1. Forex Market Insight
The Germany’s economy ministry is joining a European Central Bank campaign trying to assuage concerns among the population that currently high inflation rates are here to stay.
In a series of tweets published on Monday, 4th October 2021, the ministry labeled recent price spikes in the country as mostly temporary. It said a value-added tax cut last year and new carbon-pricing measures are partly to blame, echoing explanations offered by policy makers including ECB President Christine Lagarde and Bundesbank President Jens Weidmann.
A report last Thursday, 30th September 2021, showed inflation in Germany climbed to 4.1% in September, the strongest in three decades.
(EUR/USD 1-hour chart)
Today, pay attention to the 1.1554-line of support. If the euro breaks below the 1.1554-line, it will open up a further downside potential. At that time, pay attention to the 1.150-line of support. On top, pay attention to the suppression of the 1.1622 and 1.1663 positions. Once it breaks through the 1.1663-line, it will open up a further upside potential.
GBP Intraday Trend Analysis
The pound remains on shaky ground as the U.K. is likely to still face energy and food shortages in the fourth quarter. Coupled with strong U.S. data this week, the pound could retest the $1.34 area and revert to its September losses.
(GBP/USD 1-hour chart)
The pound is paying attention to the 1.3574-line today. Once the pound’s strength breaks below the 1.3574-line, it will open up a further downside potential. At that time, focus on the support of the 1.3522 and 1.3409 positions.
2. Precious Metals Market Insight
Gold prices rose to a more than one-week high yesterday. The demand for gold was boosted by a weaker dollar and the safe-haven sentiment in the stock market. However, the market remains a bit nervous about the central banks pulling back on stimulus policies at a time of such economic uncertainty.
Nevertheless, the market now awaits the U.S. non-farm payrolls report for September, scheduled for Friday, 8th October 2021. The report is expected to show continued improvement in the labor market, which could influence the Fed’s timetable for tapering economic support.
(Gold 1-hour chart)
Gold is still paying attention to the direction of the breakthrough in the 1751 to 1768 range. If it breaks through the 1768-line and upwards, it will open up a further upside potential. At that time, pay attention to the suppression of 1782 and 1801. If it falls below the 1751-line, it will open up a further downside space. At that time, pay attention to the strength of support at 1740 and 1724.
3. Commodities Market Insight
WTI Crude Oil
U.S. oil rose more than 3%, hitting a near seven-year high of $78.38 per barrel. Earlier, the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led oil-producing allies comprising OPEC+ confirmed they would stick to their current production policy as demand rebounded, despite calls from some countries to ramp up output.
While OPEC+’s decision to continue gradually increasing oil production has pushed up oil prices and exacerbated inflationary pressures, consumer countries still fear that it will derail the economic recovery from the pandemic.
(Crude oil 1-hour chart)
Today, the oil price maintains its bullish trend. The bottom line focuses on the support at 75.69 and 76.89, while the top line focuses on the suppression at 78.30 and 80.
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