USDINDEX
In the wake of the escalating conflict in the Middle East, secure assets like gold and the US Dollar have seen a significant rise.
The intensifying conflict in the Middle East has led to a notable increase in the value of secure assets such as gold and the US Dollar. The situation on the Israel-Lebanon border has worsened, resulting in over 2,000 civilian casualties in the Gaza Strip. In an attempt to alleviate the situation, the US has initiated covert negotiations with Iran. However, the possibility of a direct clash between Israel and Iran, a major backer of Hamas, is causing alarm. In tandem with these US-Iran discussions, oil prices have skyrocketed due to fears of impending oil sanctions. According to Bloomberg Economists, this situation could drive oil prices up to $150, potentially pushing the global economy into a recession.
The US Dollar is maintaining its upward trajectory, driven by strong inflation figures from the US. The rising geopolitical unrest in the Middle East has also strengthened the appeal of the greenback as a preferred safe-haven asset. Although the Dollar’s overall trend is subject to potential swings, the forthcoming speech by Fed Chairman Jerome Powell is a significant event to watch.
Currently, the Dollar Index is experiencing an uptrend while it tests the resistance level. However, the MACD indicates a decrease in bullish momentum, and with the RSI at 59, it suggests that the index may undergo a technical correction as the RSI has sharply withdrawn from overbought conditions.
Resistance levels: 106.60, 107.15.
Support levels: 105.65, 104.80.
EURUSD
The EURUSD pair is currently undergoing a test of the Tenkan-Sen line. The pair is trending downwards, beneath the Ichimoku Cloud, indicating a potential bearish trend. It’s anticipated that there will be a test of the Cloud’s upper boundary at 1.0565, which will then be followed by a drop to 1.0365. A bounce off the bullish channel’s lower boundary will serve as an additional signal to confirm this downward trend. However, if there’s a breakout at the Cloud’s upper boundary and the price stabilizes above 1.0605, this scenario will be invalidated, suggesting a possible rise to 1.0705.
NZDUSD
The NZDUSD pair, “New Zealand Dollar versus US Dollar”, has managed to stay above the indicator’s signal lines. The pair is trending downwards as it moves beneath the Ichimoku Cloud. It’s anticipated that it will test the Cloud’s lower boundary at 0.5935 before falling to 0.5845. A bounce off the bearish channel’s upper boundary will serve as an additional signal confirming this downward trend.
However, if the price breaks out and settles above the Cloud’s upper boundary at 0.5965, this scenario will be invalidated, indicating a potential rise to 0.6055. On the other hand, a breakout below the bullish channel’s lower boundary and a settling price below 0.5905 could confirm the downward trend.
SOLUSD Analysis
Amidst the ETF rumors, Solana’s price experienced a significant surge, peaking at $27, a trend that was mirrored by other cryptocurrencies. This spike in SOLUSD’s price resulted in it reaching the $24 - $27 resistance zone, causing both the RSI indicator and Stochastic oscillator to enter the overbought region.
Technical indicators suggest an impending market correction. With SOLUSD breaking the upper band of the Bollinger Bands, it’s anticipated that Solana will correct its recent gains and potentially decline to $22.4, aligning with the middle band of the Bollinger Bands.
This scenario is contingent on SOLUSD closing below the middle line of the Bollinger Bands on the 1-hour chart, which is currently around $23.5. If bearish momentum is observed, we can expect SOLUSD’s bearish trend to persist, with initial targets set at $23.24, followed by the $22 pivot point.
EURUSD
The European currency is stable between 1.05-1.06 levels due to lack of new data. Yesterday, there were no surprises due to the absence of significant economic data. The focus remains on the Middle East, but there are no signs of major escalation, bringing stability to international stock markets and reducing the need for dollar purchases.
It’s too early to predict if de-escalation is likely. The European currency is under pressure due to ongoing concerns. Today’s agenda includes U.S. retail sales data, which may confirm the U.S. economy’s stronger momentum compared to Europe.
After a two-month downward trend, the European currency shows signs of stability. Unless there’s a major market shock, it’s likely to remain stable this month. As the market direction is unclear, it’s best to wait and see. I’m considering buying more European currency after significant dips and new lows.
EURJPY
At the time of this EURJPY market analysis, the EURJPY is navigating a bullish channel, with the RSI indicator maintaining a position above the 50 level. On October 3, the pair managed to stay above the Ichimoku cloud, resulting in the continuation of the EURJPY uptrend. The primary hurdle for the EURJPY bulls is at the 158.64 mark.
