1. Forex Market Insight
The Federal Open Market Committee’s (FOMC) decision on when to raise interest rates has been divided as two members have brought forward the expectation of a rate hike in 2023 to 2022, and the overall odds of a rate hike in 2023 have now risen.
Powell also said that the gradual tapering of bond purchases will end around mid-2022. The last time they tapered debt, it was completed within in a year. According to him now, though, it would be completed in six months for this month. This is due to the Fed’s hawkish remarks, resulting in the downward of euro strength.
(EUR/USD 1-hour chart)
Today, we pay attention to the 1.1727-line. On the condition that the euro runs below the 1.1727-line, it will maintain its bearish trend. Below, we will pay attention to the support of the two positions 1.1663 and 1.1622 in turn.
GBP Intraday Trend Analysis
The most reasonable interpretation of Powell’s speech is that the Fed will begin tapering at a rate of $15 billion per meeting, starting in November. This would allow the exercise to be completed by June next year, a more aggressive approach of tapering than most people expected. In contrast, investors have postponed expectations of a rate hike by the Bank of England.
(GBP/USD 1-hour chart)
Today, the pound pays attention to the 1.3669-line. As long as the pound runs below the 1.3669-line, the main idea is to maintain a bearish trend. Below, pay attention to the support of the 1.3574-line. Once the strength drops below the 1.3574-line, it will open up further downside space. If the pound strength breaks above the 1.3669-line, it will open up further upside potential. At that time, focus on the suppression of the 1.3721-line.
2. Precious Metals Market Insight
Gold spot prices held steady ahead of Wednesday’s Federal Reserve meeting results, then surged lower as the meeting decisions were announced and Fed Chairman Jerome Powell held a press conference.
Meanwhile, spot gold fell below the 1,770-mark late trading in New York City and now stands at $1,768.86 per ounce, down by 0.32%.
Fed officials hinted that they may soon begin tapering their bond-buying program and revealed a growing preference for 2022 to start raising interest rates. The Federal Open Market Committee said in a statement Wednesday that conditions to slow the pace of asset purchases could be met soon if employment and inflation continue to make progress toward the Fed’s goals as widely expected.
Powell also said in the release that action could be taken at the next meeting if the economy progresses as expected. He also said that it may be appropriate to end the cuts around mid-2022.
Against this background, the market will be very sensitive to the timeline for the cuts, and the more hawkish the financial markets read the FOMC, the more likely gold will fall.
(Gold 1-hour chart)
Gold is paying attention to the 1763 line today. Once the price of gold falls below the 1763-line, it will open up further downside. At that time, pay attention to the support of the 1755 and 1741 positions.
3. Commodities Market Insight
WTI Crude Oil
Crude oil prices rose yesterday, with New York crude futures up by 2.5%; after data showed that U.S. crude inventories fell to their lowest level since October 2018.
The domestic crude inventories fell for the seventh consecutive week to about 414 million barrels, according to a report from the U.S. Energy Information Administration.
Meanwhile, U.S. stocks rose; this positive news masked the Fed’s hint that it may soon begin tapering bond purchases. With this, the focus of the market’s attention returned to supply and demand, as the market is looking highly bullish and potentially undersupplied.
However, there are real concerns about supply as winter approaches. Goldman Sachs said crude oil prices could spike to $90 a barrel if the upcoming winter in the Northern Hemisphere is colder than normal.
During this interval, the West Texas Intermediate futures for November delivery rose by $1.74 to settle at $72.23 a barrel, while the Brent crude rose by $1.83 to $76.19 a barrel, the highest since July 30.
(Crude oil 1-hour chart)
Oil prices are focused on the middle rail of the Bollinger Band today. On the upper rail of the Bollinger Band, maintains the idea of taking advantage of the trend. The top focus is on the suppression of the two positions 72.30 and 72.60. If the oil price drops below the middle rail of the Bollinger band, it can open up a further downside potential.
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