EURUSD - The US dollar controls the dynamics of the pair
According to data released yesterday, the volume of Industrial Production in the eurozone in July fell by 2.3% after rising by 1.1% a month earlier, which led to a decrease in the annual rate by 2.4% after increasing by 2.2% in the previous month. The negative dynamics was supported by today’s data on the Wholesale Price Index in Germany, which in August added only 0.1 against the forecast of 0.5%, and in annual terms slowed to 18.9% from 19.5%.
The EURUSD pair remains within the global descending channel, declining in the direction of the support line. Technical indicators hold the sell signal, somewhat weakening it: the fast EMAs on the alligator indicator are still below the signal line, and the histogram of the AO oscillator forms new bars, being deep in the sales zone.
Support levels: 0.99, 0.975 | Resistance levels: 1.0055, 1.02
On the daily chart, the quotes remain within the global Expanding formation pattern, forming a new downward wave, which has already almost reached its intermediate target at the 61.8% Fibonacci full retracement around 146. On the four-hour chart, it can be seen that the current movement is developing according to the classical structure. After rebounding from the initial correction of 23.6% Fibonacci around 163.8, the price continued its global decline, almost breaking the intermediate correction of 50.0% Fibonacci around 151.50, which is key support for the current trend.
Technical indicators confirm the high probability of continued decline: the Alligator indicator’s EMA oscillation range expands downwards, and the histogram of the AO oscillator forms downward bars in the sell zone.
AUDUSD - Investors are disappointed with rising unemployment in Australia
The Australian currency has been showing weakness lately, reinforced by yesterday’s report on the national labor market: the unemployment rate rose to 3.5%, the first increase since September 2021. The number of unemployed rose by 14.0K to 487.7K people, the youth unemployment rate rose to 8.4%, and the employment-to-population ratio increased to 64.3% from 64.2% a month earlier. Full-time employment added 58.8K people, but part-time employment decreased by 25.3K people: citizens are striving to get a stable job in the face of constant growth in prices and rates on debt obligations.
Technical indicators reversed and now are holding a sell signal: fast EMAs on the Alligator indicator are actively moving away from the signal line, and the AO oscillator histogram forms downward bars in the sell zone.
Resistance levels: 0.677, 0.6916 | Support levels: 0.6684, 0.653
NZDUSD - New Zealand’s economy continues to slow down
One of the drivers of the movement of quotations was the report on the state of the New Zealand economy in the second quarter, according to which the Gross Domestic Product (GDP) grew by 1.7% after falling by 0.2% a quarter earlier, while analysts expected growth by 1.0%, which, however, did not have a significant impact on the annual rate, which slowed to 0.4% from 1.2% a quarter earlier, while the forecast was 0.2%. Thus, the average annual GDP slowed down to 1.0% from 5.1% earlier. Today’s data on business activity showed an increase in the Manufacturing PMI in August to 54.9 points from 53.5 points a month earlier and somewhat slowed down the downward dynamics of the instrument in anticipation of the release of statistics on Household Spending next week.
Quotes of the NZDUSD pair are traded within the global downtrend, again approaching the support line of the downstream channel. Technical indicators are holding a sell signal, which started strengthening: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming descending bars.
Support levels: 0.5955, 0.58 | Resistance levels: 0.6035, 0.621
Shares of McDonald’s Corp., the world’s largest chain of fast-food restaurants, correct within a downtrend at 255. On the daily chart, there is a global upward correction, within which a local Head and shoulders reversal pattern is formed with the Neckline at 250. The four-hour chart shows that the price failed to realize it, but this week it may make a second attempt, in which case the support line around 245.00 will act as a local obstacle, consolidation below which will open the way to the main target at 236.
Technical indicators have completely reversed downwards: fast EMAs on the Alligator indicator crossed the signal line downwards, and the AO oscillator histogram forms bars with a downward trend in the sell zone.
Switzerland’s trade balance will be published tomorrow, which could fall to annual lows of 2.9B francs due to the continued rise in the cost of imports: this figure added 8.6% in August compared to last year’s value. The State Secretariat for Economic Affairs (SECO) will publish fresh economic forecasts, which will reflect the situation with inflation, which due to rising import prices, may increase to 3.3–3.5% this month, which is another anti-record for the country.
On the daily chart, the price is correcting within the downwards corridor, falling towards the support line. Technical indicators keep a sell signal, which has weakened due to an upward correction: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram has formed another downward bar in the sell zone.
