|📢 EURUSD Execution | Fundamental analysis for the Euro-dollar|
The Pound declined on Friday because of US and domestic data releases. In addition to the bulk of stock, bond, and currency markets, the energy commodities market had a pause throughout the Asian session. In the US retail sales figure for August, the US Dollar had an up-and-down day, since although it rallied the previous day in the US, it fell in Asia following the 0.7% month-on-month increase.
Following the prior month's -1.1% drop, this is the second straight monthly drop.
The International Energy Agency (IEA) claims that energy commodities saw price hikes this week because of significant capacity issues that are plaguing the worldwide supply chain. It specifically includes the Mexican Gulf's hurricane season, the Channel's power outage, and maritime snags The Baltic freight index, a measure of the price of moving energy commodities, reveals that the cost of transportation is the highest it has been in 13 years, the index says. Because of inflation, the markets are worried about the economic effects of the approaching winter and typhoon season in the Northern Hemisphere and the Western Pacific. The increasing cost of energy in many Asian nations has led to the closure of several industries.
Economic Docket
After the monthly retail sales in the UK dropped by-0.9 percent, the pound-to-dollar exchange rate plummeted by a somewhat larger amount. The 0.5 percent estimated in the prediction, as well as the prior -2.5 percent figure, were both lower than the -2.8 percent estimate the latest report gave.
Technicals
Moving forward, investors will keep a careful eye on consumer confidence data released by the University of Michigan, but Thursday's Federal Open Market Committee meeting will remain a priority.
Following the prior month's -1.1% drop, this is the second straight monthly drop.
The International Energy Agency (IEA) claims that energy commodities saw price hikes this week because of significant capacity issues that are plaguing the worldwide supply chain. It specifically includes the Mexican Gulf's hurricane season, the Channel's power outage, and maritime snags The Baltic freight index, a measure of the price of moving energy commodities, reveals that the cost of transportation is the highest it has been in 13 years, the index says. Because of inflation, the markets are worried about the economic effects of the approaching winter and typhoon season in the Northern Hemisphere and the Western Pacific. The increasing cost of energy in many Asian nations has led to the closure of several industries.
Economic Docket
After the monthly retail sales in the UK dropped by-0.9 percent, the pound-to-dollar exchange rate plummeted by a somewhat larger amount. The 0.5 percent estimated in the prediction, as well as the prior -2.5 percent figure, were both lower than the -2.8 percent estimate the latest report gave.
Technicals
Moving forward, investors will keep a careful eye on consumer confidence data released by the University of Michigan, but Thursday's Federal Open Market Committee meeting will remain a priority.
- The pound has traded in a tight range of between 1.3572 and 1.3982 over the last two months.
- Testing them now may provide support and resistance levels for future activity.
- Lows of 1.3725 and 1.3600 could serve as a source of support or resistance, while the high of 1.3913 might serve as a barrier.
- The short-term support level of 1.3770 is a recent low of 1.3763 that is seen on a trend line
The Federal Reserve's September rate decision, which has been discussed for some time, is almost here. The largest issue right now is whether the Fed would provide specifics about tapering asset purchases, since most FOMC members have indicated they anticipate the beginning of such action to begin in the course of this year, as per July's meeting. Powell told us in July that employment has not yet achieved the "significant additional progress" level that the Fed is aiming for before raising rates. After that, there was the appalling NFP data earlier this month, and it seems the Fed may not be prepared to loosen monetary policy at this time. This may result in both USD-weakness and a revival of risk-on moves in global markets.
DXY Technical Analysis
From a longer-term perspective, the US dollar is expected to trend upward, as described in our Q3 prediction, and price action is close to testing several important watermarks on the chart.
The Q1 high is about 93.43, while the 93.20 swing-high is a little higher.
The next bar up is the 2021 high, which rests at 93.73.