Forex Analysis – September 27, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Down-trending

AUDUSD 1 Hour Chart

As suggested in our previous analysis, price has been bearish and is currently finding resistance around the shorter-term moving average.

AUDUSD is clearly down-trending – price action has formed a series of lower swing highs and lower swing lows. Price is currently in a retrace move and is finding resistance. The moving averages are bearish and widening, so 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 0.6580 and 0.6670. A bearish move could find support around the recent swing low at 0.6440.

FOREX ANALYSIS: EURGBP – Up-trending

EURGBP 1 Hour Chart

Price reversed off the shorter-term moving average, as suggested in our previous Forex analysis.

EURGBP is clearly up-trending. Price is currently in a strong retrace move after forming a large bullish swing. The moving averages are bullish and widening, so the upside direction may continue.

Buying opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 0.8885, 0.8780 and 0.8715. A bullish move may stall or reverse around the horizontal resistance area at 0.9005 and 0.9190.

FOREX ANALYSIS: EURUSD – Down-trending. Possible indecision?

EURUSD 1 Hour Chart

As suggested in yesterday’s chart analysis, EURUSD is currently finding resistance around the 23.6% Fib level and the shorter-term moving average.

Price is down-trending and is currently in a retrace move. The moving averages are bearish and steady, so the downtrend could continue. But EURUSD is starting to look indecisive and could start ranging between 0.9570 and 0.9685. Price continues to downtrend on higher time-frames.

Shorting opportunities may exist around the moving averages, around any of the key Fib levels and around any of the horizontal levels at 0.9685, 0.9815 and 0.9880. A bearish move could find support around the recent lows at 0.9570.

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

GBPUSD 1 Hour Chart

GBPUSD found resistance around the 50.0% Fib level and shorter-term moving average, as suggested in yesterday’s analysis.

Price is obviously down-trending. The GBPUSD is in a retrace move after hitting record lows. The moving averages are bearish and widening, so the downside momentum may continue. Price is starting to look a little indecisive though, so GBPUSD may become indecisive and start ranging. Price continues to downtrend on higher time-frames though.

Opportunities to go short could exist around the moving averages, around the trend resistance area and around the horizontal levels at 1.0880 and 1.1220. A bearish move may find support around 1.0665 and 1.0390.

FOREX ANALYSIS: USDCAD – Up-trending

USDCAD 1 Hour Chart

As suggested in our last analysis, price has been bullish and has swung higher.

The USDCAD is up-trending within a bullish channel. Price is currently in a retrace move and is nearing the channel support area. The moving averages are bullish and steady, so USDCAD could continue to be bullish.

Long opportunities may exist around the bullish channel support area, around the dynamic support of the moving averages and around the horizontal levels at 1.3540 and 1.3425. A bullish move could be rejected or reverse around 1.3765 and around the channel resistance area.

FOREX ANALYSIS: USDCHF – Up-trending

USDCHF 1 Hour Chart

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

The USDCHF is up-trending and is currently in a retrace move. The moving averages are bullish and steady, so the uptrend may continue. Price continues to uptrend on higher time-frames too.

Opportunities to go long could exist around the bullish moving averages, around the trend support area and around the horizontal levels at 0.9860, 0.9815, 0.9760 and 0.9685. A bullish move may find resistance around 0.9965.

FOREX ANALYSIS: USDJPY – Indecision

USDJPY 1 Hour Chart

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

Price is indecisive and is moving within a large range at 140.70-145.75. The moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. USDJPY could form a large bearish move, if the Bank of Japan intervene in the FX markets again.

Trading opportunities may exist around the moving averages and around any of the horizontal levels at 140.70, 141.65, 142.60, 142.75, 144.70, 144.95 and 145.75.

METAL ANALYSIS: XAUUSD – Down-trending

XAUUSD 1 Hour Chart

GOLD has been bearish and has swung lower, as suggested in our previous analysis.

Price is down-trending. XAUUSD is currently in a retrace move. The moving averages are bearish and widening, signalling that the downtrend may continue. Price is also down-trending on higher time-frames.

Selling opportunities could exist around the bearish moving averages, around the trend resistance area and around any of the horizontal levels at 1647, 1655 and 1686. A bearish move may find support around the recent lows at 1622.

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.

GBP crashes to record lows

Today’s Major Scheduled News

1130 UTC – USD – Fed speech
1400 UTC – USD – US consumer confidence

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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