Forex and Currency News

Archive for Forex and Currency News – Page 97

Mid-Week Technical Outlook: Commodity Currencies & Minors

A sense of caution lingered across financial markets on Thursday as investors weighed the impact of rising oil prices on economic growth. Anticipation ahead of the US jobs report on Friday added to the tense atmosphere with market players adopting a guarded approach toward riskier assets. In the equity space, stocks in Europe edged higher as global markets searched for normality after the recent volatility. There was an uneasy calm in the currency markets with the dollar on standby while oil prices hovered near three-week highs after OPEC+ agreed to cut output by 2 million barrels a day.

Over the past few days, our attention has been on the mighty dollar but this morning the spotlight shines on commodity currencies and minors. The minors refer to non-USD forex currency pairs while commodity currencies are those which are correlated with the value of a particular commodity. With oil bulls back in the building thanks to OPEC+ latest decision this could influence commodity currencies. Economic, domestic, and political forces impacting non-USD currencies may translate to increased volatility across minor pairs. Where there is volatility, this presents opportunity and our tool will be technical analysis.

USDCAD eyes 1.3840

Canadian Dollar bulls failed to draw inspiration from the rebound in oil prices yesterday. The USDCAD could be experiencing a technical rebound from 1.3502 which may encourage an incline back towards 1.3840. Overall, the currency pair remains bullish on the daily charts as there have been consistently higher highs and higher lows. A solid breakout above 1.3840 could trigger a move towards 1.4000. Below 1.3502, bears will be eyeing 1.3390.

NZDUSD to resume downtrend?

After failing to conquer the 0.5800 resistance level, the NZDUSD could be preparing to resume its journey south.

All eyes will be on how prices behave around the 0.5720 level which has acted as a resistance in the past. A strong breakdown below this point could encourage a selloff towards 0.5560 and 0.5467. If bulls can push prices back above 0.5800, this could open the doors towards 0.5880 and higher.

AUDUSD trapped within range

There is nothing much going on for AUDUSD but the pressure is building. Support can be found at 0.6390 and resistance at 0.6520. Although there have been consistently lower lows and lower highs, the currency pair could need a directional catalyst to breakout/down. A solid move above 0.6520 could trigger an incline towards 0.6650 and higher. Alternatively, a move below 0.6300 may result in a selloff towards 0.6270 and 0.6200, respectively.

GBPJPY wobbles above 100 SMA

If you are craving action, then look no further. The GBPJPY has been incredibly volatile over the past few days thanks to fundamental forces in the United Kingdom. Prices are trading below 164.00 as of writing and could edge lower if the 100-day SMA gives way. Bears may target 162.00 and 160.00 if the pound continues to weaken. Alternatively, a move back above 164.00 could open the doors towards 165.50 and 167.00.

EUR/JPY back within range

The EURJPY is trading back within a range with support at 141.50 and resistance at 144.00. A breakout could be on the horizon. Bulls could take control of the driving seat if prices push beyond 144.00. Such a development is likely to open the doors toward 145.60. Should 144.00 prove to be reliable resistance, the currency pair may decline back towards 141.50 and 139.00.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

05 Oct

Pound recovers but remains at low levels – how to assess the long-term value of sterling

By Ganesh Viswanath-Natraj, Warwick Business School, University of Warwick

The pound has recovered from a recent record dip after the chancellor’s mini-budget announcement. But it is still at low levels versus many other currencies.

The recent decline can be mostly attributed to the tax cuts announced during Chancellor Kwasi Kwarteng’s recent mini-budget. The £45 billion package caused concern among investors by considerably increasing future government debt, although Kwarteng has since announced a U-turn on the £2 billion plans to abolish cuts for the highest earners. More generally, escalating inflation expectations from this increased fiscal expansion, coupled with ongoing rising energy costs, have had a negative impact on the UK economy and therefore the value of sterling.

The weakening of the pound is also part of a global phenomenon. The US dollar has appreciated by 12% since the end of 2021 against a broad index of currencies, and by more than 20% against the pound. This broad appreciation is attributed to a tightening of US monetary policy and a shift in the risk appetite of investors towards US dollar assets, currently viewed as more of a safe haven.

