Thursday Briefing: From DXY, Gold to latest FX Headlines; Sept 22, 2022

US Dollar Index Overview

  • The DXY weakens on Thursday and faces key support at 110.50 mark.
  • It made intraday high at 110.81 and low at 110.56 mark.
  • A day Chart and H1 chart with triple EMA up down trend for the time being.
  • Immediate hurdles are seen at 111.32 to 110.60 mark.
  • A sustained close of either side on H1 chart requires for the further directions of the U.S. dollar.

Technical Analysis: XAU/USD (Gold)

  • Gold remained highly volatile in previous session after FOMC interest rate decision.
  • The pair made intraday high at $1,684 and Low at $1,655 mark.
  • A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
  • A sustained close above $1,682 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,665 on H1 chart will test further supports.
$1,662 $1,684
$1,656 $1,689
$1,652 $1,694
$1,647 $1,701
$1,642 $1,708

Key Headlines for the FX market:

  • Russia pushed ahead with its biggest conscription since World War Two while Ukraine demanded “just punishment” for a seven-month-old invasion sending shock waves around the world.
  • Security forces detained more than 1,300 people in Russia at protests denouncing mobilization, while some Russian men rushed for the exits. Traffic at border crossings with Finland and Georgia surged and prices for air tickets from Moscow rocketed.
  • Russia and Ukraine carried out an unexpected prisoner swap, the largest since the war began and involving almost 300 people, including 10 foreigners and the commanders who led a prolonged Ukrainian defense of Mariupol earlier this year.
  • European Union foreign ministers agreed to prepare new sanctions on Russia and increase weapons deliveries to Kyiv.
  • Xi Jinping is unlikely to abandon his “old friend” Vladimir Putin, even as the Russian leader’s decision to send thousands more troops to Ukraine and his nuclear threats strain Beijing’s “no limits” partnership with Moscow, experts said.
  • Protesters in Tehran and several other Iranian cities torched police stations and vehicles as unrest triggered by the death of a woman detained by the Islamic Republic’s morality police intensified for a sixth day.
  • Hurricane Fiona strengthened to a powerful Category 4 storm as it headed toward Bermuda after carving a destructive path through the Dominican Republic and Puerto Rico, where the storm left most people without power and up to eight dead.
  • World stocks were close to a two-year low and Japan unilaterally intervened in foreign exchange markets for the first time since 1998 as the Federal Reserve’s aggressive U.S. rate hike signals put markets on the run.
  • Federal Reserve Chair Jerome Powell vowed that he and his fellow policymakers would “keep at” their battle to beat down inflation, as the U.S. central bank hiked interest rates by three-quarters of a percentage point for a third straight time and signaled that borrowing costs would keep rising this year.
  • The Bank of England looks set to raise interest rates by at least half a percentage point today in a bid to tame inflation that is just off a 40-year high, against a backdrop of a tumbling currency and a free-spending government. Britain’s manufacturers association slashed its forecast for growth in factory output next year, citing huge uncertainty around demand and energy prices.
  • Europe’s decade-long experiment with negative interest rates, which ended today with the Swiss National Bank’s return to positive territory, showed one thing: they can exist beyond the realms of economic science fiction.

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