Slight support for quotes at the end of the week is provided by macroeconomic statistics from Australia and China. The Chinese Manufacturing PMI from NBS in September increased from 49.4 points to 50.1 points, which was better than expected 49.6 points, but the Services PMI corrected from 52.6 points to 50.6 points, demonstrating decline more active than forecasts at the level of 52.0 points. Australian data indicated an increase in Private Sector Credit in August from 0.7% to 0.8% MoM and from 9.1% to 9.3% YoY.
In turn, the US currency is supported by macroeconomic statistics from the United States. The data released the day before confirmed the decline in the Annualized Gross Domestic Product (GDP) in the second quarter at the level of -0.6%. At the same time, Initial Jobless Claims for the week ended September 23 decreased from 209 thousand to 193.0 thousand.
Analysts at Danske Bank point to the upside potential of the Australian dollar quotes due to the limited supply of liquefied natural gas, as Australia is one of the worldâs key producers of raw materials. At its September meeting, the Reserve Bank of Australia (RBA) adjusted interest rates by 50 basis points, and analysts are confident that there will be a similar increase next month, despite growing recession risks for the national economy. Given these factors, the Australian currency will continue to receive only minor support from the tightening of monetary policy by the regulator.
EURUSD - The pair is holding within the global downward channel
The situation in the regionâs economy remains difficult as it slowly sinks into recession. Although the gross domestic product (GDP) is still in the positive zone, other indicators of economic activity hint at its imminent onset. The basis of the current economic problems, inflation, after a short slowdown, continued to rise and in September in Germany reached a historical record of 10%.
The US dollar is actively declining, approaching 112 in the USD Index. In contrast to the EU, the US is already in a recession: GDP has been in the red zone for the third month in a row, affecting the quarterly figure, which amounted to â0.6%. Against the background of these data, investors ignored the statistics on the labor market, which indicated a decrease in the number of jobless claims to 1.347M people.
The trading instrument moves within the global downward channel, reversing upwards after reaching the support line. The price will try to approach the key level of 1 again, although technical indicators keep a sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram has formed the first upward bar.
Resistance levels: 0.9878, 1.005 | Support levels: 0.9730, 0.9547
GBPUSD - The pound took advantage of the weakness of the dollar
Today the dynamics in the GBP/USD pair can change against the backdrop of the publication of an extensive block of macroeconomic statistics. Thus, the data on the countryâs Q2 gross domestic product (GDP) coincided with forecasts, and the indicator added 0.2% after growing by 0.8% a quarter earlier, acting as a catalyst for a slowdown from 8.7% to 4.4% YoY. Today, traders are also following statistics on consumer lending, which recorded a decrease in September from 1.425B to 1.077B, with a forecast of 1.400B, while the number of borrowings approved by citizens increased from 63.77K to 74.34K.
Meanwhile, British investors are concerned that Prime Minister Liz Truss has shrugged off the concerns of the countryâs leading economists by refusing to consider canceling a project recently announced by the Treasury to reduce the fiscal burden on households and businesses. The official said the 60.0B pound household support measures are helping the economy out of the crisis, but analysts are worried about lifting restrictions on bonuses to the top management of banks, as well as reducing stamp duty on property purchases.
The trading instrument is trying to return to the previously abandoned downwards channel. Technical indicators maintain a decelerating sell signal: the range of fluctuations of the EMA on the Alligator indicator began to narrow slightly, and the AO oscillatorâs histogram formed a new upward bar.
Resistance levels: 1.1250, 1.154 | Support levels: 1.1, 1.069
The American currency continues its moderate growth during the Asian session, again testing the psychological level of 145 for a breakout. The US dollar is in high demand among investors in anticipation of further tightening of monetary policy by the US Federal Reserve. It is predicted that by the end of the year the regulator will make at least one more large increase in the indicator, and the adjustment can immediately reach 1.25%. In turn, the Bank of Japan does not change its wait-and-see tactics, as it fears the return of the previous deflationary risks.
The published macroeconomic statistics from Japan put additional pressure on the yen. Tankan Large Manufacturing Index in the third quarter showed a decrease from 9.0 points to 8.0 points, while analysts expected growth to 11.0 points, and the Jibun Bank Manufacturing PMI in September fell from 51points to 50.8 points with a forecast of 51.5 points.
US investors will be watching today for data from the Institute of Supply Management (ISM), which reflects the state of business activity in the national manufacturing industry and is calculated based on a survey of purchasing and supply managers of leading national enterprises in all industries. The indicator is projected to decrease from 52.8 points to 52.2 points. In addition, during the day there will be a number of speeches by representatives of the US Federal Reserve.