Given these underlying pressures, questions about the long-term valuation of pound sterling abound, including whether it will settle at parity with the US dollar. An analysis by Bloomberg has shown financial markets believe there is a 60% probability that sterling will reach dollar parity by the end of 2022. A long-term decline in the valuation of the pound increases the price of imported goods, which can feed into consumer price inflation.

If policy makers want to shore up the currency’s strength, several economic theories suggest they must address high inflation expectations, the impacts of Brexit and the various supply chain issues plaguing the economy at present.

Comparing burgers with burgers

Ever heard of the Big Mac Index? Research about long-term movements in exchange rates shows they tend to change in line with relative inflation rates in many countries. This theory, known as purchasing power parity (PPP), uses the price of specific products or baskets of goods to compare currencies and standards of living in different countries.

As such, we can examine the value of the pound compared to other currencies by looking at a single good such as a McDonald’s Big Mac burger. Since this product is the same across countries, the Big Mac can be used to calculate a PPP-implied exchange rate by comparing its price in the UK and the US. In July 2022, the Big Mac Index showed the pound was undervalued by around 14%, based on the exchange rate implied by Big Mac prices in the US versus the UK.

Forecasts by the Bank of England put inflation at 14% by the fourth quarter of 2022, however it is expected to decline to 5% by the end of 2023. The relative fall in UK inflation in 2023 should strengthen the pound, reducing the undervaluation predicted by the Big Mac Index.

Another theory that can help us understand the long-term value of the pound is the link between the sustainability of public debt, sovereign risk and exchange rates. A large increase in the ratio of government debt to gross domestic product (GDP) can trigger a weakening of the currency as financial markets expect more risk, that is, concerns increase about the government being able to repay this debt.

Before the second world war, when sterling was the world’s reserve currency, the government could borrow at low cost. Present-day sterling no longer has the same privileges, however, particularly in recent weeks when sterling has even been compared to emerging market currencies. This theory would dictate that the debt-to-GDP ratio and corresponding sovereign risk must decrease for sterling to recover its value.

Long-term exchange rate movements can also be assessed by comparing productivity differences across countries. Known as the Balassa-Samuelson hypothesis, this theory links productivity slowdowns in a country’s tradeable sector – the industries that produce items that are traded internationally – to a weakening in its real exchange rate (that is, after accounting for differences in inflation).

This theory would therefore link supply chain disruptions resulting from Brexit and the war in Ukraine with fundamental declines in the UK’s productivity, causing the long-term value of the pound to depreciate.

Protecting the pound

Rescuing the pound from long-term parity with the dollar will require action from policy makers. The Bank of England oversees monetary policy – using interest rates, among other tools to control the supply of money to the economy – and has a mandate from the government to tackle price stability by using interest rate increases to bring down inflation. Futures markets forecast an interest rate increase of 4% to 6.25% by May 2023 , showing an expectation that the Bank will continue to hike rates to tackle inflation.

The government takes care of fiscal policy – spending and taxation decisions – and recommendations from markets and organisations such as the International Monetary Fund point towards a need for more prudence and fiscal restraint in light of current inflationary pressures. The UK government will announce a medium-term fiscal plan on November 23 that should aim to address the government debt to GDP ratio and shore up investor confidence in the economy.

Perhaps the most difficult challenge, however, will be tackling structural change as a result of the recent productivity slowdown due to Brexit and pandemic-related supply chain disruptions. Facilitating post-Brexit trade relations with the European Union could provide the necessary support to the UK’s tradeable sector to help boost the pound.

Without firm plans on these issues, the outlook for the long-term valuation of the pound remains uncertain. While global factors like the risk appetite of investors may continue to keep the dollar strong, domestic factors could mitigate these effects. Monetary tightening, fiscal consolidation and structural reform of the tradeable sector will all contribute to a revaluation of the pound, providing a route for policy makers to shore up its value on the international stage.

