Market Commentary
USD pressured overnight as players pare positions heading into next weeks critical FOMC session. Markets continue to reprice lower the probability of a rate move next week.
EURUSD hit a six day high testing stops above 1.13 as the USD fell amid the mixed US data, deepening the concerns of the prolonged hold of US interest rates at emergency levels.
The Bank of England kept rates at record-low 0.5 percent this month as expected, while the vote was 8-1. GBPUSD hit a two-week high of 1.5475 against the dollar after BOE policymakers showed less concerns about the domestic impact of turmoil in global markets.
USDJPY rallied for a fourth day after a lawmaker said the BoJ’s late October meeting would be a “good opportunity” for further monetary stimulus. Liberal Democratic Party lawmaker Kozo Yamamoto, who has advised Prime Minister Shinzo Abe on economic policy, said that the BOJ should increase annual asset purchases by at least 10 trillion yen
Technical Commentary
EURUSD Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
Broken resistance at 1.1250 becomes intraday support while this caps downside expect a test of 1.1350, the upside of the broader 1.1050 – 1.1350 range.
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish but stalling
Monitoring intraday price and Order Flow indicators on a test of 1.1050 or 1.1350
GBPUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
The close above 1.54 targets pivotal 1.5550 while 1.5350 caps intraday downside reactions
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bearish but positively orientated towards retesting midpoint from below
Monitoring intraday price action and Order Flow indicators on a test of 1.5350 or 1.5550
USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
As 121.50 caps upside expect retest of 119.50. Only a close back above 122.50 relieves downside pressure
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish
Monitoring intraday price action and Order Flow indicators on a test of 119 or 122
EURJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
While 135 supports intraday downside reactions expect a retest of range resistance towards 138.50. A failure at 135 would target a breach of 132 next
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology bullish
Monitoring intraday price action and Order Flow indicators at 138 or 132
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Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
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