InvestMacro

The Analytical Overview of the Main Currency Pairs on 2022.10.25

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 0.9871
Prev Close: 0.9873
% chg. over the last day: +0.02 %

The EU manufacturing activity index indicates a further slowdown. In Germany and the Eurozone as a whole, indicators have reached new lows. Moreover, the slowdown can be seen in both the industrial and service sectors. And in the near term, forecasts are also pointing to a decline as the ECB is planning aggressive rate hikes in the next two meetings, which will undoubtedly have a negative impact on economic growth. On the other hand, if the difference between the interest rates of the ECB and the US Fed starts to narrow, the European currency will rise above parity.

Trading recommendations

Support levels: 0.9817, 0.9755, 0.9601
Resistance levels: 0.9961, 1.0058, 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 bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, but there is a divergence, indicating the buyers’ weakness. Under such market conditions, buy trades should be considered from the support level 0.9817 or 0.9755, but with additional confirmation in the form of reverse initiative. Sell deals can be considered from the resistance level of 0.9961, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9700 and fixes below it, the downtrend will likely resume.

News feed for 2022.10.25:

– German Ifo Business Climate (m/m) at 11:00 (GMT+3);
– US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
– FOMC Member Waller Speaks at 20:55 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1319
Prev Close: 1.1277
% chg. over the last day: -0.37 %

The former finance minister, Rishi Sunak, is the new Prime Minister of Great Britain. The new government now faces the daunting task of providing stability after a period of political and financial chaos in the market. Another equally important task is to lead the country through a recession. S&P Global analysts tracking business activity data indicated yesterday that economic activity in the country had fallen to a 21-month low. Other data show that, in fact, the UK is already in recession. Investors were wary of the news about the new Prime Minister, and the British pound barely moved yesterday, indicating that traders are not yet ready to trade the British currency.

Trading recommendations

Support levels: 1.1172, 1.1093, 1.0915, 1.0817
Resistance levels: 1.1380, 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be considered from the support level of 1.1172, but better after confirmation. Sell deals are best to look for on intraday time frames, the nearest resistance level is 1.1380, but it is also better with confirmation, as the level has already been tested.

Alternative scenario: if the price breaks down of the 1.1093 support level and fixes below it, the downtrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 147.63
Prev Close: 149.00
% chg. over the last day: -0.93 %

After the second currency intervention, the USD/JPY exchange rate stabilized slightly, but the price is still pulling higher like a magnet. Historically, central bank interventions don’t work in the long run and have only a temporary effect. However, they significantly impact market volatility and can seriously hurt traders and investors. Despite the interventions, the fundamental picture is still in favor of USD/JPY quotes growth since the Bank of Japan does not intend to abandon its soft monetary policy, while the US Fed is raising the rates and the gap between the rates is widening every month.

Trading recommendations

Support levels: 146.63, 145.88, 144.91, 144.16, 143.00
Resistance levels: 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish despite the currency intervention. The price is trading at the level of the moving averages. The MACD indicator has become inactive, indicating that traders are not yet ready to trade the Japanese currency. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 146.63, but with confirmation. Sell deals can be sought from the resistance level of 150.00 or 151.05, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: If the price fixes below 145.88, the downtrend will likely resume.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3631
Prev Close: 1.3705
% chg. over the last day: +0.54 %

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the USD index and oil dynamics. The oil quotes are now inclined to grow on the OPEC+ country’s production reduction background. That’s why the Canadian dollar may strengthen considerably in the nearest future, as the US Fed officials already hint at the less aggressive policy. Meanwhile, the Bank of Canada keeps the same interest rate as the US Fed.

Trading recommendations

Support levels: 1.3639, 1.3619, 1.3583, 1.3535, 1.3454
Resistance levels: 1.3795, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3639 but better after confirmation. For sell deals, it is best to consider the resistance level of 1.3795, but only after additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3619, the downtrend will likely resume.

There is no news feed for today.