About the Author:

Ganesh Viswanath-Natraj, Assistant professor, Warwick Business School, University of Warwick

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Forex and Currency News Opinions

05 Oct

Murrey Math Lines 05.10.2022 (USDJPY, USDCAD)

Article By RoboForex.com

USDJPY, “US Dollar vs Japanese Yen”

In the H4 chart, USDJPY is trading within the “overbought area”. The Relative Strength Index is slowly moving towards 30. In this case, the pair is expected to break 8/8 (143.75) and then continue falling to reach the support at 7/8 (142.18). However, this scenario may be cancelled if the price breaks the resistance +1/8 (145.31) to the upside. After that, the instrument may grow towards +2/8 (146.87).

As we can see in the M15 chart, the pair has broken the downside line of the VoltyChannel indicator and, as a result, may continue its decline.

USDCAD, “US Dollar vs Canadian Dollar”

In the H4 chart, USDCAD is still correcting within the uptrend. The Relative Strength Index is approachi9ng 30, but may yet fall a bit. In this case, the price is expected to test 6/8 (1.3427), break it, and then continue moving downwards to reach the support at 5/8 (1.3305). However, this scenario may no longer be valid if the price breaks the resistance at 7/8 (1.3549) to the upside. After that, the instrument may resume growing towards +1/8 (1.3793).

As we can see in the M15 chart, the pair may has broken the downside line of the VoltyChannel indicator and, as a result, may continue trading downwards to reach 5/8 (1.3305) from the H4 chart.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News

05 Oct

The Analytical Overview of the Main Currency Pairs on 2022.10.05

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 0.9824
Prev Close: 0.9983
% chg. over the last day: +1.62 %

The Eurozone Producer Price Index, which measures the inflation rate between businesses and factories, reached an annualized rate of 5% in August, up from 4% in July. The biggest price increase was seen in the energy sector, plus 11.8%, while consumer goods rose by 0.8%. In her speech yesterday, ECB head Christine Lagarde said she did not know whether Eurozone inflation had peaked and was not ready to predict when that peak would be. So, the ECB will only rely on actual data and will gradually raise the interest rate until inflation starts to slow down.

Trading recommendations

Support levels: 0.9845, 0.9748, 0.9666.
Resistance levels: 0.9965, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame has changed to bullish. Yesterday, the price broke through the priority change level and consolidated higher. The MACD indicator is positive, the price is trading above the average lines, and the buyer’s pressure remains high. Buy trades should be considered after a small pullback, as the price is overbought now and has strongly deviated from the middle lines. Sell deals can be considered from the resistance level of 1.0111, but only with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9666 and fixes below it, the downtrend will likely resume.

News feed for 2022.10.05:

– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– US ISM Services PMI (m/m) at 17:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1317
Prev Close: 1.1467
% chg. over the last day: +1.33 %

The pound/dollar exchange rate is back above 1.14, extending a six-day recovery. Fiscal changes in the UK have had a fairly broad impact on global risk attitudes and likely contributed to a rebound in risk assets and bonds. But analysts believe that, given geopolitical developments in Europe and the energy crisis, it is “too early to rejoice” as winter is ahead. Experts believe that fundamentally, the euro and the pound are still inclined to fall, so any rebound should be used to look for sell deals.

Trading recommendations

Support levels: 1.1281, 1.1121, 1.0915, 1.0816, 1.0711, 1.03
Resistance levels: 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bullish. The price has broken through the priority change level and is confidently trading above the moving averages. The MACD indicator remains positive, but the divergence is present. Under such market conditions, buy trades can be considered from the support level of 1.1281, but only with confirmation. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1478, but it is also better with confirmation because the entry is against the main movement.

Alternative scenario: if the price breaks down from the 1.0709 support level and fixes below it, the downtrend will likely resume.

News feed for 2022.10.05:

– UK Services PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 144.50
Prev Close: 144.14
% chg. over the last day: -0.25 %

Japanese government bond yields fell sharply on Tuesday, following Treasury yields, which fell amid weaker-than-expected US manufacturing data. In a research note, Nomura Securities analyst predicted that the Bank of Japan (BOJ) is likely to loosen its yield curve control (YCC) policy next July, allowing 10-year bond yields to reach 0.4% or 0.5%. Right now, the BOJ is keeping the 10-year yield below 0.25%. In other words, once the BoJ starts to revise its policy, the Japanese yen could gain fundamental support.

