibonacci Retracement, highlighting its potential importance as a support level.

On the resistance side, the 1st resistance level at 158.50 is categorized as a multi-swing high resistance. Traders and investors should monitor this level closely, as it may act as a point of resistance within the ongoing bearish trend. Additionally, the intermediate resistance at 157.81 is marked as a pullback resistance, further emphasizing its potential significance.

EUR/GBP:

The EUR/GBP chart currently reflects a bearish overall momentum, with several factors contributing to this downward sentiment. Based on the technical analysis, there’s a potential scenario where the price could experience a bearish reaction off the 1st resistance level, potentially leading to a drop towards the 1st support.

The 1st support level, situated at 0.8613, is identified as a significant potential support zone. This level is classified as an overlap support, indicating its importance as a potential area where price might find support. Additionally, the 2nd support at 0.8570 is noted as a swing low support, further emphasizing its role as a potential support level.

On the resistance side, the 1st resistance level at 0.8647 is categorized as an overlap resistance. Traders and investors should pay attention to this level, as it may act as a point of resistance within the ongoing bearish trend. Beyond the 1st resistance, the 2nd resistance at 0.8668 is identified as a swing high resistance, signifying its potential significance as a point of reversal or resistance.

.

GBP/USD:

The GBP/USD chart currently maintains a bearish overall momentum, with key factors contributing to its downward trajectory. One significant factor influencing this bearish sentiment is the price’s position below a major descending trend line, which serves as a resistance and suggests the presence of bearish momentum.

In this context, there’s a plausible scenario where the price may experience a short-term rise towards the 1st resistance level at 1.2372 before reversing and heading downwards towards the 1st support at 1.2309.

The 1st support at 1.2309 is identified as a swing low support, and it aligns with the presence of the 127.20% Fibonacci Extension, indicating its role as a strong support zone. Similarly, the 2nd support at 1.2276 is characterized as a swing low support and aligns with the presence of the 161.80% Fibonacci Extension, further emphasizing its potential as a key support level.

On the resistance side, the 1st resistance at 1.2372 assumes a pivotal role, categorized as a pullback resistance, and it may serve as a point of resistance in the short term. Beyond the 1st resistance, the 2nd resistance at 1.2417 is identified as a multi-swing high resistance, underlining its significance.

GBP/JPY:

The GBP/JPY chart currently exhibits a bearish overall momentum, with several factors contributing to this downward sentiment. Price analysis reveals that the market conditions are conducive to a bearish continuation, particularly towards the 1st support level.

The 1st support level, situated at 182.52, is identified as a robust potential support zone. This level is classified as an overlap support, emphasizing its significance as a potential area where price could find support. Additionally, the 2nd support at 181.71 adds further weight to the potential support zone, as it aligns with the 78.60% Fibonacci Retracement. This confluence of technical indicators underscores the importance of these support levels in the context of the bearish trend.

On the resistance side, the 1st resistance at 183.35 is categorized as an overlap resistance. This level may act as a point of resistance within the ongoing bearish trend. Beyond the 1st resistance, the 2nd resistance at 184.26 is also identified as an overlap resistance, further reinforcing its significance as a potential resistance level.

The bearish Ichimoku cloud and the presence of a bearish descending channel are key factors contributing to the overall bearish momentum in the GBP/JPY chart

USD/CHF:

The USD/CHF chart currently exhibits a bearish overall momentum, with the potential for a bearish reaction upon reaching the 1st resistance level at 0.9014, followed by a decline towards the 1st support at 0.8944.

The 1st support at 0.8944 holds significant importance, characterized as an overlap support, signifying its historical relevance as a potential strong support zone. Similarly, the 2nd support at 0.8885 is identified as a multi-swing low support, further reinforcing its role as a key support level.

On the resistance side, the 1st resistance at 0.9014 plays a pivotal role, categorized as a multi-swing high resistance, indicating its potential as a point of resistance. Beyond the 1st resistance, the 2nd resistance at 0.9045 is characterized as an overlap resistance, further highlighting its significance.

Additionally, it’s worth noting that the Relative Strength Index (RSI) is displaying bearish divergence versus price, suggesting the possibility of a reversal occurring soon. This divergence adds to the overall bearish sentiment in the market.

.