Gold under the pressure of the âhawkishâ policy of the worldâs leading central banks
Quotes of the XAUUSD pair are holding near the level of 1660, receiving moderate support from the corrective weakening of the US dollar at the end of last week, but the âbullsâ still remained under pressure. In addition, gold is still reacting negatively to the rising yields of US government bonds.
It is likely that this week the precious metal will return to the downward plane, as the worldâs leading financial regulators continue their policy of tightening monetary conditions. On Tuesday, October 4, a meeting of the Reserve Bank of Australia will be held, which may adjust the interest rate from 2.35% to 2.85%, and the next day, officials of the Reserve Bank of New Zealand will probably increase the rate from 3.0% to 3.5%. At the end of the week, investors will be watching the rhetoric of the representatives of the European Central Bank (ECB) and the Bank of England, hoping to hear plans for further tightening of monetary policy against the background of increased inflation to 10.0% in the EU.
It is worth noting the high interest in gold from British investors after the plan announced by the national Ministry of Finance to reduce the fiscal burden in the context of the energy crisis. Long positions in the asset contrast sharply with the âbearishâ sentiment in the precious metals market, as XAU/USD quotes have lost 11% since the beginning of the year, which was facilitated by the âhawkishâ policy of the US Federal Reserve. However, the precious metalsâ status as a hedge against inflation and currency depreciation keeps high demand from retail investors.
Over the past few months, the oil market has been under serious pressure due to growing signs of a slowdown in the global economy and the strengthening of the US dollar, supported by the actions of the US financial regulator to tighten monetary policy. To stabilize prices in the current environment, leading exporters may go for another reduction in production, the most significant since the beginning of the coronavirus pandemic.
The next summit of the OPEC+ cartel and its allies will take place on Wednesday, and, according to sources within the organization, it may decide to reduce the production of âblack goldâ by 1 million barrels per day or even more. It is worth noting that already now exporters cannot fully carry out the established production quotas due to a lack of investment or sanctions pressure on the industry. Experts believe that a change in existing plans may lead to a momentary increase in oil prices, but the general market downward trend will continue, as the risks of a recession in the global economy will continue to grow.
The price is close to the level of 90 (the center line of Bollinger Bands), a breakout of which will give the prospect of further growth of quotations to the levels of 93.5 (Murray [7/8], Fibonacci retracement of 61.8%), 96.4 (upper line of Bollinger Bands). The key point for the âbearsâ seems to be 87.5 (Murray [5/8]), consolidation below which may lead to a decline to the area of 81.25 (Murray [5/8]), 75.00 (Murray [4/8]).
The long-term trend is downward. As part of the decline, the traders reached a strong support level of 0.6390, and after an unsuccessful attempt to break through it, the AUDUSD pair corrected to the resistance area of 0.6525; however, the âbullsâ failed to develop an upward impetus, forming a trading range of 0.6390â0.6525. The decision of the Reserve Bank of Australia on the interest rate, which is expected tomorrow at 05:30 (GMT+2), can take the trading instrument out of this zone.
The mid-term trend is downward. Last week the traders broke through the target zone 3 (0.6536â0.6516), and now the area of 0.6336â0.6316 serves as a new reference point for quotes. The key resistance of the trend is shifting to the levels of 0.6561â0.6543. If this resistance is reached within the upward correction, it will be possible to consider new short positions with the first target at last weekâs low at 0.6368.
Resistance levels: 0.6525, 0.67 | Support levels: 0.639, 0.626
The BTCUSD pair has been trading in the main range 19800â18750for more than two weeks: last week, the quotes of âdigital goldâ actively tested its upper limit, but could not consolidate higher and resumed the decline.
In general, the instrument remains under the influence of long-term negative factors. The continued increase in interest rates by the US Fed, the constant expectation of tighter regulation of the cryptocurrency market in the worldâs leading economies, the growth of geopolitical risks and the high probability of a global economic recession make digital assets less attractive to institutional investors. Moreover, recently there has been a tendency to decrease the popularity of cryptocurrencies among ordinary market participants. So, according to the latest Bankrate survey conducted among American youth, no more than 30% of respondents were interested in cryptocurrencies this year, while in 2020 this figure reached 50%. Experts believe that then the interest was primarily related to the rise in prices of digital assets and the possibility of quick earnings, the probability of which has sharply decreased in the current conditions.
