Forex Analysis – September 29, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Down-trending. End of the trend?

AUDUSD 1 Hour Chart

As suggested in our last analysis, price found resistance around the bearish channel resistance area and shorter-term moving average.

AUDUSD has been down-trending. Recent price action has been bullish though and has formed a higher swing high, so the downtrend could becoming to an end. The moving averages are signalling market indecision – they are tightening and moving sideways. But AUDUSD is still down-trending on higher time-frames, so price could become bearish again.

Trading opportunities may exist around the moving averages, around the support and resistance areas of the previous bearish channel and around the horizontal levels at 0.6365, 0.6440, 0.6525, 0.6580 and 0.6670.

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

EURGBP 1 Hour Chart

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

EURGBP was up-trending but is now looking indecisive. The moving averages are tight and moving sideways – confirming the current indecision – but price continues to uptrend on higher time-frames. The EURGBP is currently ranging between 0.8885 and 0.9040.

Trading opportunities could 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 may find resistance around 0.9190. A break to the downside may find support around 0.8780 and 0.8715.

FOREX ANALYSIS: EURUSD – Down-trending. End of the trend?

EURUSD 1 Hour Chart

As suggested in our previous analysis, EURUSD found resistance around the trend resistance area and shorter-term moving average.

Price has since been bullish. The EURUSD has swung above the trend resistance area and has formed a higher swing high, so downside momentum could be weakening – the downtrend could be over. The moving averages are tightening and moving sideways, suggesting market indecision.

Trading opportunities may exist around the moving averages and around any of the horizontal levels at 0.9540, 0.9650, 0.9745, 0.9815 and 0.9880.

FOREX ANALYSIS: GBPUSD – Down-trending but currently indecisive

GBPUSD 1 Hour Chart

GBPUSD has been moving sideways, as suggested in our previous Forex analysis.

Price is down-trending but is currently indecisive and ranging between 1.0580 and 1.0900. The moving averages confirm the market indecision – they are tightening and are moving sideways. GBPUSD continues to downtrend on higher time-frames.

Trading opportunities could 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 downside may find support around 1.0390. A break to the upside may find resistance around 1.1220.

FOREX ANALYSIS: USDCAD – Up-trending. End of the trend?

USDCAD 1 Hour Chart

Price has been moving sideways.

The USDCAD is up-trending but recent price action has been moving sideways, so USDCAD could become indecisive. The moving averages confirm this – they are tightening and moving sideways. Price has swung below the recent bullish channel support area, signalling that upside momentum could be weakening – the downtrend could becoming to an end. But the USDCAD does continue to uptrend on higher time-frames.

Trading opportunities may exist around the moving averages, around the previous support area of the bullish channel and around any of the horizontal levels at 1.3425, 1.3540, 1.3605 and 1.3800.

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

USDCHF 1 Hour Chart

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

The USDCHF is up-trending but recent price action has been bearish and is overall looking indecisive. The moving averages confirm the current indecision – they are tightening and are moving sideways. Price has swung below a key support area and is below the moving sideways, suggesting that upside momentum may be weakening, so the uptrend may becoming to an end.

Trading opportunities could exist around the moving averages and around any of the horizontal levels at 0.9620, 0.9685, 0.9865 and 0.9965.

FOREX ANALYSIS: USDJPY – Indecision

USDJPY 1 Hour Chart

The USDJPY has been moving sideways, as suggested in yesterday’s Forex analysis.

Price is indecisive and is lacking trend direction. But the moving averages are currently bullish, suggesting potential upside. USDJPY is moving within a large range at 140.70-145.75.

Trading opportunities may exist around the moving averages and around any of the horizontal levels at 140.70, 141.65, 142.60, 142.75, 143.70, 143.95, 144.85 and 145.75.

METAL ANALYSIS: XAUUSD – Down-trending. End of the trend?

XAUUSD 1 Hour Chart

GOLD has been bullish.

Price is down-trending but recent price action has formed a higher swing high and is above the moving averages, so XAUUSD may become bullish – the downtrend may becoming to an end. The moving averages are tightening and moving sideways, signalling market indecision.

Trading opportunities could exist around the moving averages and around any of the horizontal levels at 1616, 1622, 1639, 1662 and 1686.

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

1230 UTC – CAD – GDP
1300 UTC – NZD – RBNZ 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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