Forex Analysis – October 06, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Indecision. Possible upside?

AUDUSD 1 Hour Chart

As suggested in our previous Forex chart analysis, the AUDUSD reversed around the diagonal support area and has since been bullish.

Price continues to be indecisive but price action is forming an ascending triangle bullish pattern, so AUDUSD may become bullish. The moving averages continue to suggest market indecision – they have been crossing frequently and are moving sideways. Price continues to downtrend on higher time-frames, signalling a possible bearish move lower.

Buying opportunities could exist around the moving averages, around the diagonal support area, if price closes above the resistance at 0.6540 and around the horizontal support levels at 0.6440, 0.6395 and 0.6365. A bullish move may be rejected or reverse around the horizontal levels at 0.6540, 0.6580 and 0.6670.

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

EURGBP 1 Hour Chart

The EURGBP has failed to swing lower, as suggested in our previous analysis.

Price is down-trending and is currently in a retrace move. EURGBP is above the recent trend resistance area and above the moving averages, so the downtrend could becoming to an end. The moving averages are tightening and moving sideways, signalling market indecision.

Trading opportunities may exist around the moving averages and around any of the horizontal levels at 0.8665, 0.8695, 0.8765, 0.8845, 0.8885 and 0.9040.

FOREX ANALYSIS: EURUSD – Up-trending. Possible downside?

EURUSD 1 Hour Chart

As suggested in yesterday’s chart analysis, price reversed around the horizontal level at 0.9840.

The EURUSD is up-trending and is currently in a retrace move. The moving averages are bullish and steady, suggesting that the uptrend may continue. But price is below the shorter-term moving average and is down-trending on higher time-frames, so EURUSD may become bearish.

Long opportunities could exist around the longer-term moving average and around the horizontal levels at 0.9840 and 0.9745. A bullish move may stall or reverse around the shorter-term moving average and around the horizontal resistance levels at 0.9995 and 1.0035.

FOREX ANALYSIS: GBPUSD – Up-trending

GBPUSD 1 Hour Chart

Price has been bearish, as suggested in yesterday’s analysis.

The GBPUSD is up-trending within a bullish channel. Price is currently in a retrace move. The moving averages are bullish and steady, so the upside momentum could continue but GBPUSD is still down-trending on higher time-frames, signalling potential downside.

Opportunities to go long may exist around the longer-term moving average, around the bullish channel support area and around the horizontal levels at 1.1220, 1.1040 and 1.0900.

FOREX ANALYSIS: USDCAD – Potential downside?

USDCAD 1 Hour Chart

USDCAD has formed a new swing high.

Price continues to be below the recent consolidation area, suggesting that the USDCAD may become bearish. The moving averages confirm this – they are bearish and steady. Price action is starting to look indecisive though, so the USDCAD may start moving sideways.

Trading opportunities could exist around the moving averages and around the horizontal levels at 1.3425, 1.3505, 1.3685 and 1.3820.

FOREX ANALYSIS: USDCHF – Indecision

USDCHF 1 Hour Chart

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

Price continues to be indecisive and lack trend momentum. USDCHF is moving within a large range at 0.9735-0.9965. The moving averages confirm the current indecision – they have been crossing frequently and are moving sideways.

Trading opportunities may exist around the moving averages, around the support and resistance areas of the range and if the USDCHF moves out of the range (break-out trade). Trading opportunities may also exist around the horizontal levels at 0.9785, 0.9860 and 0.9945.

FOREX ANALYSIS: USDJPY – Ranging

USDJPY 1 Hour Chart

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

USDJPY continues to be indecisive and range between 143.85-145.15. The moving averages confirm the market indecision – they are tight and crossing frequently.

Trading opportunities could exist around the support and resistance areas of the range and if USDJPY moves out of the range (break-out trade). A break to the upside may find resistance around 145.75. A break to the downside may find support around 142.75 and 142.60.

METAL ANALYSIS: XAUUSD – Up-trending. Possible indecision?

XAUUSD 1 Hour Chart

As suggested in our previous Forex analysis, price reversed around the shorter-term moving average and has since been bullish.

XAUUSD is up-trending. The moving averages are bullish and widening, so the uptrend could continue. Price action has formed a potential range though, signalling that price could move sideways between 1706 and 1730.

Buying opportunities may exist around the moving averages and around the horizontal levels at 1706, 1686, 1682 and 1673. A bullish move could find resistance around 1730.

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.

GBP crashes to record lows.

Recent negative USD economic figures suggest that the dollar surge could becoming to an end.

Today’s Major Scheduled News

1535 UTC – CAD – BOC 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, this time by 0.25%, rather than the expected 0.50%. Rates now stand at 2.60%. The rate increases throughout 2022 have been to tackle rising inflation, which is still too high, so further rate hikes are expected. The RBA have stated that the economic outlook is cloudy, due to inflation, the war in Ukraine and China’s potential recession, 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 (5-25 bps).

Canada (CAD)

The Bank of Canada (BOC) has raised it’s interest rate by 75bps, increasing the official bank rate to 2.5% – it’s fifth consecutive rate hike. The BOC have announced that further hikes are expected to tackle rising inflation. Short-term inflation expectations are still high.

Euro Area (EUR)

The European Central Bank (ECB) has increased it’s rates by 75bps, bringing the official rate to 1.25%. Further rate hikes are expecting in coming meetings but no large rate hikes are expected.

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. The BOJ will intervene in the FX markets in order to strengthen the Yen.

Switzerland (CHF)

The Swiss National Bank (SNB) have hiked rates by 75bps, bringing the official rate to 0.5% – interest rates being positive for the first time in over a decade. 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 prices.

United Kingdom (GBP)

The Bank of England (BOE) have increased it’s official bank rate again. This time by 75bps. The official rate is now set to 2.25%. This is the 7th consecutive rate hike by the BOE. Further rate hikes are expected. The BOE has started purchasing government bonds to tackle the rapid decline of currency and bond prices.

United States (USD)

The Federal Reserve has raised the official funds rate by an additional 75bps – it’s fifth rate hike in 2022. The rate is currently now set at 3.25%. The increase in rates is to tackle rising inflation. The Fed currently plan to increase rates further – economists expecting a rate of around 4.00-5.00% by the end of 2022.

Start trading today with Triumph’s Forex MT4 trading platform – https://www.tfxi.com/

Keep up-to-date with our Forex chart analysis – https://analysis.tfxi.com/

Hits: 11