By JustMarkets

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

25 Oct

US economic indicators continue to fall. Investors’ attention is focused on tech giants’ reports

By JustMarkets

The US stocks continued to rise on Monday. Weaker economic data on business activity caused Treasury yields to fall slightly and pushed stocks higher on the background that the Federal Reserve may consider a less aggressive monetary policy after a 75 basis point rate hike next month. Stocks also rallied ahead of a wave of quarterly results from major tech companies.

As the stock market closed yesterday, the Dow Jones Index (US30) increased by 1.34%, and the S&P 500 Index (US500) added 1.19%. The NASDAQ Technology Index (US100) closed by 0.86% on Monday.

Forecasts from HSBC Holdings Plc suggest markets are still underestimating the likelihood of a return to ultra-low US interest rates as the Federal Reserve’s hawkish stance risks bringing down the economy. There is a “fairly high” probability that the US Central Bank will need to cut rates near zero over the next three to five years.

The US Treasury is taking steps to make the Treasury debt market, the private money market, and bond funds more resilient, but according to US Treasury Secretary Janet Yellen, the US financial system is functioning well despite the heightened global volatility.

Companies reporting today include Alphabet (GOOGL), Visa (V), Coca-Cola (KO), Texas Instruments (TXN), United Parcel Service (UPS), NextEra Energy (NEE), Lockheed Martin (LMT), HSBC ADR (HSBC), General Electric (GE) and 3M (MMM).

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE30) gained 1.58%, France’s CAC 40 (FR40) added 1.59%, Spain’s IBEX 35 (ES35) increased by 1.79%, and the British FTSE 100 (UK100) closed Monday with 0.64%.

In the UK, heightened political and economic uncertainty has led to a drop in business activity to 2009 crisis levels. A government report released Friday showed that retail sales fell by 1.4% in September, and consumer confidence is near its worst level ever, as inflation returned to a 40-year high. And all of these problems will now have to be addressed by the new Prime Minister Rishi Sunak. Financial experts believe the new prime minister’s key focus should be a credible fiscal responsibility plan that can guarantee that the national debt will shrink in the medium term.

Oil declined Monday as data showed Chinese demand remained sluggish in September, while weak US business data eased expectations for more aggressive interest rate hikes and limited price cuts.

Asian markets traded flat on Monday. Japan’s Nikkei 225 (JP225) jumped by 0.31% on the day, Hong Kong’s Hang Seng (HK50) ended the day sharply down by 6.36%, and Australia’s S&P/ASX 200 (AU200) was up by 1.54%.

Shares of Chinese technology companies fell sharply on Monday after Chinese President Xi Jinping’s leadership reshuffle raised fears of increased regulatory scrutiny of tech stocks. Investor sentiment also remains tense as markets fear further disruptions to the economy by the government, especially after Beijing reiterated its commitment to its strict zero COVID policy. Concerns about US restrictions on semiconductor exports to China are also having an impact.

S&P 500 (F) (US500) 3,797.34 +44.59 (+1.19%)

Dow Jones (US30) 31,499.62 +417.06 (+1.34%)

DAX (DE40) 12,931.45 +200.55 (+1.58%)

FTSE 100 (UK100) 7,013.99 +44.26 (+0.64%)

USD Index 112.01 0.00 (0.00%)

Important events for today:

– Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
– German Ifo Business Climate (m/m) at 11:00 (GMT+3);
– US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
– FOMC Member Waller Speaks at 20:55 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

25 Oct

Markets Steady As Investors Eye Earnings & ECB

By ForexTime

European markets edged cautiously higher on Tuesday as investors digested upbeat corporate earnings and news that Rishi Sunak would replace Liz Truss as U.K. prime minister.

The latest German IFO Business Climate Index supported sentiment by showing some signs of stabilisation, albeit at low levels. Most Asian shares staged a sharp rebound during early trade, tracking the recovery from Wall Street as soft economic data fueled bets around the Fed softening its hawkish stance. Interestingly, some stability returned to Chinese markets following Monday’s historic selloff as traders weighed bargain prices against China’s uncertain political landscape and economic outlook.

