Technical Levels

Also exerting downside pressure on the yen pair could be the fears emanating from North Korea’s test-firing of missiles toward Japan and South Korea. Silver price (XAG/USD) remains firmer around $19.30 while paring the post-Fed losses during early Thursday in Europe. In doing so, the bright metal rebounds from the 50-DMA to stay inside a three-week-old rising wedge bearish chart pattern. India’s BSE Sensex appears snapping the downtrend, even with mild gains, as the S&P Global India services Purchasing Managers’ Index edged up to 55.1 in October from September’s six-month low of 54.3, versus 54.6 expected, per Reuters. That said, expectations for a fresh intervention by the Japanese authorities to soften any steep fall in the domestic currency, along with geopolitical risks, benefit the safe-haven JPY.

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Risk-perceived currencies are taking a sigh of relief as wild gyrations are generally followed by a contraction in volatility. Going forward, the housing sector could face significant troubles as interest obligations are skyrocketing and households could postpone their demand for new homes. Sluggish Dotbig is a success yields allow DXY bulls to take a breather, hawkish ECBspeak also defends pair buyers. During the anticipated fall, an upward-sloping support line from early September and the yearly low, close to $18.50 and $17.55 respectively, could act as intermediate halts for the XAG/USD prices.

Technical Levels

Even the prevalent risk-off mood – as depicted by a generally weaker tone across the equity markets – fails to impress bulls or lend any support to the safe-haven XAUUSD. Market participants now look forward to the US ISM Services PMI, which, along with the US bond yields, will influence the USD price dynamics and provide a fresh impetus to gold. The Federal Reserve will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday. Stock trading based on news releases is a strategy used by many long-term investors, as well as short-term traders. If a company has strong balance sheets, cash flows and earnings reports consistently, then a trader may decide to buy and hold the sharefor a longer period of time.

If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD. A continuation of policy tightening will force the corporate to postpone its expansion plans due to higher interest obligations. Also, the real estate market will be the biggest victim due to expensive mortgages. The risk-sensitive currencies are facing Forex a sell-off on Fed’s interest rate hike. Each morning, the People’s Bank of China sets a so-called daily midpoint fix, based on the yuan’s previous day’s closing level and quotations taken from the inter-bank dealer. While portraying the mood, the S&P 500 Futures remain indecisive as it flirts with the one-week low, probing a three-day downtrend, whereas the US Treasury yields retreat from the post-Fed highs.

Boe’s Bailey: Nobody Should Read A 75 Basis Points As A New Normal

We must avoid excessive focus on short-run developments and fully taking into account the risks. European Central Bank executive board member Fabio Panetta said on Thursday, “we need to bring inflation back to our 2% target as soon as possible, but not sooner”. European Central Bank executive board member Fabio Panetta said on Thursday, “we need to bring inflation back to our 2% target as soon as possib… USD/CAD scales higher for the sixth straight day and climbs to a one-and-half-week high.

  • Geopolitical risks and intervention fears might hold back bulls from placing aggressive bets.
  • GBPUSD extends the downtrend for the second successive day and dives to a two-week low.
  • In doing so, the cross-currency pair ignores firmer Treasury bond yields during the three-day downtrend to the lowest levels since October 24.
  • Meanwhile, European Central Bank President Christine Lagarde noted that they have to be attentive to spill-over from the Fed policy but this comment doesn’t seem to be helping the shared currency find demand in a meaningful way.
  • Fed’s 75 bps increase in the benchmark rate initially triggered the market’s optimism as the rate statement highlighted the odds of a slower rate hike.

Higher terminal rate expectations for Fed’s hiking cycle are set to continue strengthening the greenback into year-end, economists at MUFG Bank report. The dramatic shift in the expected Fed rate hike path pushes the yield on the 2-year US government bond momentarily beyond the 5.0% psychological mark for the first time since May 2006. Meanwhile, the benchmark 10-year US Treasury note holds comfortably above the 4.0% threshold, which further underpins the buck and exerts additional pressure on the non-yielding gold.