Daily Market Analysis By Z Forex

[Z Forex]

*EURUSD*

Yesterday, EUR/USD depreciated dramatically to 20-year low level of 0.9550. Since ultra-hawkish FED and energy crisis keeps sellers hold, the parity continues to weaken. On the other hand, ECB's Lagarde made hawkish comments gave some support to the parity for a while before US session. Also, the news flow from Bloomberg that EU plan to delay enforcing a price cap on Russian oil imports stopped the losses.Technically, downward pressure is still on the agenda. The break of 0.9550 level gives a way to the next 0.9465-70 area before 0.9340. On the upside, the resistance level is around 0.9710. More upside, it may be followed 0.9800 level.
Support: 0.9625 - 0.9550 - 0.9490
Resistance: 0.9710 – 0.9800 – 0.9875

*GBPUSD*

GBP/USD touched the historical low level of 1.0330 and now is seen around 1.0800. The BOE was under pressure, but BoE’s Bailey repeated they would not hesitate to alter interest rates as necessary to return inflation to the 2% target sustainably in the medium term. In the market, 3Month risk reversals against the pound are near the most bearish since 2016 (Now: -3.64, 2016:-4.50). Also, Overnight index Swaps (OIS) now implies an expectation of a 150bps hike by 3 November meeting. Yet, markets are still hoping for an emergency hike that could help steady the GBP and mitigate imported inflation.
Technically, the pound is oversold condition as daily RSI14 indicator. Resistance is seen around 1.0840. More upside, the parity may lift to 1.0970 level. On the downside, the support is at 1.0630 and then at 1.0525.

Support: 1.0630 – 1.0525 – 1.0330
Resistance: 1.0840 – 1.0970 – 1.1130

*XAUUSD*

The FED will have to hike further to stamp out inflation, and policy will need to stay restrictive for longer to fight inflation expectations, Loretta Mester said yesterday. According to her, inflation is the FED’s number one priority. Thus, the more hawkish expressions lifted the real rates up to 161bps.
From a technical perspective, the year-to-date low 1620 seems like a support level. More downside, the support will be 1610-1600 region. On the upside, 1647 may follow as the first resistance. Any move upwards is more likely to expose resistance near a one-week-old trading range 1654/1656 area.

Support: 1628 – 1620 – 1611
Resistance: 1647 – 1656 – 1672

* UKOIL*

Central Banks’ guidance, global economic growth expectations decrease. Thus, brent oil prices are expected to fall more.
Technically, 50-Daily Moving Average (DMA) is crossed the 200DMA. Below 97.00 level, Brent remains under selling pressure. The expected trading range for today is between 82.90 support and 87.40 resistance.

Support: 83.65 – 82.90 – 79.30
Resistance: 87.40 – 89.70 – 92.80

 

[Z Forex]

Daily analysis 28.09.2022

The dollar index (DXY) is still on the increase because FED is set to continue with its hawkish approach. In the Asia session, DXY touched the 114.70 levels, pushing major pairs down. In other words, FED projects higher rates for the longer set to keep the dollar bid. Hence, US Treasury yields continue to rise. This morning, UST 2Y yield is seen at %4.27 vs UST 10Y at %3.97. The spread comes down for US2Y-10Y -29bps from-43bps swiftly.

Today, both Lagarde and Powell have a speech at different events, but it is not related to monetary policy. Yesterday, US Conference Board Consumer Confidence Index was released, and the data rose to 108.00 from 103.60, beating estimates at 104.60. Today’s economic calendar seems stationary.

In addition, the IMF said related to the UK’s unfunded tax cuts that it needs revision. By the way, the chancellor Kwarteng will meet with Wall Street executives today.

 

[Z Forex]

Daily analysis 28.09.2022

*EURUSD*
In Euro area, things are not going well. A little while ago, German Gfk Confidence Index released, and the data dropped to a new all time low -42.5 from -36.8 in September. Since the consumers spend more money for energy, they could reserve less money to make new purchases. Also, the DXY remain firm, and FED’s governors continue to explain hawkish message. Thus, EUR/USD continue to weaken and this morning it breaks 2-decade low of 0.9550 now.
Technically, downward pressure is still on the agenda. The break of 0.9550 level gives a way to the next 0.9470 before 0.9400. On the upside, the resistance level is around 0.9500. More upside, it may be followed 0.9690/0.9700 region.

Support: 0.9470 - 0.9400 - 0.9345
Resistance: 0.9600 – 0.9690 – 0.978

*GBPUSD*
After the UK government's announcement of new tax cuts enhanced concerns for the country's economy. Thus, the pound touched $1.0350 level as of September 26, making a record low for the currency. Economists agree that the decrease in the pound could force BoE to rate hike at least 150bps in order to support the pound. Today, 3-Month risk reversals against the pound are priced very close to the most bearish level since 2016 at -3.69.
Technically, the pound is oversold condition as daily RSI14 indicator. Resistance is seen around 1.0740. More upside, the parity may lift to 1.084070 level. On the downside, the support is at 1.0570 and then at 1.0460.

Support: 1.0570 – 1.0460 – 1.0330
Resistance: 1.0740 – 1.0840 – 1.0970

*XAUUSD*
After ultra-hawkish FED, gold price remains pressured around the new low level of year at 1615. Fears of recession and firmer yields give way to sell off for yellow metal. The real rates for 10Y reached 165bps.
From a technical perspective, below 1615 the year-to-date low level, the route to the $1,600-$1,590 region remains a distinct possibility. On the upside, 1640 level seems to act as immediate resistance, in advance of 1630 level. Any move upwards is more likely to expose resistance near a one-week-old trading range 1654/1656 area.

Support: 1613 – 1605 – 1595
Resistance: 1630 – 1642 – 1654

* UKOIL*
With the Central Banks’ hawkish guidance, global economic growth expectations fall. In other words, rising interest rates across advanced economies drags on the outlook for energy consumption. Thus, brent oil prices are expected to fall more.
Technically, 50-Daily Moving Average (DMA) is crossed the 200DMA. Below 95.60 level (50DMA), Brent remains under selling pressure. The expected trading range for today is between 83.65 support and 87.40 resistance.

Support: 83.65 – 82.90 – 79.30
Resistance: 87.40 – 89.70 – 92.80

 

[Z Forex]

Yesterday, the FED raised the interest rate by 75bps as expected and the forecast for the end of year updated %4.4. FED chair Powell said there is no painless way to get inflation down. According to projections, the benchmark interest rate would reach %4.6 in 2023, speeding up its fight against surging prices. The dot plot shows that 10 out of 19 members look for the policy rate to end above %4.25 and a year later they expect the policy rate to the end of 2023 at above %4.5. In addition, the median estimate of real GDP for 2022 is harshly updated from %1.7 YoY to %0.2YoY while that of 2023 is also downgraded to %1.2 from %1.7. Fears of recession gives way to the US Index strength. US Treasuries’ yield continue to rise and the spread between 2-10Y treasury yield reached -52bps.

After the FED, today is BoE. The bank will announce a 50bps rate increase today, but some economists predict 75bps move which would be the biggest since 1989. What is more, Swiss official will hike the policy rate into positive territory if they increase at least 25bps. In fact, the market is already priced a 75bps rate hike. With the decision, Europe’s subzero rate period come to end.

This morning, Dollar Index (DXY) rose to 111.750 level. The real rate for 10Y in US reached 117bps. After FED meeting, risk appetite in the market turns negative. European stocks market starts the day with a negative sentiment following FED implyed its third consecutive 75bps rate hike and signaled more increases until inflation slow down.

*EURUSD*

Risk sentiment is negative for the parity after FED rate decision. Yesterday, FED increased the policy rate with the widely expected 75bps hike. Also, geopolitical risk is on the agenda for EU. The referendums were declared for the four Russian occupied regions yesterday. Plus, Putin announced a partial mass mobilization of 300K and potential use of nuclear weapons.

Today, EURUSD is trading above 0.98 level. After DXY rally and firmer US Treasuries, the intense sell-off is seen now. Technically, support is seen around 0.9810/98.00 area. More downside, 0.97 level come to the forefront. On the upside, the first resistance comes at 0.9860. More upside is expected to the 0.9910.

Support: 0.9810 - 0.9770 - 0.9705
Resistance: 0.9860 – 0.9910 – 0.9970

*GBPUSD*

Today, the BoE have policy rate decision and a 50bps rate hike priced in the market. Nonetheless, some economists expect a 75bps rate hike. The cable is melting towards 1.1200 levels, sitting at 37-year lows in early because of the policy divergence between FED and BoE. Hawkish tone explanations from FED yesterday, it also leads to selling pressure on the parity.

Technically, the pair was seen at 1.1235 level. Daily RSI indicator stays well below 30 which is indicated for oversold condition. Until BoE makes hawkish surprise, the pound continues to free fall. The daily support level is around 1.12/1.1210 area, before1.1185 level. On the upside, 1.1270 level is seen as resistance. More upside, 1.1360 level could be followed as resistance.