Resistance levels: 0.97, 0.9843 | Support levels: 0.9587, 0.941
Today, the Nikkei published an article regarding the possible continuation of the fall in Japan’s gross domestic product (GDP) in the coming quarter: for the first time since 1992, the figure may fall below 4.0T dollars due to the record depreciation of the yen, which occurs due to large differences in accounting central bank rates, and if the US Federal Reserve raises interest rates this week, the Japanese currency will be under even greater pressure. Inflation data will be published tomorrow: the nationwide consumer price index may increase to 2.7% in August from 2.4% earlier, a fairly fast growth rate that strains the economy.
The trading instrument is moving within the global uptrend, holding near the year’s high, around 143. Technical indicators still ignore local price fluctuations and keep a stable buy signal: the Alligator indicator’s EMA oscillation range is directed upwards, and the AO oscillator histogram forms new bars well above the transition level.
Resistance levels: 144.55, 147 | Support levels: 142.1, 138.95
Brent Crude Oil prices show near-zero dynamics, consolidating near the level of 91. Pressure on quotes is exerted by expectations of the outcome of the US Federal Reserve meeting, at which the interest rate may be raised by 75 basis points for the third time in a row. The Bank of England and the National Bank of Switzerland are also expected to tighten their monetary policies this week. The increase in interest rates is aimed at containing the sharp increase in inflation, but also leads to a slowdown in economic activity. In particular, analysts assess the risks of a recession in the European economy, which also faced serious challenges due to the energy crisis.
Another negative factor affecting the quotes of “black gold” is the fall in industrial activity in China due to its zero tolerance policy towards COVID-19. Finally, the markets are concerned about the restrictions that apply to the import of oil and oil products from the Russian Federation. Western countries continue to discuss the introduction of marginal prices for Russian “black gold”.
Today, the focus of investors will be data from the American Petroleum Institute (API) for the week ended September 16. The previous report reflected a sharp increase in reserves of “black gold” by 6.035 million barrels, while the US Department of Energy reported an increase of only 2.442 million barrels.
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost constant, remaining rather spacious for the current level of activity in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics, having reversed upwards at the end of last week. Current readings of the indicators signal in favor of a corrective growth in the ultra-short term.
On the daily chart of the asset, the price is correcting upwards after a significant decline, forming a local ascending channel with boundaries of 132 – 146. Now the quotes have reached the support line of the range, after which an upward wave began. On the four-hour chart of the asset, the price is above the key level of the basic correction of 38.2% Fibonacci around 133 in favor of continuing the positive dynamics, after consolidation above which, the growth may continue to a full correction of 61.8% Fibonacci around 144.
Technical indicators confirm the upward momentum: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram, despite ambiguous fluctuations, is moving in the buying zone.
Brent Crude Oil prices show near-zero dynamics, consolidating near the level of 91. Pressure on quotes is exerted by expectations of the outcome of the US Federal Reserve meeting, at which the interest rate may be raised by 75 basis points for the third time in a row. The Bank of England and the National Bank of Switzerland are also expected to tighten their monetary policies this week. The increase in interest rates is aimed at containing the sharp increase in inflation, but also leads to a slowdown in economic activity. In particular, analysts assess the risks of a recession in the European economy, which also faced serious challenges due to the energy crisis.
Another negative factor affecting the quotes of “black gold” is the fall in industrial activity in China due to its zero tolerance policy towards COVID-19. Finally, the markets are concerned about the restrictions that apply to the import of oil and oil products from the Russian Federation. Western countries continue to discuss the introduction of marginal prices for Russian “black gold”.
Today, the focus of investors will be data from the American Petroleum Institute (API) for the week ended September 16. The previous report reflected a sharp increase in reserves of “black gold” by 6.035 million barrels, while the US Department of Energy reported an increase of only 2.442 million barrels.
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost constant, remaining rather spacious for the current level of activity in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics, having reversed upwards at the end of last week. Current readings of the indicators signal in favor of a corrective growth in the ultra-short term.
USDCAD - Markets are awaiting the decision of the US Federal Reserve
This week, the trading instrument renewed another annual high at 1.3340, and one of the reasons for the weakening of the Canadian dollar was yesterday’s national macroeconomic statistics: the industrial price index for August fell by 1.2%, much worse than the growth of 0.2% expected by analysts, resulting in a slowdown in annual growth from 11.5% to 10.6%. Import prices for the same period decreased by 4.2% against an expected increase of 3.2%, which decreased the annual value from 19.1% to 17.6%. The USD/CAD pair demonstrates ambiguous dynamics ahead of today’s publication of the consumer price index: analysts are counting on negative dynamics in the amount of –0.1%, which could contribute to a drop in annual data from 7.6% to 7.3%.
