1. Forex Market Insight
The EU leaders are set to approve the emergency measures for member states to ease the unprecedented energy crisis at hand this week. According to the draft statement that was made available to the media, EU heads of government may allow EU member states and the European Commission to “make full use” of the toolbox released last Wednesday, 13th October 2021, to provide short-term relief to households and businesses.
The energy crisis will be an important topic at the EU summit on 21st-22nd October 2021. According to the draft statement, leaders will also call for studying medium- and long-term measures to “mitigate excessive price volatility”, improve the EU’s energy resilience and ensure a successful transition to a green economy.
The communiqué was discussed by EU member state representatives on Friday, 15th October 2021, and is still subject to change before being approved by the head of government. The toolbox proposed by the European Commission earlier last week includes tax cuts and state support for businesses.
(EUR/USD 1-hour chart)
Today, we still pay attention to the 1.1622-line. If the euro is suppressed by the 1.1622-line, the support at 1.1554 and 1.1501 will be tested again. If the euro breaks through 1.1622 and stabilizes above the 1.1622-line, it will open up a further upside potential. At that time, focus on the suppression of the two positions at 1.1663 and 1.1708 in turn.
GBP Intraday Trend Analysis
The U.S. dollar index edged lower on Friday, 15th October 2021, as a surprise increase in the U.S. retail sales last month and strong corporate earnings boosted market risk appetite.
The pound performed best among the G-10 currencies. Meanwhile, global stocks rallied this week as concerns about economic stagflation eased as the U.S. corporate earnings beat expectations. Market popularity was also boosted by unexpectedly strong U.S. retail sales data for September. With this, retail sales rose by 0.7% last month from the previous month, partly due to rising prices, which were expected to fall by 0.2%.
(GBP/USD 1-hour chart)
The pound is focused on the middle of the Bollinger band track today. Once the strength falls below the middle of the Bollinger band track, it will open up a further downside potential. At that time, we will pay attention to the support at 1.3669 and 1.3574 in turn.
2. Precious Metals Market Insight
Spot gold is currently trading slightly higher near $1,770 per ounce after experiencing a sharp drop last Friday. Gold broke through the $1,800 barrier at one-point last week but fell by nearly $30 last Friday.
This decline was a combination of two factors, the failure to effectively break through key technical levels and the rise in the 10-year Treasury yield following the steepening of the U.S. bond yield curve after the release of strong retail data in the United States.
Additionally, the dollar also rallied. However, with market concerns about inflation and economic growth heating up, the Fed is not in a hurry to raise interest rates.
In this regard, gold prices are still hopeful of breaking the $1,800 barrier this week.
(Gold 1-hour chart)
Today, gold pays attention to the first line of 1782. The price of gold will run below the first line of 1782, but still maintains the bearish trend. With this, pay attention to the support of the two positions of 1757 and 1751 in turn.
3. Commodities Market Insight
WTI Crude Oil
The U.S. crude hovered at $82.38/barrel while oil prices extended gains last week. The U.S. oil rose for an eight consecutive week and hit its highest in nearly seven years at $82.66/barrel.
The Brent oil broke the 85 mark for the first time in three years, buoyed by forecasts of supply shortages in the coming months, while an easing of outbreak-related travel restrictions is expected to stimulate demand.
(Crude oil 1-hour chart)
Today, oil prices pay attention to the 80-line. If oil prices are above the 80-line, keep the trend of bullish thinking. Additionally, pay attention to the suppression of the 84.23 line. If the oil price falls below the 80-line, it will open up a further downside space. At that time, pay attention to the support strength in two positions of 78.25 and 76.89.
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