Forex Analysis – September 23, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Down-trending

AUDUSD 1 Hour Chart

As suggested in our last analysis, price has been finding resistance around the shorter-term moving average.

AUDUSD is down-trending and is currently in a retrace move. The moving averages are bearish and steady, so that the downtrend could continue. Price is also down-trending on higher time-frames.

Selling opportunities may exist around the dynamic resistance of the moving averages, around the trend resistance area and around the horizontal levels at 0.6670, 0.6730 and 0.6770. A bearish move could find support around the recent swing low at 0.6580.

FOREX ANALYSIS: EURGBP – Up-trending

EURGBP 1 Hour Chart

Price reversed around the trend support area and has since been finding resistance around the longer-term moving average, as suggested in our last Forex chart analysis.

EURGBP is up-trending. Price is currently in a strong retrace move. The moving averages are bearish and price is struggling to swing higher, so the uptrend may becoming to an end. EURGBP continues to uptrend on higher time-frames.

Buying opportunities could exist around the shorter-term moving average, around the trend support area and around the horizontal levels at 0.8715, 0.8705, 0.8690 and 0.8655. A bullish move may stall or reverse around the longer-term moving average and around the horizontal resistance levels at 0.8755, 0.8765 and 0.8780.

FOREX ANALYSIS: EURUSD – Down-trending

EURUSD 1 Hour Chart

As suggested in our previous analysis, EURUSD has been bearish.

Price is down-trending, just like other USD pairs. EURUSD is currently attempting a swing lower. The moving averages are bearish and widening, so the downside direction could continue. Price is also clearly down-trending on higher time-frames.

Shorting opportunities may exist around the bearish moving averages, around the trend resistance area and around the horizontal levels at 0.9880, 0.9955 and 0.9970. EURUSD could find support around the recent swing low at 0.9815.

FOREX ANALYSIS: GBPUSD – Down-trending

GBPUSD 1 Hour Chart

GBPUSD retraced and found resistance around 1.1355, as suggested in our previous Forex analysis.

Price is clearly down-trending and is currently testing recent lows. The moving averages are bearish and widening, so the downtrend may continue. But GBPUSD is currently at 36 year lows and is looking over-extended on higher time-frames, so price may be due a bullish retrace move.

Opportunities to go short could exist around the dynamic resistance of the moving averages, around the diagonal resistance area and around the horizontal levels at 1.1220, 1.1355 and 1.1460.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD 1 Hour Chart

As suggested in yesterday’s analysis, price reversed around the shorter-term moving average and 38.2% Fib level.

The USDCAD is up-trending. Price is in a retrace move. The moving averages are bullish and steady and the USDCAD is clearly up-trending on higher time-frames, so the uptrend could continue.

Long opportunities may exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.3360 and 1.3320. A bullish move could find resistance around the recent swing high at 1.3540.

FOREX ANALYSIS: USDCHF – Up-trending

USDCHF 1 Hour Chart

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

The USDCHF is clearly up-trending, just like other USD pairs. Price is currently in a retrace move. The moving averages suggest that the uptrend may continue – they are bullish and widening. USDCHF is also up-trending on higher time-frames.

Opportunities to go long could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 0.9760, 0.9685 and 0.9620. A bullish move may be rejected or reverse around the horizontal resistance levels at 0.9815, 0.9840 and 0.9860.

FOREX ANALYSIS: USDJPY – Indecision?

USDJPY 1 Hour Chart

The USDJPY has been strongly bearish, due to intervention from the Bank of Japan.

Price was up-trending but is now looking indecisive. The moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. The USDJPY could start ranging between 140.70 and 145.75.

Trading opportunities may exist around the moving averages and around the horizontal levels at 140.70, 141.65, 142.60, 143.70, 144.95 and 145.75.

METAL ANALYSIS: XAUUSD – Ranging

XAUUSD 1 Hour Chart

As suggested in our previous chart analysis, XAUUSD reversed around 1686 and has been moving sideways.

Price is indecisive and is ranging between 1655 and 1686. The moving averages confirm the current indecision – they have been crossing frequently and are moving sideways.

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 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 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.

The Dollar continues to be king.

Today’s Major Scheduled News

0715 UTC – EUR – French services PMI
0730 UTC – EUR – German manufacturing and services PMI
0830 UTC – GBP – UK manufacturing and services PMI
1345 UTC – USD – US services PMI
1800 UTC – USD – Fed 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, 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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