On the weekly chart of the asset, the price is moving within a wide ascending channel with dynamic boundaries 1.2800–1.3400, approaching the resistance line. The Alligator indicator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator forms upward bars in the buying zone.
Resistance levels: 1.3310, 1.3450 | Support levels: 1.3210, 1.3040
EURUSD - The US dollar controls the dynamics of the pair
The European currency remains neutral against the backdrop of new negative reports regarding the economic state of the EU. Thus, the Eurostat agency published a study that estimates the price rise for a key food product – bread. In August, its average cost in the EU increased by 18% compared to last year and reached an absolute historical record. Bread prices rose the most in Hungary, by 60% YoY and 10% last month, and the least in France and Belgium, by 10% and 13%, respectively. Thus, food and fuel prices increase, and the inflation rate will continue to rise.
The trading instrument is moving within the global downward channel, falling towards the support line. Technical indicators maintain a weakening sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram is forming bars in the sell zone.
Resistance levels: 1.0100, 1.0320 | Support levels: 0.9900, 0.97
GBPUSD - The pound is preparing to renew the year’s lows
The pound has consolidated near another historical low and is being traded in anticipation of new macroeconomic data but investors are paying attention to consumer sentiment now. Yesterday, Prime Minister Liz Truss said that the issue of rationing electricity tariffs is not worth it, as they will be frozen. Ordinary Britons fear the measure will come at a too high current cost: rates have risen sharply in recent times, putting a heavy strain on households that risk a financial crisis by the start of winter.
The US dollar continues to develop positive dynamics in anticipation of today’s meeting of the US Federal Reserve. Investors perceived yesterday’s data on the housing market as neutral: the number of building permits issued in August decreased to 1.517M from 1.658M, which is a fairly significant drop when taking into account the average values of the current year, and the volume of construction of new houses, on the contrary, showed a significant increase, amounting to 1.575M instead of 1.404M a month earlier.
The trading instrument is moving within the global downward channel, declining along the support line. Technical indicators maintain an increasing sell signal: the Alligator indicator’s EMA oscillation range expands, and the histogram of the AO oscillator forms new downward bars.
Resistance levels: 1.1462, 1.1686 | Support levels: 1.13, 1.11
XAUUSD - Investors continue to reduce their positions in gold
Today the decision of the US Federal Reserve on monetary policy will be published. Most analysts believe that the interest rate will be raised by 75 basis points, which could lead to another rise in the dollar and exceed the summer peak of 110 in the USD Index. The price of gold is tightly tied to the price of the US currency, and even taking into account the stability of the precious metal, the growth of the USD Index by 2-3% can provoke a decrease in asset quotes by 1-2%. The main scenario of analysts today assumes such a variant of price movement.
In turn, the demand for contracts for gold has recently declined slightly. According to the latest report from the US Commodity Futures Trading Commission (CFTC), sellers continued to actively reduce their positions last week, while buyers slightly strengthen them. In the positions of swap dealers, which usually react quickly to any changes in the market, buyers increased their number by 0.535 thousand contracts, while sellers reduced them by 4.059 thousand contracts. As for the general trend, the number of positions has been decreasing for the third week in a row, this time to 97.3 thousand from 103.9 thousand.
On the weekly chart of the asset, the price is holding in a descending channel and after reaching the low of the year at 1650 is still at these levels. Technical indicators hold a sell signal, which remains quite strong: fast EMAs on the Alligator indicator are moving away from the signal line again, and the AO oscillator histogram is forming new downward bars, being in the sell zone.
Support levels: 1650, 1610 | Resistance levels: 1680, 1730
S&P 500 - the US market froze in anticipation of the decision of the US Federal Reserve
The Fed’s Monetary Policy Meeting is due tonight, and 80% of analysts are suggesting a 75 basis point hike in interest rates to 3.25% for the first time since 2008, with a small group of experts believing the regulator could take extreme measures to combat inflation and increase the rate to 3.50%. Traders are focused on the forecasts regarding the rate’s dynamics until the end of the year: Fed officials have repeatedly spoken in favor of a possible period of stabilization of the interest rate, and investors are focused on a preliminary assessment of its length.
The trading instrument is moving within a local downtrend, approaching the year’s low at 3640. Technical indicators reinforce the sell signal: fast EMAs on the Alligator indicator move away from the signal line, and the AO oscillator histogram forms downward bars in the sell zone.