Support: 1.1210 – 1.1185 – 1.1100
Resistance: 1.1270 – 1.1360 – 1.1460

*XAUUSD*
Yesterday, FED raised the policy rate by 75bps to %3.25 during its September meeting. Also, their projections are updated harshly. The dot plot signaled interest rate will likely reach %4.4 at the end of the year. After decision, the gold price was tested the low level of the year 1654 again. During the press conference, the volatility came to the market. Yet, hawkish tones from Powell gives way gold to lose power. Now, DXY is still on the increase and US10Y real yield is seen around 117bps. However, fears related to Russia referendum plans for occupied regions stabilize the gold price.
Technically, daily RSI (14) indicator is oversold condition. Also, 1654 level is critical on daily closed because it is two-year low level. Further downside, the support occurs at 1642, before 1630 level. On the upside, the first resistance is at 1685 level, then 1692 level could be followed.

Support: 1654 – 1642 – 1630
Resistance: 1685 – 1692 – 1702/1705

* UKOIL*

Brent oil prices are expected to fall because hawkish FED makes the growth forecasts down. Yesterday, FED updated the growth projections downside to %0.2 from %1.7 at the end of 2022. Fed also signaled further tightening to bring down inflation, sacrificing about global economic outlook and energy demand. Thus, the black gold is vulnerable in this setting.
Technically, 50-Weekly Moving Average (WMA) is based nearly 97.20 level. The sentiment below that level is negative for Brent oil. The expected trading range for today is between 88.50 support and 94.65 resistance.

Support: 88.50 – 87.25 – 86.30
Resistance: 93.50 – 94.65 – 96.85

 

[Z Forex]

Yesterday, the Dollar Index (DXY) widened its appreciation in European session. Then, DXY hit a record high of 114.78. Yet, after Wall Street's opening it retreats towards 112.60 level. Thus, the sentiment in the market turns positive mode and major currencies take breath in the least. Besides, several FED officials made explanations that they are waiting for Fed funds rate between 4.25% and 4.75% in the first quarter of 2023.

In this morning, DXY was last seen at 113.50 and 2Y10y yield differential hovered around 36bps, widening from 32bps seen this time yesterday. In addition, the Bank of England (BoE) would buy bonds on “whatever scale is necessary” to calm markets, after the collapse in sterling to the lowest level in history on Monday and a dramatic rise in the UK’s borrowing costs to the highest level since the 2008 financial crisis.

Today, the investors' focus will be on German inflation, expected to have raised by 9.4% YoY in September. Also, eyes are very much on the third print of the 2Q US GDP release before the highly scrutinized PCE core tomorrow.

*EURUSD*

The EURUSD was last seen around 0.9960 level. Yesterday, the pair touched to a 22-year low of 0.9535, but after US session it recovers intraday losses and moved up to 0.9750. Also, the parity receive support from BoE decision as well as USD retracement. Fundamentally, the EU energy crisis disturb local authorities and the EU Commission released a paper assessing gas price measures. EU nationals can no longer hold high -paying roles in Russian state -owned companies according to European Commission President Ursula von der Leyen.

Technically, downward pressure is still on the agenda. The break of 0.9535 level gives a way to the next 0.9490. On the upside, the resistance level is around 0.9750. More upside, it may be followed 0.9790/0.9800 region.

Support: 0.9620 - 0.9535 - 0.9490
Resistance: 0.9750 – 0.9800 – 0.9895

*GBPUSD*

The pair was quite volatile because BoE pledged unlimited purchase of longer-tenor bonds along with the delay on the start of its plan to sell existing stock of bonds. Long-term yields soared with the announcement. The pair raised t0 1.0915 level, but today it was last seen 1.0790 because DXY is rising again. Overnight Interest Swap still shows an expectation of a 150bps hike by 3 November meeting.

Technically, the pound is still oversold condition as daily RSI14 indicator. Resistance is seen around 1.0930. More upside, the parity may lift to 1.1035 level. On the downside, the support is at 1.0700 and then at 1.0555.

Support: 1.0700 – 1.0555 – 1.0330
Resistance: 1.0930 – 1.1035 – 1.1105

XAUUSD*

After the GBP recovery and the weakness of US treasury yields, the gold price soared to the highest level of the week to 1660 level. Yet, the real yield for 10Y is again on the increase around 156bps.

Technically, the sharp downturns in Gold seem corrective amid the last dollar's overbought conditions. Below 1645, the gold could test the year-to-date low level at 1615, in advance of 1633. Then the route to the $1,600-$1,595 region remains a distinct possibility. On the upside, 1654 level seems to act as immediate resistance. Any move upwards is more likely to expose resistance near yesterdays’ high level around 1663. And if the gold price pass over the weekly 200MA 1680 level, the sentiment would turn positive.

Support: 1633 – 1615 – 1598

Resistance: 1654 – 1663 – 1678

 

[Z Forex]

Last week, we saw unprecedented volatility for the British pound following the presentation of the highly controversial mini-budget. The pound was driving in a new all-time low of 1.0340 at the beginning of the week, but the parity became reversed its direction and regained at 1.1200 early Friday since the Bank of England (BoE) decided to intervene in the bond markets on Wednesday.

Today, DXY was last seen at 112.20. The index is gathering strength at the beginning of the week because the PCE core deflator surprised to the upside at 0.6%m/m vs. the previous 0.0%. Year-on-year, the inflation measure rose %4.9, accelerating from the previous %4.7 (also revised higher). US 10Y treasury is now trading at %3.78, but last week it raised %4.00 for the first time since 2008. The spread difference between 2y-10y is again on the increase with 42bps.

This week, the investors focus on US nonfarm payrolls and wage growth releases on Friday. Before PMI data will be updated by the US, Eurozone, and U.K. In addition, the Reserve Bank Australia (RBA) will likely raise the cash rate to %2.85 from %2.35. Also, the Reserve Bank of New Zealand (RBNZ) is likely to hike by another 50bps on Wednesday. The official key rate is now %3.00 and the market expects %3.50 with a 50bps rate hike.

EURUSD

The parity closed the third quarter at the level of 0.98. Today, it is heading the North and trading around 0.9830 level. At the weekend, Russia stopped gas supply to Italy. Also, The Kremlin announced the results of several election-style events in Ukraine last week, claiming that four occupied regions had voted overwhelmingly in favor of joining Russia. Thus, Putin will move to annex them. In short, the geopolitical risk is still on the increase for Eurozone.

Technically, Stochastics are oversold but the momentum is upside because DXY is no trading below 112 level. Resistance is now seen at 0.9850 before the next 0.9940. On the downside, 0.9780 is a critical support, below that level the selling pressure may increase up to 0.9660.

Support: 0.9780 - 0.9735 – 0.9660
Resistance: 0.9850 – 9.9940 – 1.0015

GBPUSD

Last week, we saw the unprecedented volatile for the British pound following the presentation of the highly controversial mini budget. The pound was drive in a new all-time low of 1.0340 at the beginning of the week, but the parity became reversed its direction and regained at 1.1200 early Friday since Bank of England (BoE) decided to intervene in the bond markets on Wednesday. Also, the Dollar Index's overbought conditions gave way to a correction and then the pair gained nearly 400 pips since Wednesday and turned positive on the week.

In the morning, the GBPUSD was last seen around 1.1240 level. Technically, below 1.1025 the selling pressure is again on the agenda. More downside, 1.0890 may be the first support, before 1.0650. On the upside, the resistance was seen at 1.1290 (21Daily Moving Average) before the next at 1.1350. However, the main resistance is positioned at the level of 1.1350.

Support: 1.1025 – 1.0890 – 1.0650
Resistance: 1.1290 – 1.1350 – 1.1460

XAUUSD

Last week, gold price touched to the lowest level at 1615 since pandemic starts. Yet, the US treasury yields soften and US10Y yields are now trading around %3.78.

In addition, the PCE core deflator surprised to the upside at 0.6%m/m vs. previous 0.0% last week. Year-on-year, inflation measure rose %4.9, accelerating from previous %4.7 (also revised higher). Now, the real rate is around 157 bps. This week, we will follow the September jobs report from the US.

Technically, the gold price bounced off the yearly low level at 1615 which is the lowest level since pandemic starts. On the upside, we follow 1675 the first resistance, then next at 1687. On the downside, 1652 level is seen as support, if breaks down then at 1641.

Support: 1675 – 1687 – 1696
Resistance: 1652 – 1641 – 1632

UKOIL

OPEC+ will hold its meeting on Wednesday in Vienna. It is the first-time head-to-head meeting after pandemic. Some media reported mentioned that the OPEC+ is considering slashing production by more than 1 million barrels a day but the alliance delegates said a final decision on the size of the cuts won’t be made until Wednesday. Also, Reuters reported that Saudi Arabia is considering raising prices for most crude grades it sells to Asia in November, as the world’s top oil exporter expects demand to recover and Chinese refineries to increase output.

Today, eyes will be on PMI data. The expected trading range for today is between 86.10 support and 90.10 resistance.

Support: 87.10 – 85.00 – 82.95
Resistance: 88.70 – 90.20 – 94.75

 

[Z Forex]

Weak PMI data, UK U-turns on tax plans and RBA rate decision

The dollar index softens because of weaker US data. ISM manufacturing for September decreased more than expected to 50.9 from 52.8. Also, UK Chancellor Kwasi U-turns on plans to scrap %45 tax rate on income above £150.000. Then, gilts regained and 10Y- US treasury yield came down nearly 25bps to %3.62 level. The pullback in treasury yields led to increase in risk appetite. However, FED Williams took a stand that FED still has ‘significant ways’ to hike rate. In addition, FED Barking warned of inflationary headwinds in the post pandemic era.