In the currency space, the offshore Yuan has weakened past the psychological 7.30 level following the party congress, while dollar bulls are taking a pause amid expectations around a potential Fed pivot. Sterling has appreciated against every G10 currency this morning ahead of Rishi Sunak’s meeting with King Charles and his first public address later this morning. The euro seems to be on standby and is likely to remain trapped within a range until the European Central Bank (ECB) meeting on Thursday.

Will the ECB come to the Euro’s rescue?

Markets widely expect the central bank to raise interest rates by another 75 basis points on Thursday, in a move to contain inflation which is well above the 2% target. Given how this has already been priced in, this may offer little support to euro bulls that have been beaten black and blue by a stronger dollar over the past few months. Much attention will be directed towards President Christine Lagarde’s press conference which will be closely scrutinised by investors for clues on the central bank’s next policy move. If policymakers move ahead with a 75bp hike and open the door for more jumbo hikes in the future, this could provide some support to the euro. A shock 100bp rate hike would inject euro bulls with fresh inspiration to break decisively out of the current range. Should the central bank surprise markets with a smaller than expected 50bp hike, the EURUSD could tumble back to 0.9700 and lower. Whatever the outcome of the ECB meeting, it is likely to set the tone for the euro over the next few weeks.

Currency spotlight – Time for king dollar to rest?

The dollar has weakened against most G10 currencies since the start of the fourth quarter thanks to the improving market mood and expectations around the Fed dialing back on its hawkish stance. As economic data in the United States continues to illustrate a gloomy picture, this could fuel speculation around the jumbo-sized rate hikes coming to an end. Throughout 2022, dollar bulls have derived strength from safe-haven flows, optimism over the US economy, and Fed rate hike expectations. As some positivity returns to global markets amid robust earnings, and shaky US data prompts the Fed to drop its aggressive approach towards rates, this could hit dollar bulls hard.

Looking at the technical picture, DXY bulls look exhausted on the daily charts with prices back within a range. A breakdown below the 111.50 support level could trigger a decline toward 110.00 and 109.00, respectively. If prices can break out above 113.50, the DXY could retest its 20-year high at 114.78.

Oil prices wait for fresh catalyst

Oil prices are likely to swing between losses and gains as fears over a global economic slowdown collide with caution over tightening supply. Brent remains under pressure this morning, trading around $90.25 as of writing. As investors juggle with slowdown concerns, sharp changes in risk sentiment, dollar volatility, and other themes impacting the supply/demand dynamics, this could result in more choppy price action into year end.

Looking at the technical picture, Brent remains under pressure on the daily charts. Prices are trading below the 50-, 100- and 200-day Simple Moving Average. A breakdown below $90.00 could open a path toward $87.00 and $82.50. Should prices push back above $92.00, the next key level of interest can be found at $95.00.

Commodity spotlight – Gold

After staging a stunning rebound last Friday, gold has found itself under pressure thanks to the improving market mood and rising Treasury yields. Appetite towards the precious metal is likely to remain shaky as investors evaluate whether the Fed will indicate next week if it will remain hawkish after raising interest rates by another 75 basis points in November. In the meantime, gold could trend lower until a fresh directional catalyst is brought into the picture. Talking technicals, sustained weakness below $1655 could open the doors towards $1615 and $1600 respectively. A breakout above $1655 may trigger an incline towards $1670 and $1680.

Article by ForexTime

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

Economics & Fundamentals Financial News

24 Oct

Rugby union’s financial crisis: why the sport’s model is ‘broken’

By Christina Philippou, University of Portsmouth

As athletes, rugby union players are notoriously robust. But in England, the finances behind the sport are looking far from healthy. In the space of a few weeks, two of its most famous club teams, Worcester (founded 1871) and Wasps (1866), have gone into administration.

Bill Sweeney, chief-executive of the Rugby Football Union (RFU) which governs the English game, said the financial model of the sport is “broken”. He added: “Two professional clubs facing financial difficulties is a clear barometer of the challenges being felt by the economy, sport and rugby union specifically.”

A parliamentary inquiry has now been launched over “serious concerns about the future of the sport”.

