iFOREX Daily Analysis : September 25,2018

The US Dollar continues to see an upside against other major currencies ahead of the Federal Reserve meeting on Wednesday, where many believe that the interest rates could be increased. This trend however did mostly not apply to emerging markets, as currencies like the Russian Ruble (RUB), Turkish Lira (TRY) and Polish Zloty (PLN) again gained against the Dollar.

Oil further extended its gains after the OPEC meeting failed to yield an agreement on increasing production and the recent incident in Iran, where attackers ambushed a military parade further increased tensions in the gulf region.

After the recent rise, most major cryptocurrencies retraced on Monday and further extended losses on Tuesday morning. Of the bigger cryptocurrencies by market capitalization, Ripple lost more than 20% of its value within 24 hours. Ripple prices recently skyrocketed, after the company announced a successful test run of using its crypto tokens and trading platform for settlements between independent banks.

On Tuesday in France Business Climate Indicator data will be released. Poland is due to release its Unemployment Rate statistic and in Saudi Arabia Gross Domestic Product (GDP) data will be published. In the US the Redbook Store Sales statistic, the FHFA as well as the S&P Case-Shiller House Price Index and Consumer Confidence and Investor Confidence statistics will be released. Later in the Asian-Pacific trading session New Zealand will publish its Merchandise Trade Balance data.

EUR/USD

The Euro saw again an upside towards a new 3-months high, following remarks by the President of the European Central Bank (ECB) Mario Draghi, as he mentioned at a hearing in the European Parliament that he expects inflation to further increase over the coming months. Inflation is one of the key figures central bankers pay attention to when making their interest rate decisions.

The EUR/USD however later consolidated due to the strong dollar, ahead of the FOMC meeting on Wednesday, where markets expect a rate hike as possible.

On Tuesday in France Business Climate Indicator data will be released. In the US the Redbook Store Sales statistic, the FHFA as well as the S&P Case-Shiller House Price Index and Consumer Confidence and Investor Confidence statistics will be released.

Pivot: 1.173 Support: 1.173 1.17 1.1675Resistance: 1.1775 1.1795 1.1815 Scenario 1: long positions above 1.1730 with targets at 1.1775 & 1.1795 in extension. Scenario 2: below 1.1730 look for further downside with 1.1700 & 1.1675 as targets. Comment: the RSI calls for a rebound.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

Gold

Gold trades almost unchanged around the $1,200 level. While the strengthening Dollar on one hand in theory could push dollar traded commodity prices down, for gold the effect of higher interest rates can also play a significant role. Ahead of the FOMC meeting on Wednesday, where many believe an interest hike could be announced, the 10 Year US Treasury Note Yield hit the level of 3.1% for the first time since May. It is assumed that higher yields on safe haven assets like Treasury Bonds make gold as a safe haven investment less appealing, as it does not pay any interest.

Palladium on the other hand further extended gains, trading at the highest level since February. Some analysts believe that demand for palladium, which is predominantly used in gasoline cars, could increase due to the switch by car makers from diesel back to gasoline engines, as for example Porsche recently announced that it would stop manufacturing diesel cars.

Pivot: 1197 Support: 1197 1194 1191.5Resistance: 1202 1204 1207 Scenario 1: long positions above 1197.00 with targets at 1202.00 & 1204.00 in extension. Scenario 2: below 1197.00 look for further downside with 1194.00 & 1191.50 as targets. Comment: the RSI advocates for further upside.

WTI Oil

Oil prices continued to see an upside on Monday and extended gains on Tuesday morning. Some analysts voiced the opinion that besides the OPEC meeting, where no decision to increase production was made the ambush attack on an Iranian armed forces parade on Sunday could also have played a role in pushing oil prices higher. The fragile political relationship between Iran and its neighbors in the Gulf could further deteriorate on allegations by Iran that state actors were involved in such an attack. It is feared that in the extreme case, Iran could block the Strait of Hormuz and thus affecting global oil shipments from that region.

On Tuesday the American Petroleum Institute (API) will release oil stockpile figures, followed by the Energy Information Administration (EIA) on Wednesday.

Pivot: 71.65 Support: 71.65 70.9 70.5Resistance: 72.75 73.1 73.45 Scenario 1: long positions above 71.65 with targets at 72.75 & 73.10 in extension. Scenario 2: below 71.65 look for further downside with 70.90 & 70.50 as targets. Comment: the RSI is mixed to bullish. The 20-period moving average stays above the 50-period one. In fact, the prices keep seeking support from the 50-period moving average.

US Tech 100

With the exception of the NASDAQ (US Tech 100), major US equity indices closed overall mostly lower on the first trading day of the week. The recovery of Apple (+1.39%) shares was quoted as one of the key reasons, for the outperformance of the NASDAQ on Monday, as Apple shares (NASDAQ:AAPL) make up well over 10 percent of the entire index weight.

AMD (+5.27%) stopped the four day long losing streak and strongly recovered after additional analysts gave the stock a positive rating and price target.

Meanwhile Snap (-2.08%), the owner of the social media app ‘Snapchat’ continues to struggle, as the stock closed at a record low. Later on Monday the company announced a partnership with Amazon (NASDAQ:AMZN) to bring a ‘point-and-buy’ feature to the platform, which would allow recognized barcodes or items then be directly purchased by the user in Amazon’s store.

On Tuesday Nike (NYSE:NKE) will publish its quarterly financial results as one of the first major companies this earning season, with more earnings coming in the following weeks.

Pivot: 7601.75 Support: 7545.25 7527.5 7503 Resistance: 7601.75 7618 7638 Scenario 1: short positions below 7601.75 with targets at 7545.25 & 7527.50 in extension. Scenario 2: above 7601.75 look for further upside with 7618.00 & 7638.00 as targets. Comment: as long as 7601.75 is resistance, expect a return to 7545.25.

Written By: iFOREX