Thread: Daily Market Analysis from ForexMart

Analysis and trading tips for EUR/USD on September 9​​​​​​​

Analysis of transactions in the EUR / USD pair

Euro tested 0.9985 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which led to a price increase of around 40 pips. In the afternoon, another buy signal was formed at 0.9941, and this also resulted to a rise of more than 40 pips.

The ECB's decision to raise rates by 0.75% led to a slight decrease in euro because markets already expected that outcome. But after Christine Lagarde said another increase is possible in October, demand rose, which led to the rise of EUR/USD. US data on jobless claims and speech of Fed Chairman Jerome Powell were ignored by markets.

A number of reports are scheduled to be released today, including the change in the volume of industrial production in France. There will also be another speech from ECB President Christine Lagarde, which may add optimism in markets. The EU economic summit and Eurogroup meeting may also have a positive impact on euro, especially if decisions are made to support the population and pay off their energy debts. In the afternoon, there are no important statistics in the US, except for changes in the volume of stocks in wholesale warehouses. There will be presentations from FOMC members Charles Evans, Christopher Waller and Esther George, but all of them are likely to talk about further increases in interest rates.

For long positions:

Buy euro when the quote reaches 1.0078 (green line on the chart) and take profit at the price of 1.0135. Growth may continue today as the ECB raised interest rates by 0.75%.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0042, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0078 and 1.0135.

For short positions:

Sell euro when the quote reaches 1.0042 (red line on the chart) and take profit at the price of 0.9998. Pressure will return if the Fed remains hawkish on its monetary policy.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0078, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0042 and 0.9998.

But we don't care: USD/JPY is rushing like a tank, ignoring all the negative factors

After Friday's fall, the dollar-yen pair finds the strength to rush upward. The asset demonstrates a confident upward trend at the beginning of the week, despite the predominance of negative factors.

Recall that last Friday the USD/JPY pair underwent intense sales. The quote fell by more than 1%, being under pressure from the growing risk of foreign exchange intervention.

The Japanese authorities significantly tightened their warning of their intervention after the yen came close to a new 24-year low of 145 in the middle of the week.

Many analysts believe that this key threshold is a red line for the Japanese government. As soon as the yen crosses it, officials will move from words to deeds.

Over the weekend, the risk of actual rather than verbal intervention increased significantly. On Sunday, Deputy Cabinet Secretary General Seiji Kihara said the authorities were deeply concerned about the excessive fall in the yen.

According to him, in the near future the government should take a number of measures in order to stop the depreciation of the national currency.

At the same time, Kihara refused to give any comments on the country's monetary and credit rate. This once again confirms that at this stage, Japanese politicians are not considering the possibility of helping the yen by raising interest rates.

The only option now being discussed at the top echelon is foreign exchange intervention. But will it bring the desired result if it is one-sided?

– For intervention to be effective, support from the Federal Reserve and other central banks is needed. However, right now, as major central banks fight inflation with policy tightening, global official support for the yen looks unlikely, said National Australia Bank currency strategist Rodrigo Catril.

The expert is confident that the yen will stop falling only as a result of a change in the exchange rate of the Bank of Japan.

To strengthen the currency, the central bank must abandon its ultra-soft policy and start raising the rate. Otherwise, the yen is waiting for a further collapse.

With no signs of BOJ capitulation on the horizon right now, the market has no choice but to ignore yet another warning of FX intervention.

Traders are well aware that even in the event of an actual intervention, the recovery of the yen will be very short-lived, so they resume long positions on the USD/JPY pair again.

The asset returned to the area above 143 on Monday morning.

Even the news that Japan intends to further weaken border controls when entering the country did not prevent its rise.

According to the Nikkei newspaper, the Japanese government may lift all current restrictions on foreign nationals entering the country by October.

The authorities hope that the rise in inbound tourism will help revive the fragile Japanese economy and thereby support the yen that has fallen heavily this year.

Another negative factor that the USD/JPY pair stubbornly turns a blind eye to this morning is tomorrow's release of US inflation statistics for August.

According to forecasts, the consumer price index on an annualized basis will decrease to 8.1% from the previous value of 8.5%.

It would be quite logical to expect that the weakening of inflationary pressure for the second consecutive month will force the Fed to reduce the degree of aggressiveness in relation to interest rates.

Despite a possible decline in inflation, prices still remain well above the 2% target.

Based on this, the markets continue to believe that the US central bank will raise rates by 75 bps in September. The probability of such a step is now estimated at 85%.

Traders' unwavering confidence in the Fed's determination is a key driver for the dollar, especially against the Japanese yen.

Most analysts believe that the USD/JPY asset could again demonstrate an impressive rally in the coming days, as moment X is just around the corner.