Technically, the key for the âbearsâ remains the mark of 18750 (Murray [0/8]) at the lower border of the trading range, consolidation below which will allow the quotes to continue the downward movement to the levels of 17800 (June lows), 17187.5 (Murray [-2/8]), 16900 (Fibo extension 100.00). The most important for the âbullsâ is the 19800 mark. If the price consolidates above it, the recovery of the positions of the trading instrument may begin in the area of 21093.75 (Murray [3/8]), 21875 (Murray [4/8]).
On the four-hour chart, there is a formation of a Double Bottom price pattern, which is reversal and indicates that the asset has reached a local Bottom. In addition, at the key support level of 0.5593, a Morning Star candlestick analysis pattern formed, which also signals that the âbullsâ have seized the initiative, and at around 0.5653, a Hammer reversal pattern is formed. To continue the uptrend according to the Double Bottom pattern, the quotes need to test the level of 0.5653, after which, most likely, the asset will continue to recover by impulse movement to the resistance level of 0.5845, overcoming which will mean the retreat of the âbearsâ from their positions and continued movement to the zone of 0.6149â0.6379. An alternative scenario is possible if the sellers overcome the support level of 0.5593, then the negative dynamics may increase to the area of 0.5348â0.5022.
D1
On the daily chart, at the level of 0.5653, there is the formation of a âbullishâ Inverted Hammer pattern, which warns market participants about a possible price reversal, and the Hammer and Morning Star candlestick analysis patterns, the combination of which indicates the transition of the initiative to the âbullsâ. More likely at the moment is a scenario with the continuation of the uptrend to the resistance level of 0.5845, the overcoming of which will allow buyers to head higher in the range of 0.6149â0.6379.
The US dollar shows mixed dynamics of trading during the Asian session, consolidating near local highs from September 28 and 0.9920, despite the fact that the macroeconomic background from the US remained rather weak, and data from Switzerland supported buyers of the franc.
Business activity index from the Institute of Supply Management (ISM) in September showed a decline from 52.8 points to 50.9 points. It is worth noting that a similar index from S&P Global rose from 51.8 points to 52.0 points in September with analystsâ neutral forecasts. In turn, data from Switzerland pointed to a slowdown in inflation. In September, the Consumer Price Index showed a decrease of 0.2% after rising by 0.3% last month. Finally, the Business Activity Index from SVME recorded a moderate increase from 56.4 points to 57.1 points with analystsâ neutral forecasts.
H4
On the four-hour chart, there is a formation of a Double Bottom price pattern, which is reversal and indicates that the asset has reached a local Bottom. In addition, at the key support level of 0.5593, a Morning Star candlestick analysis pattern formed, which also signals that the âbullsâ have seized the initiative, and at around 0.5653, a Hammer reversal pattern is formed. To continue the uptrend according to the Double Bottom pattern, the quotes need to test the level of 0.5653, after which, most likely, the asset will continue to recover by impulse movement to the resistance level of 0.5845, overcoming which will mean the retreat of the âbearsâ from their positions and continued movement to the zone of 0.6149â0.6379. An alternative scenario is possible if the sellers overcome the support level of 0.5593, then the negative dynamics may increase to the area of 0.5348â0.5022.
D1
On the daily chart, at the level of 0.5653, there is the formation of a âbullishâ Inverted Hammer pattern, which warns market participants about a possible price reversal, and the Hammer and Morning Star candlestick analysis patterns, the combination of which indicates the transition of the initiative to the âbullsâ. More likely at the moment is a scenario with the continuation of the uptrend to the resistance level of 0.5845, the overcoming of which will allow buyers to head higher in the range of 0.6149â0.6379.
Crude Oil - Upward correction ahead of the OPEC+ meeting
According to sources within the organization, during the meeting, a decision may be made to reduce the production of âblack goldâ by 1 million barrels to stabilize prices. Larger production adjustments than previously expected will be an indicator of producersâ concern about the rapid slowdown in the global economy in the face of active tightening of monetary policy by leading central banks. A number of experts believe that a consistent increase in interest rates carries the risk of a contraction in the economy in the future. These fears led to the most rapid drop in oil prices since the start of the coronavirus pandemic in early 2020, forcing OPEC+ to think about ways to stabilize the market. Any move by the cartel to raise prices could put additional pressure on Western consumers, who are under unprecedented pressure amid the energy crisis.
An additional factor contributing to the strengthening of the Brent Crude Oil rate remains the disruption of energy supplies to Europe. The International Energy Agency (IEA) has estimated that gas consumption in the countries of the region will decrease by 10% this year alone, outstripping the indicators of the largest economic crisis in 2009 and the COVID-19 pandemic in 2020. Of course, fuel shortages, as well as a complete restructuring of supply chains, will put pressure on oil prices for a long time. Against this background, one can assume that in the long term the quotes of the trading instrument will correct to the level of 95.50, in the area of which the further direction of quotes will be determined.
