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USDJPY - Bank of Japan started foreign exchange interventions

The Bank of Japan conducted the first foreign exchange intervention since 1998 to support the yen after the decision to keep interest rates at a very low level of –0.10%. Its value is unknown but judging by the movement on the stock exchange, it was a test operation to determine the “depth” of the market, but more serious steps may follow from the financial authorities, which will provoke new pressure on the USD/JPY pair. It is obvious that the key point for making a decision will be 145.00, upon reaching which the officials are likely to approve new interventions. It is quite logical that in the current situation, macroeconomic statistics faded into the background, but this morning, Service PMI in Japan was published, which in September rose to 51.9 points after three months of decline in a row.

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The trading instrument is moving within the global uptrend, holding near the high of the year, around 145.9. Technical indicators keep a stable buy signal: the range of fluctuations of the EMA on the Alligator indicator is directed upwards, and the histogram of the AO oscillator forms bars well above the transition level.

Resistance levels: 144.55, 145.9 | Support levels: 142.30, 140.33
 

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EURUSD - A fall is possible.

On the daily chart, the downward wave of the higher level А develops, within which the fifth wave (5) of А forms. Now, the fifth wave of the lower level 5 of (5) is developing, within which the third wave iii of 5 of (5) is forming. 

If the assumption is correct, the EURUSD pair will fall to the area of 0.9470 – 0.9300. In this scenario, critical stop loss level is 0.9904.

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USDCAD - The trend in the pair has changed upwards

Statistics Canada published a report on retail sales, which reflected negative dynamics in nine out of eleven sectors, and in general, in July, the figure fell by 2.5% to 61.3B dollars (for the first time since the beginning of the year). Gasoline prices fell the most (by 14.2%), while demand for new cars was corrected by -0.6% and used cars by –1.7%. This week, no more important macroeconomic data from Canada will be released, so the USDCAD pair will continue to be under the full control of the US currency.

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On the daily chart of the asset, there is an upward trend: the range of fluctuations of the EMA on the Alligator indicator expands upwards, and the histogram of the AO oscillator forms ascending bars in the buying zone.

Resistance levels: 1.374, 1.39 | Support levels: 1.36, 1.34
 

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Crude Oil - US strategic oil stock hits 1984 low

The dynamics of the asset are affected by the continued release of oil from US reserve storage facilities. As noted in The Wall Street Journal, energy stocks fell last week to a minimum since 1984, reaching 427.0M barrels, and fell below commercial reserves held by US firms, which raises fears of experts ahead of the entry into force of the ban. for the import of Russian "black gold" by the EU countries from December 5. According to preliminary estimates, the market may lose up to 1.0M barrels per day, which will lead to a sharp increase in prices and have nothing to compensate for.

Despite the fall in quotations, the demand for contracts from investors continues to rise for the third week, reaching a value of 239.9K against 227.1K a week earlier. Such values were last recorded in 2016, during the first serious decline in oil prices to levels around 30 – 40 dollars per barrel, and at the current level of demand, there is no increase in asset quotes expected.

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On the daily chart of the asset, the price is moving within a downwards corridor, declining towards the support line. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator are below the signal line and move away from it, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 85.5, 92 | Support levels: 82.4, 76.8
 

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Crude Oil - "black gold" remains under pressure

Pressure on quotes is exerted by growing fears of a global recession, which are confirmed in macroeconomic publications and comments by official representatives of monetary regulators. In addition, investors are concerned about possible disruptions in oil supplies from Russia, as the country is under sanctions pressure, and the geopolitical risks associated with the escalation of the military conflict in Ukraine are only intensifying. Finally, the fact of the continued release of the energy carrier from the US reserve storage facilities contributes to the decline in "black gold", which leads to a short-term increase in supply on the market. Inventories fell to a 1984 low last week to 427.0 million barrels, according to The Wall Street Journal. In addition, on Monday, the Organization for Economic Cooperation and Development lowered its forecasts for global economic growth: this year it may still be 3.0%, but next year it will drop to 2.2% instead of the 2.8% previously expected.

