Forex Analysis – September 21, 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. Potential downside?

AUDUSD 1 Hour Chart

As suggested in yesterday’s analysis, price reversed around the range resistance area.

AUDUSD has been indecisive and ranging but current price action has been bearish and has closed below the recent range support area, so price could start down-trending again. The moving averages are bearish and steady – confirming the possible downside.

Selling opportunities may exist around the moving averages and around any of the horizontal levels at 0.6670, 0.6730, 0.6770 and 0.6825.

FOREX ANALYSIS: EURGBP – Up-trending

EURGBP 1 Hour Chart

Price reversed around the longer-term moving average, as suggested in yesterday’s Forex analysis.

EURGBP is clearly up-trending and is currently in a retrace move. The moving averages are tightening and price is below the moving averages, so EURGBP may struggle to swing higher – the uptrend may becoming to an end.

Buying opportunities could exist around the trend support area and around the horizontal levels at 0.8715, 0.8705, 0.8685 and 0.8655. A bullish move may be rejected or reverse around the moving averages and around the horizontal levels at 0.8765 and 0.8780.

FOREX ANALYSIS: EURUSD – Indecision. Potential downside?

EURUSD 1 Hour Chart

EURUSD has been bearish.

Price continues to be indecisive but EURUSD has recently formed a swing lower and a diagonal resistance area, so price could start down-trending. The moving averages have been crossing frequently and are moving sideways, so EURUSD could continue to be indecisive.

Shorting opportunities may exist around the moving averages, around the diagonal resistance area and around the horizontal levels at 0.9955, 0.9970 and 1.0035. A bearish move could stall or reverse around the recent lows at 0.9875.

FOREX ANALYSIS: GBPUSD – Down-trending

GBPUSD 1 Hour Chart

As suggested in our last chart analysis, GBPUSD reversed around the longer-term moving average and has been bearish.

Price is clearly down-trending – price action has formed a series of lower swing highs and lower swing lows. The moving averages are bearish and steady, so the downtrend may continue. GBPUSD is down-trending on higher time-frames too but is around a key support area, so price may attempt a bullish move.

Opportunities to go short could exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 1.1355, 1.1460, 1.1480 and 1.1580.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD 1 Hour Chart

Price has been bullish and has swung higher, as suggested in our last analysis.

The USDCAD is clearly up-trending. The moving averages are bullish and steady, so the uptrend could continue. Price is also up-trending on higher times, adding confidence that the upside could continue.

Long opportunities may exist around the bullish moving averages and around any of the horizontal levels at 1.3320 and 1.3245.

FOREX ANALYSIS: USDCHF – Uptrend? Market indecision?

USDCHF 1 Hour Chart

As suggested in our previous Forex chart analysis, price has been finding support around the longer-term moving average.

The USDCHF is up-trending but is currently in a sideways retrace move, so price may become indecisive. The moving averages are moving sideways – confirming the market indecision.

Trading opportunities could exist around the support and resistance areas of the range and if USDCHF moves out of the range (break-out trade). A break to the upside may find resistance around 0.9750, 0.9765 and 0.9785. A break to the downside may find support around 0.9555 and 0.9485.

FOREX ANALYSIS: USDJPY – Ranging

USDJPY 1 Hour Chart

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

Price is indecisive and is moving within a large range at 141.65-144.95. The moving averages are crossing frequently and moving sideways – confirming the market indecision.

Trading opportunities may exist around the support and resistance areas of the range, if the USDJPY moves out of the range (break-out trade) and around the moving averages.

METAL ANALYSIS: XAUUSD – Down-trending. Current range

XAUUSD 1 Hour Chart

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

Price is down-trending but recent price action has been indecisive and is currently ranging between 1662-1678. The moving averages confirm the market indecision – they are tightening and are moving sideways.

Trading opportunities could exist around the support and resistance areas of the range and if XAUUSD moves out of the range (break-out trade). A break to the downside may find support around 1655. A break to the upside may find resistance around 1692 and 1706.

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

1800 UTC – USD – FOMC
1830 UTC – USD – FOMC Press Conference

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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