After a 1.3% loss over the previous trading day, EURUSD has found footing around the 0.98 price level. The Dollar index continued to trend higher during Asia and European trading sessions on the 22nd, but demand for the U.S. Greenback slowed as the American trading session began. The key U.S. 10-year treasury yield has soared passed 3.7% as the short-term yield curve continues to get even more loaded after the Fed remarks on the 21st. On the economic docket, Germany is set to release its manufacturing PMI for September during the European trading session today.
On the technical side, EURUSD has found support near our previously estimated support level of 0.98; however, the previously estimated support level of 0.99 has changed polarity to become a short-term resistance for the pair. RSI for the pair sits at 43.66, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.0011, 1.0055
Support: 0.9902, 0.98
Cable some upward movement ahead of the BoE’s interest rate decision; however, the pair soon faced selling pressure after the BoE announced an increase of 50 basis points on its benchmark interest rate. The hawkish stance of the BoE failed to attract sustained demand for the British Pound as markets have already priced in a 50 basis point rate hike by the BoE; furthermore, the economic fundamentals of Britain have not improved by much since the BoE’s last interest rate decision. Without a press conference by the BoE following its interest rate announcement, market participants are left to interpret the central bank’s move on their own. On the economic docket, the U.K. will announce PMI data during today’s European trading session.
On the technical side, GBPUSD has found support at slightly above our previously estimated support level of 1.12. Our previous estimated support level of 1.1463 has changed polarity and now becomes a short-term resistance level for GBPUSD. RSI for the pair sits at 47.55, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.1561, 1.1854
Support: 1.1463, 1.12
Gold has shrugged off the impacts of interest rate hikes by global central banks and managed to find upward traction amid escalating tensions in global geopolitical events. Russian President Vladimir Putin’s decision to mobilize half of Russia’s military forces has caused concern among market participants. At the onset of the Russia-Ukraine war, Gold staged a historical rally to beyond $2050 per ounce as market participants fled for safety. A rare and irregular rally of the non-yielding metal, however, should not be ruled out under current geopolitical conditions—tensions rising in the South China sea, possible further escalation of the Russian- Ukrainian war, and the competition for global domination between China and the U.S.—are all possible catalysts for a historical run by Gold.
On the technical side, XAUUSD has found support near our previously estimated support level of $1660 per ounce. The secondary support for the precious metal remains at $1600 per ounce. Near-term resistance for the pair stands at $1695 per ounce. RSI for the pair sits at 37.62, as of writing. On the four-hour chart, XAUUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1695, 1724
Support: 1660, 1600