26 September 2018
powered by Land Prime
US New Home Sales: Wednesday, 14:00. Contrary to other segments of the US economy, the housing sector has been somewhat on the back foot. Sales of new homes disappointed with an annualized level of 627K in July. A similar figure is likely for August. A level of 630K is on the cards.
Fed decision: Wednesday, decision and dot-plot at 18:00, press conference by Fed Chair Jerome Powell at 18:30. The Fed will raise rates. That is certain after the move was well-telegraphed by the FOMC members and recent data has been mostly positive. A relatively more open question is: will they raise rates in December, making it a total of four hikes? And the greatest unknown is what the Fed will do next. Will Powell and co. move from an accommodative policy to a tight one or settle for neutral? A tight policy means setting interest rates above the inflation level. This was recently hinted by Fed Governor Lael Brainard. Wage data has been robust, with 0.4% m/m and 2.9%. However, the most recent Core CPI number disappointed with Core CPI sliding from 2.4% to 2.2%. The current composition of the Fed is quite hawkish and the stance is unlikely to change at this juncture. A few more weak inflation figures will probably be needed for a change of heart at the central bank. The first reaction will come from the dot-plot: the document that details the Fed projections for interest rates and also for inflation, growth, and employment. These numerical figures are easily digested by markets. A quick digest of the regular Fed statement will come next before Powell begins speaking. The Fed Chair tip-toes around politically sensitive topics such as tariffs but provides straight answers about monetary policy. Tension is expected to mount towards the event. We will then see quite a bit of choppiness around the release with a second and a third reaction afterward. This is easily the most important event of the week.
New Zealand rate decision: Wednesday, 21:00. The Reserve Bank of New Zealand has recently shifted to the dovish side, opening the door to rate cuts down the line. However, the team led by Adrian Orr is unlikely to slash the 1.75% Official Cash Rate just now. A reiteration of the dovish policy and especially a hint of an upcoming cut may weigh on the kiwi. This may come despite OK GDP data. Orr will hold a press conference at 22:00 and will move markets.
USD
Fed decision
US New Home Sales
NZD
New Zealand rate decision
- EURUSD
Update: Still traded above the neck-line. As could be seen on the daily timeframe that the pair is still traded above the neckline of the head and shoulders patter shown on the chart above. Having the pair traded above the neckline opens the door for further upward movement during the week that it may reach the level of 1.1850. Breaking the resistance level of 1.1850 opens the door for further upward movement during the week that it may reach the level of 1.20.
| Resistance levels: |
Support levels: |
Recommended: |
▪ 1.21
▪ 1.1850
▪ 1.18 |
▪ 1.15
▪ 1.1450
▪ 1.14 |
We are bullish as long as the pair is traded above the neckline.
|
- GBPUSD
Update: Still traded below the level of 1.33. Having the pair traded below the resistance level of 1.33 is considered to be a bearish factor which can help the USD to gain value against the GBP. We also have a bearish engulfing pattern (bearish) that supports the negative scenario. Therefore, we are bearish as long as the pair is traded below the level of 1.33. First target: 1.29.
| Resistance levels: |
Support levels: |
Recommended: |
▪ 1.36
▪ 1.3350
▪ 1.33 |
▪
▪ 1.2650
▪ 1.2550 |
We are bearish as long as the pair is traded below the level of 1.33.
|
- GOLD
Update: Still traded below the level of 1218. As could be seen on the 4 hours chart that the pair is traded below a strong resistance level of 1218 so we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 1190 during the week. This is conditioned by the continuation of trading below the level of 1218.
| Resistance levels: |
Support levels: |
Recommended: |
▪ 1330
▪ 1320
▪ 1220 |
▪ 1200
▪ 1190
▪ 1180 |
We are bearish as long as the pair is traded below the level of 1220.
|
- AUDUSD
Update: Still traded below the downtrend line. As could be seen on the daily chart that the pair is traded below a strong resistance level that is the down trendline shown on the chart in blue. Therefore, we are bearish as long as the pair is traded below the trendline. Our first target is 0.7160. On the other hand, if the downtrend line along with the resistance level of 0.7315 is broken, we can go long targeting the level of 0.74 during the week.
| Resistance levels: |
Support levels: |
Recommended: |
|
▪ 0.7550
▪ 0.7600
▪ 0.7260
|
▪ 0.7160
▪ 0.71
▪ |
Waiting for the pair to reach the downtrend line.
|
- GBPJPY
Update: Still traded below the level of 149.30. As could be seen on the chart above that the pair is traded below a strong resistance level that is 149.30 so we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 146 during the week. This is conditioned by the continuation of trading below the level of 149.30.
| Resistance levels: |
Support levels: |
Recommended: |
▪ 156
▪ 155
▪ 149 |
▪ --
▪ 145
▪ 140
|
We are bearish as long as the pair is traded below the level of 149.30.
|
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