USD/JPY:

The USD/JPY chart currently maintains a bullish overall momentum, with several factors contributing to its upward trajectory. A significant factor in this bullish sentiment is the price’s position above a major ascending trend line, suggesting the potential for further bullish movement.

However, there’s a plausible scenario where the price may experience a short-term drop towards the 1st support level at 147.54 before bouncing from there and rising towards the 1st resistance at 148.46.

The 1st support at 147.54 is identified as an overlap support, signifying its historical relevance as a potential strong support zone. Similarly, the 2nd support at 146.56 is characterized as an overlap support, further reinforcing its role as a key support level.

On the resistance side, the 1st resistance at 148.46 is noted as a point of significance and is associated with the presence of the 127.20% Fibonacci Extension, highlighting its potential as a point of resistance. Beyond the 1st resistance, the 2nd resistance at 149.17 is also important and corresponds to the presence of the 161.80% Fibonacci Extension, further emphasizing its significance.

USD/CAD:

The USD/CAD chart is currently exhibiting an overall bullish momentum, indicating an upward trend with price making a bullish continuation towards the 1st resistance level.

The 1st resistance level at 1.3499 is identified as an overlap resistance that aligns with a confluence of Fibonacci levels i.e. the 38.20% retracement and the 61.80% projection levels. Higher up, the 2nd resistance level at 1.3549 is marked as a pullback resistance that also aligns with a confluence of Fibonacci levels i.e. the 50% retracement and the 78.60% projection levels.

To the downside, the 1st support level at 1.3387 is identified as an overlap support, indicating that it has previously acted as a strong support zone.

AUD/USD:

The AUD/USD chart is currently displaying an overall bearish momentum, suggesting a bearish continuation towards the 1st support level.

The 1st support level at 0.6402 is identified as an overlap support that aligns close to the 127.20% Fibonacci extension level while the 2nd support level at 0.6365 is identified as a pullback support.

To the upside, the intermediate support level at 0.6429 is identified as an overlap resistance while the 1st resistance level at 0.6472 is identified as a pullback resistance.

NZD/USD

The NZD/USD chart is currently displaying an overall bearish momentum, suggesting a bearish continuation towards the 1st support level.

The 1st support level at 0.5891 is identified as an overlap support while the 2nd support level at 0.5859 is marked as pullback support that aligns close to the 127.20% Fibonacci extension level.

To the upside, the 1st resistance level at 0.5936 is identified as an overlap resistance. Further up, the 2nd resistance level at 0.2984 is marked as a swing-high resistance that aligns with the 78.60% Fibonacci retracement level.

DJ30:

The DJ30 (Dow Jones Industrial Average) chart currently reflects a bearish overall momentum, indicating a prevailing downtrend in the market. Multiple factors contribute to this bearish sentiment.

There is a potential scenario where the price could continue its bearish movement towards the 1st support level at 34321.82. The 1st support level is characterized as a multi-swing low support, and it also aligns with a Fibonacci confluence, incorporating the 61.80% Fibonacci Projection. This confluence of technical indicators highlights the 1st support as a robust potential support zone within the current bearish trend.

Additionally, the 2nd support at 34183.36 is identified as a swing low support, and its significance is further reinforced by the presence of the 127.20% Fibonacci Extension and the 100% Fibonacci Projection, indicating a high degree of Fibonacci confluence. This emphasizes the importance of the 2nd support level as a key support zone.

On the resistance side, the 1st resistance at 34561.80 is categorized as a pullback resistance, suggesting its potential as a point of resistance within the ongoing bearish trend. Beyond the 1st resistance, the 2nd resistance at 34765.18 is characterized as an overlap resistance, further highlighting its significance as a potential resistance level.

GER30:

The GER30 (DAX) chart is currently exhibiting a bearish overall momentum, indicating a prevailing downtrend in the market. Several factors contribute to this bearish sentiment.

In this context, there’s a potential scenario where the price may continue its bearish movement towards the 1st support level at 15558.82. The 1st support is identified as a multi-swing low support, and it also coincides with a Fibonacci confluence, comprising the 78.60% Fibonacci Projection and the 161.80% Fibonacci Extension. This confluence of technical indicators suggests that the 1st support level holds significance as a strong potential support zone within the current bearish trend.

Furthermore, the 2nd support at 15444.66 is categorized as a swing low support and is reinforced by the presence of the 100% Fibonacci Projection, underlining its importance as a key support level.

