Fx Daily Analysis

GBP/USD

Current trend

 

Yesterday we saw a good growth of the US dollar against the background of a positive speech by the head of the US Federal Reserve. Yellen gave a positive assessment to the labor market and expressed optimism about the further growth of inflation. In addition, the probability for raising the rates of the US Federal Reserve has not changed, i.e. we can expect another increase until the end of 2017 remains. Due to these comments and forecasts, the pair declined by more than 100 points and stopped near strong support at 1.3450. Later, the pair adjusted upwards, but, not being able to gain strength, dropped again to the local minimum.


Today, special attention should be paid to the data on the US labor market.



Support and resistance


In the short term, the most likely scenario is further decline in a downward correction in the wake of a rise in investor attraction to the oversold dollar. The main catalyst for this movement will be a reversal of trade sentiment, investors will begin to close profitable long positions, which will weaken the position of the pound.


Technical indicators confirm the signal of further fall: MACD indicates a sharp decrease in the volume of long positions, the Bollinger bands are directed downward.


Support levels:1.3480, 1.3450, 1.3380, 1.3310, 1.3270, 1.3200, 1.3125, 1.3020.

 

Resistance levels: 1.3515, 1.3615, 1.3690, 1.3820, 1.3900.




EUR/USD

Current trend

 

On Wednesday the pair was rapidly corrected after the Fed decided to start the process of budget cutting in October. Currently the budget of the regulator makes up about $4.47 trln. The market positively reacted to this decision, and the pair dropped to 1.1860. However the tightening of USD may be temporary first of all due to small volumes of reduction. On the first stage of the program the balance is expected to be reduced by $10 bln a month, and the next year the sum will be increased to $20 bln.


However, the issue of interest rate increase was postponed as expected, and it remained on the previous level of 1.25%. According to the follow-up statement recent inflation increase was of temporary nature and had been caused by recent storms, but generally CPI would be below the target level for a long time. To confirm this, the Fed reduced its basic inflation forecast in the current year from 1.7% to 1.5%.



Support and resistance


Technically the pair started upward correction the targets of which may be located at 1.1960 (middle line of Bollinger Bands, Murrey level [4/8]) and 1.2000 (Murrey level [5/8]). Otherwise the price may return to the level of September minimums at 1.1870 (Murrey level [1/8]) and drop below to 1.1840 (Murrey level [0/8]) and 1.1810 (Murrey level [-1/8]).


Support levels:1.1870, 1.1840, 1.1810.

 

Resistance levels: 1.1960, 1.2000, 1.2025.




NZD/USD

Current trend

 

NZD grew considerably against US dollar during trading on Wednesday, September 20, marking a new local maximum since August 4, but lost the majority of gained positions during the evening session in view of the release of the final minutes of the Fed's meeting.


As was expected, the Fed decided not to change the interest rate levels and announced the beginning of the balance reduction program in October. Along with that the Fed pointed out it planned on yet another increase of the interest rate by the end of 2017 despite slow inflation growth.


During the morning session of September 21 the pair is showing "bearish" dynamics. The data from New Zealand had only a small impact on the traders' interests. Thus, New Zealand GDP in Q2 2017 grew by 0.8% QoQ and 2.5% YoY which met the expectations of the analysts.



Support and resistance


Bollinger Bands in D1 chart demonstrate stable increase. The price range is narrowing. MACD indicator is growing preserving a weak buy signal (the histogram is above the signal line). Stochastic is located near the border with the overbought area and has eversed horizontally.


Support levels:0.7319, 0.7297, 0.7261, 0.7246.

 

Resistance levels: 0.7342, 0.7370, 0.7401, 0.7432.





AUD/USD

Current trend

 

The quotes of AUD/USD are falling under the influence of growing US dollar and today's statement by the RBA head Philip Lowe. He believes it is impossible to increase the interest rates in the near future as it would have a negative impact on the whole Australian banking system and on the welfare of Australian citizens. Also the pair is under pressure from the results of 2-days meeting of the Fed. As was expected, the regulator left the interest rate unchanged on the level of 1.25%. However, it hinted that the increase of the interest rate this year was still possible. Also yesterday the Fed announced the beginning of the budget cut program in October. The regulator plans to reduce assets by $10 bln every month. Investors reacted to this news by active purchases of the US currency. In view of this the rate of AUD/USD dropped by 0.65% to the level of 0.7950.


Today market players will pay attention to statistics on initial jobless claims from the USA (14:30 GMT+2). The indicator is expected to grow to 300K a week from 284K a week earlier. The confirmation of the outlook or values above expected may support the rate of AUD/USD in the short term.



Support and resistance


Technical indicators show the continuation of the current downward tendency: Bollinger Bands are directed downwards, MACD histogram is actively reducing in the positive zone and is about to enter the negative one.


Support levels:0.7939, 0.7904, 0.7870.

 

Resistance levels: 0.8005, 0.8065, 0.8124.