IC Markets Europe Fundamental Forecast | 27 September 2022

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What happened across the Asia session?

With no key news release, most currencies continued to retrace higher as the DXY traded lower towards the 113 support level. 

What does it mean for Europe and US Sessions?

Look for the current retracement to continue as the DXY continues to retrace. However, a continuation of the trend could occur on completion of the retracement. 


The Dollar Index (DXY)

Key news events today

USD Fed Chair Powell Speaks

USD CB Consumer Confidence  

What can we expect from DXY today?

The DXY spiked up to the 114.49 price level early yesterday, but consolidated above 113 through the trading session. Currently trading at 113.70, look for the DXY to consolidate before climbing higher to test and possibly breach the 114.40 resistance level. US consumer confidence data today is likely to indicate a stronger sentiment toward household spending, which could lead to further hawkish sentiment on the DXY.

Central Bank Notes:

  • Federal Reserve hikes rates by 75bps taking interest rates to 3.25%
  • Next meeting on 3 November 
  • Further rate increases can be anticipated, with rate cuts expected only if Fed Reserve is confident inflation is moving back down to 2%

 

Next 24 Hours Bias

Weak Bullish 

Gold (XAU)

Key news events today

No major news events. 

What can we expect from Gold today?

Gold slides to a significant low as the price reached the 1624 level before retracing towards 1630 now. While further downside can be expected, especially if the DXY recovers in strength, Gold would have to break below the current swing low first, with the next key support level at 1575, the major swing low from March 2020. 

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No Major News Event

What can we expect from EUR today?

No major movements on the EURUSD as price is trading around the 0.9650 levels. The PMI data came out higher at 49.2 as compared to the forecast of 45.5 and along with the border uncertainty between Russia and Ukraine, the predicted move lower to the downside for the EURUSD has been anticipated. The FED is going to have another talk tonight- The next important support level is at 0.8446, therefore watch for a price break below the current support level to indicate the further possibility for downward movement.

Central Bank Notes:

  • Next meeting on 27 October 2022

 

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No Major News Event

What can we expect from CHF today?

Due to the strength of the DXY, the USDCHF surged up overnight but it has reversed slightly and is trading around 0.9896 levels. With a rate increase of 75 bps anticipated in the SNB rate decision, the CHF has created some volatility in the market and is projected to strengthen. We’re looking at price to break the key level at 0.9973 before moving towards 1.0046 levels 

 

Central Bank Notes:

  • Next meeting on 15 December 2022

 

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No Major News Events

What can we expect from GBP today?

Early in the trading session yesterday, the GBPUSD fell towards the 1.0420 price level, however, the move lower was quickly retraced. Through the trading session, the Bank of England announced that it was monitoring the markets very closely. Although this failed to bring significant upside to the GBPUSD, it halted the strong decline as price consolidated at the 1.08 price area. With the strong downtrend, look for the GBPUSD to continue trading lower, especially if the DXY continues to recover in strength. If price breaks below the 1.07 interim support level, the GBPUSD could retest the immediate support level of 1.0420 again.

Central Bank Notes:

  • Interest rate is currently at 2.25%
  • Peak inflation revised to more than 15% in 2023. 
  • Next meeting on 3 November 2022

Next 24 Hours Bias

Medium Bearish 

The Canadian Dollar (CAD)

Key news events today

No Major News Events 

What can we expect from CAD today?

As the DXY gained momentum, the USDCAD surged sharply to reach the 1.3520 price level. Further gains are projected as long as the upward trend continues and there are no significant upcoming news events for the Canadian economy. After the price retraces to the temporary support level of 1.3470, look for buying chances on the USDCAD, with the next significant resistance level at 1.37.

Central Bank Notes:

  • Increased interest rates to 3.25%  
  • Indicated further rate increases likely.
  • Next meeting on 26 October 2022

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No Major News Events 

What can we expect from Oil today?

Overnight on oil, both Brent & WTI has continued its bearish momentum downwards, with Brent trading at 84.553 and WTI at 76.746. On the 4hrs chart, both of these pairs are below the Ichimoku cloud which further indicates a bear market. With no major news for oil for today, expect Brent to head towards 83.000 and WTI to head towards 75.300 within the day. 

Next 24 Hours Bias
Weak Bearish