Forex Analysis – September 19, 2022


Our previous Forex analysis can be viewed here… Click here. Technical analysis and fundamental analysis of the Forex markets is available below…

Technical Analysis

FOREX ANALYSIS: AUDUSD – Market Indecision. Potential downside?

AUDUSD Forex analysis
AUDUSD 1 Hour Chart

As suggested in Friday’s analysis, price has been moving sideways.

AUDUSD continues to be indecisive and lack trend direction. Price is still below the recent consolidation area though, so AUDUSD could attempt a bearish move lower. The moving averages confirm the possible downside – they are bearish and steady.

Selling opportunities may exist around the dynamic resistance of the moving averages and around the horizontal levels at 0.6730, 0.6770 and 0.6825. A bearish move could find support around the recent lows at 0.6670.

FOREX ANALYSIS: EURGBP – Up-trending

EURGBP technical analysis
EURGBP 1 Hour Chart

Price has been bullish and has formed a swing higher, as suggested in Friday’s chart analysis.

EURGBP is clearly up-trending and is currently in a retrace. The moving averages are bullish and widening, so the uptrend may continue. Price is indecisive on higher time-frames.

Buying opportunities could exist around the bullish moving averages, around the trend support area and around the horizontal levels at 0.8715, 0.8705, 0.8685 and 0.8655. A bullish move may stall or reverse around the recent swing high at 0.8780.

FOREX ANALYSIS: EURUSD – Indecision

EURUSD Forex analysis
EURUSD 1 Hour Chart

As suggested in our last analysis, EURUSD has been moving sideways.

Price continues to be indecisive and lack trend momentum. EURUSD was ranging between 0.9960-1.0010 but is now ranging between 0.9950-1.0030. The moving averages confirm the current indecision – they are tightening and are moving sideways.

Trading opportunities may exist around the support and resistance areas of the range and if the EURUSD moves out of the range (break-out trade). A break to the upside could find resistance around 1.0065 and 1.0110. A break to the downside could find support around 0.9915 and 0.9875.

FOREX ANALYSIS: GBPUSD – Down-trending

GBPUSD price action analysis
GBPUSD 1 Hour Chart

GBPUSD has been bearish, as suggested in our last Forex chart analysis.

Price was indecisive but is now down-trending again. The moving averages are bearish and steady, so the downtrend may continue. But GBPUSD is around key support on higher time-frames (lows from 1985), so price may become bullish.

Shorting opportunities could exist around the moving averages and around the horizontal levels at 1.1410, 1.1450, 1.1480, 1.1580 and 1.1600. A bearish move find support around the recent swing low at 1.1370.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD price chart
USDCAD 1 Hour Chart

As suggested in our previous Forex analysis, price has been bullish.

The USDCAD is up-trending. Price is currently attempting to swing higher. The moving averages are bullish and steady and USDCAD is up-trending on higher time-frames, so the upside direction could continue.

Long opportunities may exist around the dynamic support of the moving averages and around any of the horizontal levels at 1.3255, 1.3200 and 1.3140. Price could find resistance around the recent highs at 1.3305.

FOREX ANALYSIS: USDCHF – Uptrend?

USDCHF price chart
USDCHF 1 Hour Chart

Price has been bullish, as suggested in our previous chart analysis.

The USDCHF has formed a short series of higher swing highs and higher swing lows, signalling a potential uptrend. The moving averages confirm this – they are bullish and steady. Price is also clearly up-trending on higher time-frames.

Opportunities to go long could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 0.9635 and 0.9555. A bullish move may be rejected or reverse around any of the horizontal levels at 0.9700, 0.9725, 0.9750, 0.9765 and 0.9785.

FOREX ANALYSIS: USDJPY – Ranging

USDJPY Forex chart
USDJPY 1 Hour Chart

As suggested in Friday’s analysis, the USDJPY has been moving sideways.

Price continues to be indecisive and range between 141.65-144.95. The moving averages are tight and crossing frequently, so the market indecision could continue. But the USDJPY is up-trending on higher time-frames, signalling that price could become bullish.

Trading opportunities may exist around the support and resistance areas of the range and if price moves out of the range (break-out trade).

METAL ANALYSIS: XAUUSD – Down-trending

GOLD chart
XAUUSD 1 Hour Chart

GOLD reversed around the shorter-term moving average and has since been bearish, as suggested in our last Forex analysis.

Price is down-trending and is currently attempting a move to recent lows. The moving averages suggest that the downtrend may continue – they are bearish and widening. GOLD recently closed below key support on higher time-frames, so the downtrend may continue long-term.

Opportunities to go short could exist around the dynamic resistance of the moving averages and around the horizontal levels at 1678, 1692, 1706 and 1712. A bearish move may be rejected or reverse around the recent swing low at 1655.

Fundamental Analysis

Key Analysis

Global inflation, a European energy crisis, the war in Ukraine and the possibility of a 2023 global recession are driving the markets.

Recent government interventions with energy prices may help to reduce rising inflation.

Ukraine has taken significant ground from Russia.

The BOJ may intervene in the markets to strengthen the Yen.

The Dollar continues to be king.

Today’s Major Scheduled News

0130 UTC – AUD – Monetary Policy Meeting Minutes

Interest Rate Analysis

A summary of recent central bank rate changes and statements…

Australia (AUD)

The Reserve Bank of Australia (RBA) has increased rates again, by another 0.50% to 2.35% – the third consecutive 50-bps hike. The rate increases throughout 2022 have been to tackle rising inflation. The RBA have stated that the economic outlook is cloudy, due to inflation, the war in Ukraine and China’s anti-COVID measures, so the RBA will respond when necessary to tackle inflation and stabilise the Australian economy.

The RBA recently mentioned that there may be no more need for large rate hikes, so future rate hikes could be much lower (5-15 bps).

Canada (CAD)

The Bank of Canada (BOC) has raised it’s interest rate by an entire percent, increasing the official bank rate to 2.5%. The BOC have announced that further hikes are expected to tackle rising inflation.

Euro Area (EUR)

The European Central Bank (ECB)has increased it’s rates by 0.50%, bringing the official rate to 0.75%. Further rate hikes could happen, due to rising inflation.

Japan (JPY)

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The Japanese economy is making a steady but moderate recovery from the COVID crisis but not as great as initially thought – inflation and a resurgence of COVID cases are weighing on the Japanese economy.

Switzerland (CHF)

The Swiss National Bank (SNB) have hiked rates by 0.50%, bringing the official rate to -0.25% – interest rates still being negative. The SNB did not rule out further rate hikes in future or the possibility of intervening in foreign exchange markets. The rate increase is to tackle rising inflation.

United Kingdom (GBP)

The Bank of England (BOE) have increased it’s official bank rate again. This time by 0.50% – it’s biggest rate increase since 1995! The official rate is now set to 1.75%. This is the 6th consecutive rate hike by the BOE. Further rate hikes are expected. The BOE has announced a potential recession by the end of 2022, which could last throughout 2023.

United States (USD)

The Federal Reserve has raised the official funds rate by an additional 0.75% – it’s fourth rate hike in 2022. The rate is currently now set at 2.5%. The increase in rates is to tackle rising inflation. The Fed currently plan to increase rates further – economists expecting a rate of around 3.25% by the end of 2022.

The recent US CPI figure indicates that the Fed could do another large rate hike.

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