Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
Market updates on September 25
Key events ahead:
Speech by the FOMC member Evans – 15:00 MT (12:00 GMT);
Speech by the FOMC member George – 17:00 MT (14:00 GMT);
Crude oil inventories – 17:30 MT (14:30 GMT);
US President Donald Trump meets Japan’s Prime Minister – 19:10 MT (16:10 GMT)
US President Donald Trump holds a press conference – 23:00 MT (20:00 GMT)
- USD/JPY has risen towards the resistance at 107.43 (100-period SMA on H4). The pair has been correcting to the downside with the support at 107.23 in focus. In case of more geopolitical uncertainties resulting in the risk-off mood, the 107.23 level will be broken and the next support in focus will be placed at 106.95. After that, the next key level will lie at 106.76 (200-period SMA and the lower border of the descending channel). If bulls take bake their positions, the retest of the 107.43 level seems likely. Further resistance level will be situated at 107.54. Strong bullish pressure may push the pair even higher towards the upper border of the descending channel and the resistance level at 107.67.
- GBP/USD jumped yesterday on the Supreme Court’s decision to stop the prorogation of UK Parliament by Boris Johnson. The pair could not hold its positions after the UK 30-year gilt yields fell to the lowest level since September 4. The cable has fallen below the 50-period SMA to the support at 1.2437. If this level is broken, the next support will lie at 1.2414. This level is also the neckline of the head and shoulders pattern on H4. Reaching the neckline may signal the bullish weakness. Next, the support level from September 17 at 1.2391 will be targeted. Pay attention to the news as it is expected that the UK government will make a push for an election vote this Thursday.
- Oil prices are awaiting the release of crude oil inventories at 17:30 MT time. According to the forecasts, we will see a decline by 0.3 million barrels. Higher figures will pull the oil prices down and vice versa.
The price for WTI has been testing the support at $56.45. If bears manage to break this level, they will move the crude's price lower to the level at $55.9. The breakout of this level will may the price for WTI vulnerable to the fall towards the $55.5 level. If the oil prices are supported today by the lower-than-expected release, the price for WTI will rise to the $57.25 level (100-period SMA). Further resistance levels will be placed at $57.7 and $58.15.
- The price for Brent, in its turn, has been testing the support at $62. Further levels in focus of bears will lie at $61.6 and $60.6 In case of a reversal, it is recommended to pay attention to the highs above the 100-period SMA. The first one is at $62.8, the breakout of it may help bulls to reach the $63.25 and $63.92 levels.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.