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The American Petroleum Institute (API) report released the day before pointed to an increase in reserves by 4.15 million barrels. For the last reporting week, the report showed an increase in the indicator by 1.035 million barrels. Today, investors are waiting for the publication of similar data from the Energy Information Administration of the US Department of Energy (EIA).

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On the daily chart, Bollinger Bands are steadily declining. The price range expands from below, making way for new local lows for the "bears". MACD is preserving a weak sell signal (located below the signal line). Stochastic, having reached the zero level, reversed into the horizontal plane, indicating risks of the oversold instrument in the ultra-short term.

Resistance levels: 78, 79.24, 81, 83 | Support levels: 76, 74, 73, 72
 

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EURUSD - US dollar continues a record growth

The cost of gas to consumers could rise by 60% in the fourth quarter, with a new high for electricity at 66.6 cents per kilowatt-hour, up 25.0 cents from the previous quarter, according to forecasts by Italian analyst Nomisma Energia. The supply of "blue fuel" from Russia was again under threat after reports were received of the destruction of three strings of gas pipelines of the Nord Stream system near the Danish island of Bornholm. According to representatives of Nord Stream AG, which is the operator of the project, critical damage has been recorded, the timing of the repair of which is still unknown. Meanwhile, experts predict a slowdown in the Gross Domestic Product (GDP) of Italy at least by two times, and the inflation rate is expected to be around 10.0%. Last month, energy prices in the country rose by 44.9% compared to 42.9% a month earlier, food prices rose by 10.5%, and durable goods by 3.9%. The Italian authorities have already allocated more than 50.0 billion euros to stabilize the economic situation, but it is obvious that this is not enough.

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The trading instrument is traded within the global downward channel and has almost reached the support line. Technical indicators continue holding a sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram is forming new bars, being in the sell zone.

Support levels: 0.948, 0.93 | Resistance levels: 0.967, 0.986
 

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USDJPY - The trading instrument is preparing to continue growing

The quotes are supported by the "hawkish" policy of the US Fed, aimed at combating inflation, which has reached 40-year peaks. Despite the fact that in August there was a slight decrease in the indicator from 8.5% to 8.3% in annual terms, officials intend to follow the course of tightening monetary incentives. In yesterday's speech, the head of the Federal Reserve Bank (FRB) of St. Louis, James Bullard, stated the need for a consistent increase in the interest rate, stressing that the US Fed is already losing the confidence of investors and citizens due to the inability to overcome high inflation. He noted that the peak rate is possible at the level of 4.5%, after which it will remain high for some time to manifest an economic effect. In turn, the president of the Federal Reserve Bank (FRB) of San Francisco, Mary Daly, stated the need to reduce excessive demand, which only acts as a driver of consumer price growth.

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The long-term trend is upward. After the correction to the level of 141.9, the USDJPY pair continued to grow and is currently trying to break out the resistance level of 144.8. If successful, the upward trend will continue with a target at 148.5. 

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The mid-term trend remains upward. Last week, market participants tested the key support of the trend 141.36–140.92. The zone was held, after which a new upward momentum began, the purpose of which is to update the local maximum in the area of 145.80. Then the quotes will be able to continue moving to the area of 147.77–147.29.

Resistance levels: 144.80, 148.5 | Support levels: 141.9, 139, 136
 

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EURUSD -The euro returns to declining

The European currency is falling, retreating after an active corrective growth the day before, when quotes retreated from record lows. The reason for the strengthening of the downtrend was mainly technical factors, as well as the prospect of foreign exchange interventions by regulators.
 
In turn, the news background remained quite pessimistic, which did not allow the "bulls" to develop an uptrend. In particular, Gfk Group's Consumer Confidence Index, published yesterday in Germany, corrected from -36.8 points to -42.5 points in October. In addition, the index of Economic Expectations in Switzerland in September from the Center for European Economic Research (ZEW) fell from -56.3 points to -69.2 points.
 