For Wasps and Worcester, those concerns are immediate. Both clubs will be relegated from the top tier of English rugby, and hundreds of staff have lost their jobs. Fans of the clubs will miss out too of course, as will local businesses who rely on match-day spending by large numbers of supporters.

In the case of Wasps, there is a knock-on effect on its affiliated netball team, whose players and staff have also been made redundant, and its close relationship with Coventry City, the football club which shares use of its stadium.

That said, going into administration need not be fatal, and is a way of trying to save a business from disappearing completely (liquidation).

The running of the business is passed on to an external team of specialists who try to negotiate with creditors and typically attempt to find new investors while also cutting costs. Administration has been commonly used in sport, particularly football, to keep clubs in existence, and has touched rugby union’s top tier of clubs before.

Two years after the top professional league (Premiership) was established in 1997, two long-standing clubs (London Scottish and Richmond) went into administration. Both now play in the league’s second tier, the RFU Championship.

But a broader fear remains over the financial sustainability of the sport. Former Wasps and England player Rob Andrew said recently that governance of the game was due an overhaul, adding: “The game has not been on a solid footing for quite some time.”

He’s right. Rugby union was the last of all the main team sports in the UK to turn professional when the Premiership was established. This put it at a significant financial disadvantage right from the start, as the likes of football, cricket and rugby league had already negotiated commercial deals with sponsors and broadcasters.

Rugby union had to try to muscle in and make up for the delay, facing what the business world calls “last mover disadvantage” in the market – arriving late to a limited pot of cash.

As a sport, it is heavily dependent on ticket sales for revenue. Part of Wasps’ decision to move to Coventry from London (for a time the club had been known as London Wasps) was an attempt to drive up attendances in a less saturated market than the capital.

But, as with so many decisions associated with sport, that was a gamble. Investors being repaid for helping finance the move to Coventry is part of the reason money is needed so desperately now.

COVID didn’t help either. In common with other sports (and industries), the closure of stadiums during the pandemic drastically affected income. Such reduced capacity in the stands meant match-day income was zero (or extremely low) for most of the 2020-21 season.

Must try harder

But perhaps the key issue comes from the wider difficulty of governing and regulating what are essentially private businesses. The agility and strength demanded from players on the pitch is not always matched by those responsible for running these business behind the scenes.

And as with other sports (like football) that are struggling with financial sustainability, keeping control of expenses is a major problem.

To that end, the Premiership introduced a salary cap in 1999. This was designed to put a limit on how much clubs are allowed to spend on wages, the largest costs they face (although there have been instances of breaches by teams such as Leicester Tigers and Saracens).

The salary cap is a “hard” cap, which means it is a set value for all clubs, rather than a percentage of revenue. The trouble with this system is that clubs can still try to spend as much as the salary limit allows, even if their income cannot cover it.

As a result, research into Premiership rugby clubs found imbalances in their financial status had increased between 2006 and 2015, and that there were issues around wage costs and how these compared with turnover.

Wasps, for example, spent 103% of its income on wages in 2014. Three years later, the club’s 2017 accounts were already highlighting a “material uncertainty to continue as a going concern” – that is, a risk that the club wouldn’t be able to pay its debts.

It seems, then, that the warning signs were there some time ago. Perhaps the time has finally come for the sport to submit itself to a serious financial health check.

About the Author:

Christina Philippou, Principal Lecturer, Accounting and Financial Management, University of Portsmouth

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

Economics & Fundamentals Opinions

24 Oct

Pound is Recovering Fast

By RoboForex Analytical Department

On Monday, GBPUSD is rising, chiefly fluctuating near 1.1380.

The pound quite fast recovered from the stress provoked by Liz Truss leaving her post. This reshuffling of the government might have been inevitable because Truss’s economic policy was unpopular and could have some consequences.

Now London needs to be patient and wait for the election of a new Prime Minister. The most probable candidate is the former minister of finance Rishi Sunak.

The new Prime Minister will face a most complicated task to reassemble the British economy after the Brexit trauma, with all the supply issues and foreign trade trouble.

