1. Forex Market Insight
The initial value of the U.S. IHS Markit Services PMI fell to 54.4 in September. Although it has been above the boom-and-bust mark for the 14th consecutive month, it was at a new low since July 2020. The final value in August was 55.1, the same period in 2020 was 54.6.
The initial value of the employment sub-index fell to 49.9, the lowest since June 2020 while the new business sub-index also hit a new low since July 2020. This has led to the euro’s rally yesterday.
(EUR/USD 1-hour chart)
Today, pay attention to the 1.1753-line. The euro is still running below the 1.1753-line, but the trend is still bearish. Below, pay attention to the support of the 1.1727 and 1.1705 positions. Once the strength of the euro breaks through the 1.1753-line, it will open up further room for rebound. At that time, focus on the suppression of the 1.1786 and 1.1820 positions.
GBP Intraday Trend Analysis
The Bank of England expects GDP growth in the third quarter to be 2.5% lower than the pre-epidemic level. The GDP growth is expected to be 2.1% in the third quarter, compared with the previous estimate of 2.9%. The downward revision to the GDP growth in the third quarter reflects the impact of supply constraints. In this regard, inflation is partly driven by base effects. Hence, any initial tightening measures should be implemented through the bank rate.
In spite of everything, current energy developments pose an upside risk to the April forecast. Thus, UK inflation is expected to remain above 4% by the second quarter of 2022.
(GBP/USD 1-hour chart)
The pound’s attention remains on the 1.3669 line today. It is operating above the 1.3669 line, while maintaining the bullish trend. Once the pound falls below the 1.3669-line again, then it will pay attention to the 1.3574 line of support.
2. Precious Metals Market Insight
Gold prices fell by 1% yesterday, due to the rising U.S. bond yields and investors’ preference for riskier assets as investors continue to prepare for an earlier-than-expected Federal Reserve rate hike. With this, global stock market gains also put pressure on safe-haven assets.
The Federal Reserve said Wednesday that it may begin tapering its bond purchases as early as November and hinted that a rate hike after the end of bond purchases could come sooner than expected. That being said, a Fed rate hike would increase the opportunity cost of holding gold, which does not hold interest.
(Gold 1-hour chart)
Today, gold pays attention to the 1741-line. The upper part pays attention to the suppression of the 1755 and 1768 positions, while the lower part pays attention to the 1724-line of support.
3. Commodities Market Insight
WTI Crude Oil
Yesterday, Brent oil rose by $1.06, or 1.4%, to settle at $77.25/barrel, a new high since October 2018. Meanwhile, the U.S. oil rose by $1.07, or 1.48%, to settle at $73.3/barrel.
The upside in oil prices was supported by lower U.S. crude inventories as production in the Gulf of Mexico remained disrupted after two hurricanes, while fuel demand grew.
(Crude oil 1-hour chart)
Today, the oil prices pay attention to the 72.30 line of support. As long as the oil price runs above the 72.30-line, it will maintain the bullish trend. At that time, pay attention to the suppression of the 73.90 and 75.04 positions. If the oil price falls below the 72.30-line, it could possibly open up a further downside potential. At that time, pay attention to the support at 71.33 and 69.75.
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