In addition, PMI releases from other regions indicated increasing weakness. The S&P Global Eurozone Manufacturing PMI was revised lower to 48.4 in September of 2022 from a preliminary of 48.5 and below 49.6 in August, pointing to the biggest contraction in factory activity since June of 2022. There were further slides in both output and new orders, linked to high energy prices in some cases, while many firms downwardly adjusted their operating schedules in line with lower order books.

In this morning, we followed the Reserve Bank of Australia (RBA) interest rate decision. RBA raised the official cash rate (OCR) by 25bps from %2.35 to %2.60.


EURUSD

The parity is trading above 0.9850 today. Fundamentally, weaker DXY give support to move upside for the EURUSD. However, geopolitical risk in Ukraine is still on the agenda. Yesterday, Ukraine leader announced that they have recaptured strategic town of Lyman. This emerging development shows that Kyiv do not give up evet after Russia’s annexation of four region.

Technically, the EURUSD is heading the north, but the first resistance shows up at 0.9885 (21DMA). Since the daily RSI 14 is recovered from oversold condition, the parity may attempt to test 1.0010/15 area (50DMA). On the downside, 0.9735 is the critical support. More downside 0.9660 is seen as support level.

Support: 0.9780 - 0.9735 – 0.9660

Resistance: 0.9885 – 9.9950 – 1.0010

GBPUSD

The pound was last seen at 1.1355 level. Weaker than expected US ISM manufacturing decreased in value both DXY and UST yields. Also, UK chancellor Kwasi announced U-turn in tax cuts for UK’s top earners. Also, the BoE still
Technically, above 1.1350 the sentiment will be positive for the pound. More upside, 1.1460 may be the first resistance, then 1.1550. On the downside, 1.1290 (21Daily Moving Average) now seems to protect the immediate downside. More downside, the support is seen at 1.1085.

Support: 1.1280 – 1.1085 – 1.1025

Resistance: 1.1460 – 1.1550 – 1.1670

XAUUSD

Gold price is trading above 200-Weekly moving average and now at 1706 level. Today, the US treasury yields continue to decrease and US10Y yields are now trading around %3.58 – with a low 20bps compared to yesterday pricing. Also, risk appetite in the market is positive since weakness in Sep US ISM manufacturing data likely inducing some bets for a pullback in hawkish Fed stance again.

Technically, the gold price breaks 1680 level (200WMA) and the daily RSI 14 indicator recovered from oversold region. On the upside 1714 could be the first resistance. The next is at 1724 (50DMA). On the downside, the 21DMA at 1679 is seen as crucial support level.

Support: 1713 – 1724 – 1696

Resistance: 1695 – 1686 – 1679

UKOIL

OPEC+ will hold its meeting on Wednesday in Vienna. And its allies will decide the output cut. According to analysts at Goldman Sachs, they predict that the output will reduce one million bbl/day. If the cut comes strong like one million bbl/day, then the price will rise approximately $13/bbl. Also, Reuters reported that Saudi Arabia is considering raising prices for most crude grades it sells to Asia in November, as the world’s top oil exporter expects demand to recover and Chinese refineries to increase output.

Technically, 89.95 (21DMA) is seen as resistance level. More upside, the next is at 92.75 level. On the downside, 88.75 is seen as support level. If broken, the next will be at 87.10 level.

Support: 88.75 – 87.10 – 85.00

Resistance: 89.95 – 92.75 – 94.50

 

[Z Forex]

RBNZ rate hike, FED still hawkish and Labor data vs US Dollar

This early morning, The Reserve Bank of New Zealand (RBNZ) raises the official cash rate 50bps to %3.50. Economists agree the cash rate hikes will continue until the RBNZ is confident in seeing enough restraint. In other words, RBNZ maintains its hawkish tones to tackle inflation which rose to %7.3 in July, a 32-year high. In the market, we see optimistic pricing for two-days on currencies, but the outlook does not change. After RBNZ rate hike decision, the market realize that FED is still hawkish, and we are following the labor data deluge that starts today with US ADP employment change. Tomorrow, the market will focus on initial jobless claims and Nonfarm Payroll (NPF) on Friday.

In addition, there are already some market calls for FED to pause very soon and Dollar Index (DXY) runs into difficulty. Back on DXY index daily chart, price was last at 110.20. Support is now seen at 109.30. Momentum has turned bearish. Resistance at 112.75 before 113.80. Also, US treasury yields starts the day positive and 10Y treasury yield is trading above %3.65. The real rate for 10Y is around 145bps now.



EURUSD

The parity is trading above 0.9935 today. Fundamentally, a weaker DXY leads to a move upside for the EURUSD. However, the energy crisis is still on the agenda and increases the risk premium on Euro for now.

For EURUSD daily chart, the resistance is now seen at 1.00 (50DMA + psychological level). Momentum has turned bullish, but stochastic indicator raises overbought condition. On the downside, the key support at 0.9895 (21DMA). More downside 0.9715 is seen as a support level.

Support: 0.9895 - 0.9820 – 0.9715

Resistance: 1.0000 – 1.0050 – 1.0190

GBPUSD

The pound was last seen at 1.1410 level. The pound finds a foothold US dollar retracement. Also, in the bond market, gilts indicate signs of stabilization and 2-y gilts is trading around %3.96 without BoE’s purchase on the long end yesterday. In addition, UK chancellor said that the medium-term strategy for the economy will announce on 23 Now.

Technically, the pound is cheering, but still risk on the agenda related to fiscal policy in UK. Today, the sentiment seems negative for the pound. On daily chart, stochastic indicator raises overbought condition. On the downside, support at 1.1350, then 1.1290 (21Daily Moving Average) seems to protect the immediate downside. On the upside, 1.1500 is psychological resistance level. If passes, the 1.1670 (50DMA) will be the main resistance.

Support: 1.1350 – 1.1290 – 1.1025

Resistance: 1.1500 – 1.1670 – 1.1765

XAUUSD

Gold price is trading below 50-daily moving average and now at 1717 level. Today, the US treasury yields are raising and US10Y yields are now trading around %3.67. However, tensions between U.S. and China remain high. Biden administration has taken more hawkish stance on China. In addition, and we are following the labor data deluge that starts today with US ADP employment change. Tomorrow, the market will focus on initial jobless claims and Nonfarm Payroll (NPF) on Friday.

For daily chart, above 1695 level, the sentiment for gold price is positive. Resistance is seen at 1729 level (yesterday’s high level). More upside is at 1745 level On the downside, the key support is at 1695. More downside, 21DMA at 1681 is seen as crucial support level.

Support: 1705/08 – 1695 – 1681

Resistance: 1729/33 – 1745 – 1758

UKOIL

OPEC+ will hold its meeting today in Vienna. The oil cartel and its allies are considering an output cut of more than a million barrels per day. If the cut comes strong like one million bbl/day, then the price will rise approximately $13/bbl.

For a daily chart, the main resistance is at 94.30 (50DMA), but stochastic indicator raises overbought condition. On the downside, 88.75 is seen as support level. If broken, the next will be at 86.40 level.

Support: 90.00 – 88.75 – 86.40

Resistance: 92.40 – 93.50 – 94.40

 

[Z Forex]

OPEC+ output cut by 2mn barrels per day, Sanctions EU vs Russia

Yesterday, the US ADP employment and ISM services data released more than expected. The results give way to the Dollar Index (DXY) a jump. Also, US treasury yields move upwards and us10years reached at %3.79. In addition, OPEC+ decided to cut production by 2mn barrels per day from Aug’s quota from Nov onwards. Saudi energy minister clarified that the real impact could be a lowering of production by 1-1.1mn barrels per day, given that some members are already producing below allocated quotas. This decision came out of the first in-person meeting since 2020 and the next ministerial meeting will be held on 4 Dec. After decision, US expresses disappointment in move that could spur an increase in oil prices, which had dropped in recent months.

Moreover, the geopolitical risk is again on the agenda between Russia and European Union (EU). Russian President Vladimir Putin ordered the government Wednesday "to take into federal ownership the facilities of the Zaporizhzhia nuclear power plant and other property necessary for the implementation of its activities." Then, EU confirmed the eighth package of sanctions against Russia, including a price cap on Moscow’s crude oil and refined products. Besides, the United Kingdom is also planning to implement sanctions banning Russian services and limiting exports to the country.

Today, we follow FED official speech from Mester, Evans, and Neel Kashkari on financial stability. And Retail sales data from Eurozone is the key data we watch.


EURUSD

The parity is trading around the 0.9900 level. Fundamentally, improving DXY leads to a downward risk for EURUSD. Also, geopolitical tensions are again emerging. The EU approved the eighth package of sanctions against Russia. Thus, the energy crisis is still loading and increasing the risk premium on Euro for now.

For EURUSD daily chart, the support is now seen at 0.9885. Resistance is seen around 1.0000 (50DMA + psychological level). Momentum is now unclear, but stochastic indicator raises overbought condition.