On H4, the currency pair completed a wave of correction to 1.1060. At a certain point, the market demonstrated an impulse of growth to 1.1300 and is today consolidating around this level. With an escape upwards, the wave of growth may continue to 1.1560; the goal is local. After the goal is reached, a correction to 1.1300 is possible (with a test from above), followed by growth to 1.1677. Then the trend may continue to 1.0200. Technically, this scenario is confirmed by the MACD oscillator. Its signal line is above zero and continues developing a structure of growth to new highs.

On H1, GBP/USD performed an impulse of growth to 1.1300. Today the market opened with a gap upwards and continues forming a consolidation range around the level. With an escape upwards, the impulse may continue to 1.1560. With an escape downwards, the wave of decline may continue to 1.1010. Technically, the scenario is confirmed by the Stochastic oscillator. Its signal lines bounced off 20 and goes on growing to 50. With a breakaway upwards, growth will continue to 80. If the line bounces off 50 downwards, another link of decline to 20 is not excluded.

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

24 Oct

Trade of the Week: Will ECB help EURUSD end its monthly losing streak?

By ForexTime

Euro bulls are desperate for any form of solace from the rampant US dollar.

The world’s most-popular FX pair, EURUSD, has endured 5 consecutive months of declines. In fact, EURUSD has only managed one monthly gain so far in 2022, which was back in May.

To be fair, at the time of writing, EURUSD is holding on to a 0.5% gain so far in October.

Whether EURUSD can officially claim a gain for the entirety of October and break this monthly losing streak could all boil down to the European Central Bank policy meeting this Thursday, October 27th.

What to look out for?

Size of the rate hike: Markets are forecasting a 89% chance that the ECB will hike its benchmark rates by yet another 75-basis points (bps), as they did back in September.
Lagarde’s press conference: Traders and investors worldwide will be closely monitoring the words used by ECB President Christine Lagarde during her press conference at 2:45PM GMT, just half an hour after the ECB’s Governing Council publishes its policy decision.
Given the forward-looking nature of markets, traders and investors worldwide will be ready to react to what ECB President Christine Lagarde’s latest clues on the central bank’s next policy moves.

How might EURUSD react?

If the ECB disappoints markets and triggers a smaller-than-75bps hike, that could see EURUSD faltering once more.
If the ECB shocks markets with a gargantuan 100-bps hike, that could see EURUSD breaking substantially above its 50-day SMA.
If a 75bps hike materialises, that may offer little reaction in the euro, given that such a move is already the primary outcome that markets are expecting.
If Lagarde suggests that we’ve not seen the last of these 75bps hikes, perhaps leaving the door open for another such supersized move at subsequent meetings, that may help the euro recover.
However, if Lagarde’s press conference or the ECB Governing Council’s policy statement unveils greater concern over incurring too much economic damage with the ongoing inflation-fighting rate hikes, that may unwind the euro’s month-to-date gains.

Expect a combination of the scenarios stated above.

Key levels to look out for:

RESISTANCE: 50-day simple moving average (SMA)
Since March, EURUSD has struggled to sustain consecutive daily closes above its 50-day SMA. This FX pair has been guided lower by this widely-known technical indicator, with this key resistance level yet again holding its ground so far today (Monday, Oct 24).
STRONGER RESISTANCE: 1.000 a.k.a. parity
If EURUSD has enough reason to see a substantial upside break, then stronger resistance is set to arrive at the parity mark, which had already repelled EURUSD bulls earlier this month.
SUPPORT: Recent cycle lows

0.97049
0.96313
0.95357
These support levels may be called into action once more this week, especially if the ECB fails to assure markets that the central bank’s fight against inflation will not cause too much damage to the Eurozone economy.

At the time of writing, markets are forecasting greater odds of 69.3% that EURUSD would touch the 0.990 mark over the next one week period, versus the less-than-even chance (45.5%) that EURUSD would touch 0.970.

Sustained EURUSD gains this week may require a hawkish ECB that can convince markets of its ability to keep hiking rates aggressively.

