1. Forex Market Insight
With rising inflation expectations weighing on the relative attractiveness of U.S. Treasury bonds, yields have generally risen. However, the U.S. bond yields are climbing faster as traders bet the Fed will act faster than other global central banks. In addition, rate differentials are tilting toward the dollar, weakening low-yielders and putting pressure on economies with large borrowing needs. In return, this move has put significant upward pressure on the euro and the pound.
(EUR/USD 1-hour chart)
Today, we pay attention to the direction of the breakout of the 1.1663 to 1.1725 range. If it breaks through the 1.1725-line upwards, then pay attention to the suppression of the 1.1753 and 1.1786 positions. If it falls below the 1.1663-line, pay attention to the support of the 1.1622-line.
GBP Intraday Trend Analysis
Traders are betting that the Fed will move faster than other global central banks. Against this background, rate differentials are tilting toward the dollar, driving down low-yielding currencies and putting pressure on economies with large borrowing needs.
(GBP/USD 1-hour chart)
Today, the pound pays attention to the 1.3574-line. If it is below the 1.3574-line, it will maintain a bearish trend. At that time, focus on the support of the 1.3409-line below and the suppression of the 1.3669-line above.
2. Precious Metals Market Insight
Gold prices fell more than 1% on Tuesday, 28th September 2021, hitting a seven-week low as the dollar strengthened and the U.S. Treasury yields surged after the market expected the Fed to raise interest rates sooner than expected.
The dot plot of the Federal Open Market Committee (FOMC) members showed that the federal funds rate will rise sooner than previously expected. The overall increase in U.S. Treasury yields continued to negatively impact gold as it increased the opportunity cost of holding non-yielding gold.
The benchmark of the U.S. Treasury yields rose back above 1.5%, the highest in more than three months, as the market began to digest expectations of higher inflation ahead. Some investors see gold as a hedge against the possibility of rising inflation due to stimulus measures. However, the rising U.S. Treasury yields have partially eroded the appeal of this non-yielding commodity.
(Gold 1-hour chart)
Gold pays attention to the 1756-line today. If the price of gold breaks above the 1756-line it could possibly open up a further upside space. At that time, pay attention to the suppression of the 1768 and 1782 positions. If the gold price is below the 1756-line, it will maintain in the shock range.
3. Commodities Market Insight
WTI Crude Oil
Yesterday, the November contract for Brent crude oil fell by $1.31, or 1.65%, to close at $8.22/barrel, after rising to $80.75/barrel for the first time in nearly three years. The U.S. oil fell by $1.12, or 1.48%, to close at $74.33 per barrel, after hitting a record high of $76.67 since July.
The five-day-long rally lost its momentum as oil prices retreated, dragged down by the plunge in U.S. stocks. Data released by API showed that crude oil inventories unexpectedly increased by 4.127 million barrels and gasoline inventories increased by 3.555 million barrels in the week ended September 24, putting oil prices under pressure again.
(Crude oil 1-hour chart)
On oil prices today, pay attention to the support of the lower Bollinger Band, and focus on the suppression of the two positions at 75.04 and 75.69 on the upper end. Once the strength drops below the lower Bollinger Band, it will open up a further downside potential. At that time, focus on the 72.30-line of support.
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