Forex Analysis – September 20, 2022


Our previous Forex analysis can be viewed here… Click here. Technical analysis and fundamental analysis of the Forex markets is available below…

Technical Analysis

FOREX ANALYSIS: AUDUSD – Market Indecision

AUDUSD price chart
AUDUSD 1 Hour Chart

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

Price continues to be indecisive and lack trend direction. The moving averages are moving sideways and price action has formed a range at 0.6670-0.6730, so the market indecision may continue. But AUDUSD is still down-trending on higher time-frames, suggesting that price may become bearish.

Trading opportunities could exist around the moving averages, 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 0.6770 and 0.6825.

FOREX ANALYSIS: EURGBP – Up-trending

EURGBP technical analysis
EURGBP 1 Hour Chart

The EURGBP has been finding resistance around 0.8780, as suggested in last analysis.

Price is clearly up-trending. EURGBP is currently struggling to swing higher and break the 0.8780, so upside momentum could be weakening – price could be due a retrace move. EURGBP is forming a potential range at 0.8750-0.8780, so price could start form a sideways retrace move. The moving averages are bullish and widening, signalling that the uptrend could continue.

Opportunities to go long may exist around the dynamic support of the moving averages, around the trend support area and around any of the horizontal levels at 0.8750, 0.8715, 0.8705, 0.8685 and 0.8655. A bullish move could continue to stall or reverse around the recent highs and range resistance area at 0.8780.

FOREX ANALYSIS: EURUSD – Indecision

EURUSD Forex chart
EURUSD 1 Hour Chart

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

The EURUSD continues to be indecisive. The moving averages are tight and moving sideways also – confirming the market indecision. Price is also becoming indecisive on higher time-frames.

Trading opportunities could exist around the moving averages and around any of the identified horizontal levels at 0.9915, 0.9955, 0.9970, 1.0035, 1.0065 and 1.0110.

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

GBPUSD Forex analysis
GBPUSD 1 Hour Chart

Price found resistance around the longer-term moving average, as suggested in our previous analysis.

The GBPUSD has been down-trending. Price is currently in a retrace move. GBPUSD is starting to look indecisive and could start ranging between 1.1355 and 1.1445, so price could become indecisive. The moving averages confirm the potential indecision – they are starting to move sideways.

Opportunities to go short may exist around the longer-term moving average, around the possible range resistance area and around the horizontal levels at 1.1480 and 1.1580. A bearish move could be rejected or reverse around the shorter-term moving average and around the potential range support at 1.1355.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD analysis
USDCAD 1 Hour Chart

As suggested in yesterday’s Forex analysis, USDCAD has bounced off the longer-term moving average.

Price is up-trending and is currently in a retrace move. The moving averages are bullish and steady, so the upside direction may continue. USDCAD is also up-trending on higher time-frames.

Long opportunities could exist around the longer-term moving average and around any of the horizontal levels at 1.3200, 1.3140 and 1.3095. A bullish move may find resistance around the shorter-term moving average and around the recent swing high at 1.3320.

FOREX ANALYSIS: USDCHF – Uptrend?

USDCHF chart
USDCHF 1 Hour Chart

USDCHF has been finding support around the moving averages, as suggested in yesterday’s analysis.

Price action has formed a series of higher swing highs and higher swing lows, so price could start up-trending. The moving averages confirm this – they are bullish and steady. USDCHF is up-trending on higher time-frames, adding confidence that price could also uptrend on the 1 hour.

Buying opportunities may exist around the dynamic support of the moving averages and around the horizontal levels at 0.9635 and 0.9555. A bullish move could stall or reverse around 0.9685, 0.9725, 0.9750 and 0.9765.

FOREX ANALYSIS: USDJPY – Ranging

USDJPY price chart
USDJPY 1 Hour Chart

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

USDJPY is clearly indecisive. Price action has formed two ranges; a tight range at 142.60-143.70 and a larger range at 141.65-144.95, so price may continues to be indecisive. But USDJPY is up-trending on higher time-frames, suggesting a potential bullish move. The moving averages confirm the current indecision – they are tight and crossing frequently.

Trading opportunities could exist around the support and resistance areas of the ranges and if USDJPY closes out of either of the ranges (break-out trade).

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

XAUUSD Forex analysis
XAUUSD 1 Hour Chart

Price reversed off the longer-term moving average, as suggested in our last chart analysis.

XAUUSD is down-trending and is currently in a retrace move. Price is starting form a potential range at 1655-1678, so GOLD could become indecisive. The moving averages confirm this – they are tightening and are moving sideways.

Trading opportunities may 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 could find resistance around 1692, 1706 and 1712. Trading opportunities may also exist around the moving averages.

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 government interventions with energy prices may help to reduce rising inflation.

Ukraine has taken significant ground from Russia.

The BOJ may intervene in the markets to strengthen the Yen.

The Dollar continues to be king.

Today’s Major Scheduled News

1230 UTC – CAD – CPI

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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