Support: 0.9885 - 0.9815 – 0.9710
Resistance: 1.0000 – 1.0050 – 1.0185

GBPUSD

The pound was last seen at 1.1340 level. The pound falls back after US dollar gains. Also, the office of budget responsibility could still give negative set of fiscal projections on 23 Nov when Kwarteng is due to release his medium -term fiscal plan. Further unwinding of their mini budget could see diminishing support for the GBPUSD as the credibility of the government is likely damaged.

Technically, the pound is under selling pressure today. On daily chart, stochastic indicator is hovering overbought condition. On the downside, support at 1.1280 (21DMA), then 1.1225 (yesterday’s low level) On the upside, 1.1500 is psychological resistance level. If passes, the 1.1640 (50DMA) will be the main resistance.

Support: 1.1290 – 1.1225 – 1.1060
Resistance: 1.1500 – 1.1640 – 1.1755

XAUUSD

Gold price is trading very close to 1724 level 50-daily moving average. The risk tone is negative in the market. EU step up gear related to Ukrainian-Russia war to decrease the radius of Russian’s action. They confirmed the eighth package of sanctions against Russia, including a price cap on Moscow’s crude oil and refined products.

Also, a decline in odss for a 75bps rate hike give support the gold price. However, the data related to US Nonfarm payroll will we watched on Friday.

Today, the US treasury yields are raising and US10Y yields are now trading around %3.78. The real rate is around 157bps. Technically, above 1697 level, the sentiment for gold price is positive. Resistance is seen at 1729-1733 region. More upside is at 1745 level. On the downside, the key support is at 1695. On the additional declines, 21DMA at 1682 is seen as crucial support level.

Support: 1705/08 – 1697 – 1682
Resistance: 1729/33 – 1745 – 1758

UKOIL

OPEC+ agreed its deepest cut to oil production since the coronavirus pandemic. After a meeting in Vienna, the global cartel of oil producing countries announced it would cut production by 2mn barrels per day from the Aug’s quota for Novembers onwards. Brent price extended gains towards the $94 – figure after the decision, but 50 daily moving keep under the price at 94.20 level.

For a daily chart, the main resistance is at 94.20 (50DMA), but stochastic indicator raises overbought condition. On the downside, 93.00 is seen as support level. If broken, the next will be at 90.90 level.

Support: 93.00 – 90.90 – 89.75
Resistance: 94.20 – 95.80 – 97.25

 

[Z Forex]

OPEC+ output cut by 2mn barrels per day, Sanctions EU vs Russia

Yesterday, the US ADP employment and ISM services data released more than expected. The results give way to the Dollar Index (DXY) a jump. Also, US treasury yields move upwards and us10years reached at %3.79. In addition, OPEC+ decided to cut production by 2mn barrels per day from Aug’s quota from Nov onwards. Saudi energy minister clarified that the real impact could be a lowering of production by 1-1.1mn barrels per day, given that some members are already producing below allocated quotas. This decision came out of the first in-person meeting since 2020 and the next ministerial meeting will be held on 4 Dec. After decision, US expresses disappointment in move that could spur an increase in oil prices, which had dropped in recent months.

Moreover, the geopolitical risk is again on the agenda between Russia and European Union (EU). Russian President Vladimir Putin ordered the government Wednesday "to take into federal ownership the facilities of the Zaporizhzhia nuclear power plant and other property necessary for the implementation of its activities." Then, EU confirmed the eighth package of sanctions against Russia, including a price cap on Moscow’s crude oil and refined products. Besides, the United Kingdom is also planning to implement sanctions banning Russian services and limiting exports to the country.

EURUSD

The parity is trading around 0.9900 level. Fundamentally, improving DXY leads to downward risk for EURUSD. Also, the geopolitical tensions are again emerging. The EU approved the eighth package of sanctions against Russia. Thus, energy crisis is still loading and increases risk premium on Euro for now.

For EURUSD daily chart, the support is now seen at 0.9885. Resistance is seen around 1.0000 (50DMA + psychological level). Momentum is now unclear, but stochastic indicator raises overbought condition.


Support: 0.9885 - 0.9815 – 0.9710
Resistance: 1.0000 – 1.0050 – 1.0185

GBPUSD

The pound was last seen at 1.1340 level. The pound falls back after US dollar gains. Also, the office of budget responsibility could still give negative set of fiscal projections on 23 Nov when Kwarteng is due to release his medium -term fiscal plan. Further unwinding of their mini budget could see diminishing support for the GBPUSD as the credibility of the government is likely damaged.

Technically, the pound is under selling pressure today. On daily chart, stochastic indicator is hovering overbought condition. On the downside, support at 1.1280 (21DMA), then 1.1225 (yesterday’s low level) On the upside, 1.1500 is psychological resistance level. If passes, the 1.1640 (50DMA) will be the main resistance.


Support: 1.1290 – 1.1225 – 1.1060
Resistance: 1.1500 – 1.1640 – 1.1755

XAUUSD

Gold price is trading very close to 1724 level 50-daily moving average. The risk tone is negative in the market. EU step up gear related to Ukrainian-Russia war to decrease the radius of Russian’s action. They confirmed the eighth package of sanctions against Russia, including a price cap on Moscow’s crude oil and refined products. Also, a decline in odss for a 75bps rate hike give support the gold price. However, the data related to US Nonfarm payroll will we watched on Friday.

Today, the US treasury yields are raising and US10Y yields are now trading around %3.78. The real rate is around 157bps. Technically, above 1697 level, the sentiment for gold price is positive. Resistance is seen at 1729-1733 region. More upside is at 1745 level. On the downside, the key support is at 1695. On the additional declines, 21DMA at 1682 is seen as crucial support level.

Support: 1705/08 – 1697 – 1682
Resistance: 1729/33 – 1745 – 1758

UKOIL

OPEC+ agreed its deepest cut to oil production since the coronavirus pandemic. After a meeting in Vienna, the global cartel of oil producing countries announced it would cut production by 2mn barrels per day from the Aug’s quota for Novembers onwards. Brent price extended gains towards the $94 – figure after the decision, but 50 daily moving keep under the price at 94.20 level.

For a daily chart, the main resistance is at 94.20 (50DMA), but stochastic indicator raises overbought condition. On the downside, 93.00 is seen as support level. If broken, the next will be at 90.90 level.

Support: 93.00 – 90.90 – 89.75
Resistance: 94.20 – 95.80 – 97.25

 

[Z Forex]

Focus on Nonfarm Payrolls, BoE’s Ramsden speaks

Today, the Dollar Index (DXY) continue to raise persistently and is trading now below 112.40 level. Also, US treasury yields are on the increase. The 10y US treasury yield is at %3.85 and the real yield for 10y reach 165bps. The market focus on US Nonfarm Payroll (NFP) data It will be released at 15.30 (GMT+3) and the consensus is 265K in Sep vs 315K in Aug. In addition, the unemployment rate is expected to print the same reading with previous month, and it was %3.7. The key data for today is related to NFP. If the data comes below 200K, then the market agree that the economy is slowing, so it is creating jobs at a pace lower than the covid era. Thus, FED should be slow to hike the rate for November meeting. In other words, it would be sufficient a 50bps rate hike for the rate decision. What else, if the data comes above 300K, the market would be more volatile because DXY would rise immediately, and FED continue to rise the rate aggressively. Besides, there are some other key events today. BoE’s Deputy Governor Ramsden speaks at event. Also, Fed’s Williams speaks another event for today.

EURUSD

The parity is trading below 0.9800 level because DXY turns the positive momentum and now is trading below 112.40 level. Yesterday, European Central Bank published the Monetary Policy Meeting notes which indicated that some officials chose a lower rate hike of 50bps. In addition, the median three-year inflation expectations remained unchanged with %3.

What is more, retail sales data in Germany released this morning and it declined by %4.3 YoY in Aug. Thus, selling pressure for EURUSD is still going on. Technically, the support is now seen at 0.9720. Resistance is seen around 1.0000 (50DMA + psychological level).

Support: 0.9720 - 0.9640 – 0.9540
Resistance: 0.9830 – 0.9870 – 1.0000

GBPUSD

The pound was last seen at 1.1160 level. Due to the risk off flows, the pound is decreasing. Also, the NFP data will remain in spotlight. If the data comes considerably over 400K, it will indicate that the job growth continues. Thus, FED goes on tightening.

For daily chart, stochastic indicator turns below overbought condition, but the pound is still under selling pressure today. On the downside, support at 1.1060 (fib %61.8), then 1.0940. On the upside, 1.1230/50 region is the key resistance. If passes, the 1.1385 will be followed.

Support: 1.1060 – 1.0940 – 1.0765

Resistance: 1.1230/50 – 1.1385 – 1.1500

XAUUSD
Gold price is coming back, and it is trading now at 1711 level. The pullback in the gold price was mainly driven by sharp recovery in US real yields. Further, the investors’ eye is on today’s NFP data. If the data comes within expectations, the DXY will stay higher and US yields continue to rise.

Technically, above 1698 level, the sentiment for gold price is positive. Resistance is seen at 1722 (50DMA). More upside is at 1730 level. On the downside, the key support is at 1695. On the additional declines, 21DMA at 1682 is seen as crucial support level.