Trading recommendations

Support levels: 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
Resistance levels: 144.66, 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become negative, and the price is trading below the moving averages. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 143.00, but with confirmation. Sell deals can be sought from the resistance level of 144.66, but only with additional confirmation.

Alternative scenario: If the price fixes below 140.60, the downtrend will likely resume.

News feed for 2022.10.05:

– Japan Services PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3618
Prev Close: 1.3508
% chg. over the last day: -0.81 %

The Canadian dollar strengthened sharply yesterday as the dollar index fell. CAD confidence was boosted by oil, which jumped by 3%, ahead of the OPEC+ meeting. The meeting will take place today, and OPEC+ countries will consider cutting their quota by 1-2 million BPD to support oil prices. If the OPEC+ countries do cut production, this move will drastically reduce supply in the oil market, but the Canadian dollar will only benefit from this as it is a commodity currency.

Trading recommendations

Support levels: 1.3454, 1.3297, 1.3212, 1.3053, 1.2990, 1.2958
Resistance levels: 1.3660, 1.3755, 1.3858, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bearish. The MACD indicator became negative, and the price is trading below the moving lines. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3454, but with confirmation. For sell deals, it is better to consider the resistance level of 1.3660 or 1.3756, but only after the additional confirmation.

Alternative scenario: if the price breaks out through and consolidates above the resistance level of 1.3756, the uptrend will likely resume.

News feed for 2022.10.05:

– OPEC+ Meeting at 13:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Forex and Currency News

05 Oct

The Dollar Has Hit The First Target

By Ino.com

The king currency has finally hit the first long-term target of $114 that was set in the summer of a distant 2019 when it traded around $96.

That aim wasn’t clear then as the dollar index (DX) looked weak in the chart. The short-term structure was similar to a pullback after a heavy drop.

The majority of readers did not believe the DX would ever raise its head as you can see in the 2019 ballot results below.

However, I had found a bullish hint in a very big map, and I warned you “Don’t Get Trapped By Recent Dollar Weakness”.

Back in August, you had already been more bullish on the dollar as you voted the most for the target of $121.3 in the earlier post. This confidence is due to the certain position of the Fed, which resolutely fights the inflation, lifting the rate aggressively round by round.

Let me update the visualization of the real interest rate comparison below to see if the dollar still has fuel to keep unstoppable.

Source: TradingView

The real interest rate differentials are shown on the scale B: blue line for U.S. – Eurozone, orange line for U.S. – U.K. and the red line for U.S. – Japan.

As you can see in the chart above the dollar’s buffer only grows over time as the trend gets even sharper. In August, the blue line was at +2.4%, the orange line was at +2.35% and the red line was at -3.3%. The change is huge in favor of the U.S. compared to its rivals.

Currently, the DX is lagging behind two differentials: U.S. – Eurozone (the largest component of the DX) and U.S. – U.K. (3rd largest component of DX). We can clearly observe the potential of the dollar to close that gap, rallying at least in the area of $120-$123, where the next target of the distant 2001-year top is located.

Let me refresh the technical chart below for more details.

Source: TradingView

This chart above represents the right part of a Giant Double bottom pattern (purple). It emerges accurately as planned as the price is approaching the main barrier of the Neckline.

There is another crucial element in the chart, the uptrend channel (blue dotted). Recently, the price has pierced the upside of it above $114. However, the DX couldn’t consolidate the success and dropped back below the barrier to close the month’s candle underneath.

The price could take two paths from here. The continuation to the upside based on the aggressive tightening is the first option. Another option could put the market on the pause within a consolidation (red down arrow). The former is needed to let the market take a break and reflect on the consequences of the Fed’s actions. This path is not bearish as it is just one of the natural stages of the market to let the latter accumulate enough power for further growth.

The bearish scenario is not considered as the next target of $121 is closer than the first support at $100. That area has been shown in my earlier post. It consists of the simple moving average for the past one year and the large volume profile zone.

Intelligent trades!

Aibek Burabayev
INO.com Contributor

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: The Dollar Has Hit The First Target

Forex and Currency News Opinions

04 Oct

Murrey Math Lines 04.10.2022 (AUDUSD, NZDUSD)

Article By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

As we can see in the H4 chart, AUDUSD is trading below the 200-day Moving Average to indicate a possible descending tendency. The Relative Strength Index has rebounded from the resistance line. In this case, the pair is expected to break 1/8 (0.6469) and then continue falling towards the support at 0/8 (0.6347). However, this scenario may be cancelled if the price breaks the resistance at 2/8 (0.6591) to the upside. After that, the instrument may move upwards to reach 3/8 (0.6714).