The US central bank's meeting on monetary policy issues, at which the decision on interest rates will be announced, will be held on September 20-21.

As the event approaches, hawkish expectations about the Fed's course should intensify even more. This will push the dollar to new heights, and the yen - to the next anti-records.

the funds and risks that exist must be able to be considered properly, this is done so that traders can be more leverage in getting maximum trading security and comfort like what I got from Tickmill.

US stocks closed higher, Dow Jones up 0.71%​​​​​​​

At the close in the New York Stock Exchange, the Dow Jones rose 0.71%, the S&P 500 index rose 1.06%, the NASDAQ Composite index rose 1.27%.

The leading performer among the components of the Dow Jones index today was Apple Inc, which gained 6.06 points or 3.85% to close at 163.43. Quotes of American Express Company rose by 4.01 points (2.53%), closing the session at 162.45. Salesforce Inc rose 3.04 points or 1.87% to close at 165.63.

The biggest losers were Amgen Inc, which shed 10.07 points or 4.07% to end the session at 237.62. Home Depot Inc was up 2.23 points (0.74%) to close at 297.54, while Johnson & Johnson was down 0.07 points (0.04%) to end at 165. .64.

Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 5.98% to hit 28.36, APA Corporation, which gained 5.01% to close at 40.00, and shares of Fortinet Inc, which rose 4.20% to end the session at 55.84.

The biggest losers were The Mosaic Company, which shed 6.76% to close at 52.44. Shares of Amgen Inc lost 4.07% to end the session at 237.62. Quotes of CF Industries Holdings Inc decreased in price by 4.05% to 99.48.

Leading gainers among the components of the NASDAQ Composite in today's trading were Neurobo Pharmaceuticals Inc, which rose 101.30% to hit 0.56, InMed Pharmaceuticals Inc, which gained 70.42% to close at 18.78, and also shares of Ventyx Biosciences Inc, which rose 64.98% to end the session at 38.11.

The biggest losers were Tuesday Morning Corp, which shed 31.19% to close at 0.19. Shares of WeTrade Group Inc lost 30.19% and ended the session at 1.11. Akari Therapeutics PLC was down 27.88% to 0.75.

On the New York Stock Exchange, the number of securities that rose in price (2,360) exceeded the number of those that closed in the red (764), while quotes of 160 shares remained virtually unchanged. On the NASDAQ stock exchange, 2431 companies rose in price, 1384 fell, and 259 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.74% to 23.87.

Gold futures for December delivery added 0.43%, or 7.45, to $1.00 a troy ounce. In other commodities, WTI crude for October delivery rose 1.36%, or 1.18, to $87.97 a barrel. Brent oil futures for November delivery rose 1.44%, or 1.34, to $94.18 a barrel.

Meanwhile, on the Forex market, EUR/USD rose 0.81% to hit 1.01, while USD/JPY edged up 0.21% to hit 142.82.

Futures on the USD index fell 0.60% to 108.08.

Hot forecast for EUR/USD on 14/09/2022

Inflation in the United States of course slowed down, but not to 8.1%, but to 8.3%. At the same time, in monthly terms, it increased by 0.1%, while it was expected to decline by 0.2%. In addition, the core inflation rate, instead of remaining unchanged, accelerated from 5.9% to 6.3%. Monthly data on the core inflation rate showed an increase of 0.6%, while the forecast was 0.4%. After that, everyone immediately started talking about the fact that in just a week the Federal Reserve would raise the refinancing rate by 100 basis points. And the single currency literally fell below parity in the blink of an eye.

Inflation (United States):

The situation is aggravated by the fact that until next Wednesday, when the meeting of the Federal Open Market Committee takes place, representatives of the Fed will not make any official statements. They can't even comment on the situation with inflation. Internal rules forbid it. In other words, market participants will be able to focus only on macroeconomic statistics and its interpretation by various media. Data on producer prices will be released today, the growth rate of which seems to be slowing down from 9.8% to 8.9%. If these forecasts are confirmed, then it will be possible to assume that inflation will still gradually slow down, and then a rebound is possible, and the euro's return above parity. But if the producer price index declines even a little less, then the market will panic again, and the dollar will further strengthen its positions.

Producer Price Index (United States):

The EURUSD currency pair fell over 200 points in the course of speculative operations during the past day. This movement led to the return of quotes below the parity level.

Technical instruments RSI H1 during the intensive weakening of the local euro fell below 22. This signal indicated a high level of oversold in short-term time periods. RSI H4 and D1 are moving in the lower area of the 30/50 indicator, which corresponds to a downward trend.

The MA moving lines on Alligator H4 changed direction from top to bottom, this was caused by sharp price changes a day earlier.