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The focus of investors today will be a block of data on the level of Consumer Confidence and Economic Sentiment in the euro area for September. Also, during the day statistics on the dynamics of inflation in Germany is expected to be released: the figure may accelerate sharply from 7.9% to 9.4% in September.
 
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According to Bloomberg, the EU states intend to postpone the final decision on the issue of setting a price limit for Russian "black gold". Earlier it was predicted that the amendments could be part of another package of sanctions against the Russian economy, which is likely to target specific sectors such as aviation, as well as affect the export of technologies for industry. In particular, it was not possible to obtain unanimous approval of all EU member states: among those who expressed disagreement, Bloomberg names Cyprus and Hungary. Against this backdrop, the region's authorities are discussing other sanctions policy options against Russia, which include control over the supply of diamonds and a ban on the export of certain products made from steel and wood.
 
Resistance levels: 0.97, 0.975, 0.98, 0.985 | Support levels: 0.9600, 0.9534, 0.945, 0.94
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USDCHF - Correction within the side channel

At the end of last week, the Swiss National Bank lifted the interest rate out of the negative zone. It raised it by 75 basis points, bringing it to 0.5% in response to inflation rising to 3.5%, recorded by statistics in August. Despite the measures taken, the regulator expects that the indicator will remain above 3% until the end of the year and will begin a gradual decline only in 2023. Due to high uncertainty in the global economy, officials have also adjusted their forecasts for GDP growth until the end of the year and now expect the figure to rise by 2% rather than 2.5%, as noted earlier.

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The asset's price is correcting within the lateral corridor, declining towards the lower border on the daily chart. Technical indicators hold a buy signal, which has somewhat weakened due to a downward correction: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram has formed a down bar in the buying zone.

Support levels: 0.9745, 0.962 | Resistance levels: 0.9840, 0.9965
 

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Crude Oil - Markets fear restrictions on oil imports from Russia

The quotes moved to corrective growth after it became known that the European authorities are intending to return to the issue of setting a maximum price level for the oil supply from Russia. Initially, such an initiative was not supported by all the states of the EU (Hungary and Cyprus were opposed), but yesterday, the head of the European Commission, Ursula von der Leyen, said that restrictions could appear in the new, already eighth package of sanctions against the Russian economy. The European Union also intends to limit the import of products to up to 7B euros and prohibit EU citizens from entering the management bodies of Russian companies, which is now quite common. Thus, investors fear that by December, the region will experience not only a shortage of gas, the supply of which has practically ceased after reports of the destruction of three pipelines of the Nord Stream system near the Danish Island of Bornholm but also oil due to a "mirror" response to the introduction of sanctions by official Moscow.

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On the daily chart, the price is moving within a downwards corridor, falling towards the support line. Technical indicators maintain a sell signal: fast EMAs of the Alligator indicator are below the signal line, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 89.68, 97.1 | Support levels: 82.54, 76.2
 

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DAX 40 - German stock market remains under pressure

Despite the fact that the leading stock indicators of the Eurozone showed strong growth in yesterday's trading, the German market index was able to interrupt its global decline only briefly, and now the DAX 40 is correcting down, trading at 12140.

The upward dynamics was a reaction to the rhetoric of the President of the European Central Bank (ECB) Christine Lagarde, who announced an increase in interest rates at at least three subsequent meetings of the regulator. At the same time, the GfK Group published October data on the indicator of Consumer Confidence in Germany, which is the leading indicator. The value turned out to be the worst in the history of observations, dropping to -42.5 points from -36.8 points in September, which was the main reason for the negative dynamics of the DAX 40 index.

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On the daily chart of the asset, the price is trading within the global descending channel, falling towards the support line. Technical indicators have been holding a sell signal for a long time: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO oscillator histogram, having moved into the sell zone, continues to form downward bars.

