Packed day ahead

Peter Iosif, ACA, MBA IronFX

Fed policymakers to get attention

In the FX market, the USD continued to strengthen, driven by high market expectations for the Fed to continue to tighten its monetary policy. In a packed day, we have highlight the Fed policymakers scheduled to speak today and should a more hawkish tone prevail, we may see the USD getting additional support. Be advised that we get a slew of US high impact economic data in the coming days that could rock the greenback.

US equities slip

US equities tended to slide lower yesterday as the week began given the cautious market sentiment. US bond yields remained at high levels, reflecting the market’s worries but also worries for AI technology tended to weigh. We see the case for fundamentals to continue to weigh on US equities, yet US stock markets have shown substantial resilience to selling pressure until now.

Gold’s price stabilises after drop

Gold’s price tended to stabilise in today’s Asian session, even edging just a bit higher. Analysts highlight developments in the Middle East among other factors for the stabilisation, yet we consider it as more of a technical correction given yesterday’s sell-off and continue to view fundamentals including the Fed’s intentions, high yields and high inflation, still as weighing on the precious metal’s price.

Oil prices maintain a wait and see position

Oil prices tended to remain relatively stable as conflicting fundamentals tend to dictate a wait and see position. Market hopes for diplomacy to bear fruit regarding the US-Iranian conflict and a possible reopening of the Strait of Hormuz, tend to weigh on oil prices. Yet the negotiations seem to be stalling, and worries for an escalation of the conflict re-emerge pushing oil prices higher.

Other highlights for today

Today we get Switzerland’s KOF indicator, Euro Zone’s market and consumer data, the US consumer confidence all for September, Canada’s GDP rate for July, the US JOLTS Job Openings for August and the weekly US API crude oil inventories figure. On a monetary level a plethora of policymakers of various central banks are scheduled to speak. In tomorrow’s Asian session, we get Japan’s building approvals and Australia’s CPI rates, both for August, China’s NBS and Rating Dog PMI figures for September.

Charts to keep an eye out

In the FX market, EUR/USD tended to edge lower in today’s Asian session testing the 1.1350 (S1) support line. We maintain a bearish outlook for the pair and intend to keep it as long as the downward trendline guiding it remains intact. The RSI indicator has dropped below the reading of 30, signalling a strong bearish market sentiment for the pair yet also a possible oversold conditions that could cause a correction higher of the pair’s price action. Should the bears remain in the driver’s seat, EUR/USD is expected to break the 1.1350 (S1) support line and start aiming for the 1.1210 (S2) support level. Should the bulls take over, we may see EUR/USD breaking the 1.1470 (R1) resistance level, opening the way for the 1.1575 (R2) resistance level.

XAU/USD stabilised in today’s Asian session, between the 4275 (R1) and the 3960 (S1) levels. We maintain yesterday’s bearish outlook for the precious metal’s price and intend to keep it as long as the downward trendline guiding it remains intact. Supporting our bearish outlook is also the RSI indicator which remained low, signaling a continuance of the bearish market sentiment for gold’s price. Should the bears maintain control over gold’s price we may see it aiming if not breaking the 3960 (S1) support line and exposing the 3600 (S2) support level as the next possible target for the bears. Should the bulls take over, Gold’s price could break the 4275 (R1) resistance line and start aiming for the 4550 (R2) resistance level.

Calendar follows

EUR/USD daily chart

Support: 1.1350 (S1), 1.1210 (S2), 1.1065 (S3).
Resistance: 1.1470 (R1), 1.1575 (R2), 1.1685 (R3).

XAU/USD daily chart

Support: 3960 (S1), 3600 (S2), 3250 (S3).
Resistance: 4275 (R1), 4550 (R2), 4890 (R3).

Author

Peter Iosif, ACA, MBA

IronFX

Mr. Iosif joined IronFX in 2017 as part of the sales force. His high level of competence and expertise enabled him to climb up the company ladder quickly and move to the IronFX Strategy team as a Research Analyst. Mr.

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