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

24 Oct

Murrey Math Lines 24.10.2022 (EURUSD, GBPUSD)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

On H4, the quotes failed to rise over the 200-days Moving Average and for now remain under it. The RSI has bounced off the resistance level. A test of 0/8 (0.9765) is to be expected, followed by a breakaway and falling to the support level of -1/8 (0.9643). The scenario can be cancelled by rising above 1/8 (0.9887). This might lead to a trend reversal and growth to 2/8 (1.0009).

On M15, a breakaway of the lower border of VoltyChannel will increase the probability of the decline.

GBPUSD, “Great Britain Pound vs US Dollar”

On H4, the quotes have broken through the 200-days Moving Average and are now above it, inducating the possibility of an uptrend. The RSI have risen over the resistance level. We should expect a breakaway of 7/8 (1.1474) upwards and growth to the resistance level of 8/8 (1.1718). The scenario can be cancelled by a breakaway of the support level of 6/8 (1.1230) downwards. In this case, the decline will start again, and the quotes might drop to the support level of 5/8 (1.0986).

On M15, the upper border of the VoltyChannel is broken, which increases the probability of further growth

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

24 Oct

EURUSD: Fed’s interest rate is in focus again. Overview for 24.10.2022

Article By RoboForex.com

On Monday, the EURUSD major looks quite stable. The current quote is 0.9840 In the US Fed, they are discussing an increase in the interest rate by 75 base points again, as reported in a WSJ publication. Some members of the monetary committee do not exclude the chance for a slow-down in the tightening of the credit and monetary policy later. The Fed will hold a meeting at the beginning of November.

On Thursday this week, the European Central Bank will also have a meeting. As a result, the interest rate might grow by 50 or even 75 base points, or at least this is what the inflation situation requires. According to average market expectations, the ECB interest rate will have reached 3% by the end of Q1, 2023.

Increased price pressure on the economy might become the factor that will make the ECB act more decisively. It should also be remembered that the European regulator has already acknowledged the CPI as a serious trouble, though it refuse to move as fast as the Fed.

The chance for a higher than usual increase in the interest rate supports the EUR.

Article By RoboForex.com

Financial News Forex and Currency News

24 Oct

The Analytical Overview of the Main Currency Pairs on 2022.10.24

By JustMarkets

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 0.9780
Prev Close: 0.9856
% chg. over the last day: +0.77 %

The euro gained about 1.4% against the US dollar last week, the best week since late May. On Friday, San Francisco Federal Reserve President Mary Daly said it was time to start talking about slowing borrowing costs and that the Fed should be less aggressive in its rate hike cycle. So the next rate hike is being considered at 0.5%. The statement came as a surprise to analysts as all previous statements of the Fed representatives were only aimed at an aggressive rate hike cycle with the next step at 0.75%. Because the ECB is planning to raise the rate by 0.75% this week, a reduction in the interest rate differential between the US Fed and the ECB might give confidence to the European currency.

Trading recommendations

Support levels: 0.9817, 0.9755, 0.9601
Resistance levels: 0.9961, 1.0058, 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 bullish. The price is trading above the moving averages. The MACD indicator became positive, and the buyers’ pressure is prevailing again. Buy trades should be considered from the support level of 0.9817 or 0.9755, but with additional confirmation in the form of reverse initiative. Sell deals may be considered from the resistance level of 0.9961, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9700 and fixes below it, the downtrend will likely resume.

News feed for 2022.10.24:

– French Manufacturing PMI (m/m) at 10:15 (GMT+3);
– French Services PMI (m/m) at 10:15 (GMT+3);
– German Manufacturing PMI (m/m) at 10:30 (GMT+3);
– German Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3);
– US Treasury Secretary Yellen Speaks at 18:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1219
Prev Close: 1.1292
% chg. over the last day: +0.65 %

This week the Conservative Party of Great Britain must choose a new leader to become the fifth Prime Minister in Great Britain in the last six years. Boris Johnson has announced that he will not run for the Conservative Party leader and UK prime minister position. Thus, former finance minister Rishi Sunak is the front-runner for the prime minister. The next prime minister will inherit an economy on the road to a recession, with rising interest rates and inflation of more than 10%, leaving millions of people facing a cost-of-living crisis. Chancellor Jeremy Hunt, who is expected to remain in office under the new prime minister, said Friday that he would do “whatever is necessary” to reduce the national debt ahead of his new budget, to be announced on October 31.

