The US Dollar had some gains against some of its major counterparts yesterday, ahead of the FOMC meeting. The bank is widely expected to hike rates and market participants already have started to look out for any early signs. Also, the ongoing trade wars continue to influence the greenback’s direction, as the new round of tariffs was imposed and no side of the US-Sino trade war seems to be backing down. Currently, analysts point out, that the US economy is doing fine despite the trade wars, hence it allows the Fed for further tightening. As the Fed’s decision draws near we could see the USD continuing to strengthen, however after the decision it could follow a different path.
USD/JPY continued to trade in a bullish market on Monday, breaking the 112.80 (S1) resistance line, now turned to support. Technically, it should be noted that the upward trend-line, incepted since the 7th of September remained intact, hence we maintain our bullish bias. It should also be noted that the RSI indicator in the 4-hour chart, has reached the reading of 70, implying an overcrowded long position. Should the pair’s direction continue to be dictated by the bulls, we could see the pair aiming if not testing the 113.60 (R1) resistance line. Should the bears take over, we could see the pair breaking the 112.80 (S1) support line, the prementioned upward trend-line and aim if not break the 112.05 (S2) support level.
- Support: 112.80 (S1), 112.05 (S2), 111.30 (S3)
- Resistance: 113.60 (R1), 114.75 (R2), 115.60 (R3)
GBP corrects somewhat but remains in check
GBP/USD corrected somewhat yesterday, after one of the widest drops of the year on Friday. The bounce was marked by UK’s Brexit minister stated that he was confident to reach a deal with the EU. UK’s PM Theresa May remains under pressure as her party is to hold its annual conference this week and hard Brexiteers draft their own Brexit plan. Pressure also piles as the opposition, the Labour party, seems to be preparing to vote down the PM’s Brexit deal plan. Overall, tensions inside the UK’s political scene, seem to undermine the market’s confidence and keep the pound in check. Should there be further negative headlines about Brexit, we could see the UK pound weakening.
GBP/USD corrected somewhat yesterday, breaking 1.3080 (S1) resistance levels, now turned to support and testing the 1.3150 (R1) resistance level, before lowering again. We could see the cable trading in a bearish market today, should there be negative headlines about Brexit. Should the pair be underselling interest we could see it breaking the 1.3080 (S1) support level and aim for the 1.3030 (S2) support hurdle. Should, on the other hand, the bulls take over once again we could see the pair breaking the 1.3150 (R1) resistance level and aim for the 1.3215 (R2) resistance barrier.
- Support: 1.3080 (S1), 1.3030 (S2), 1.2965 (S3)
- Resistance: 1.3150 (R1), 1.3215 (R2), 1.3285 (R3)
In today’s other economic highlights:
During the American session, we get the US CB consumer confidence indicator for September and later on the API weekly crude oil inventories figure.
As for speakers, BoJ’s governor Kuroda, BoE’s Vlieghe, Norges Bank’s Governor Olsen, as well as ECB’s Praet and Coeure, speak. Please be advised that FOMC will not be the only central bank releasing its interest rate decision tomorrow. From the Czech Republic, CNB will also be releasing their own and may be heading for a third consecutive rate hike, providing for volatility for CZK pairs.
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