Support: 1698 – 1682 – 1660
Resistance: 1722 – 1730 – 1745

UKOIL

After the cut for oil production, the black metal price is on the increase. The members did not take only cutting decision (the 2mn barrels per day quota cut), but also the members agreed to reduce the frequency of their meetings. The next meeting will be on 4 December, and ministers will meet every six months

Today, brent is trading now above 94.75. For a daily chart, the main resistance is at 95.00, but stochastic indicator raises overbought condition. On the downside, 93.90 is seen as support level. If broken, the next will be at 92.70 level.

Support: 93.90 – 92.70 – 90.90
Resistance: 95.00 – 95.80 – 96.90

 

[Z Forex]

Onshore market close in US, DXY continue to rise after strong US NFP data

Last week, the US nonfarm payroll (NFP) report indicated that U.S. firms continued to hire more people in September. Thus, the unemployment rate decreased from %3.7 to %3.5. All things are taken into consideration, US labor data is still strong and give way to the FED to tighten monetary policy for a while.

In addition, stronger than expected NFP give way to a lift for the Dollar Index (DXY). Today, DXY is trading around 113.00 level. Onshore market in US is closed today because of Columbus Day.

This week, the investors focus on US inflation data on Thursday. If the inflation continues to rise, the FED would be aggressive for the next meetings. On Friday, US retail sales data will be released. The data may increase for September because of the auto sales jump. On Wednesday, the FED minutes and September PPI will be announced. It is significant for the investors to understand the outlook for the next meetings.



EURUSD

The parity is hovering around 0.9720 level because DXY turns the positive momentum after strong US NFP released. In early morning, the price decreases to a fresh one-week low and the investors follows the descending line.

Today, there is no economic data, so the range for the parity will be narrow. Momentum is still mildly but falling trend channel remains solid. Stochastics turned neutral. Technically, the support is now seen at 0.9710. Resistance is seen around 0.9815.

Support: 0.9710 - 0.9640 – 0.9540
Resistance: 0.9815 – 0.9860 – 0.9970

GBPUSD

The pound is last seen at 1.1075 level. Due to the strong NFP data, the parity retraces from 1.1225 level. Also, the market waits for the medium fiscal plan which is released on 23 November. The office of budget responsibility could still give negative set of fiscal.

Back on the daily chart of the pound, stochastic indicator turns oversold condition, so the momentum is still bearish for the parity. Support is at 1.1050/60 region. More downside 1.0910 is seen as support level. Resistance is seen around 1.1115, then 1.1225 (21DMA).

Support: 1.1050 – 1.0910 – 1.0765
Resistance: 1.1115 – 1.1225 – 1.1385

XAUUSD

The US nonfarm unemployment report indicated that U.S. firms continued to hire more people in September. Thus, the unemployment rate decreased from %3.7 to %3.5. All things are taken into consideration, US labor data is still strong and give way to the FED to tighten monetary policy for a while. Thus, the latest probabilities of FOMC rates moves reached %72.8 for a75bps hike for November meeting. After all, Gold price is coming back, and it is trading now at 1684 level. The pullback in the gold price was mainly driven by sharp recovery in US real yields (US10-year real yield at 165bps).

Technically, below 1700 level, the sentiment for gold price is negative. Support is seen at 1682/84 region. More downside, the support is at 1672 level. On the upside, the key resistance is at 1700. On the additional upwards, the falling trendline is seen as crucial support level at 1714.

Support: 1684/82 – 1672 – 1658
Resistance: 1700 – 1714 – 1720

UKOIL

Last week, OPEC+ reduce oil production by 2 million barrels per day from November. Yet, US President Biden gave instruction to the Energy Department to release an additional 10 million barrels from the Strategic Petroleum Reserve (SPR) in November.

Today, brent is trading around 97.35 level. Technically, above 50-daily simple moving 94.00 the momentum is positive for the black metal. The main resistance region is between 98.50-99.00 level, but stochastic indicator is still overbought condition. On the downside, 95.20 is seen as support level. If broken, the next will be at 94.00 level.

Support: 95.20 – 94.00 – 92.35
Resistance: 99.00 – 100.50 – 96.90

 

[Z Forex]

FED officials continue to speak Hawkish, Global recession at the door

This morning, the dollar index extends its upside momentum and US treasuries continue to raise because of hawkish FED. Risk sentiments is still prudent in the market. Fed speakers continue to defend aggressive rate hike. Yesterday, Chicago FED president Evans had a speech at a National Association for Business Economics conference in Chicago. He said FED needs to quickly get interest rates to a level where policymakers can feel comfortable pausing in order to reduce the risk of overshooting. Also, he stated that front-loading was a good thing, given how far below neutral rates were. But ‘overshooting is costly too, and there is great uncertainty about how restrictive policy must become.’

Also, the warnings come related to global economy growth from the World Bank and IMF. Their chiefs said that the risk of recession in the global economy is growing due to rising interest rates and slowing economies around the world. Furthermore, the coronavirus pandemic compelled many countries to get more borrowing, and they are already facing or at risk of debt distress amid rising global inflation and hiking interest rates.

Today, the jobless rate in the UK decreased to %3.5 in the three months to August of 2022 which is new low since 1974. In the rest of the day, the investors follow the speech of central banks’ officials to understand the opinion for the next meetings.

EURUSD

The EURUSD remains weighty because DXY continue to raise, and US 10-year is hovering near at %4.00. The pair is trading now above 0.9700 level. Still, the geopolitical tension is on the increase. Also, the fight between hawkish FED and hawkish ECB goes on. Some ECB members (Kizmir & Kazak) expressed opinion a 75bps rate hike for the next meeting. Today, ECB’s Lane have a speech.

Technically, resistance is seen at 0.9795. Momentum is still moderate but falling trend channel remains solid. Stochastics turned oversold condition for daily chart. The support is now seen at 0.9635.


Support: 0.9635 - 0.9540 – 0.9480
Resistance: 0.9795 – 0.9870 – 0.9995

GBPUSD

The pound is now hovering at 1.1035 level. However, the pair touched 1.0998 level after UK Unemployment rate released by %3.5 in three months to August from %3.6. Also, Bank of England (BoE) announced a temporary pause to corporate bond sale operations this week.

Back on the daily chart of the pound, stochastic indicator is still oversold condition, so the momentum is still bearish for the parity. Support is at 1.10 (psychological level). More downside 1.0910 is seen as support level. Resistance is seen around 1.1115, then 1.1200 (21DMA).

Support: 1.0910 – 1.0765 – 1.0540
Resistance: 1.1115 – 1.1200 – 1.1305

XAUUSD

FED officials continue to speak hawkish. Yesterday, Chicago FED Evans looked for benchmark rate to likely reach 4.5 -4.75% by spring 2023 while Kashkari also spoke about more interest rate hikes. Also, the yields for US Treasuries are on the increase. US 2-year yield is now trading at %4.30 and the real rate for US 10-year raise to 170bps. Thus, the gold price retraced to 1661 level. Now, the gold is trading around 1664 level.

Technically, below 1700 level, the sentiment for gold price is negative. Support is seen at 1660/58 region. More downside, the support is at 1641 level. On the upside, the resistance is at 1674. On the additional upwards, 1689 is seen as crucial support level.

Support: 1660/58 – 1641 – 1633
Resistance: 1674 – 1689 – 1698/1700

UKOIL

The warnings come related to global economy growth from the World Bank and IMF. Their chiefs said that the risk of recession in the global economy is growing due to rising interest rates and slowing economies around the world. Thus, the demand for oil will decrease forthcoming period

Today, brent is trading around 94.60 level. Technically, above 50-daily simple moving 93.90 the momentum is positive for the black metal. The main resistance region is between 98.50-99.00 level, but stochastic indicator is turning overbought condition. On the downside, 93.60/80 is seen as support region. If broken, the next will be at 92.65 level.

Support: 93.60/80 – 92.65 – 90.70
Resistance: 96.45 – 98.65 – 100.50

 

[Z Forex]

BoE’s governor Bailey warns the Gilts investors, IMF announced Economic Outlook Report

Yesterday, BoE’s governor Bailey warned for Gilt investors, and he stated that the emergency support package will end on Friday. He told especially for pension funds that they should rebalance their positions because the support which is provided by BoE is not permanent, just for financial stability. The risk sentiment in the market is complicated. The rise on Bond yields in US continues with the growing recession concerns. US 10-year Gilt is trading near %3.90. Also, the Dollar Index (DXY) remains firm because of FED officials’ hawkish speech.

In addition, The International Monetary Fund (IMF) announced the economic Outlook Report. According to report, global growth is forecast to slow to %3.2 in 2022 and %2.7 in 2023. Furthermore, U.S. Treasury secretary Janet Yellen said the U.S. economy has slowed down after a strong recovery, but jobs reports indicate a resilient economy. She also said that inflation in US is too high and that lowering it is a priority for the Biden administration.

Today, the industrial production data in EU will be released. Also, ECB’s president Lagarde speech will be followed by the markets. Again today, producer inflation data will be announced in U.S. It is expected to increase to %0.2 from %-0.1 and PPI (Yoy) data, is expected to decline to %8.4 from %8.7. Lastly, the FOMC minutes which held on 20-21 September will release at the evening hours.