The long-term trend is downward, but at the moment a correction is developing with the target at 95.5. If the âbearsâ hold this level, the decline will continue to the area of 89. Otherwise, growth to 104 can be expected.
The midterm trend remains downtrend. Now the price is moving towards the key resistance at 92.77â91.92, after the test of which it is worth considering new short positions with a target at the September low of 83.50. If the resistance of 92.77â91.92 is broken upwards, then the trend will change to an upward one, and in this case, it is worth moving on to looking for long positions with the target of 101.27â100.42.
Resistance levels: 95.5, 104 | Support levels: 88, 83.5
ETHUSD - Trading within the mid-term descending channel
This week, the quotes are trying to test the upper limit of the channel, but so far they are being held back by the middle line of the Bollinger Bands. If the price consolidates above the level of 1375, the growth may continue to the levels of 1450.00 (Fibo retracement 50.0%), 1500 (Murray [4/8]) and 1575 (Fibo retracement 38.2%), otherwise it is likely that the downward dynamics will resume and the price will return to the lower limit of the 1250 range, as well as the continuation of the movement of cryptocurrency quotes to the levels of 1125 (Murray [1/8]), 1000 (Murray [0/8]).
Despite the temporary consolidation of prices, the downward trend in the ETHUSD pair persists, which is confirmed by the downward reversal of the Bollinger Bands, however, the upward movement of the Stochastic and shrinking of the MACD histogram in the negative zone do not exclude the development of an upward correction, but its potential is seen to be limited.
On the four-hour chart, below the level of 0.9943, there is a formation of a âbearishâ Hanging Man pattern, which signals that the asset has reached a local top and warns of a reversal. In addition, the Three Black Crows trend continuation pattern, which included the Bearish Marubozu, indicates that buyers failed to restore the price to previous highs, so at the moment there are prevailing âbearishâ sentiments in the instrument. In this situation, a decrease in the quotes of the USD/CHF pair to the support level of 0.9742, consolidation below which will allow sellers to head to the zone of 0.9625â0.9500, is a more likely scenario. An alternative scenario is possible if the âbullsâ successfully overcome the resistance level of 0.9846, and then the price may recover to the range of 0.9943â1.0064.
D1
A Double Top reversal pattern appeared on the daily chart, and the quotes of the trading instrument fell to the Neck area. Completion of the construction of this model should occur at the level of 0.9500. In addition, at 0.9943, there is an appearance of the Evening Star candlestick analysis pattern, which formed the first top, as well as the Bearish Marubozu pattern, which signals the predominance of sellers. Continuation of the downtrend to the support level of 0.9742 is the most likely scenario at the moment, after which the quotes may continue to move towards the area of 0.9625â0.9500.
The pressure on the position of the instrument is exerted by weak macroeconomic statistics, which allowed investors to revise their forecasts regarding the pace of further tightening of monetary policy by the US Federal Reserve. In particular, market participants drew attention to the rapid drop in the Manufacturing PMI from 52.8 points to 50.9 points, against a forecast of 52.2 points, according to the Institute for Supply Management (ISM). The negative background intensified today, when a zero trend in the volume of manufacturing orders in the US was recorded in August after falling by 1% in the previous month, although analysts expected a value of 0.3%. JOLTS Job Openings in August also adjusted from 11.17 million to 10.053 million.
On Wednesday, the market will focus on Automatic Data Processingâs (ADP) private sector employment report, as well as the Institute for Supply Managementâs (ISM) September data set on US service sector business activity. Canada will publish statistics on International Merchandise Trade for August.
Bank of Canada Governor Tiff Macklem said that high inflation requires policymakers to take decisive action, so officials will continue to raise interest rates despite the fact that the regulator has faced public criticism for increasing the cost of borrowing at a time when many Canadians can hardly afford the goods of the first need. Officials have adjusted the interest rate by 300 basis points in just six months, trying to return inflation to the target level of 2.0%. It is worth noting the effectiveness of the measures taken: in September, the figure fell from 8.1% to 7.0%.
Crude Oil - Upward correction ahead of the OPEC+ meeting
According to sources within the organization, during the meeting, a decision may be made to reduce the production of âblack goldâ by 1.0 million barrels to stabilize prices. Larger production adjustments than previously expected will be an indicator of producersâ concern about the rapid slowdown in the global economy in the face of active tightening of monetary policy by leading central banks. A number of experts believe that a consistent increase in interest rates carries the risk of a contraction in the economy in the future. These fears led to the most rapid drop in oil prices since the start of the coronavirus pandemic in early 2020, forcing OPEC+ to think about ways to stabilize the market. Any move by the cartel to raise prices could put additional pressure on Western consumers, who are under unprecedented pressure amid the energy crisis.