In the M15 chart, the pair may break the downside line of the VoltyChannel indicator and, as a result, continue its decline towards 0/8 (0.6347) from the H4 chart.

NZDUSD, “New Zealand Dollar vs US Dollar”

As we can see in the H4 chart, NZDUSD is also trading below the 200-day Moving Average, thus indicating a descending tendency. The Relative Strength Index has rebounded from the resistance area. In this case, the price is expected to test 2/8 (0.5615), break it, and then continue moving downwards to reach the support at 1/8 (0.5493). However, this scenario may no longer be valid if the price breaks the resistance at 3/8 (0.5737) to the upside. After that, the instrument may resume growing towards 4/8 (0.5859).

In the M15 chart, the pair may break the downside line of the VoltyChannel indicator and, as a result, continue moving downwards.

Article By RoboForex.com

Financial News Forex and Currency News

04 Oct

Ichimoku Cloud Analysis 04.10.2022 (EURUSD, XAUUSD, USDCHF)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is testing the bearish channel’s upside border. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.9760 and then resume moving upwards to reach 1.0085. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 0.9605. In this case, the pair may continue falling towards 0.9510. To confirm a further uptrend, the price must break the bearish channel’s upside border and fix above 0.9895.

XAUUSD, “Gold vs US Dollar”

XAUUSD is about to break another resistance level. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen at 1680.00 and then resume moving upwards to reach 1755.00. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1630.00. In this case, the pair may continue falling towards 1605.00.

USDCHF, “US Dollar vs Swiss Franc”

USDCHF has rebounded from the resistance level. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.9870 and then resume moving upwards to reach 1.0140. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 0.9725. In this case, the pair may continue falling towards 0.9635.

Article By RoboForex.com

Financial News Forex and Currency News

04 Oct

The Analytical Overview of the Main Currency Pairs on 2022.10.04

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 0.9788
Prev Close: 0.9823
% chg. over the last day: +0.36 %

The index of business activity in the manufacturing sector in Europe continues to decline. The most significant drop is in Germany (48.3→47.8), Spain (49.9→49.0), and France (47.8→47.7). Italy has a small gain (48.0→48.3), but the Eurozone Manufacturing PMI Index has fallen from 48.5 to 48.4. A value below 50 for the third consecutive month indicates that the Eurozone economy is, de facto, already in recession. The main problem for the Eurozone is still high inflation combined with rising energy and gas prices, which forces companies to economize and cut production.

Trading recommendations

Support levels: 0.9748, 0.9666, 0.9601.
Resistance levels: 0.9863, 0.9951, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price has approached the priority change level. The MACD indicator is positive, but the buyers’ pressure is weakening. It is best to look for sell deals from the resistance level of 0.9863. Buy trades can be considered from the support level of 0.9666 or 0.9601, but only with confirmation.

Alternative scenario: if the price breaks out through the resistance level of 0.9863 and fixes above it, the uptrend will likely resume.

News feed for 2022.10.04:

– US FOMC Member Williams Speaks (m/m) at 16:00 (GMT+3);
– US FOMC Member Mester Speaks (m/m) at 16:15 (GMT+3);
– US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
– Eurozone ECB President Lagarde Speaks (m/m) at 18:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1155
Prev Close: 1.1321
% chg. over the last day: +1.49 %

British Prime Minister Liz Truss unexpectedly canceled plans to cut the maximum income tax rate after a negative reaction from the public and the International Monetary Fund. Analysts believe this is a serious and humiliating situation for the new Prime Minister Liz Truss, who had insisted on the contrary on Sunday. On the other hand, the British pound hardly reacted to this news and continued its rally.

