Forex Market Outlook: 22 September 2022

Updated September 22, 2022

Dollar rallied on Thursday, hitting above the 111.5 level, the highest since June 2002, after the US benchmark rates were raised by 75 bps by the Federal Reserve. The hawkish Fed have also indicated a strong concensus of continuous hikes beyond the current level, with markets anticipating interest rates to reach 4.4% by the end of 2022 before peaking at 4.6% in 2023. GDP growth targets have been cut to 0.2% from 1.7%, while unemployment is expected to reach 4.4% next year and remain high compared to the current 3.7%, indicating an oncoming recession and showing the Fed’s willingness in bringing down interest rates. Markets are now anticipating the possibility of more 75bps rate hikes within this year.

Euro declined below $1 against the stronger greenback after a partial military mobilization in Russia was announced by President Vladimir Putin, raising Russian-Ukraine tensions. ECB President Christine Lagarde stated the possibility of policymakers raising interest rates further to curb soaring interest rates, even if such decisions would restrict economic growth. On the data front, German’s PPI was announced at 7.9% mom, exceeding expectations of a 2.5% rise. Meanwhile, the Pound extended its decline to 1.13, the lowest level since 1985, ahead of BoE’s interest rate hikes. Public sector net borrowing was 11.1 billion in August 2022, 3 billion above the estimated 8.2 billion. Markets are anticipating a total of 200 bps in rate hikes over the next 3 meetings, with more than 60% chance of 75bps hike at the upcoming one.

Trade ideas that played out on Tuesday: 13 September 2022

EURUSD H1: Bearish outlook seen, further downside below 1.004

On the H1 timeframe, prices are testing a key resistance zone at 1.004, in line with the 38.2% Fibonacci extension, presenting an opportunity to play the drop to the next support target at 0.986, coinciding with the 78.6% Fibonacci retracement. Stochastic is also approaching a resistance at 101.63, where we could see a reversal, in line with our bearish bias.

Before:

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/EURUSD/4WpJISKg-Bearish-outlook-on-EURUSD-20-September-2022/

After:

XAUUSD H1: Bearish outlook seen, further downside below 1693

On the H1 timeframe, prices are testing a key resistance level at 1693, in line with the 50% Fibonacci retracement. A pullback to the resistance zone provides and opportunity to play the drop to the next support zone at 1618, in line with the 78.6% Fibonacci extension. A break below our downside confirmation level of 1654 could provide bearish acceleration to the 1618 support zone. Stochastic is testing resistance as well, supporting the bearish bias.

Before:

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/XAUUSD/nVRWMDAl-Bearish-outlook-on-XAUUSD-20-September-2022/ 

After:

Today’s trade ideas: 22 September 2022

GBPUSD M30: Bearish outlook seen, further downside below 1.147

On the M30 time frame, a pullback to the resistance area at 1.147 in line with the 78.6% Fibonacci retracement presents an opportunity to play the drop to the next support level at 1.116, in line with the 78.6% Fibonacci extension . Stochastic is also approaching a resistance at 101.5, where we could see a reversal, in line with our bearish bias.

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/GBPUSD/VaK2ruMt-Bearish-outlook-on-GBPUSD-22-September-2022/

NZDUSD H1: Bearish outlook seen, further downside below 0.600

On the H1 timeframe, prices tested a key resistance level at 0.60, in line with the 61.8% Fibonacci extension . A pullback to the resistance zone could present an opportunity to play the drop to our next support target at 0.58, in line with the 141.4% Fibonacci extension . Prices are also holding below the Ichimoku cloud , supporting our bearish bias.

Coloured candles represent our projection
Source: TradingView.  https://www.tradingview.com/chart/NZDUSD/8ARAmpZ3-Bearish-outlook-on-NZDUSD-22-September-2022/

USDCHF H1: Bullish outlook seen, further upside above 0.950

On the H1 timeframe, prices are approaching a key support level at 0.95, in line with the 78.6% Fibonacci retracement . The presents an opportunity to play the bounce to the resistance zone 0.988, in line with the 0.786 Fibonacci extension . A break above the upside confirmation level at 0.97 could provide bullish acceleration to the resistance zone at 0.988. Prices are also holding above the Ichimoku cloud , supporting our bullish bias.

Coloured candles represent our projection
Source: TradingView. https://www.tradingview.com/chart/USDCHF/v4XAsJDU-Bullish-outlook-on-USDCHF-22-September-2022/

Past performance is no indication of future performance. This report is provided by Zeta Labs, a specialized Forex Fintech Consultant and Technical Advisor who provides white-label solutions for FX Market Analysis, trading insights and education webinars. The team has a wealth of industry experience, with our analyst being part of the team recognised by The Technical Analyst Awards as Finalist for the Best FX Research for 4 consecutive years (2019, 2020, 2021, 2022). 

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