Forex Analysis – September 28, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Down-trending

AUDUSD 1 Hour Chart

As suggested in yesterday’s chart analysis, the AUDUSD reversed around the shorter-term moving average and has since been bearish.

Price is clearly down-trending and is currently forming a swing lower. Price action has formed a bearish channel and the moving averages are bearish and widening, so the downtrend may continue. AUDUSD continues to downtrend on higher time-frames also.

Opportunities to go short could exist around the moving averages, around the bearish channel support resistance area and around the horizontal levels at 0.6440, 0.6500, 0.6580 and 0.6670. A bearish move may stall or reverse around the bearish channel support area.

FOREX ANALYSIS: EURGBP – Up-trending. Market indecision?

EURGBP 1 Hour Chart

The EURGBP has been moving sideways.

Price is up-trending but is currently in a retrace move and is moving sideways. EURGBP is potential ranging between 0.8885 and 0.9005. The moving averages are tightening and starting to move sideways, so price could become indecisive.

Trading opportunities may exist around the support and resistance areas of the range and if the EURGBP moves out of the range (break-out trade). A break to the upside could find resistance around 0.9190. A break to the downside could find support around 0.8780 and 0.8715.

FOREX ANALYSIS: EURUSD – Down-trending

EURUSD 1 Hour Chart

As suggested in yesterday’s analysis, price found resistance around the shorter-term moving average and has swung lower.

The EURUSD is down-trending and is currently forming a swing lower. The moving averages are bearish and steady, so the downtrend may continue. Price continues to downtrend 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 0.9570, 0.9600, 0.9685 and 0.9815.

FOREX ANALYSIS: GBPUSD – Down-trending. Possible indecision?

GBPUSD 1 Hour Chart

Price has been moving sideways, as suggested in our last Forex chart analysis.

The GBPUSD is down-trending but is currently in a sideways retrace move, signalling market indecision. The moving averages confirm the current indecision – they are tightening and starting to move sideways, so price may continue to move sideways. GBPUSD continues to downtrend on higher time-frames.

Selling opportunities may exist around the moving averages and around the horizontal levels at 1.0810 and 1.0880. A bearish move could find support around 1.0390.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD 1 Hour Chart

As suggested in our last Forex analysis, USDCAD reversed around the shorter-term moving average and has swung higher.

Price is clearly up-trending and is currently forming a swing higher. The USDCAD is trending within a clear bullish channel. The moving averages are bullish and steady, so the uptrend may continue.

Opportunities to go long could exist around the bullish moving averages, around the bullish channel support area and around the horizontal levels at 1.3765, 1.3660, 1.3540 and 1.3425.

FOREX ANALYSIS: USDCHF – Up-trending. Possible indecision?

USDCHF 1 Hour Chart

USDCHF has been bullish and is currently finding resistance around 0.9965, as suggested in our previous analysis.

Price is up-trending and is currently testing recent highs. The moving averages are bullish and steady, suggesting that the uptrend could continue, but USDCHF is currently struggling to swing higher, signalling that upside momentum could be weakening – the uptrend could become to an end. Price may form a bearish move or become indecisive.

Long opportunities may exist around the dynamic support of the moving averages and around the horizontal levels at 0.9860, 0.9815 and 0.9760. A bullish move could reverse around 0.9965.

FOREX ANALYSIS: USDJPY – Indecision

USDJPY 1 Hour Chart

As suggested in our previous chart analysis, USDJPY has been moving sideways.

Price is indecisive and is moving within a large range at 140.70-145.75. The moving averages confirm the market indecision – they have been crossing frequently. USDJPY may suddenly become bearish due to Bank of Japan intervention.

Trading opportunities could exist around the moving averages and around the horizontal levels at 140.70, 141.65, 142.60, 142.75, 143.70, 144.30, 144.95 and 145.75.

METAL ANALYSIS: XAUUSD – Down-trending

XAUUSD 1 Hour Chart

GOLD reversed around the shorter-term moving average and has since been bearish, as suggested in yesterday’s analysis.

Price is down-trending. XAUUSD is currently attempting a move lower. The moving averages are bearish and steady, so the downtrend could continue.

Shorting opportunities may exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 1622, 1639, 1647 and 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 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

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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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