Trading recommendations

Support levels: 1.1172, 1.1093, 1.0915, 1.0817
Resistance levels: 1.1369, 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. But the price is trading below the moving averages. The price is trading below the moving averages again. The MACD indicator has become positive, and buyers’ pressure prevails. Under such market conditions, buy trades can be considered from the support level of 1.1172, but better after confirmation. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1369.

Alternative scenario: if the price breaks down of the 1.1093 support level and fixes below it, the downtrend will likely resume.

News feed for 2022.10.24:

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

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 150.13
Prev Close: 147.58
% chg. over the last day: -1.73 %

On Friday, the Japanese Ministry of Finance carried out another intervention to protect the yen from falling further. The background to this price movement is the continued monetary policy divergence between the Bank of Japan and the US Federal Reserve. The Japanese government is expected to announce a stimulus package by the end of this month. The weak yen exacerbates household problems by raising the expensive food and fuel costs. The Bank of Japan will also meet on monetary policy and interest rates this week. But analysts do not expect any changes and believe that the Bank of Japan will maintain its current loose monetary policy, which will continue to put pressure on the yen.

Trading recommendations

Support levels: 146.63, 145.88, 144.91, 144.16, 143.00
Resistance levels: 149.55, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish despite the currency intervention. The price is trading below the moving levels. The MACD indicator is in the negative zone, but the buyers’ pressure remains. Under such market conditions, buy trades can be sought on intraday time frames from the support level of 146.63, but with confirmation. Sell deals can be searched from the resistance level of 150.00 or 151.05, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: If the price fixes below 145.88, the downtrend will likely resume.

News feed for 2022.10.24:

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

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3761
Prev Close: 1.3643
% chg. over the last day: -0.86 %

The Bank of Canada will hold its monetary policy and interest rate meeting this week. The Bank of Canada is expected to raise its benchmark interest rate by 50 basis points, although a move from 75 bps is possible as core inflation in Canada shows no signs of slowing. Also, keep in mind that the Canadian dollar is a commodity currency, so it is also highly exposed to oil price fluctuations. The medium-term oil outlook points to growth, so amid a decline in the dollar index, the Canadian currency can at least take over the initiative.

Trading recommendations

Support levels: 1.3639, 1.3619, 1.3583, 1.3535, 1.3454
Resistance levels: 1.3795, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading at the level of moving averages. The MACD indicator has become negative, but the sellers’ pressure is weak. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3638 but better after confirmation. For sell deals, it is best to consider the resistance level of 1.3795, but only after additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3619, the downtrend will likely resume.

There is no news feed for today.

By JustMarkets

Financial News Forex and Currency News

24 Oct

The US Federal Reserve is discussing a less aggressive policy. Xi Jinping was re-elected president of China.

By JustMarkets

The US stock indexes rose Friday after news that US Federal Reserve officials are discussing a 0.5% interest rate hike in November, raising hopes that the central bank may adopt a less aggressive policy. As the stock market closed on Friday, the Dow Jones Index (US30) increased by 2.47% (3.48% for the week), and the S&P 500 Index (US500) added 2.37% (2.93% for the week). The NASDAQ Technology Index (US100) jumped by 2.31% on Friday (2.69% for the week).

According to a Wall Street Journal report, some Fed officials have begun stating their desire to slow the pace of the increase soon. On Friday, San Francisco Federal Reserve President Mary Daly said it was time to start talking about slowing the pace of borrowing costs and that the Fed should be less aggressive in its rate hike cycle. Charles Evans, president of the Federal Reserve Bank of Chicago, also cited similar statements. According to Reuters calculations, speculators’ net long rates on the US dollar rose last week.

