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Last week’s primary focus was on the speeches of Federal Reserve members. These members continued to repeat the Federal Reserve Chairman’s previous comments regarding further rate hikes.
In other central bank news, European Central Bank (ECB) President Lagarde stated that ECB would do everything necessary to reduce inflation, including raising interest rates.
This week, the Bank of England unexpectedly intervened in the market to avoid further pound depreciation following the unveiling of the UK government’s budget, which included tax cuts and an energy bill cap.
In addition, the European CPI increased, showing the necessity for the ECB to hike interest rates again.
(All data taken from MT4 VT Markets)
(Picture taken from forexfactory.com)
This week’s focus is on the US Non-Farm Employment Change, Unemployment Rate, and Average Hourly Earnings.
The US will also release the ISM Manufacturing PMI and ISM Services PMI, together with JOLTS Job Opening and ADP Non-Farm Employment Change.
Meanwhile, the Reserve Bank of Australia and the Reserve Bank of New Zealand will announce their interest rate decisions, and Switzerland and Canada their Consumer Price Index and Employment data.
The Swiss Consumer Price Index increased 0.30% in August 2022 over the previous month.
Analysts expect that the Consumer Price Index in September will be higher by 0.2%.
The ISM Manufacturing PMI was unchanged in August of 2022, staying at 52.8, the same as in July.
For September, we can expect the ISM Manufacturing PMI to be around the same figure as 52.8.
The Reserve Bank of Australia increased the cash rate by 50bps to 2.35% in September, the fourth consecutive rate hike since May. The move brings the cash rate to a level not seen since January 2015. The board sought to bring inflation down to the 2–3% range while keeping the economy stable.
Some analysts predict that RBA will raise another 50bps for this month’s meeting.
The number of job openings in the US rose by 199,000 from a month earlier to 11.2 million in July of 2022.
Analysts expect that job openings in the US will be around the exact figure as forecasted at 11.1 million.
Since June 2022, oil prices have continued to fall, causing concern among OPEC countries, and prompting them to seek ways to raise the price.
Discussions on supply cuts will be the main topic at the OPEC meetings this October.
The Reserve Bank of New Zealand increased its official cash rate to 3.0% at its August meeting, a level not seen in 7 years.
The RBNZ expects the inflation rate to fall as fuel prices and shipping costs stabilise. It also highlighted that inflation will only return to the target range by mid-2024 at the earliest and that monetary tightening will be necessary, with a peak at 4.1% in March 2023.
Analysts forecast another 50-bps hike for this time.
Private businesses in the US hired 132,000 workers in August, down from 268,000 in July.
Analysts expect the ADP Non-Farm Employment Change to rise by 135,000 for September.
The ISM Services PMI unexpectedly increased to 56.9 in August of 2022 from 56.7 in July, indicating the most robust growth in services activity in four months.
Analysts’ consensus forecasted that ISM Services PMI would be around 56.5 this month.
The economy in Canada shed 39,700 jobs in August of 2022, missing market expectations of a 15,000 rise and bringing cumulative declines since May 2022 to 113,500. The unemployment rate increased to 5.4% in August of 2022 from the record-low of 4.9%.
Analysts forecast another decline of 15,000 jobs for September, with the unemployment rate at 5.3%.
Average hourly earnings in the US increased by 0.3% in August of 2022. The US economy added 315,000 jobs, and the unemployment rate rose to 3.7%, the highest since February.
This month’s average hourly earnings are forecast to rise by 0.3%, with 250,000 additional jobs and an unemployment rate to remain at 3.7%.
Last week, the USD index (USDX) declined by 0.75%, ending at 112.10, after reaching our Resistance Levels of 114.72.
On the Weekly timeframe, the Stochastic Indicator is within the overbought level and is beginning to reverse. This technically indicates that the purchasing power has reached its peak. The price is currently above the 20, 50, and 200-candle moving averages. This may signal that the price may decline more early in the week while waiting for Non-Farm Employment data at the end of this week.
Our Weekly Resistance levels are 113.83 and 115.35, and the Support Levels are 110.82 and 107.97.
On the H4 timeframe, the Stochastic Indicator is moving higher yet moves unclearly at the end of the week, showing that some taking profit action is in place. The price is moving below the 10 and 50-candle Moving Averages but above the 200-candle Moving Average, indicating that we may see some weaker movement for the start of next week, targeting our support levels and 200-candle Moving Averages.
Our H4 Resistance levels are at 112.61 and 114.53, and the support levels are at 111.53 and 109.16.
Gold prices increased by 1.01% after getting their safe-haven status back for a while after the Dollar fell for the week. The price reached our Support level at $1,618.
On a weekly timeframe, the Stochastic Indicators are inside the oversold level, indicating a potential reversal. Gold prices have recently broken through the 200-candle Moving Average, indicating that further downward movement is possible if the price cannot move back up.
Our Weekly Resistance levels are at $1,680 and $1,708, with the support levels at $1,618 and $1,563.
On the H4 period, the Stochastic Indicators show an upward rise at the end of the week, indicating that Gold may move higher in the short term. Meanwhile, the price is still below the 20, 50, and 200-candle moving averages, which will continue to decline.
Our H4 Resistance levels are at $1,680 and $1,695, with the support levels at $1,613 and $1,594.
Last week, US stocks declined for another week. Our support level for NAS100 has been reached at 11037.
On the Weekly timeframe, the Stochastic Indicator is moving lower within entering the oversold level. The price is moving below the 20- and 50-candle moving averages and can break the 200-candle Moving Average, indicating that the price may go lower and use the 200-candle Moving Average as resistance.
Our Weekly Resistance levels are at 11599 (200 MA), 11849 and 12130, with the support levels at 11037 and 10665.
On our H4 timeframe, we can see that our stochastic indicators are consolidating after trying to reach a higher level and coming back down. The price is now moving below the 20, 50, and 200-candle Moving Averages, indicating that potential lower movement is still intact.
Our H4 Resistance levels are at 11484, 11718 and 11901, and the support levels are at 10954 and 10713.
Last week, US stocks declined for another week. Our support level for DJ30 has been reached at 28781.
On the Weekly timeframe, the Stochastic Indicator is moving lower, entering the oversold level, while the price is moving below the 20- and 50-candle moving averages and can move below the 200-candle Moving Average, indicating that the price may go lower and use the 200-candle Moving Average as resistance.
Our Weekly Resistance levels are at 30651 and 31362, with the support levels at 28781 and 27642.
While on our H4 timeframe, we can see that our stochastic indicators are consolidating within the oversold level and trying to reverse up, but that price is now moving below the 20, 50, and 200-candle Moving Averages, indicating that potential lower movement is still intact. Still, we must be wary of the short-term upward movement.
Our H4 Resistance levels are at 30004 and 30576, while the support levels are at 28388 and 28036.
