Monday Briefing: From DXY, Gold to Latest FX Headlines: Aug 22, 2022

US Dollar Index Overview

  • The DXY appreciates on Monday and hits highest level since July 15, 2022.
  • It made intraday high at 108.44 and low at 108.10 mark.
  • A day Chart and H1 chart with triple EMA suggest bullish trend for the time being.
  • Immediate hurdles are seen at 108.66 to 108.20 mark.
  • A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Technical Analysis:

Gold (XAU/USD):

  • Gold weakens sharply on Monday on robust U.S. dollar and touches $1,729 mark.
  • The pair made intraday high at $1,749 and Low at $1,729 mark.
  • A day chart and H1 chart with triple EMA suggest bearish trend for the time being.
  • A sustained close above $1,738 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,726 on H1 chart will test further supports.
$1,726 $1,738
$1,721 $1,742
$1,716 $1,748
$1,712 $1,752
$1,708 $1,758

Key Headlines for the FX market:

  • South Korea and the United States began their largest joint military drills in years with a resumption of field training, officials said, as the allies seek to tighten readiness over North Korea’s potential weapons tests.
  • Kenya’s veteran opposition leader Raila Odinga filed a challenge to the results of this month’s presidential election in the Supreme Court, his legal team said.
  • President Joe Biden launches a coast-to-coast tour this week to tout the new climate and tax bill and boost Democrats running in November’s elections.
  • Britain recorded its biggest fall in output in more than 300 years in 2020 when it faced the brunt of the COVID pandemic, as well as a larger decline than any other major economy, updated official figures showed.
  • British consumer price inflation is set to peak at 18% – nine times the Bank of England’s target – in early 2023, an economist at U.S. bank Citi said, raising his forecast once again in the light of the latest jump in energy prices.
  • China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin, adding to last week’s easing measures, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID cases.
  • The U.S. Federal Reserve will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries, according to economists in a Reuters poll, who said the risks were skewed towards a higher peak.

Latest updates on Russia – Ukraine Conflicts:

  • Russia fired rockets at towns to the west of Europe’s largest nuclear power plant in southern Ukraine while the capital Kyiv banned rallies this week to commemorate independence from Soviet rule for fear of Russian attacks.
  • Turkey doubled its imports of Russian oil this year, Refinitiv Eikon data showed on Monday, as the two countries are set for broader cooperation in business and especially energy trade in the face of western sanctions against Moscow.
  • Europe faces fresh disruption to energy supplies due to damage to a pipeline system that brings oil from Kazakhstan through Russia, the pipeline operator said on Monday, adding to concerns over a plunge in gas supplies.
  • Ukraine’s capital Kyiv banned public celebrations this week to commemorate independence from Russian-dominated Soviet rule and its second city Kharkiv declared a curfew due to a heightened threat of Russian attack, local authorities said.

Source: Reuters

Keep an eye open for the latest news and fundamentals affecting the FX markets.

Take a look and do trade wisely!
Good Luck