The four largest US companies by market capitalization are due to report this week. Investors are filled with optimism as corporate earnings help keep the stock market from falling amid soaring inflation and an aggressive Federal Reserve rate hike.

Stock markets in Europe were mostly down Friday, but all closed the week in positive territory. German DAX (DE30) decreased by 0.29% on Friday (+2.11% for the week), French CAC 40 (FR40) lost 0.85% (+1.44% for the week), Spanish IBEX 35 (ES35) fell by 1.29% (+1.72% for the week), British FTSE 100 (UK100) was up by 0.15% (+1.62% for the week).

Boris Johnson announced that he would not run for the Conservative Party leader and British Prime Minister post. Johnson’s announcement will pave the way for Rishi Sunak, who will likely become the next prime minister. Liz Truss was forced to resign after she launched an economic program that caused turmoil in the financial markets. Former Finance Minister Rishi Sunak earlier confirmed that he would be on the ballot, promising to handle the country’s “deep economic crisis” with “honesty, professionalism, and accountability.” Chancellor Jeremy Hunt, who is expected to remain in office under the new prime minister, said Friday that he would do “whatever is necessary” to reduce the national debt ahead of his new budget, to be announced on October 31.

Oil prices rebounded Friday as hopes for stronger demand in China and a weaker US dollar outweighed concerns about the global economic slowdown and the impact of higher interest rates. Overall, the oil market remains uncertain as, on the one hand, OPEC+ production cuts and European sanctions against Russia for its invasion of Ukraine are keeping oil prices from falling. On the other hand, falling oil demand in the largest importer China, along with the release of strategic reserves by the US, are keeping the price down.

Chinese President Xi Jinping secured an unprecedented third presidential term and introduced a top governing body made up of loyalists, cementing his place as the country’s most powerful ruler since Mao Zedong. On Monday, China released a slew of macroeconomic statistics, the publication of which was delayed by a week because of the presidential re-election. The data indicated that China’s GDP grew by 3.9% in the last quarter, but analysts believe the numbers do not correspond to reality. China now faces a host of economic challenges, and China’s biggest concerns remain the real estate market and falling manufacturing numbers due to the new Covid lockdowns.

Japan’s promised economic stimulus should be big enough to overcome the economy’s manufacturing deficit of about 15 trillion yen ($100 billion), a top ruling party official said Sunday. On Friday, Japan’s Finance Ministry held another intervention to protect the yen from falling further. The background to such price movement is the continuing unequal monetary policy between the Bank of Japan and the Federal Reserve.

At the commodities market, futures on lumber (+8.36%), silver (+7.35%), platinum (+4.44%), and Brent oil (+2.15%) showed the biggest gains over the week. Futures on natural gas (-22.64%), cotton (-4.51%), coffee (-3.94%), cocoa (-3.2%) and sugar (-2.49%) showed the biggest drop.

S&P 500 (F) (US500) 3,752.75 +86.97 (+2.37%)

Dow Jones (US30) 31,082.56 +748.97 (+2.47%)

DAX (DE40) 12,730.90 −36.51 (−0.29%)

FTSE 100 (UK100) 6,969.73 +25.82 (+0.37%)

USD Index 111.18 −0.14 (−0.12%)

Important events for today:

– Australia Manufacturing PMI (m/m) at 01:00 (GMT+3);
– Australia Services PMI (m/m) at 01:00 (GMT+3);
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– China GDP (q/q) at 05:00 (GMT+3);
– China Retail Sales (m/m) at 05:00 (GMT+3);
– China Industrial Production (m/m) at 05:00 (GMT+3);
– China Unemployment Rate (m/m) at 05:00 (GMT+3);
– China Exports (m/m) at 06:00 (GMT+3);
– China Imports (m/m) at 06:00 (GMT+3);
– French Manufacturing PMI (m/m) at 10:15 (GMT+3);
– French Services PMI (m/m) at 10:15 (GMT+3);
– German Manufacturing PMI (m/m) at 10:30 (GMT+3);
– German Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3);
– US Treasury Secretary Yellen Speaks at 18:00 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

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