On the resistance side, the 1st resistance at 15829.92 is characterized as an overlap resistance, signifying its potential as a point of resistance within the ongoing bearish trend. Beyond the 1st resistance, the 2nd resistance at 16000.35 is associated with a swing high resistance, highlighting its significance as a potential resistance level.

`US500

The US500 (S&P 500) chart currently exhibits a bearish overall momentum, suggesting a prevailing downward trend in the market. Several factors contribute to this bearish sentiment.

There’s a potential scenario where the price may continue its bearish movement towards the 1st support level at 4379.6. The 1st support is identified as an overlap support, indicating its potential as a strong support zone. Additionally, the 2nd support at 4332.6 is categorized as a multi-swing low support, further emphasizing its importance as a key support level within the current downtrend.

On the resistance side, the 1st resistance at 4418.3 is characterized as a pullback resistance, signifying its potential as a point of resistance within the ongoing bearish trend. Beyond the 1st resistance, the 2nd resistance at 4462.0 is associated with the presence of multi-swing high resistance, further highlighting its significance as a potential resistance level.

BTC/USD:

The BTC/USD chart currently exhibits a neutral overall momentum, indicating a lack of a clear directional bias in the market. Several factors contribute to this neutral sentiment.

In this context, there’s a possibility that the price may continue to fluctuate within the range defined by the 1st support and the 1st resistance levels. Traders should be prepared for potential price swings within this range while recognizing the absence of a strong bullish or bearish bias at this time.

The 1st support at 26,721 is identified as an overlap support and coincides with the presence of the 23.60% Fibonacci Retracement, signifying its potential as a key support zone. Similarly, the 2nd support at 26,283 is categorized as an overlap support, further emphasizing its importance as a potential strong support level.

On the resistance side, the 1st resistance at 27,471 is characterized as a multi-swing high resistance, indicating its potential as a point of resistance within the current range. Beyond the 1st resistance, the 2nd resistance at 28,127 is associated with the presence of a swing high resistance, further highlighting its significance.

.

ETH/USD: 

The ETH/USD chart currently maintains a neutral overall momentum, indicating a lack of a clear directional bias in the market. In this context, there’s a possibility that the price could continue to fluctuate within the range defined by the 1st support and the 1st resistance levels.

The 1st support at 1608.46 is identified as an overlap support, and it aligns with the presence of the 50% Fibonacci Retracement, suggesting its significance as a potential strong support zone. Similarly, the 2nd support at 1540.15 is categorized as a multi-swing low support, further reinforcing its role as a key support level.

On the resistance side, the 1st resistance at 1659.52 is characterized as a multi-swing high resistance, indicating its potential as a point of resistance within the current range. Beyond the 1st resistance, the 2nd resistance at 1701.43 is associated with the presence of the 78.60% Fibonacci Retracement, further emphasizing its importance as a potential resistance level.

WTI/USD:

The WTI (West Texas Intermediate) chart currently exhibits an overall bearish momentum, suggesting a bearish break below the 1st support level with a potential continuation towards the 2nd support level.

The 1st support level at 88.77 is identified as an overlap support that aligns with the 23.60% Fibonacci retracement level while the 2nd support level at 87.49 is also marked as an overlap support.

To the upside, the 1st resistance level at 92.09 is identified as a multi-swing-high resistance. Further up, the 2nd resistance level at 94.51 is noted as a resistance that aligns with the 100.00% Fibonacci projection level.

XAU/USD (GOLD):

The XAU/USD chart currently exhibits a bearish overall momentum, with key factors contributing to its downward trajectory. In this context, there’s a potential scenario where the price may continue its bearish movement towards the 1st support level at 1915.81.

The 1st support at 1915.81 is identified as a pullback support, and it coincides with the presence of the 61.80% Fibonacci Retracement, signifying its importance as a significant support zone. Similarly, the 2nd support at 1901.57 is categorized as an overlap support, further emphasizing its potential significance as a key support level.

On the resistance side, the 1st resistance at 1937.84 is characterized as a pullback resistance and may serve as a point of resistance in the short term. Beyond the 1st resistance, the 2nd resistance at 1946.07 is identified as an overlap resistance, further highlighting its significance.

Additionally, there is an intermediate resistance level at 1028.18, categorized as a pullback resistance, which traders will monitor closely.

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