Trading recommendations

Support levels: 1.1121, 1.0915, 1.0816, 1.0711, 1.03
Resistance levels: 1.1311, 1.1449, 1.1626, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. But the price is close to the priority change level. The MACD indicator remains positive, but the divergence is present. Under such market conditions, looking for sell deals on intraday time frames is better. The nearest resistance level is 1.1311, which is the priority change level. Buy trades can be considered from the support level of 1.0915 or 1.0816, but only with confirmation and short targets

Alternative scenario: if the price breaks out of the 1.1311 resistance level and fixes above it, the uptrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 144.65
Prev Close: 144.55
% chg. over the last day: -0.07 %

Japanese Finance Minister Shunichi Suzuki said that Japan is ready for “decisive” steps in the currency market if excessive yen movements persist. At the moment, the ministry is holding the price ceiling of USD/JPY at 145. On the other hand, the yen is weakening due to Japan’s policy of keeping interest rates low while they are rising elsewhere. As a result, USD/JPY quotes are trading in balance without any significant advances.

Trading recommendations

Support levels: 144.19, 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
Resistance levels: 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become inactive, the price is trading at the level of the moving averages, and the balance is being formed. Under such market conditions, buy trades can be sought in the intraday time frames from the support level of 144.19, but with confirmation, since the level has already been tested. Sell deals can be searched from the resistance level of 145.35, but only with additional confirmation.

Alternative scenario: If the price fixes below 140.60, the downtrend will likely resume.

News feed for 2022.10.04:

– Japan Tokyo Core CP (m/m) at 02:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3815
Prev Close: 1.3622
% chg. over the last day: -1.42 %

Canada’s Manufacturing PMI Index showed a sharp increase over the previous month. The PMI rose from 48.7 to 49.8, indicating that the Canadian economy is close to a recovery. But there were a few negatives as well. The PMI report indicated that demand had been hit hard by rising interest rates. Companies have become less optimistic about their production expectations for the year ahead. Overall, the Canadian economy is probably one of the strongest in the world right now, despite rising global inflation and high-interest rates.

Trading recommendations

Support levels: 1.3545, 1.3453, 1.3297, 1.3212, 1.3053, 1.2990, 1.2958
Resistance levels: 1.3858, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator became negative, and the price is trading below the moving lines. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3545, but with confirmation. For selling, it is better to consider the resistance level of 1.3756, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.3545 support level, the downtrend will likely resume.

There is no news feed for today.

By JustForex

Financial News Forex and Currency News

03 Oct

Pound is Keeping a Stiff Upper Lip

By RoboForex Analytical Department

The Pound Sterling keeps trying to reach stability against the USD. On Monday, 3 October, GBP/USD is balancing around 1.1211.

After the Bank of England revised its stance on supporting the country’s economy and decided to buy government bonds instead of selling them, the Pound got too much stress and dropped to multi-year lows.

The monetary and financial policy delivered by the Bank of England together with Her Majesty’s Treasury makes investors worry. It looks like London put up with an inflation boost and might try to improve the economy from the other side.

It does not necessarily mean that this strategy will work – market players should wait for real data that will help them to analyse the effect.

So far, the Pound remains fundamentally weak.

As we can see in the H4 chart, after finishing the descending wave at 1.1275, GBP/USD has formed a new consolidation range there. If later the price breaks the range to the downside, the market may resume trading downwards with the target at 1.0880; if to the upside – form one more ascending structure towards 1.1447 and then start another decline to reach 1.0185. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving above 0 and may continue growing to reach new highs soon.

In the H1 chart, GBP/USD has completed the ascending structure with the short-term target at 1.1275. Possibly, the pair may fall towards 1.0880 and then start another growth to reach 1.1447. Later, the market may resume trading within the downtrend with the target at 1.0880. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: its signal line is moving below 80 and may fall to break 50. After that, the line may reach 20 and then resume growing to return to 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News

03 Oct

The Analytical Overview of the Main Currency Pairs on 2022.10.03

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 0.9817
Prev Close: 0.9795
% chg. over the last day: +0.25 %

For the first time in history, inflation in the Eurozone reached a double-digit number. It jumped to a record 10% (9.1% in August) on an annualized basis in September. The core inflation rate (excluding food and fuel prices) reached 4.8% (4.3% in August). The biggest surprise came in Germany, where overall inflation accelerated from 8.8% to 10.9%. Thus, of the big four eurozone economies, Germany is now the country with the highest inflation. The energy sector continues to be the biggest source of inflation. Even though oil prices have fallen, high market prices for gas and electricity continue to be reflected in consumer prices. Extremely high inflation figures mean the ECB will continue aggressively raising rates in upcoming meetings.