EURUSD

The pair remains firm unlike DXY continue to raise, and US 10-year is hovering near at %3.90. The EURUSD is trading now above 0.9715 level. Today, ECB’s president Lagarde speech will be followed by the markets. Also, more ECB officials will speak this week; Nagel speaks on Thu, Holzmann will speak on Friday.

Technically, resistance is seen at 0.9775. Momentum is still variable but falling trend channel remains solid. Stochastics is trying to turn oversold condition for daily chart. The support is now seen at 0.9670, before the next at 0.9540.


Support: 0.9670 - 0.9540 – 0.9480

Resistance: 0.9775 – 0.9870 – 0.9950

GBPUSD

The pound is now trading around 1.1000 level. However, the pair was under the pressure of selling because BoE Bailey said emergency support package will end on Friday. Also, UK industrial and manufacturing production continue to decline. In this morning, the data released, and the industrial sector lost momentum in August by decreasing %5.2 YoY.

Back on the daily chart of the pound, stochastic indicator is still oversold condition, so the momentum is still bearish for the parity. Support is at 1.0925 level. More downside 1.0765 is seen as support level. Resistance is seen around 1.1060, then 1.1165 (21DMA).

Support: 1.0910 – 1.0765 – 1.0540

Resistance: 1.1060 – 1.1165 – 1.1270

XAUUSD

Today, eyes will be on FED minutes. Yet, US treasuries’ yields are on the increase. The real rate is retreating to 161bps. Thus, gold price is challenging critical support at 1660 level. Technically, below 1660 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1633 level. On the upside, the resistance is at 1684. On the additional upwards, 1684 is seen as crucial resistance level.

Support: 1660 – 1641 – 1633

Resistance: 1684 – 1691 – 1700

UKOIL

The International Monetary Fund (IMF) announced the economic Outlook Report. According to report, global growth is forecast to slow to %3.2 in 2022 and %2.7 in 2023. Also, Biden conveys his disappointment with the OPEC+ decision.

Now, Brent is trading around 94.30 level. Technically, above 93.75 (50-daily simple moving average) the momentum is positive for the black metal. The main resistance region is between 98.50-99.00 level, but stochastic indicator is turning overbought condition. On the downside, 93.60/80 is seen as support region. If broken, the next will be at 92.65 level.

Support: 92.65 – 90.70 – 88.85

Resistance: 95.05 – 96.45 – 97.80

 

[Z Forex]

FED minutes still hawkish, today’s key data is US September Inflation data

Yesterday, FED released the Minutes of the latest meeting. Policymakers agreed that they continue to tighten monetary policy in order to control elevated inflation. Aside from that, there was not much of a surprise. Today's key data is US inflation report. The headline inflation is expected to have risen by 8.1% YoY (previous 8.3%). On the other hand, core inflation is expected to have ticked higher toward its recent multi-decade high of 6.5%. A main source of this lift is likely stemming from soaring rents, which is contributing to the largest weight of the metric - housing. If the upward risks still go on, FED will continue further policy hikes.

Also, a 75-basis point Fed rate hike is largely priced in for November FOMC with the probability of %83.7 at CME, followed by another 50bps rate hike in December. A strong inflation print could raise the December rate hike expectations to 75bps. That may lead to increase the US Dollar and Treasury yields.

Today, the dollar Index (DXY) continue to remain firm. At the same time, US treasuries’ yields are on the increase after hawkish FED minutes. For FED, fighting inflation is still on the priority.

Lastly, in Japan producer inflation rose by %9.7 YoY in September 2022, but the market consensus is at %8.8 and following an upwardly revised %9.4 for August data. Still there is an upward risk for producer inflation because of that commodity prices are on the increase thanks to Russia-Ukraine war. Also, the yen rapidly declines.



EURUSD

The pair is hovering around 0.97. Yesterday, ECB President Lagarde said that Europe is not currently in recession. She also stated that the Euro area economy is still growing even as concerns over the outlook continue to mount in the face of surging energy costs. Today, ECB’s Nagel speaks, and eyes will on US inflation data.

Technically, resistance is seen at 0.9740. Momentum is still variable but falling trend channel remains solid. More upside, resistance is around 1.00 (psychological level). Stochastics is trying to turn oversold condition for daily chart. The support for EURUSD is now seen at 0.9670, before the next at 0.9540.

Support: 0.9670 - 0.9540 – 0.9460

Resistance: 0.9740 – 0.9805 – 1.0000

GBPUSD

The pound is now trading around 1.1075 level. Yesterday Financial Times published an article saying that BoE officials mean that the gilt intervention program could be
extended beyond Friday (14 October). Then, BoE emphasized that the deadline on Friday is obviously clear. The program is not permanent, just for finance stability. Also, Chancellor Kwarteng said the BoE should be responsible if markets see further volatility after Friday.

Back on the daily chart of the pound, stochastic indicator is still oversold condition, so the momentum is still complicated for the parity. Support is at 1.0920 level. More downside 1.0765 is seen as support level. Resistance is seen around 1.1135/50 region, then 1.1270 (21DMA).

Support: 1.0920 – 1.0765 – 1.0540

Resistance: 1.1150 – 1.1270 – 1.1325

XAUUSD

Today, eyes will be on US inflation data. The headline inflation is expected to have risen by 8.1% YoY (previous 8.3%). On the other hand, core inflation is expected to have ticked higher toward its recent multi-decade high of 6.5%. Now, US10-year yield is trading around %3.92. The real rate is retreating to 156bps. In other words, more hawkish signals from the FED remain supportive of elevated US Treasury bond yields. Thus, gold price is challenging between critical region at 1660 -1684 level.

Technically, below 1660 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1633 level. If the data comes well above than expected, the gold price will have a downward path ahead, the September low at 1615 is a key suspect for support. On the upside, the resistance is at 1684. On the additional upwards, 1691 is seen as crucial resistance.


Support: 1660 – 1641 – 1633

Resistance: 1684 – 1691 – 1700

UKOIL

The downside risks are still advocated amid escalating fears of a recession situation in the global economy. Thus, the demand for brent will be on the decrease.

Now, brent is trading around 93.25 level. Technically, below 93.70 (50-daily simple moving average) the momentum is negative for the black metal. Yet, stochastic indicator is near oversold condition. The main resistance is at 93.70, then at 95.15. On the downside, 91.50 is seen as support level. If broken, the next will be at 90.70 level.

Support: 91.50 – 90.70 – 88.20

Resistance: 93.70 – 95.15 – 96.45

 

[Z Forex]

US Inflation announced hotter than expected, the US Dollar the safest currency until global slowdown over

Yesterday, the US Consumer Price Index raised %8.2 YoY in September. Additionally, annual core inflation in US lifted to %6.6 in September from a year earlier. After the data released by the US Bureau of Labor Statistics (BLS), the Dollar index touched fresh weekly high level 113.87 and US10-year treasury yield rockets above %4. Also, yield 2-year note was above %4.52.

Furthermore, odds for a 75 bps November Fed rate hike have spiked to %95.4 today. In other words, the market is pricing in more 75 bps rate hikes coming up. Until the end of year FED has two more times FOMC meeting which holds on November 2-3 and December 14-15. If the inflation is ever rising, the chances are clearly higher for a 100bps hike. That would help push rates toward US10-year yield %4.4 target.

On the other hand, China consumer inflation released in this morning and the inflation hit two- year high in September which rose %2.8 on annual basis. Due to the fact the People’s Bank provide liquidity measures to increase on spending during the mid-Autumn festival. The facilities helped support retail prices, although factory-gate inflation continued to soften near 20-month lows. In addition, Japanese Chief Cabinet Secretary Hirokazu Matsuno said that ‘North Korea launched one ballistic missile early Friday’.

Today, the dollar Index (DXY) is hovering 112.55 level. Firmer yields, hawkish FED bets and geopolitical uncertainty in Ukraine support the US dollar’s demand. Until the current slowdown in global market ends, DXY will stay powerful because the investors adopt the US dollar the safest currency. Thus, according to Citibankgroup Global Markets Inc. says Dollar peak will only come when world economy recovers.

EURUSD

The pair touched the lowest level of the week 0.9632 after the hotter inflation release and US Treasury yields bounced with the expectation on a 75bps rate hike for December rise. US2-year treasury yield rose above %4.52, but then retracing 6bps. Also, the DXY jumped to 113.90 level, then soften below 113 level because European Central Bank staff updated the model called Target-Consistent Terminal Rate, indicated ECB needed its deposit rate %2.25 or even less and the goal is to bring inflation back %2.

Technically, above 0.98 level the momentum is positive for the EURUSD. Resistance is seen at 0.9870. Falling trend channel remains solid. More upside, resistance is around 1.00 (psychological level). The support for the pair is now seen at 0.9760, before the next at 0.9630.


Support: 0.9760 – 0.9630 – 0.9540

Resistance: 0.9870 – 0.9990 – 1.0050

GBPUSD

The pound is now trading around 1.1295 level. Yesterday, the parity touched 1.1057 level, but the ECB stuff put terminal rate at %2.25. Also, the rumors of further U-turns in Truss-Kwarteng’s tax plans lead to increase the demand for the Pound. Then, the pair jumped to 1.1380 before easing to levels 1.1325. What else, the gilt intervention program will end today. Thus, markets see further volatility during the trading hours.

