Forex Analysis – September 22, 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 – Down-trending
As suggested in our previous chart analysis, the AUDUSD has been bearish and has swung lower.
Price is down-trending and is currently forming a swing lower. The moving averages are bearish and widening, so the downtrend may continue. AUDUSD is down-trending on higher time-frames too.
Opportunities to go short could exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 0.6670, 0.6730 and 0.6770.
FOREX ANALYSIS: EURGBP – Up-trending
The EURGBP has reversed around 0.8715, as suggested in our previous analysis.
Price is clearly up-trending. EURGBP is currently in a retrace move and testing moving averages. The moving averages have crossed bearish and price is below the moving averages, so upside momentum could be weakening – EURGBP could struggle to swing higher.
Opportunities to go long may exist around the trend support area and around any of the horizontal levels at 0.8715, 0.8705, 0.8685 and 0.8655. A bullish move could be rejected or reverse around the moving averages and around the horizontal resistance levels at 0.8765 and 0.8785.
FOREX ANALYSIS: EURUSD – Down-trending
As suggested in yesterday’s Forex analysis, price has been bearish.
The EURUSD is below the recent consolidation area and is forming a swing lower, so price may be down-trending again. The moving averages confirm the trend – they are bearish and widening. EURUSD is also down-trending on higher time-frames.
Shorting opportunities could exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 0.9875, 0.9955, 0.9970 and 1.0035.
FOREX ANALYSIS: GBPUSD – Down-trending. Time for a retrace move?
Price has been bearish and has swung lower, as suggested in yesterday’s analysis.
The GBPUSD is clearly down-trending and is forming a swing lower. The moving averages are bearish and steady, so the downtrend may continue. Fundamentals suggest that the trend will continue but price is starting to look oversold, so there could be some temporary upside.
Selling opportunities may exist around the moving averages, around the trend resistance area and around the horizontal levels at 1.1355, 1.1460 and 1.1480.
FOREX ANALYSIS: USDCAD – Up-trending
As suggested in our last Forex chart analysis, USDCAD has been bullish and has swung higher.
Price is up-trending. USDCAD is currently forming a large swing higher. The moving averages are bullish and widening, so the uptrend may continue. Price is up-trending on higher time-frames also.
Long opportunities could exist around any of the key Fib levels, around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.3360, 1.3320 and 1.3245.
FOREX ANALYSIS: USDCHF – Up-trending
USDCHF has been bullish, as suggested in our last analysis.
Price was indecisive for a while but is now clearly up-trending. The moving averages are slightly bullish, signalling that the uptrend could continue. The USDCHF is up-trending on higher time-frames.
Buying opportunities may exist around the moving averages and around the horizontal levels at 0.9765, 0.9685 and 0.9620. A bullish move could stall or reverse around any of the horizontal levels at 0.9785, 0.9840 and 0.9860.
FOREX ANALYSIS: USDJPY – Up-trending
As suggested in our previous analysis, USDJPY moved above the range resistance area and has since been bullish.
USDJPY is above the recent range consolidation area and is forming a swing higher, so price may start up-trending again. The moving averages confirm the trend – they are bullish and widening. Price action has formed a potential large bullish channel.
Opportunities to go long could exist around the dynamic support of the moving averages, around the bullish channel support area and around the horizontal levels at 143.70 and 142.60. A bullish move may find resistance around 144.95 and 145.75.
METAL ANALYSIS: XAUUSD – Ranging
GOLD has been moving sideways, as suggested in our previous Forex analysis.
Price was down-trending but is currently indecisive. XAUUSD has formed a range at 1655-1686. The moving averages confirm the market indecision – they are tight and crossing frequently.
Trading opportunities may exist around the support and resistance areas of the range and if price moves out of the range (break-out trade). A break to the upside could find resistance around 1692 and 1706.
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
0730 UTC – CHF – SNB rate announcement
0800 UTC – CHF – SNB press conference
1100 UTC – GBP – BOE rate announcement
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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