For the bullish trend to persist, it’s crucial for the EURJPY bulls to achieve a close above the 158.64 level. Should this occur, the next target for this currency pair would be projected towards the 162.0 area.
GBPUSD
The British Pound (GBP) against the US Dollar (USD) is showing a decline in the European market on Tuesday. This is undoing some of the 0.65% increase we saw on Monday. The reason for this decline is weaker than expected growth in UK salaries, which is causing concern for those who want another rate hike from the Bank of England (BoE).
Everyone is waiting for the UK’s inflation report for September, which will be released on Wednesday. The forecast is 6.5% year-on-year, compared to 6.7% in August, and the core is forecasted at 6.0% compared to 6.2% in August.
If the September figure meets or falls below expectations, it will further discourage a hawkish view on rates and keep the pound on the defensive.
The recent drop in value is putting pressure on the initial support level at 1.2141 (the upward trend line from the 1.2037 low), before a crucial point at 1.2122 (Friday’s low). If it falls below this, it could signal further decline and risk retesting the October 4 low at 1.2037.
The converged 10/20 day moving averages at 1.2200/13 are a crucial barrier. If it breaks through this level and stays above it, it could sideline immediate downside threats and pave the way for a new recovery.
Bitcoin
Bitcoin has successfully breached the $28,000 threshold. This significant level had previously maintained Bitcoin’s price within a range of $28,000 to $25,000 since mid-August 2023.
Upon examining the BTCUSD 4-hour chart, it’s evident that Bitcoin, often referred to as ‘digital gold’, is trading within a bullish channel. However, the Relative Strength Index (RSI) indicator is currently in the overbought zone. The critical level that sustains BTCUSD’s bullish trend is $27,952. As long as the price remains above this level, Bitcoin is likely to trade above the median line of the bullish channel. Given that the RSI is in the overbought territory, a minor decline to the R1 level is anticipated. This level presents a substantial supply zone for BTCUSD bulls.
If the R1 level is breached, the next bearish target for the bulls would be the $27,237 pivot point, followed by the lower boundary of the bullish channel.
EURUSD
Last week, the EUR/USD tried to rise above a downward trend channel but didn’t succeed, so the channel is still active. The highest point reached was 1.0640, but it ended the day below the downward trend line, which might mean the trend line is still valid.
If it rises above the trend line, it could face resistance at 1.0620, 1.0640 and 1.0675, which are previous high points. Further up, there could be resistance at an earlier peak of 1.0737, which is currently where the 55-day simple moving average (SMA) is. Beyond that, another earlier high point near 1.0770 could also offer resistance.
A bearish triple moving average (TMA) pattern happens when the price is below the short-term SMA, which is below the medium-term SMA, which is in turn below the long-term SMA. All SMAs also need to be decreasing.
When looking at any combination of the 21-, 34-, 55- and 100-day SMAs, if they meet these conditions, it might suggest that a bearish momentum is developing.
On the downside, support might be found near the low points of early 2023 that were tested at the start of this month, with 1.0480 and 1.0440 as potential important levels.
EURJPY: Navigating the Fluctuations and Identifying Trading Opportunities
The EURJPY currency pair seems to have returned to its usual fluctuations after resisting a downward trend two weeks ago, which saw it drop to a three-month low at 154.39.
This decline went below the low of September and the 100-day Simple Moving Average (SMA), but managed to close above these levels in the following sessions.
This situation could present opportunities for a range trading strategy. For more insights on range trading, explore our related resources.
In terms of support, it could be found at the breakpoint and a recent low around 156.50. If there’s a continued downward trend, keep an eye on the previous lows and breakpoints at 154.39, 153.45, 151.60, 151.40, and 151.07.
Looking upwards, resistance might be encountered at recent highs and breakpoints near 158.65, 159.50, and 159.75.
Gold
Gold (XAUUSD) did great last week, reaching a high of 1930/32. It managed to hold a small resistance at 1940/45 all morning before breaking above 1950. This gave another buy signal aiming for 1962/65. We saw the day’s high right there, and things still look good even though it’s quite overbought. I don’t see any reason to sell yet.
If it breaks above 1965, it could aim for 1970/75 & 1980/82, maybe even up to 1986/88. I’ll keep an eye out for any sell signals.
