1. Forex Market Insight
Despite the temporary weakening of risk aversion, the continued safe-haven appeal of the dollar will limit its decline. At the same time, the market remains cautious about the risk of the Fed’s unexpected announcement of hawkish policies today.
The market still expects the Fed to signal Quantitative Easing (QE) tapering this week but will not begin tapering until the end of 2021. Therefore, the increase in the Fed’s dot plot could trigger a hawkish surprise and a stronger dollar.
However, while a hawkish surprise could ignite demand for the dollar, the dollar’s rally may be limited as the market is not as short of dollars as it was before the June meeting and still faces the risk of the dollar PPI falling into a negative territory tomorrow. Therefore, the overall performance of the euro will fluctuate.
(EUR/USD 1-hour chart)
Today, we pay attention to the direction of the euro’s breakthrough in the 1.1705 to 1.1753 shock range. If it breaks upwards through the 1.1753 line, it will open up a further upside potential. At that time, pay attention to the suppression of the 1.1779 line. If it falls below the 1.1705 line, it will open up further downside space. By then, pay attention to 1.1663 first-line support.
GBP Intraday Trend Analysis
The UK will not release any major economic data that will affect the market movements, which leaves the GBPUSD subject to the price dynamics of the U.S. dollar.
The market’s focus remains on the outcome of the two-day Federal Open Market Committee (FOMC) monetary policy meeting for clues on the Fed’s tapering of its bond purchase program.
Beyond that, investors will take further clues from the Bank of England’s latest policy update scheduled for Thursday, 23rd September 2021. Against this background, key central bank events should help determine the next phase of directional movement for the pound against the dollar.
(GBP/USD 1-hour chart)
Today, the pound pays attention to the 1.3721-line. As long as the pound runs below the 1.3721-line, the main trend will remain bearish. Below, pay attention to the support of the 1.3601-line. Once the strength drops below the 1.3601-line, it will open up further downside space. If the strength of pound breaks upwards the 1.3721-line, it will open up further upside space. At that time, focus on the suppression of the 1.3771-line.
2. Precious Metals Market Insight
Gold prices rose yesterday as concerns about global growth spurred safe-haven buying. In addition, the Federal Reserve meeting that ends today could provide clues to the timetable for cutting economic stimulus.
(Gold 1-hour chart)
Today, gold pays attention to the suppression of the first line of 1782. As long as the price of gold runs below the line of 1782, the main idea is to keep the bearish trend. Below, pay attention to the support of 1768 and 1755. Once the price of gold breaks above 1782, it will possibly open up a further upside potential.
3. Commodities Market Insight
WTI Crude Oil
U.S. oil ended the day up by $0.68, or 0.97%, to close at $70.82 per barrel, while Brent rose by $0.77, or 1.04%, to close at $74.69 per barrel.
Brent crude and the November U.S. crude contract were earlier seen as high as $75.18 and $71.48 per barrel, respectively. Earlier released API data showed that crude oil inventories fell by 6.108 million barrels in the week ended 17th September, exceeding by far expectations of 2.4 million barrels, sending oil prices to the upside in the short term. Meanwhile, the market expects tighter supply to fuel higher prices as major Organization of the Petroleum Exporting Countries (OPEC) producers struggle to provide enough supply to meet growing demand.
(Crude oil 1-hour chart)
Today, oil prices still maintain its bullish trend. The top focus is mainly on the 71.33-line. As long as the oil price can break through the 71.33-line, it may open up further upside potential. On the lower end, focus on the support at 70.49 and 69.75.
While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.