IC Markets Europe Fundamental Forecast | 29 September 2022

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What happened across the Asia session?

The AUDUSD and NZDUSD traded lower during the Asia session as the DXY showed signs of a recovery in strength. 

What does it mean for Europe and US Sessions?

Look for the DXY to trade higher and for the downtrend to continue on the EURUSD and GBPUSD. 


The Dollar Index (DXY)

Key news events today

No major news events. 

What can we expect from DXY today?

The DXY retraced strongly from the 114.70 resistance area overnight. The DXY ended the trading session significantly lower at the 112.45 price level. This move was likely due to the intervention from the BoE in an attempt to manage the decline of the GBPUSD. With the DXY currently trading at the 113.20 price level, look for the DXY to recover towards the 114.50 price level if it is able to trade higher above 113.50. 

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?

Overnight, Gold retraced strongly as the price rejected the support level of 1616 and was pushed higher due to the weakness of the DXY. With the price currently at the 1655 price level, price action on Gold shows a rejection of the 1665 resistance level. Look for Gold to trade lower towards the 1630 interim support level if the DXY recovers in strength.  

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No Major News Event

What can we expect from EUR today?

 

The price is moving back to the descending trend after reaching the 0.9750 price area. Today the German Prelim CPI m/m and Spanish Flash CPI y/y will be out today, if the data is better than expected, we can expect a bit of recovery of EUR. Otherwise, with the border uncertainty between Russia and Ukraine, a move lower to the downside for the EURUSD has been anticipated. The next important support level is at 0.9550 which was the recent lowest price. 

Central Bank Notes:

  • Next meeting on 27 October 2022

 

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No Major News Event

What can we expect from CHF today?

With the DXY weakening significantly overnight, the USDCHF reversed lower strongly from the 0.9966 resistance level. The USDCHF reached a low of 0.9760 at the end of the trading session. However, in today’s trading session the USDCHF has retraced back to above 0.98 as the DXY recovers in strength. Look for the USDCHF to continue climbing steadily higher towards the near term resistance of 0.99.

 

Central Bank Notes:

  • Next meeting on 15 December 2022

 

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No Major News Events

What can we expect from GBP today?

GBPUSD looks like it’s in continuation of a bearish trend with prices bouncing off the resistance level at 1.0915. 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 when 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 1.0355 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

CAD GDP m/m 

What can we expect from CAD today?

The USDCAD reversed from the resistance level of 1.3830, as the DXY weakened overnight, to reach the interim support of 1.36. With the price bouncing higher to the 1.37 round number resistance level, look for the USDCAD to close strongly above to signal further upside. The Canadian GDP is due to be released today, with data anticipated to be -0.1% which could bring further Canadian weakness.

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 had bullish momentum upwards, with Brent trading at 89.100 and WTI at 81.345. Last night, oil prices jumped after U.S. crude, field stocks dropped & the dollar weakened. Do be cautious ahead today if you are trading oil. With no other major news on oil for today, expect Brent to head towards 90.400 and WTI to head towards the 82.600 level. 

Next 24 Hours Bias
Weak Bullish