Wednesday Briefing: From DXY Gold to Latest FX Headlines; Oct 05, 2022

US Dollar Index Overview

  • DXY strengthens on Wednesday and stabilizes around 111.00 mark.
  • It made intraday high at 111.09 and low at 110.06 mark.
  • A day Chart is up and H1 chart with triple EMA suggests down trend for the time being.
  • Immediate hurdles are seen at 111.22 to 110.04 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 erases previous gain against U.S dollar and hovers around $1,705 mark.
  • The pair made intraday high at $1,727 and Low at $1,704 mark.
  • A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
  • A sustained close above $1,712 on H1 chart requires for the upside rally.
  • Alternatively, a consistent close below $1,702 on H1 chart will test further supports.

Key Headlines for the FX market:

  • OPEC+ looks set for deep cuts to its oil output targets when it meets today, curbing supply in an already tight market despite pressure from the United States and others to pump more. The potential cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago.
  • Elon Musk is proposing to proceed with his original $44 billion bid to take Twitter private, calling for an end to a lawsuit by the social media company that could have forced him to pay up, whether he wanted to or not.
  • A steepening drop in euro zone business activity last month will likely put paid to any hopes the currency union avoids recession, just as elevated inflation puts pressure on the European Central Bank to act, a survey showed.
  • U.S. voters prefer Republicans over Democrats for solving immigration and crime problems, suggesting the Republican emphasis on border security and fighting crime could help it in the November 8 midterm elections, a Reuters/Ipsos poll showed.
  • President Joe Biden will travel to Florida today and pledge support to help the state recover from Hurricane Ian during a visit that includes a meeting with Governor Ron DeSantis, a possible rival in the 2024 presidential race.
  • South Korea and the U.S. military conducted rare missile drills and an American supercarrier repositioned east of North Korea after Pyongyang flew a missile over Japan, one of the allies’ sharpest responses since 2017 to a North Korean weapon test. But the South Korean display of military force went wrong in a blaze of burning rocket fuel, alarming residents of a seaside town.
  • British Prime Minister Liz Truss urged her fractious party to stick together and help transform the economy and the country, fighting to restore her dwindling authority after a chaotic first month in office.
  • Russian President Vladimir Putin formalized the annexation of four Ukrainian regions despite major battlefield reversals in recent days shrinking the amount of seized territory Moscow controls.
  • U.S. President Joe Biden promised a new $625-million security assistance package to Ukraine, prompting a warning from Moscow that such a move risked a direct military clash between Russia and the West.
  • Belarusian President Alexander Lukashenko accused Ukraine of sending 15,000 troops to the border area to build defenses and conduct reconnaissance, actions that he called “provocations”.

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