Forex Analysis – November 02, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Indecision

AUDUSD technical analysis
AUDUSD 1 Hour Chart

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

AUDUSD is indecisive and is currently ranging between 0.6370 and 0.6455. FOMC today may provide some needed direction. The moving averages are tight and moving sideways, so the market indecision may continue. Price is down-trending on higher time-frames, so AUDUSD may become bearish.

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 0.6485 and 0.6515. A break to the downside may find support around 0.6290 and 0.6235.

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

EURGBP price chart
EURGBP 1 Hour Chart

Price reversed off 0.8620 and has been bearish, as suggested in yesterday’s analysis.

EURGBP is down-trending and is currently in a retrace phase. The moving averages are tightening and are beginning to move sideways, so the downtrend could becoming to an end. Price could start ranging between 0.8575 and 0.8620.

Opportunities to go short may exist around the moving averages and around any of the horizontal levels at 0.8620, 0.8650, 0.8685, 0.8700 and 0.8755. A bearish move could stall or reverse around the recent lows and potential range support at 0.8575.

FOREX ANALYSIS: EURUSD – Market indecision. Potential downside?

EURUSD Forex Analysis
EURUSD 1 Hour Chart

As suggested in our previous Forex analysis, EURUSD has been moving sideways.

Price continues to be indecisive and lack trend momentum. The moving averages are bearish though and price action has formed a bearish channel, so EURUSD may become bearish. Price is down-trending on higher time-frames.

Trading opportunities could exist around the moving averages, around the bearish channel support and resistance areas and around any of the horizontal levels at 0.9755, 0.9820, 0.9855, 0.9940 and 1.0095.

FOREX ANALYSIS: GBPUSD – Market indecision. Possible downside?

GBPUSD Forex analysis
GBPUSD 1 Hour Chart

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

Price is looking indecisive but price action has formed some lower swing highs, signalling that GBPUSD could become bearish. The moving averages confirm the possible downside – they are bearish and steady.

Trading opportunities may exist around the dynamic resistance of the moving averages, around the diagonal resistance area and around any of the horizontal levels at 1.1185, 1.1270, 1.1380, 1.1435, 1.1550, 1.1615 and 1.1635.

FOREX ANALYSIS: USDCAD – Indecision

USDCAD technical analysis
USDCAD 1 Hour Chart

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

The USDCAD is indecisive and is lacking trend direction but FOMC today could provide some trend direction. The moving averages confirm the current indecision – they are tight and moving sideways. Price action has formed two consolidation patterns – a range at 1.3520-1.3675 and a symmetrical triangle pattern.

Trading opportunities could exist around the support and resistance areas of both consolidation patterns and if USDCAD moves out of either pattern (break-out trade). A break to the upside may find resistance around 1.3740, 1.3820, 1.3890 and 1.3920.

FOREX ANALYSIS: USDCHF – Indecisive

USDCHF 1 Hour Chart

Price has been indecisive, as suggested in our last analysis.

The USDCHF is indecisive and is lacking trend direction. The moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. Price is also looking indecisive on higher time-frames.

Trading opportunities may exist around the moving averages and around any of the horizontal levels at 0.9845, 0.9885, 0.9920, 1.0030, 1.0060 and 1.0120.

FOREX ANALYSIS: USDJPY – Market indecision

USDJPY price chart
USDJPY 1 Hour Chart

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

Price continues to be indecisive but FOMC today may provide some direction. The moving averages are tight and moving sideways though, so the market indecision may continue. USDJPY is also looking indecisive on higher time-frames.

Trading opportunities could exist around the moving averages and around any of the identified horizonal levels at 145.25, 146.00, 147.05, 148.25, 148.75, 149.40, 149.60 and 151.50.

METAL ANALYSIS: XAUUSD – Indecisive

XAUUSD
XAUUSD 1 Hour Chart

GOLD has been moving sideways, as suggested in our previous chart analysis.

Price continues to be choppy and indecisive. The moving averages confirm the indecision – they have been crossing frequently.

Trading opportunities may exist around the moving averages and around the horizontal levels at 1620, 1631, 1654, 1667, 1673 and 1681.

Fundamental Analysis

Key Analysis

Global inflation, a European energy crisis, the war in Ukraine and warnings of a 2023 global recession are driving the markets.

Recent missile attacks on Ukrainian cities have escalated the Russian-Ukrainian war.

The BOJ has started intervening in the FX markets, in an attempt to strengthen the Yen.

Recent negative USD economic figures suggest that the dollar surge could becoming to an end – the inflation top could be close.

There are rumours that China may start easing it’s strict COVID lockdown

Today’s Major Scheduled News

1215 UTC – USD – ADP Employment Change
1800 UTC – USD – Fed Interest Rate Decision
1830 UTC – USD – Fed Press Conference
0030 UTC – AUD – Balance of Trade

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 another 0.25%, so rates are now set at 2.85%. The rate increases throughout 2022 have been to tackle rising inflation, which is potentially starting to pivot, so large rate hikes could be coming to an end.

Canada (CAD)

The Bank of Canada (BOC) has hiked the interest rate by 50bps, increasing the official bank rate to 3.75% – it’s sixth consecutive rate hike. 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 another 75bps, so the official rate is now at 2.00%. Europe is entering recession. Rising inflation may result in further rate hikes.

Japan (JPY)

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The BOJ does not currently plan to increase rates to tackle high inflation. It will however continue to buy bonds and intervene in the FX markets when needed.

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 signalled that rates could move higher, so further rate hikes expected.

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.

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.

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