There’s solid support at 1938/33. If you’re going long, you should put your stops below 1928.
USDJPY
The currency pair USDJPY, which stands for “US Dollar vs Japanese Yen”, is currently in a phase of consolidation. This means that the currency pair is not making significant moves up or down, but is rather staying within a certain range. The specific range in this case is centered around the price of 149.75.
If the price were to break out of this consolidation range on the upside, it could potentially lead to an increase in the value of the USDJPY pair. The target for this potential increase is at 150.13. This means that if the price breaks out upwards from the consolidation range, it could potentially rise to 150.13.
On the other hand, if the price were to break out of the consolidation range on the downside, it could potentially lead to a decrease in the value of the USDJPY pair. However, this decrease could be followed by a correction, which is a short-term move in the opposite direction of the prevailing trend. The target for this potential correction is at 149.00.
After reaching this correction target, it’s possible that the price could then rise to 150.75. This means that even if the price breaks out downwards from the consolidation range and reaches the correction target of 149.00, it could then reverse direction and rise to 150.75.
EURUSD
Stable Interest Rates and Outlook: The ECB is expected to keep interest rates and its outlook stable in its upcoming meeting. The current interest rate level is seen as contributing substantially to achieving the inflation target.
Impact of Higher Oil Prices: Questions may arise about the impact of higher oil prices due to a potential crisis in the Middle East. The effects could vary, with possible inflation increase on one hand, and loss of purchasing power for households and businesses on the other.
Decline in Inflation Rate: A long-term decline in the inflation rate is expected, with uncertainty about the speed. Factors such as a weak economy could accelerate the decline, while stronger wage increases could slow it down.
Eurozone PMI Data: A flash estimate of Eurozone PMI data will be published next week, with no immediate improvement in sentiment expected for October. However, an increase in growth momentum in the Eurozone is anticipated from the first half of 2024.
Technical
The currency pair is currently trending downwards within a bearish channel, and the Relative Strength Index (RSI) is on the verge of dipping below the midpoint of 50. If the bears manage to close below the bullish channel (indicated in blue), we can expect the downward trend to persist, with targets set at Support 1 (S1) and subsequently Support 2 (S2).
On the other hand, Resistance 1 (R1) is set at 1.06. If the currency pair closes above this resistance level on the 4-hour chart, it would indicate a continuation of the bullish trend that began earlier this month.
EURUSD
The Euro to US Dollar exchange rate is currently below the indicator’s signal lines. It’s moving above something called the Ichimoku Cloud, which usually means the exchange rate might increase.
We expect it to first reach the lower edge of the Cloud at 1.0550, and then rise to 1.0675. Another sign that it might rise is if it bounces off the lower edge of the ‘bullish channel’. However, if it breaks through the lower edge of the Cloud and goes below 1.0525, this could mean it will drop further to 1.0430.
EURGBP
The EURGBP currency pair has been increasing in value for six consecutive days, reaching its highest point in over five months. This rise is part of a larger upward trend that started on August 23, 2023, when the value was at 0.8492.
This trend has been boosted by weaker than expected retail sales in the UK in September. The value has surpassed a significant level at 0.8735 but may face some resistance as the market is overbought and traders might start taking profits, which could lead to a period of stability.
Despite this, the pair is set to make substantial gains this week, indicating that the upward trend is still strong. Any short-term stability should ideally be above the previous high of September 26 and the 200-day moving average (0.8705 / 0.8695) to maintain the upward momentum.
However, be cautious if the value drops significantly and closes below 0.8678 as this could weaken the upward trend and make further declines more likely.
The resistance levels to watch are: 0.8735; 0.8792; 0.8808; 0.8863. The support levels to watch are: 0.8705; 0.8695; 0.8678; 0.8662.
Euro Stays the Same as Everyone Waits for the Big Bank Meeting
The Euro isn’t changing much. It’s still a little bit less than 1.06 dollars. It’s hard for it to go higher right now. People are also watching what’s happening in places far away in the Middle East. They’re worried things might get worse there. This worry makes it tough for the Euro to start going up a lot.
In the United States, they’re getting more money back for lending it (this is called high “yields” on something named “Treasuries”), and things are uncertain. So, for now, people like the US dollar more. But, the Euro is trying to stay strong. It’s reacting well even when things get tough, and it’s not going down just because stock markets might be going down.
There’s not much news today. The only big thing is how confident people in Europe feel about buying things. There’s no big news or talks from the United States today.