Trading recommendations

Support levels: 0.9666, 0.9601
Resistance levels: 0.9808, 0.9864, 0.9951, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price has approached the priority change level. The MACD indicator is in the positive area, but the buyers’ pressure is weakening. It is best to look for sell deals from the resistance level of 0.9808 or 0.9864. Buy trades can be considered from the support level of 0.9666 or 0.9601, but only with confirmation.

Alternative scenario: if the price breaks out through the resistance level of 0.9808 and fixes above it, the uptrend will likely resume.

News feed for 2022.10.03:

– Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
– Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
– French Manufacturing PMI (m/m) at 10:50 (GMT+3);
– German Manufacturing PMI (m/m) at 10:55 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
– US FOMC Member Williams Speaks (m/m) at 22:10 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1114
Prev Close: 1.1160
% chg. over the last day: +0.41 %

The Bank of England set the maximum amount it can buy each business day at 5 billion pounds, which means it can buy up to 65 billion pounds during the next two weeks. Analysts believe that the Bank of England has put a lot of pressure on itself by setting exact dates for the end of this temporary quantitative easing and the beginning of the quantitative easing operation. Thus, experts believe that the British pound will return to the declining phase at the end of the period (October 14).

Trading recommendations

Support levels: 1.0915, 1.0816, 1.0711, 1.03
Resistance levels: 1.1210, 1.1449, 1.1626, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. But the price has approached the priority change level. The MACD indicator remains positive, but buyer pressure is decreasing. Under such market conditions, sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1210, which is the priority change level. Buy trades can be considered from the support level of 1.0915 or 1.0816, but only with confirmation and short targets.

Alternative scenario: if the price breaks out of the 1.1210 resistance level and fixes above it, the uptrend will likely resume.

News feed for 2022.10.03:

– UK Manufacturing PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 144.43
Prev Close: 144.73
% chg. over the last day: +0.21 %

Stronger-than-expected industrial production and good labor market data suggest that Japan’s economy continues to recover this quarter. Further easing restrictions and the resumption of domestic traveler assistance programs will also support growth in the next quarter. Experts raised Japan’s 2022 GDP growth forecast to 1.6% from 1.2% annualized. Japan is recovering slower than other Asian economies, and the reopening effect is just starting to show, which should be a major factor in the positive outlook for the year’s second half. However, as the headwind of the global recession grows, the Bank of Japan is in no hurry to change its soft monetary policy.

Trading recommendations

Support levels: 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
Resistance levels: 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become inactive, the price is trading at the level of the moving averages. Under such market conditions, buy trades can be sought on intraday time frames from the support level of 143, but with confirmation. Sell deals can be sought from the resistance level of 145.35, but only with additional confirmation.

Alternative scenario: If the price fixes below 140.60, the downtrend will likely resume.

News feed for 2022.10.03:

– Japan Manufacturing PMI (m/m) at 3:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3672
Prev Close: 1.3829
% chg. over the last day: +1.15 %

The Canadian dollar is a commodity currency, so it is highly correlated with instruments like the dollar Index and oil. On Friday, oil prices were down, while the dollar Index was slightly stronger. As a result, the USD/CAD quotes are updated 2-year-high. However, investors should keep in mind that the Bank of Canada keeps one of the highest interest rates, so the Canadian dollar may start to strengthen at any time.

Trading recommendations

Support levels: 1.3675, 1.3545, 1.3453, 1.3297, 1.3212, 1.3053, 1.2990, 1.2958
Resistance levels: 1.3858, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone, but the price is trading between the moving average lines. Under such market conditions, buy trades should be considered on the lower time frames from the support level 1.3675, but with confirmation. For sell deals, it is best to consider the resistance level of 1.3858, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.3545 support level, the downtrend will likely resume.

News feed for 2022.10.03:

– Canada Manufacturing PMI (m/m) at 16:30 (GMT+3).

By JustForex

Financial News Forex and Currency News

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