Weekly Technical Analysis For September 24th to 28th, 2018

Next Up, Wednesday’s FOMC Meeting: What To Expect From The FED

EUR/USD:

The US dollar pulled off a three-month low hit versus the Euro last week. The US-China trade conflict is growing. We have seen the US announce tariffs of $200bn on Chinese exports to the US – with the potential for more to come. China retaliated with the announcement of tariffs in the range of 5-10% on $60bn US imports.

The FOMC Monetary Policy Meeting and US GDP data will be significant in the upcoming week.

The markets appear to have priced in a 25 basis points interest rate to 2.25 - 2.00%, which is expected. The FOMC press conference will be important to follow in order to learn what the Fed plans for rest of 2018. If the Federal Reserve projects a more aggressive interest rate hike outlook, the greenback would rise sharply.

The US GDP, for the second quarter, is expected to stay at 4.2% annual rate. Additionally, the US CB Consumer Confidence, New Home Sales, Pending Home Sales, and Core Durable Goods Orders as well as Core PCE Price Index will be closely watched by traders in the upcoming week.

In the Eurozone, the Consumer Prices Index will be published on Friday. The CPI y/y inflation for September is expected to rise to 2.1% from 2.0%.

The EURUSD pair jumped up from 1.1607 and closed last week above the key level of 1.1720. In the event that the rise continues above 1.1720, we will face 1.1812 as a daily resistance level. Moreover, in order for the upward movement to gain more momentum, it needs to rise and sustain above 1.1812 on a daily basis. On the other hand, if the price moved down below 1.1720, the next support level can be found at 1.1607 again.

Support: 1.1720 – 1.1607 - 1.1531
Resistance: 1.1812 – 1.1884 - 1.1968

GBP/USD:

The Pound dropped sharply last Friday as British PM Theresa May said Brexit talks are at an impasse, called for “respect” from the EU and warned that a no-deal outcome is possible. She said the UK will never agree to a customs border with Northern Ireland and added that now the UK needed to hear from the EU on real issues.

Looking ahead, the UK second-quarter economic growth will be announced on Friday. The UK GDP is expected to come out at 1.3%, the same as the initial estimate. A higher than expected reading should be taken as positive for the Sterling.

The GBPUSD pair closed last week above the main level of 1.3050. However, as long as the price stays above 1.3050 on a four hourly basis, the downward movement may be limited and we will follow the resistance level at 1.3152 again. On the other hand. If the price falls below 1.3050, the next support level is holding at 1.2961.

Support: 1.3050 - 1.2961 - 1.2844
Resistance: 1.3152 -1.3241 - 1.3338

USD/JPY:

In Japan, BoJ Meeting Minutes will be published next week. The release should provide additional insight into the discussion behind the central bank's latest monetary policy decision.

The Yen has extended losses against the US Dollar. The USDJPY pair closed last week above the key level of 112.46. As long as the price stays above 112.46 on a four hourly basis, the rise may continue and the daily resistance level will be at 113.63. On the other hand, if the price shows a downward movement below 112.46, the next support level can be found at 111.66

Support: 112.46 - 111.66 - 110.86
Resistance: 113.63 - 114.63 - 115.61

GOLD:

The Gold Price gave up last week's gains on Friday. The metal was down 1.1%, set for the biggest decline since Aug. 15. As long as the yellow metal price stays below 1199, on a four hourly basis, the selling pressure may continue and we will see support level at 1188. On the other hand, if the price rises above 1199, the next daily resistance level will in 1207.

Support: 1188 - 1177 - 1166
Resistance: 1199 – 1207 – 1215

23 Sep 18 (Sun)

06:54 pm


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