BOJ preferred today to not join the central banks easing chorus sending USDJPY down during the Asian session to be traded close to 107.80, after reaching 108.47 following the widely expected Fed's decision to lower its fund rate by 0.25% again, scoring its first back to back cut since 2008.

Following this decision which was not taken unanimous again as 2 members were preferring no cut, The Federal Reserve Chairman Jerome Powell mentioned in the beginning of his press conference that The decision has been taken today as "insurance against ongoing risks" not as “mid-term policy adjustment” as what he said following last July 31 meeting when he warned against expecting long U.S. monetary easing cycle.

Fed projections have shown that 7 of 17 officials saw the need for further 0.25% cut by this yearend and no forecast for more than one rate cut this year shocking who were looking forward for more cuts this year. The projections were good news for UST 10 yr yield which rose above 1.80%, while gold retreated to $1484 per ounce, before stabilizing near $1490.

The Fed has taken also an action to fix the recent volatility in US money markets by lowering The interest rate on excess reserves by 0.30% to improve the market functioning .

Powell said “If we experience another episode of pressures in money markets, we have the tools to address those pressures,” putting the option of widening the balance sheet back again on the Fed's table, when it is to look for sustaining the expansion, boosting the inflation rate, combating the lingering headwinds of weaker global growth and against the current higher geopolitical uncertainty,

Powell assured on The Fed's acknowledge of the current strong labor market and consumption, but it is still worried about investment, exports and the current clearly muted inflation rate which is expected to rise later to The Fed's 2% yearly target.

The Powell indicated that There’s no monetary policy preset course and the Fed is to remain dependent on data, But if the economic expansion is to falter after growing by 2.5% in the first half, the Fed is “prepared to be aggressive” and “more extensive sequence” of rate cuts could be appropriate to stimulate the economy and boost inflation which was up in July by only 1.6% y/y based on the Fed’s preferred gauge PCE.

XAUUSD Daily Chart:


After sliding from its formed peak at $1557.03 on Sep. 4, XAUUSD is still showing ability to stand close to $1500 per ounce psychological level in its eleventh consecutive day below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today $1520.

XAUUSD is still keeping existence above its daily SMA50 and it is still underpinned over longer range by continued existence above its daily SMA100 and its daily SMA200.

The daily chart of XAUUSD shows that its RSI-14 is now inside its neutral area reading 47.986.

XAUUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line inside its neutral territory reading 34.638 and leading to the upside its signal line which is reading now 32.075, after positive crossover inside the oversold area below 20.


Important levels: Daily SMA50 @ $1481, Daily SMA100 @ $1409 and Daily SMA200 @ $1351

The Closest Experienced S&R:

S1: $1479.93

S2: $1381.80

S3: $1319.61

R1: $1557.03

R2: $1616.62

R3: $1697.10


Have Good Trading Times

Not Walid Salah El Din nor FX recommends accepts any liability for any loss or damage what's ever that may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in these trading recommendations.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

AUD/USD consolidates the rally above 0.67 on China's PMI, weaker USD

AUD/USD consolidates the rally 0.6700 after the Chinese Caixin Manufacturing PMI beat estimates with 50.7. Bulls are relieved that Trump's China news conference didn't mention trade, downing the US dollar broadly. Focus shifts to US ISM Manufacturing PMI. 


USD/JPY off highs, tracks broad USD weakness

USD/JPY drops back towards 107.50 following another failed attempt towards 108.00, despite a risk-on rally in the Asian equities. The spot tracks broad US dollar weakness, especially after US President Trump's softer stance on China boosted risk appetite. 


Trump tenderness, China's Caixin, boost Asia

Asia is off to a rollicking start to the week with equities performing strongly and currency markets rotating out of haven US Dollars. The turbocharging of bullish sentiment this morning has multiple drivers starting with President Donald Trump. 

Read more

Gold: Teasing a rectangle breakout, $1750 in sight

Gold bulls gathering pace for the next push higher. The extension of last week’s rally in the yellow metal is mainly driven by the sell-off in the US dollar across the board, in the wake of US-China trade war relief and escalating US riots.

Gold News

WTI: Overbought RSI challenges the bulls above $35.50

WTI seesaws around 7-week-old resistance line, retreats from highest since March 11. A short-term ascending trend line on the bears’ radars during the pullback. 100-day SMA, 61.8% Fibonacci retracement together offers strong upside barrier.

Oil News

Forex Majors