Resistance levels: 3950, 4130 | Support levels: 3830, 3640
EURUSD - In anticipation of poor statistics on business activity in the EU
The European currency is showing negative dynamics against its main competitors in anticipation of tomorrow’s publication of an extensive block of macroeconomic statistics: analysts predict a decline in business activity indicators for September in almost all leading EU countries. Thus, Composite PMI in Germany may fall to 46.0 points from 46.9 points in August, and Composite PMI in France may fall to 49.8 points from 50.4 points earlier. EU Composite PMI index of business activity in the EU is expected to be 48.2 points, down from 48.9 points in the previous period.
Yesterday, analysts’ attention was focused on the US markets. The US dollar renewed the year’s high and is currently trading around 111.200 in the USD Index after the country’s financial regulator raised its interest rate by 75.0 basis points to 3.25% and provided forecasts for the development of the economic situation. Expectations worsened on all three main indicators: inflation in 2022 is expected at 5.4% from 5.2% previously, unemployment will increase to 3.8% from 3.7% earlier, and economic growth may slow to 0.2% from 1.7% earlier, which most disappointed experts, as the decline in the gross domestic product (GDP) confirms the annual recession.
The trading instrument is moving within the global downward channel, falling towards the support line. Technical indicators maintain an increasing sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram is forming bars in the sell zone.
Resistance levels: 0.9900, 1.012 | Support levels: 0.9800, 0.965
Crude Oil - Growth in US inventories puts pressure on asset quotes
According to a Reuters report yesterday, OPEC+'s target deviation in production is currently around 3.58M barrels per day (about 3.5% of global demand). The excess relative to the August value of 2.89M barrels amounted to 24%. According to cartel representatives, the negative dynamics are observed due to insufficient investment in oil projects in Nigeria and Angola and the impact of Western sanctions on Russian production. Thus, the production of hydrocarbons in Nigeria in August fell by a record 1.0M barrels against fuel theft from pipelines.
On the daily chart of the asset, the price is moving within a downwards corridor, approaching the year’s low. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator remain below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.
Resistance levels: 91.15, 96.4 | Support levels: 86.85, 77.66
Over the weekend, Ripple Labs and SEC lawyers filed motions for a summary judgment in the case, signaling the imminent completion of a process in which the company has a significant chance of winning, as officials could not prove that the XRP token fully met the definition of a security. The chairman of the US Commodity Futures Trading Commission (CFTC), Caroline D. Pham, also visited the corporation’s central office, where she met with the head of Ripple, Brad Garlinghouse. Although the parties did not announce the purpose of the visit, its very fact was positively assessed by the market, as it may indicate a gradual decrease in pressure from American regulators on the crypto company. All this caused a new interest of investors, first of all, “whales” in the XRP token, provoking the strengthening of its position.
The trading instrument rose above 0.4150 (Murrey [+1/8]), which gives the prospect of further growth to 0.4395 (Murrey [+2/8]), 0.4600, 0.4950. If 0.3906 (Murrey [8/8]) is broken down, the decline may resume to 0.3418 (Murrey [6/8]). Technical indicators confirm the upward trend: Bollinger bands reverse upwards, the MACD histogram increases in the positive zone, and Stochastic may leave the overbought zone, but the downside potential is limited.
The pressure on the position of the instrument is exerted by the decision of the US Federal Reserve published the day before to increase the interest rate by another 75 basis points for the third time in a row. At the same time, the regulator raised inflation estimates and lowered economic growth expectations for 2022–2023. The Chair of the Fed, Jerome Powell, signaled a further tightening of monetary policy until the end of the year: in particular, it is assumed that at the next meeting the regulator can adjust the value immediately by 125 basis points.
Today, the focus of traders will be two more meetings of central banks: the National Bank of Switzerland, which can raise the rate from -0.25% to 0.5%, and the Bank of England, which can adjust the value from 1.75% to 2.25%. Also, the British regulator is expected to publish updated forecasts for economic growth, suggesting evidence of a possible recession in expert estimates.
NZDUSD - The situation in the New Zealand economy remains difficult
The key driver of the downward movement of quotations is the trade deficit of New Zealand, which in August, for the first time in history, reached –12.280B dollars, falling from –11.970B in the previous period and losing 2.447B dollars on a monthly basis. The main factor behind the negative dynamics is the continued growth in the value of imports, which amounted to 7.93B dollars in August compared to 7.76B dollars earlier. Exports fell to 5.48B dollars from 6.35B dollars earlier. The cost of fuel imports rose the most — by 462.0M dollars or 79%.
The trading instrument is moving within the global downtrend, approaching the support line of the downstream channel. Technical indicators maintain a strong sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.
Support levels: 0.58, 0.565 | Resistance levels: 0.59, 0.603