Back on the daily chart of the pound, stochastic indicator is rising near overbought condition, so the momentum could be negative within today. Support is at 1.1205 level. More downside 1.1100 is seen as support level. Resistance is seen around 1.1380, then 1.1500 (psychological level).

Support: 1.1205 – 1.1100 – 1.1055

Resistance: 1.1380 – 1.1500 – 1.1645

XAUUSD

Yesterday, US inflation data increased well above expected and then US treasuries made rally by rising above %4 for US10-year yield. Gold price fall down to 1642 level, then US yields softened, and the gold price recovers the loss by rising near 1670 level. However, rising US inflation gives way to FED more hawkish. It means FED remains supportive of elevated US Treasury bond yields. Thus, gold price is challenging between critical region at 1615 -1683 level.

Technically, below 1658 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1630 level. On the upside, the resistance is at 1683. On the additional upwards, 1697 is seen as crucial resistance.

Support: 1658 – 1641 – 1630

Resistance: 1683 – 1697 – 1711

UKOIL

Brent price touched the lowest level of the week to 91.10 level after a larger than expected rise in US inflation data. Yet, the momentum turns positive with the speculation of ECB terminal rate updated. Also, OPEC+ decision which is production cut by 2 million barrel per day starting in November keep brent oil prices firm.

Now, brent oil is trading around 94.68 level. Technically, below 93.95 (200-daily simple moving average) the momentum is negative for the black metal. The main resistance is at 95.80, then at 98.65. On the downside, 93.95/70 is seen as support region. If broken, the next will be at 92.20 level.

Support: 93.95 – 92.20 – 91.10

Resistance: 95.80 – 98.65 – 100.60

 

[Z Forex]

US Core inflation still on the increase, UK politic and economic crisis increase. Also, Xi Jinping talked on China’s 20th Communist Party Congress.

Last week, the US core inflation climbed to %6.6 from previous %6.3 year-on-year. The strong reading on core inflation likely showed that a hawkish discourse from FED will continue for the foreseeable future. Also, headline inflation slowed less than expected to %8.2 year-on-year in September (August %8.3). Now, FED futures are pricing a 75bps rate hike for November FOMC meeting with %97 probability on CME Fedwatch Tool. It is even priced for a 75bps rate hike for December meeting with %70 chance, but it was 50bps dots plot projections for December. In addition, US 2-year treasury bond is hovering %4.50, and US10-year treasury bond is trading closely %4.00.

Hawkish comments from ECB officials continue to provide gradual support for EUR. Thus, Bundesbank President Nagel said that ECB would begin softening its balance sheet in early 2023.Also, Dutch Central Bank Chief Knot said that "Once we will have reached neutral territory with our policy rate, it makes sense to consider the roll-off of asset purchases by limiting reinvestments”. In short, quantitative tightening is approaching in Europe region.

In UK, Finance Minister Kwarteng was fired earlier on Friday after political pressure and market chaos. Today, UK’s chancellor will make a statement on medium-term fiscal plan. This statement will be crucial to getting the crisis somewhat stabilized. Also, Xi Jinping requalified 20th Party Congress and he said that he would prioritize the national security over growth.

Today, the economic calendar is so silence. The US data NY Empire State Manufacturing Index for October will be followed closely.


EURUSD

The EURUSD is trading around 0.9750. Risk appetite is still complicated today. Hawkish comments from ECB officials continue to provide gradual support for the pair. Yet, US Treasury yields are still on the increase. US2-year treasury yield is rising near %4.5. Also, the DXY remains firm close to 113 level.

Technically, above 0.98 level the momentum is positive for the EURUSD. Resistance is seen at 0.9925. Falling trend channel remains solid. More upside, resistance is around 1.00 (psychological level). The support for the pair is now seen at 0.9700, before the next at 0.9630.

Support: 0.9700 – 0.9630 – 0.9540

Resistance: 0.9805 – 0.9925 – 0.9995/1.0000

GBPUSD

The pound is hovering around 1.1280 level. Last week, UK President Truss fired Chancellor Kwarteng in favor of Jeremy Hunt as her new Chancellor. Also, she will meet Cabinet and make a statement on medium-term fiscal plan which is announced on 31 October. This statement will be crucial to getting the crisis somewhat stabilized.

Back on the daily chart of the pound, stochastic indicator is rising near overbought condition. Also, political uncertainties make the pair more volatile. Support is at 1.1205 level. More downside 1.1150 is seen as support level. Resistance is seen around 1.1380, then 1.1500 (psychological level).

Support: 1.1205 – 1.1150 – 1.1055

Resistance: 1.1380 – 1.1500 – 1.1645

XAUUSD

Last week, US inflation data increased well above expected and the Dollar index and US treasuries made rally. Thus, gold price touched 1640 level again last day of the week. In this morning, China Xi Jinping said on 20th Party Congress he will take all necessary measures related to Taiwan. Thus, the geopolitical risk become at the top agenda. However, rising US inflation gives way to FED more hawkish. It means FED remains supportive of elevated US Treasury bond yields. Thus, gold price is challenging between critical region at 1615 -1684 level.

Technically, below 1664 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1630 level. On the upside, the resistance is at 1664. On the additional upwards, 1684 is seen as crucial resistance.

Support: 1641 – 1630 – 1615

Resistance: 1664 – 1673 – 1684

UKOIL

Brent prices remain firm since OPEC+ reduce oil production by 2 million barrels per day from market on November only one week before US midterm election. Thus, US President Biden warned the OPEC+ members. However, they said there is a complete consensus among OPEC+ countries that best approach in dealing with the oil market conditions.

Technically, brent oil is trading around 92.65 level. Below 93.60 (50-daily simple moving average), the momentum is negative for the black metal. The main resistance is at 93.60, then at 95.10. On the downside, 91.90 is seen as support region. If broken, the next will be at 90.85 level.

Support: 91.90 – 90.85 – 88.75

Resistance: 93.60 – 95.10 – 96.70

 

[Z Forex]

UK U-turn completed, European Economic Sentiment will followed

Yesterday, new UK Chancellor Hunt announced that the UK government reversed most of Liz’s original tax plan which was declared on 23 September. When PM Liz was elected, she immediately released mini-budget which are tax-related measures. Then, the market is drifted into a state of chaos and the pound depreciated dramatically. After that ex-Finance Minister Kwarteng bear the cost by firing earlier on Friday after political pressure and market chaos. For now, the market in UK is trying to stabilize, but still political risk is on the table. In other words, there are still growing calls for Liz’s resignation because she lost the confidence of the UK people and others.

In addition, risk sentiment was positive in global markets due to UK U-turn step. Thus, the dollar index softened to 111.90 level. Also, the weaker empire manufacturing contributed to fall on the dollar. On the other hand, US10Y is still hovering around %4.00. The difference between US2-10year bond is nearly 45bps.

Today, Germany and European ZEW survey will be released. Also, ECB’s Scnabel have a speech today. In America, capacity utilization for September will be released and it is expected %80 (Aug: %80). Lastly, FED Bostic will participate in panel discussion.


EURUSD

The EURUSD is trading around 0.9850. Risk appetite is still moderate today. Also, DXY lose power and hawkish comments by ECB officials thus give support to the pair. Yet, the geopolitical risk related to Ukraine-Russia war is resuming. It should not be forgotten that Europe is facing a generational energy crisis as it heads into winter because Russia won’t be delivering gas to Europe.

Technically, above 0.9810 level the momentum is positive for the EURUSD. Resistance is seen at 0.9925. Falling trend channel remains solid. More upside, resistance is around 0.9955 level. Then, at 1.00 (psychological level). The support for the pair is now seen at 0.9810, before the next at 0.9675.


Support: 0.9810 – 0.9675 – 0.9540

Resistance: 0.9925 – 0.9960 – 1.0000

GBPUSD

The pound was last seen at 1.1340 level. Yesterday, New Finance Minister said that the UK government reversed most of tax-related measures in the Growth Plan released just three weeks ago. Then, the market takes a breath for a while, but still political issues could make pressure on the Pound. There is a growing call for PM Liz’s resignation.

Back on the daily chart of the pound, stochastic indicator is rising near overbought condition. Also, political uncertainties make the pair more volatile. Support is at 1.1290 level. More downside 1.1130 is seen as support level. Resistance is seen around 1.1440, then 1.1500 (psychological level).

Support: 1.1290 – 1.1130 – 1.1050

Resistance: 1.1440 – 1.1485/1.1500 – 1.1590

XAUUSD

Yesterday, risk on mood is seen in the market after the British New Finance Minister reversed the previous promises. Therefore, DXY softened and US treasury yields came back for a while. Then, gold price touched 1668 level. Also, hawkish comments from ECB officials supports the yellow metal. Yet, the inflation expectations are still on the agenda globally. There is seriously upside risk on global inflation because of energy crisis and grain products challenge. On the other hand, China is speeding up plans for unification with Taiwan. Thus, the geopolitical risk become the main topic of the agenda.