The long-term trend is downward, but at the moment a correction is developing with the target at 95.50. If the âbearsâ hold this level, the decline will continue to the area of 89.00. Otherwise, growth to 104.00 can be expected.
The midterm trend remains downtrend. Now the price is moving towards the key resistance at 92.77â91.92, after the test of which it is worth considering new short positions with a target at the September low of 83.50. If the resistance of 92.77â91.92 is broken upwards, then the trend will change to an upward one, and in this case, it is worth moving on to looking for long positions with the target of 101.27â100.42.
Resistance levels: 95.5, 104 | Support levels: 88, 83.5
The pound quotes are supported by the partial cancellation of the governmentâs plan to reduce the fiscal burden, which was negatively perceived by the market due to the high probability of an increase in inflation and public debt. Earlier in the week, the Treasury Department announced that it would not cut the income tax rate for wealthy citizens from 45% to 40%, and investors hope that other reliefs under the reform can be adjusted. However, todayâs GBPUSD growth may be interrupted, as data on business activity in the UKâs key Services sector may turn out to be weak. It is expected that in September the indicator will decrease from 50.9 points to 49.2 points and for the first time since the beginning of 2021 will be in the stagnation zone.
The price of the trading instrument is close to 1.15 (Fibonacci retracement 23.6%), fixing above which will give the prospect of further growth to the levels of 1.1718 (Murray [8/8]) and 1.2020 (Fibonacci retracement 38.2%). The key for the âbearsâ is the level of 1.1230 (Murray [7/8]), supported by the center line of Bollinger Bands, the breakdown of which will allow quotes to resume movement to the area of 1.0742 (Murray [6/8]), 1.05.
This week, cryptocurrency quotes are actively adding in value, heading above the key level for the âbullsâ of 0.4883 (Murray [2/8]) with subsequent targets at 0.5219 (Fibo retracement 38.2%) and 0.5548 (the area of September highs). The key for the âbearsâ is the support level of 0.4395 (Fibo retracement 23.6%, Murray [1/8], the middle line of the Bollinger Bands), the breakdown of which will be a catalyst for the development of downward dynamics to the levels of 0.3906 (Murray [0/8]) and 0.3418 (Murray [-1/8]), however, at the moment this option price movements seem less likely.
Technical indicators point out the continuation of the short-term upward trend: the Bollinger Bands and the Stochastic are reversing upwards, the MACD histogram is stable in the positive zone.
NZDUSD - RBNZ raises interest rate to a seven-year high
The New Zealand dollar shows a moderate increase during the Asian session, testing 0.5800 for a breakout. The NZDUSD pair renews its local highs from September 23 amid reduced activity in the market, as traders are in no hurry to open new trading positions, waiting for the publication of an extensive block of US macroeconomic statistics on the labor market for September and hoping to receive new signals regarding the pace of further tightening of monetary policy by the US Federal Reserve.
Meanwhile, the Reserve Bank of New Zealand (RBNZ) held a meeting on Wednesday, following which, as expected, the interest rate was raised by 50 basis points to 3.5%, which was the eighth adjustment of the monetary tightening cycle that started a year ago and the highest rate in the last seven years. According to the RBNZ Governor Adrian Orr, the âhawkishâ course allows maintaining price stability and contributes to the most sustainable employment. The market estimates the probability of an interest rate increase by another 50 basis points at the next meeting of the Reserve Bank of New Zealand in November to be more than 60%, and by May the value could reach 4.5%. It is worth noting that the decision of the financial authorities somewhat disappointed the traders, who were counting on the easing of pressure from the leading central banks. The day before, the Reserve Bank of Australia raised interest rates by only 0.25%, while the market expected a correction of 50 basis points. In an accompanying statement, agency officials noted that an increase of 0.25% is necessary to assess the effectiveness of measures already taken to combat inflation.
The long-term trend is downward. At the end of September, a correction began in the asset, within which the traders reached the resistance level of 1.1450. If it is held by the âbearsâ, the decline will continue to the levels of 1.06, 1.03.
The medium-term trend is upward. As part of the trend, the traders reached the target zone 3 (1.1391â1.1355), but failed to break through it, and now the price is correcting down to the key trend support 1.1087â1.1046. After reaching this area, it is worth considering medium-term long positions with the target at the weekly high of 1.1490.
Resistance levels: 1.1450, 1.1695, 1.177 | Support levels: 1.06, 1.03
