Weekly Technical Analysis September 25th to 29th, 2017
EUR/USD: The FOMC hold benchmark interest rate at 1.00-1.25% last Wednesday, as expected. The FED forecast still signals another 2017 hike and three more in 2018.The Fed officials set an October start for shrinking they are $4.5 trillion stockpiles of assets. The Chair Janet Yellen spoke at the press conference. She said ‘Low 2017 inflation doesn't mean it will continue’. ‘Must judge if factors behind low inflation transitory’. ‘Rate hikes will be needed to sustain the economic expansion.’ The hawkish Fed outlook helped US Dollar.
Coming week, The final estimate for GDP growth in second quarter of 2017 in the US to be released. It is expected to be 3.0%, as the same as the previous number. A stronger than expected outcome would support dollar index and lead to further rise in US bond yields.
The US Dollar gained more value against the Euro after the hawkish FOMC policy meeting. The price closed last week below the key resistance level of 1.1968. As long as the pair stays below 1.1968, on a four-hourly basis, we might see a bearish movement in the EUR/USD pair and we will follow 1.1884 and 1.1812 as support levels. On the other hand, if the price goes beyond 1.1968, the next daily resistance level will be at 1.2053. Moreover, In order for the EUR/USD rally to accelerate, it needs to rise and sustain above 1.2053 on a daily basis.
Support: 1.1884- 1.1812 – 1.1768
Resistance: 1.1968 - 1.2053
GBP/USD: The GBP/USD pair dropped significantly last Friday as UK Prime Minister Theresa May delivered a long-awaited speech on Brexit in Florence in which she emphasized that the UK will cease to be an EU member in March 2019. May said the Brexit transition will be about 2 years. Also, the British pound felt on news that Moody's cut the UK's credit rating to AA2.
The most important release for the U.K. this week will be Q2 GDP. No change from previously announced 0.3% q/q is expected by the market and it stands for 1.7%. A negative surprise would weigh on GBP/USD pair
The GBP/USD closed last week just above the 1.3485 daily support level. As long as the price stays above that level, on a daily basis, we will follow 1.3555 and 1.3632 as resistance levels. On the other hand, if the price drops below 1.3485, the next support level will be at 1.3433.
Support: 1.3485 – 1.3433 – 1.3369
Resistance: 1.3555 – 1.3632
USD/JPY: Bank of Japan kept monetary policy unchanged, as forecasted. The central bank left the main lending rate and 10-year yield target unchanged at -0.10 percent and 0.00 percent respectively. In addition, the bond purchasing program continues to chug along at an annual pace of JPY80 trillion.
The BoJ seems more dovish at the policy meeting. Kataoka said that the yield curve effect is not enough for the inflation target and that there is a low chance of CPI increasing to 2% from 2018 on
The USD/JPY pair dropped the main support level of 111.66 and then bounced back up last week. The price closed last week just below the 112.08 resistance level. In the event the upward movement continues above 112.08, the next resistance level will be 112.46. On the other hand, if the price a downward movement, we will face again 111.66 as a daily support level. However, As long as the price stays above 111.66 on a daily basis, the bullish action may continue.
Support: 111.66 – 111.28 – 110.86
Resistance : 112.08 – 112.46 – 112.94
Gold: The Gold price dropped the main support level of 1291 last week and then the price showed an upward reaction. As long as the price remains above 1201 on a daily basis, we will follow the daily resistance level of 1307. On the other hand, if the price drops below 1291, the next support level will be at 1283.
Support: 1291 – 1283 – 1276
Resistance: 1307
CRUDE OIL: The Price of Crude Oil has been rising for three weeks and closed last week above the 50.30 key level. As long as the price sustains above that level o a four-hourly basis, the upward movement may continue. At this point, we will face resistance level at 51.75. Although, if the price shows a downward movement below 50.30, we will watch 49.33 and 48.48 as support levels.
Support: 50.30 –49.33 – 48.48
Resistance. 51.75