Everyone is really thinking about a big meeting for the European Central Bank coming on Thursday. They’re pretty sure the bank won’t change the interest rates (the cost of borrowing money). But they’re very curious about what the bank’s boss, President Lagarde, will say about how things are going with money and prices going up (that’s called inflation).
For today, no one thinks anything surprising will happen. The value of money between the Euro and the dollar probably won’t change much. If the Euro can stay at or above 1.06 dollars, that’s good. But things can always change because of what’s happening in the Middle East.
Bitcoin’s Rollercoaster Ride: Predictions from the Pros
As Bitcoin’s wild ride keeps everyone guessing, big names are dropping hints about where it might head next. Currently, Bitcoin is at $30,377, a tiny bit higher than yesterday.
The Dollar’s Dive: Schiff’s Scary Prediction
Peter Schiff, a money expert, thinks trouble’s brewing for the US dollar. He predicts a long-lasting money slump and prices going up too fast, which isn’t good news for folks with dollars. But for Bitcoin, it might be a silver lining.
Saylor Says Bitcoin’s a Winner
Then there’s Michael Saylor, a big Bitcoin fan, showing off how well his Bitcoin plan has worked. His company, MicroStrategy, loves Bitcoin so much; they bought more, now owning a stash worth a whopping $4.68 billion. This big move might be giving Bitcoin’s price a nudge up.
Kiyosaki’s Crystal Ball: Gold Glitters, Bitcoin Booms
Robert Kiyosaki, the guy who wrote “Rich Dad Poor Dad,” thinks Bitcoin could shoot up to an amazing $135,000. He’s also big on gold, expecting it to do pretty well.
Predicting Bitcoin’s Next Move
Looking at Bitcoin’s recent price chart, there are some key numbers to watch. It’s swinging around $29,208, with the next big hurdle at $31,207. If it breaks through that, it could head for $32,440 or even $34,473. But if it starts slipping, it might drop to around $29,174 or lower.
GBJPY
GBPJPY is seeing a drop, like it’s sliding down a hill after leaving a climbing trail. The Stochastic indicator is hinting that this isn’t the time for the value to go up. The GBPJPY isn’t rising above 182.9, and it seems pretty determined to stay low, possibly even heading down to 176 next.
But here’s something to think about: if the GBPJPY starts to climb unexpectedly and passes a key level (the pivot), this downward slide might just turn around. Those who believe it’s going to rise (the optimists!) are hoping it might reach as high as 187.9.
Gold
Gold prices have stopped rising just below a five-month high on Monday. The rapid increase in prices slowed down as it got close to the $2000 mark. After a strong push back on Friday, it’s clear that the $2000 area is a big hurdle. This has led traders to take some profits from the over 7% increase in the last two weeks.
Daily indicators suggest that this pause was expected, although the slight drop shows that buyers are still interested in pushing the price above $2000.
Due to unrest in the Middle East, traders are looking for safer options. The possibility of conflict escalating increases the demand for gold, which continues to drive up its price.
The slight drop in price has stabilized above the rising 5-day moving average ($1960). Any further drops are expected to stay above $1945 (the halfway point between $2080 and $1810), indicating a normal correction and keeping the overall upward trend intact.
EURUSD
The eurusd graph indicates a sharp decline, potentially in five distinct stages. We’re currently experiencing a temporary rise in the fourth stage. The third stage seems finished, and now we’re in a phase of slight recovery.
The price is moving along a track at 1.07, corresponding to a key financial marker known as the 38.2 Fibonacci level. Our hope is for prices to adhere to this boundary and then plummet swiftly to round off the fifth stage. We anticipate the price might settle around 1.03000 when the fifth stage ends. Our projection is that the euro will become more robust as 2023 progresses.
Inflation rates in Europe are dipping, and the prediction is that the European Central Bank (ECB) will maintain the current interest rates throughout 2023. Expenses, especially for fuel, are surging due to turmoil in the Middle East. If these expenses stabilize, the euro is likely to fortify against other currencies.
Upcoming crucial updates this week: On EURO 23rd October, we expect news on French and German manufacturing and services. October 25th will bring insights into the German business climate and a speech from ECB President Lagarde. October 26th will feature announcements on interest rates, the ECB’s financial strategy, and a major press event.
Potential high points: 1.07; 1.07580; 1.083
Potential low points: 1.04; 1.036; 1.03