Spreads
Spreads
Spreads
Spreads
Spreads
EURUSD
The Euro sank against the Dollar on the first trading day of the week. The shared currency extended its decline from last week and is heading towards multi-year lows amid a strong Dollar. Risk-off sentiment across markets have allowed the Dollar to gain tremendous bidding at the start of the Asia trading session. A string of speeches by Fed officials is set to happen for this week, starting with Fed Chair Jerome Powell’s speech on Tuesday the 27th. The U.S. 10-year treasury yield has continued to rise as bonds sell off—yields have topped 3.8%, as of writing. The Fed’s most recent conference has delivered a clear message of reining in inflation at all costs. The U.S. PCE report, which is scheduled for September 30th, will be in focus as it is a favoured leading inflation indicator for the Fed.
On the technical side, EURUSD has once again traded towards our previously estimated support level of 0.96. The next level of support for EURUSD could form around 0.94 should the U.S. Greenback continue to gain strength. RSI for the pair sits at 37.96, 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: 0.96, 0.94
Cable tumbled on the first day of the new trading week. The British Pound witnessed a fresh historic low as the Pound sold off during the Asia and European trading sessions. Market participants dumped the Pound as news of Britain’s latest corporate tax reduction sparked concerns over the fiscal deficit of the British government. As mentioned in last week’s report, we see rising credit risk from Britain as the country continues to face significant growth challenges, while the BoE continues to hike rates; on the other hand, the British government has decided to run a further budget deficit to finance the private sector and subsidize energy costs for British residents. Members from the BoE and the Fed are scheduled for speeches throughout the week—starting with Fed Chair Jerome Powell on the 27th.
On the technical side, Cable has broken below our previously estimated support level of 1.08 and is now consolidating around the 1.06 price level. Parity is now firmly in play for Cable as the Dollar continues to reach historical highs. RSI for the pair sits at 43.13, 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: 1.06, 1
Gold slid more than 1% on the first trading day of the week. The Dollar denominated Gold could fare worse against the Dollar as market participants continue to demand the U.S. Greenback. As of writing, Gold has sunk to $1,624 per ounce, the lowest level since April of 2020. Some reasons contribute to the plummet of gold—hawkish central banks across the globe, rising yields on sovereign debt, and risk-averse market sentiment, which is typically a positive signal for Gold but market participants have favoured the U.S. Greenback over gold. However, as Russia begins their partial mobilization of its armed forces, Gold prices could see a surge should the war between Russia and Ukraine take a turn for the worse.
On the technical side, XAUUSD has broken below our previously estimated support level of $1640 per ounce. The next level of support for the non-yielding metal forms around the $1600 per ounce price level. RSI for the pair sits at 32.8, as of writing. On the four-hour chart, XAUUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1695, 1724
Support: 1620, 1600
