IC Markets Europe Fundamental Forecast | 30 September 2022

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What happened across the Asia session?

The major currencies traded in consolidation with low volatility as the DXY traded along the 112 price level. 

What does it mean for Europe and US Sessions?

Look for the DXY to drive prices across the major currencies with significant breakout potential for the EURUSD and USDCHF. 


The Dollar Index (DXY)

Key news events today

USD Core PCE Price Index m/m 

What can we expect from DXY today?

The DXY continued trading lower, breaking below the 112 price level. While further downside can be expected, following from the current trend, the DXY could stage a brief retracement first. Look for a possible rejection of the 112.60 interim resistance level to signal a continuation of the downtrend. The Core PCE Price Index to be released today is likely to show continual inflation growth, which could spur further rate hikes from the FOMC.

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 traded higher overnight as price failed to trade below the interim support of 1640. As the DXY weakens, look for further upside on Gold, with the key resistance level at 1680. However, it is likely that Gold could retrace briefly to test the 1655 price level before a further push to the upside.  

Next 24 Hours Bias

Weak Bullish 

The Euro (EUR)

Key news events today

EUR Core CPI / CPI Flash Estimate y/y

EUR Unemployment Rate

What can we expect from EUR today?

The price rising and testing the 0.9800 area, after 2 days rise, the price is showing a small pull back trend. Today the CPI Flash Estimate y/y will be out, the forecast is 9.7%, which is higher than the previous. The unemployment rate is forecasted at 6.6%, which is the same as previous. If the actual data is in line or better than the expected, we can expect the price to go up. The next resistance level is at 0.9895. Otherwise, if the data is worse than the expectation, combined with the rebound of DXY, the price may continue the bearish trend. The next key support level could be at 0.9550, where the swing low sits. 

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 lowered strongly from the 0.9966 resistance level to the current 0.9762 levels. The USDCHF is currently testing a key support level and if it breaks this level, we’re looking at further downside to 0.9626 where the next key overlap support sits. 

 

Central Bank Notes:

  • Next meeting on 15 December 2022

 

Next 24 Hours Bias

Medium 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 bullish trend with prices breaking out of  the previous resistance level at 1.0915. With the strong uptrend, look for the GBPUSD to continue trading higher, especially when the DXY continues to lose its strength. If price breaks above the 1.1443 interim resistance level, the GBPUSD could continue with further upside momentum to 1.1732 levels 

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

Weak Bullish 

The Canadian Dollar (CAD)

Key news events today

No Major News Events

What can we expect from CAD today?

Overnight, the Canadian GDP was released stronger than expected at 0.1% (Forecast: -0.1%) this lead to significant volatility in the USDCAD as the price fluctuated between the 1.3656 and 1.3750 price range. Currently trading at the 1.3720 level, the USDCAD is likely to consolidate as the DXY finds a directional bias. If the USDCAD breaks above the 1.3750 interim resistance level, the USDCAD could climb towards the next resistance of 1.3835. 

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No Major News Events 

What can we expect from Oil today?

Oil prices fell overnight in both Brent and WTI, with Brent trading at 88.428 and WTI at 80.787. Oil prices settled lower last night after reaching $90/bbl as OPEC+ considers cutting output. If you trade oil, you should be cautious today. With no other major news on oil for today, expect Brent to rise to 87.500 and WTI to fall to 78.900.

Next 24 Hours Bias
Weak Bullish