Forex Analysis – September 26, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Down-trending
As suggested in Friday’s chart analysis, the AUDUSD has been bearish and has swung lower.
Price is clearly down-trending and is currently forming a swing lower. The moving averages are bearish and steady, so the downtrend may continue. AUDUSD is also down-trending on higher time-frames.
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 0.6580 and 0.6670.
FOREX ANALYSIS: EURGBP – Up-trending
The EURGBP has been bullish and has swung higher, as suggested in Friday’s analysis.
Price has formed a very large bullish move and is now in a retrace move. EURGBP is clearly up-trending but price is looking overbought, suggesting that the EURGBP could struggle to swing higher. The moving averages are bullish and widening though, so the uptrend could continue.
Opportunities to go long may exist around any of the key Fib levels and around the dynamic support of the moving averages. A bullish move could find resistance around the recent highs at 0.9190.
FOREX ANALYSIS: EURUSD – Down-trending
As suggested in our last Forex analysis, price has been bearish.
The EURUSD is clearly down-trending and is forming a swing lower. The moving averages are bearish and steady, so the downtrend may continue. Price is also down-trending on higher time-frames.
Shorting opportunities could exist around any of the key Fib levels, around the bearish moving averages and around the horizontal levels at 0.9815 and 0.9880. A bearish move may find support around the recent lows at 0.9570.
FOREX ANALYSIS: GBPUSD – Down-trending
Price has been bearish, as suggested in our last analysis.
The GBPUSD is down-trending and is currently in a retrace move. Price action has recently formed a large bearish move and the moving averages are bearish and widening, signalling that the downside direction could continue. GBPUSD is starting to look oversold though, so price could struggle to swing lower.
Selling opportunities may exist around any of the key Fib levels and around the bearish moving averages. A bearish move could stall or reverse around the recent swing low at 1.0390.
FOREX ANALYSIS: USDCAD – Up-trending
As suggested in our previous Forex chart analysis, USDCAD has been bullish and has swung higher.
Price continues to uptrend and is currently in a slight retrace move. The moving averages are bullish and steady, so the uptrend may continue. The USDCAD is up-trending on higher time-frames.
Long opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.3540, 1.3425 and 1.3320. A bullish move may be rejected or reverse around the recent swing high at 1.3630.
FOREX ANALYSIS: USDCHF – Up-trending
USDCHF has been bullish, as suggested in our previous analysis.
Price is up-trending. The USDCHF is currently in a retrace move. The moving averages suggest that the uptrend could continue, they are bullish and widening. Price is also up-trending on higher time-frames.
Buying opportunities may exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 0.9815, 0.9760 and 0.9685.
FOREX ANALYSIS: USDJPY – Indecision
USDJPY has been bullish.
Price is looking indecisive and is ranging between 140.70 and 145.75. The moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. USDJPY is still up-trending on higher time-frames, so price may attempt a move higher.
Trading opportunities could exist around the support and resistance areas of the range, around the moving averages and around the horizontal levels at 141.65, 142.60, 142.75 and 144.95.
METAL ANALYSIS: XAUUSD – Down-trending
As suggested in Friday’s analysis, price closed below the range support area and has since been bearish.
XAUUSD is down-trending and is currently in a retrace move after forming a swing lower. The moving averages are bearish and steady, suggesting that the downtrend could continue. Price is also down-trending on higher time-frames.
Selling opportunities may exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 1655, 1686 and 1692.
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 European government interventions with energy prices may help to reduce rising inflation.
Ukraine has taken significant ground from Russia.
The BOJ has started intervening in the FX markets, in an attempt to strengthen the Yen.
The Dollar continues to be king.
GBP crashes to record lows
Today’s Major Scheduled News
1300 UTC – EUR – ECB speech
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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