Expectations and prospects

The overheating of euro short positions led to a technical rollback, which is considered a common phenomenon in the market in case of inertial movement. A gradual recovery of the euro exchange rate is possible, but only in case prices are stable above the parity level. Under this scenario, growth in the direction of 1.0050-1.0120 is possible.

An alternative scenario for the development of the market considers the continuation of the downward cycle, in which the technical signal of oversold will be ignored by traders. In this case, keeping the price below 0.9950 will eventually lead to a new low of the downward trend.

Comprehensive indicator analysis in the short-term and intraday periods indicate a downward cycle, due to the inertial price movement. In the medium term, technical instruments have a sell signal, which corresponds to a downward trend.

Tips for beginner traders in EUR/USD and GBP/USD on September 15, 2022

Details of the economic calendar for September 14
Annual inflation in the UK fell to 9.9% in August, with forecast of growth to 10.6% from 10.1%. The change is small, but this is a positive factor because the Bank of England at the upcoming meeting may well indicate a slowdown in the rate of inflation, which will affect the revision of the rate of increase in the refinancing rate.

Euro area industrial production declined to -2.4% YoY in July from the previous month's growth of 2.2%. Forecasts assumed growth of 1.7%. This is a negative factor, but the euro has already been heavily oversold. For this reason, there was no proper reaction on the market.

US producer prices recorded a decline from 9.8% to 8.7%. The market almost did not react to these statistics.

Analysis of trading charts from September 14
The EURUSD currency pair, despite the characteristic sign of oversold, continued to tread within the base of the recent downward momentum. As a result, a range of 50/60 points was formed.

The GBPUSD currency pair reached 1.1588 at the stage of a pullback from the value of 1.1480, where there was a demand for dollar positions. As a result, the quote rushed back to the recent support level.

Economic calendar for September 15
Today the market is expecting data on the United States, where not the best indicators are predicted, which may have a negative impact on dollar positions.

US retail sales may fall from 10.3% to 9.0% YoY, while the volume of industrial production may slow down from 3.9% to 3.5% YoY. The negative for the US will not end there, as the weekly data on claims for benefits may reflect an increase.

Statistics details:

The volume of continuing claims for benefits may increase from 1.473 million to 1.475 million.

The volume of initial claims for benefits may increase from 222,000 to 226,000.

Time targeting:

US Retail Sales – 12:30 UTC

US Jobless Claims – 12:30 UTC

United States Industrial Production – 13:15 UTC

Trading plan for EUR/USD on September 15
In this situation, there is a process of accumulation of trading forces, which, in principle, restrains the quote from a full-scale pullback. The optimal trading tactic is considered to be the method of the impulse coming from the range of 0.9955/1.0010.

We concretize the above:

The downward move will be relevant after the price holds below 0.9950. This step may lead to an update of the low of the downward trend.

An upward movement in the currency pair is considered in case of a stable holding of the price above the value of 1.0030 in a four-hour period.

Trading plan for GBP/USD on September 15
In this situation, the signal for a subsequent decline will be the price holding below the 1.1480 mark in a four-hour period. This step is highly likely to lead to touching the 2020 low.

In your work, it is worth taking into account the factor of overheating of short positions in the pound sterling, where the recent pullback could not lead to a regrouping of trading forces. In this case, the lack of holding the price below 1.1480 may lead to a movement towards the values of 1.1588–1.1600.

the funds and risks that exist must indeed be able to be considered properly, this is done so that traders can be more leverage in getting maximum trading security and comfort like what I got from Tickmill.

USD/JPY: is black swan event possible?

USD/JPY traders are awaiting the policy meetings of the Federal Reserve and the Bank of Japan this week. For many market players, the outcome of these meetings is obvious. However, some analysts do not rule out an unexpected turn of events.

Market expectations
Last week, the US dollar found strong support in US CPI data for August.

According to the report, inflation in the US decreased to 8.3% in August from 8.5% in July, falling short of expectations.

Inflation in the US remains above the Fed's target level of 2% and continues to be persistent, increasing expectations of more aggressive Fed monetary tightening.

The markets are currently pricing in an 81% probability of a 75 basis points hike. Some market players even believe the Federal Reserve could increase interest rates by 100 bps at its next meeting on September 20-21.

Both scenarios would fuel the US dollar's upward momentum against other major currencies, particularly against the Japanese yen.

Since the beginning of 2022, the yen decreased by 20% against the dollar due to a growing monetary policy gap between the Bank of Japan and the Federal Reserve.

While Fed policymakers are actively fighting inflation by rapidly hiking interest rates, their Japanese counterparts keep interest rates at very low levels.

Many traders now expect the BOJ to maintain their ultradovish policy course this week.

Recent decisions by the Bank of Japan suggest the regulator remains committed to its dovish course. Last week, the BOJ increased bond purchases twice to keep yields at their low level.