Support levels: 11850, 11200 | Resistance levels: 12400, 13060
 

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USDCAD - Two-year high update

This week, the quotes of the USDCAD pair updated the June 2020 high at 1.372 against the background of the strengthening of the USD, which was supported by the decisions of the US Fed officials to continue the tightening of monetary policy. The President of the Federal Reserve Bank of Atlanta, Raphael Bostic, believes that due to the lack of progress in reducing inflation in the USA, the regulator will have to pursue a more restrictive monetary policy, setting an interest rate in the range of 4.25% -4.5% by the end of 2022.

In addition, the correction of quotations for WTI Crude Oil to the levels of 75 - 80 dollars per barrel leads to a weakening of the Canadian currency, giving an advantage to the "bulls" in the USDCAD pair. Continuation of this trend will accelerate the upward dynamics of quotations, and one of the possible targets for purchases will be the level of 1.3870.

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The long-term trend in the USDCAD instrument remains upward: after updating the June 2020 high in the area of 1.372, the target for long trades became the mark of 1.3870, if it is broken, the quotes may rise to the area of 1.41. The RSI indicator enters the overbought zone of the market, which signals to traders about a possible correction in the medium term. Buyers of the pair should take this fact into account and focus on closing long positions as the price approaches the next resistance level.

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The mid-term trend is upward. Market participants broke out the target zone 1.3668-1.3644 this week. The next target is the zone 1.3919 – 1.3894. The key trend support is shifting to the levels 1.3606 – 1.3584. This zone was tested yesterday, which caused another wave of instrument purchases. The nearest target is the maximum of the current week in the area of 1.383.

Resistance levels: 1.387, 1.41 | Support levels: 1.36, 1.34, 1.336

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AUDUSD - The pair is consolidating near 0.65

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.
 
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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.
 
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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 world's 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.
 
Resistance levels: 0.6572, 0.665, 0.67, 0.675 | Support levels: 0.645, 0.64, 0.632, 0.625
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EURUSD - The pair is holding within the global downward channel

The situation in the region's 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 –0.6%. 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.
 
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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
 
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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 country's 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 country's 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.
 
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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 oscillator's histogram formed a new upward bar.
 
Resistance levels: 1.1250, 1.154 | Support levels: 1.1, 1.069
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USDJPY - US dollar holds near its record highs

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.
 
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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.
 
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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.
 
Resistance levels: 145, 146, 147, 148 | Support levels: 144, 142.54, 141.5, 140.78
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Gold under the pressure of the "hawkish" policy of the world's 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 "bulls" still remained under pressure. In addition, gold is still reacting negatively to the rising yields of US government bonds.

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It is likely that this week the precious metal will return to the downward plane, as the world's 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.

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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 "bearish" sentiment in the precious metals market, as XAU/USD quotes have lost 11% since the beginning of the year, which was facilitated by the "hawkish" policy of the US Federal Reserve. However, the precious metals' status as a hedge against inflation and currency depreciation keeps high demand from retail investors.

Resistance levels: 1675, 1688.58, 1700, 1720 | Support levels: 1653.92, 1640, 1620, 1600

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Crude Oil - Waiting for the OPEC+ meeting

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 “black gold” 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.

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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 "bears" 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]).

Resistance levels: 90, 93.5, 96.4 | Support levels: 87.5, 81.25, 75
 

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AUDUSD - Trade in the range of 0.639 – 0.6525

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 "bulls" failed to develop an upward impetus, forming a trading range of 0.6390–0.6525. 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.

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The mid-term trend is downward. Last week the traders broke through the target zone 3 (0.6536–0.6516), and now the area of 0.6336–0.6316 serves as a new reference point for quotes. The key resistance of the trend is shifting to the levels of 0.6561–0.6543. If this resistance is reached within the upward correction, it will be possible to consider new short positions with the first target at last week's low at 0.6368.

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Resistance levels: 0.6525, 0.67 | Support levels: 0.639, 0.626
 

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