Technically, below 1650 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1630 level. On the upside, the resistance is at 1669. On the additional upwards, 1683 is seen as crucial resistance.

Support: 1650 – 1641 – 1630

Resistance: 1669 – 1683 – 1699

UKOIL

Brent oil is trading around 92.15 level. Below 93.50 (50-daily simple moving average), the momentum is negative for the black metal. However, stochastic indicator is falling near oversold condition. The main resistance is at 93.50, then at 94.15. On the downside, 91.40 is seen as support level. If broken, the next will be at 90.90 level.

Support: 91.40 – 90.90 – 88.75

Resistance: 93.50 – 94.15 – 96.50

 

[Z Forex]

DXY mentally strong, BoJ makes intervention, European economy have in difficulties, Uncertainties’ in UK economy still on the agenda.

The Dollar Index is mentally strong. Yet, the market sentiment is mixed. US10-year is trading again above %4.00. The spread between US2-10Y become narrow by 42bps.

Japan Central Bank (BoJ) intervene the currency market yesterday. The pair is holding its head up above 149.00 level around 32-year high. Yet, there is no reversal signal for Yen. Today, the market sees another intervention because USDJPY may test 150.00 psychological level. Besides, Japan Finance Minister Suzuki said that they cannot tolerate excessive currency moves driven by speculators. They are closely watching currency moves with a high volatility.

Furthermore, Germany ZEW Economic Sentiment released yesterday. The data came -59.2 from -61.9 which is slightly seen recovery in German economy. Yet, the current Situation index sharply decreased from -60.5 to -72.2 Also, European region ZEW Economic Sentiment enhanced slightly from -60.7 to -59.7. But, the current Situation index sharply tumbled to -70.6 In short, the economic situation is downhill at the way for Eurozone.

In addition, inflation in New Zealand lifted to %2.2 QoQ in Q3, well-above expectation %1.60. The key driver for rising in prices is mainly food and housing. Shortly, the inflation is still o the increase everywhere in the world without stopping.

Today, UK inflation will be released. It is expected to announce %10.0 YoY. Increased energy prices are a main reason things are getting more expensive. Also, the war in Ukraine gave way to food prices going up because of the amount of grain available. In the evening hours, FED’s beige book report will be announced.

EURUSD

The EURUSD is trading around 0.9840. Risk appetite is still moderate. Yesterday, the economic situation related data came below expectations. Today, final readings for EU inflation will released. On the other hand, DXY is still mentally strong. FED Kashkari said that FED needs to do more to fight inflation. Also, the geopolitical risk related to Ukraine-Russia war is still on the agenda.

Technically, above 0.9775 level the momentum is positive for the EURUSD. Resistance is seen at 0.9925. Falling trend channel remains solid. More upside, resistance is around 0.9960 level. Then, at 1.00 (psychological level). The support for the pair is now seen at 0.9775, before the next at 0.9670.

Support: 0.9775 – 0.9670 – 0.9540

Resistance: 0.9925 – 0.9960 – 1.0000

GBPUSD

The pound was last seen at 1.1320 level. Yesterday, the main focus is again a rumor which is released by The Financial Times. They said BoE could delay the beginning of the quantative tightening for Bond selling program. Yet, the bank immediately denied the headline by saying it was inaccurate.

On the weekly chart of the pound, RSI 14 indicator is falling oversold condition. Also, political uncertainties make the pair more volatile. Support is at 1.1260 level. More downside 1.1135 is seen as support level. Resistance is seen around 1.1440, then 1.1500 (psychological level).

Support: 1.1260 – 1.1135 – 1.1050

Resistance: 1.1440 – 1.1500 – 1.1590

XAUUSD

The gold price is trading around 1645 level. Still investors’ eyes on the US treasury yields. In other words, hawkish FED policy keep the US treasury yields. US10-year is trading again above %4.00. The spread between US2-10Y become narrow by 42bps. Also, FED official Kshkari said FED may need to push policy rate above %4.75. Since the inflation expectations are still on the agenda globally, the yellow metal stays on the spot.

Technically, below 1660 level, the sentiment for gold price is negative. Support is seen at 1641. More downside, the support is at 1630 level. On the upside, the resistance is at 1669. On the additional upwards, 1683 is seen as crucial resistance.

Support: 1641 – 1630 – 1615

Resistance: 1669 – 1683 – 1699

 

[Z Forex]

UK inflation Boosted, EU inflation still on the increase, BoJ ready for intervention.

Yesterday, the fresh European Union(EU) inflation report re-evoke the market that global inflation continues to rise. EU inflation for the second estimation revised to %9.90 so close to two digit numbers. Also, core inflation in EU was confirmed %4.8. Therefore, risk off sentiment and rising US treasury yields support the DXY is trading above 112.80 level. US10-year bond is hovering around %4.16. The spread between US2-10year is still around 43bps.

Yesterday, FED’s Beige Book showed that economic activity has slowed and inflation pressures have somewhat eased. Also, UK inflation was released. It came stronger than expected. The headline reached to %10.1 YoY (previously %9.9). The core inflation boosted to %6.5 YoY vs %6.3 previously. In the UK, whispers come related to Liz’s resignation. There is a growing call for her resignation in the country. Thus, the pound dropped to 1.1200 level with the political uncertainties. In addition, gilts remained firm with 30-year gilt below at %4.00

In addition, Chicago Fed President Charles Evans said yesterday, “inflation is just much too high, and so we need to continue on the path that we’ve been indicating — at least that. And I’m hopeful that that will be enough.”

In this morning, Germany producer Price Index released. The data is still on the increase with %45.8 YoY. For the rest of the day, US Initial Jobless Claims and US Existing Home Sales Change will be announced.


EURUSD

The EURUSD is trading around 0.9785. Risk appetite is still in the favor of the Dollar Index. Yesterday, the inflation data estimated for the second this month and still upside risk is seen on the agenda for European region. On the other hand, ECB officials expects the ECB to hike 75bps at October and December meeting. Overnight Index swap (OIS) indicates a 150bps increase in target rate

Technically, above 0.9735 level the momentum continues to firm for the parity. Resistance is seen at 0.9800. Falling trend channel remains solid. More upside, resistance is around 0.9950 level. Then, at 1.00 (psychological level). The support for the pair is now seen at 0.9735, before the next at 0.9645.


Support: 0.9735 – 0.9645 – 0.9540

Resistance: 0.9800 – 0.9830 – 0.9950

GBPUSD

The pound was last seen at 1.1220 level. Yesterday, the political issues led the parity sell off. There is a growing call for PM Liz’s resignation. Also, inflation boosted to %10.1 YoY. Both politically and economically, the UK is facing hard times. Thus, gilt for 30Y is trading closely %4.00.

On the weekly chart of the pound, RSI 14 indicator is well-belowed oversold condition. Below 1.12 level, the pound has a negative sentiment. Also, political uncertainties make the pair more volatile. Support is at 1.1180 level. More downside 1.1120 is seen as support level. Resistance is seen around 1.1280, then 1.1345.

Support: 1.1180 – 1.1120 – 1.1050

Resistance: 1.1280 – 1.1345 – 1.1440

USDJPY
The USD/JPY pair remains under pressure as the market expects the Federal Reserve to pause its rate-hiking cycle and the looming risk of a recession benefits the safe-haven Japanese Yen. The International Monetary Fund also trimmed its 2023 global growth outlook, citing the impact of higher interest rates. However, the dovish outlook of the Bank of Japan is limiting losses for the USD/JPY pair. The new BoJ Governor, Kazuo Ueda, recently stated that it was appropriate to maintain the ultra-loose stance as inflation has yet to hit 2% as a trend.

The USD/JPY pair remains range-bound between support at 130 and resistance at 133.8 on the 4-hour chart. Currently, the pair is testing resistance at 133.8 after the release of Data from US the pair reversed gooing back to its first support at 133.00. helped by the dollar weakness the pair may continue the slide down toward the next support at 132.00 and followed by 130.80. The resistance level stay the 133.750 as range top line.

Support: 131.00 – 130.00 – 129.00 Resistance: 131.70 – 132.40 – 133.75

XAUUSD
Gold has recently climbed to around the $2,029 level, reaching its highest point since the beginning of the year. This increase is due to a variety of factors, including recent inflation data and the Federal Open Market Committee (FOMC) meetings that have caused the US dollar to weaken. Additionally, the market is pricing in a decline in interest rates, which has further supported gold prices.

Investors continue to view gold as a hedge against inflation and the possible recession that could occur later this year in the US. This is in line with IMF projections of a global economic slowdown. As a result of these concerns, treasury yields have decreased across the curve, with the 2-year bond seeing the most significant decline, trading below 4.0%, having been above 5.0% in March. The likelihood of the Fed pausing after their May hike and potentially cutting rates later in the year has also impacted gold prices positively. This is due to a recent banking crisis and a tightening of credit conditions affecting the banking sector. With the current economic conditions and rates on pause, gold prices may continue to increase as the US dollar and yields decline.

Currently, gold is hovering around the resistance level of $2,029, with the potential for a breakout towards historical levels of $2,050/70 or a correction towards the first support level of $2,022 and $2,018.

Support: 2022 – 2018 – 2015
Resistance: 2029 – 2050 – 2075