The BOJ's policy meeting is concurrent with the Fed meeting in the US. If decisions of both central banks match market expectations, it would send USD/JPY skywards once again.

Both events could give redoubled support to the instrument in the next few days. Many analysts predict significant upward movement for the pair in the short term.

Currency strategists at the Goldman Sachs see the yen fall to 155 against the dollar. An outlook by Rabobank predicts that JPY could slide down to 150, while RBC Capital Markets forecast a decline to 147. HSBC Holdings predicts that the yen could decrease to 145 against the US dollar.

What could go differently
Many analysts warn that USD/JPY would be highly volatile this week.

There are numerous factors listed above that could push the US dollar up. However, a Japanese yen rally should not be ruled out.

The most obvious driver for the Japanese yen is a currency intervention. Last week, high-ranking Japanese policymakers have repeatedly raised the topic of a possible currency intervention.

If the yen once again approaches the key mark of 145 before or after policy meetings of the Fed and the BOJ, this could trigger an intervention by the Japanese government.

A less obvious scenario that could halt the uptrend of USD/JPY would involve the Bank of Japan giving up its current stance.

So far, few believe that the Bank of Japan could amend its policy, but their number is steadily increasing. According to reports by Reuters, swap rates betting on a shift in policy have sharply increased over the past several days as the regulator stopped referring to inflation as "temporary".

The Bank of Japan stopped labeling inflation as "temporary" in its transcripts and minutes of the policy meetings in July.

That month, Japanese core CPI hit 2.4%, the highest level in more than 7 years.

Inflation in Japan has exceeded its target level of 2% for a fourth consecutive month.

Furthermore, most BOJ policymakers expect core consumer prices to rise to 3% in October, Reuters reported.

This inflation surge could be driven by rising food prices. According to a survey by private research firm Teikoku Databank, about 80% of Japanese food companies plan to raise prices next month.

This price hike would affect more than 20,000 food items, which are expected to go up by 14% on average.

As a result, many BOJ policymakers have revised their inflation outlooks upwards, Reuters reported. It remains to be seen when the Bank of Japan will express its concern over price growth.

Some experts believe the first signs of such a shift could happen at the next BOJ policy meeting.

If the Bank of Japan begins to lose its sticky deflationary mindset and acknowledges that price growth is an issue that must be resolved, this would be regarded as the first hawkish signal by the market.

Such an event would pose a threat to USD/JPY rally.

Existing analytical skills must be able to be considered properly, this is done so that traders can become more leverage in getting maximum trading security and comfort like what I got from Tickmill.

Hot forecast for EUR/USD on 22/09/2022

Of course, the growing tension and confrontation in Europe, caused by the decision to hold referendums on joining the Russian Federation of four more regions, as well as the partial mobilization announced yesterday by Vladimir Putin, put pressure on the single European currency. And not only on it, but on almost all financial instruments. In fact, there is now a massive flight of capital to the United States, which leads to even greater strengthening of the dollar. The Federal Reserve's decision to raise the refinancing rate by 75 basis points, and the subsequent statement by Fed Chairman Jerome Powell about the justification for further tightening of monetary policy, only strengthens this process. Yes, Powell acknowledged the fact that inflation is slowing down, but noted that this is happening much more slowly than expected. Therefore, it is necessary to continue to raise interest rates. From this follows the conclusion that during the next meeting of the Federal Open Market Committee, the refinancing rate will again be raised by 75 basis points.

Refinance rate (United States):

Nevertheless, we should not forget about the excessive overbought dollar. So for its further growth, the market needs to release steam, in the form of a noticeable rebound, or a local correction. It is quite possible that this is what will happen today. The reason will be the Bank of England's decision on the refinancing rate, which can be raised by 50 basis points. Such results of the central bank's meeting can certainly push the pound to grow, and given the market's need for a rebound, it will pull the single currency along with it.

Refinancing rate (UK):

The EURUSD currency pair, after walking along the 0.9900 level for 3.5 weeks, managed to stay below it in the daily period. This difficult step led to the prolongation of the long-term downward trend, where the quote was again at the levels of July 2002.

The RSI H4 technical instrument, due to the intense downward movement of the price, turned out to be below the level of 30, which indicates a signal about the oversold euro.

The MA moving lines on Alligator H4 and D1 are directed downwards, which corresponds to the trend direction.

Expectations and prospects

In this situation, there is an overheating of short positions in the euro, which from the point of view of technical analysis can lead to a price pullback. In this case, a reverse move to the previously passed 0.9900 level is possible.

A comprehensive indicator analysis in the short term indicates a long position due to a pullback emerging in the market. Indicators in the intraday and medium-term periods are focused on a downward trend.