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4 Global Market Updates- 25 August, 2022

In this article, we have covered the highlights of global market news about the EUR/USD, NZD/USD USD/CAD and EUR/HUF.
EUR/USD Price Analysis: Breaks through bearish channel to highlight 1.0100 barrier

In defiance of the eight-day-old negative trend, the EUR/USD price rose to a new weekly high of 1.0025 on Thursday morning in Europe.

The short-term negative trend channel’s upward break also gets cues from the RSI’s recent recovery and the MACD signals’ waning bearish bias (14).

With this, the EUR/USD buyers are moving closer to a horizontal resistance that will last for one month at 1.0100. However, the major currency pair’s potential gains may be limited by the 21-DMA at 1.0155.

However, it should be highlighted that the sellers can continue to exert pressure up until the quotation falls below the monthly high around 1.0370.

Alternatively, for pullback swings to undo the most recent bullish breakthrough, they could need to go below the 0.9990 level.

The recent multi-year bottom at 0.9900 might perhaps provide entertainment for EUR/USD bearish after that.

The pair’s subsequent decline, however, may be constrained by the 61.8% Fibonacci Expansion (FE) of the May–August movements and the support line of the indicated channel, which are located respectively around 0.9855 and 0.9815.

The 78.6% FE and a downward-sloping support line from May, which are close to 0.9700 and 0.9680 in that order, will be crucial to observe in the event that the EUR/USD seller maintains control beyond 0.9815.

NZD/USD: More range-bound trading is likely – UOB

According to UOB Group FX Strategists Lee Sue Ann and Quek Ser Leang, the NZD/USD exchange rate may currently fluctuate between 0.6125 and 0.6260 in the next weeks.

View for the next 24 hours: “We said yesterday that “momentum indicators are flattish” and that we anticipated the New Zealand dollar to “consolidate and trade within a band of 0.6160/0.6220.” Despite the fact that the NZD traded inside a somewhat smaller range than anticipated (0.6164/0.6219), our assessment of consolidation was accurate. Price movements have been quite calm, which suggests that further consolidation is not unexpected. Today’s expected range is 0.6160–0.6220.

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Within the next three weeks: “Our analysis from yesterday (24 August, spot at 0.6195) remains valid. NZD is unlikely to weaken much further, as was mentioned. For a while, she allowed NZD trading between 0.6125 and 0.6260.

USD/CAD may continue to rise, but there is no fresh territory to be explored – HSBC

There is minimal chance that the Bank of Canada (BoC) will make a quick change during its meeting on September 7. HSBC economists see moderate further increases for the USD/CAD pair.

“The market is well valued for a discussion between 50 bps and 75 bps at the September meeting of the BoC. The decision may determine the knee-jerk response, but the hawkish delivery style should enable the CAD to outperform other “risk on” currencies in the near run, but not by enough to beat the USD, not least since the USD will be supported by the tailwind of risk aversion.

While USD/CAD may continue to rise, we are not looking to break new territory.

EUR/HUF: A return to 415 is possible in the following days, according to ING.

According to ING economists, the EUR/HUF is likely to rise in the near future, approaching 415. Positive press surrounding the talks between the government of Hungary and the European Commission, however, ought to bring the pair down to 400.

“Over the next several days, a climb back near 415 EUR/HUF is not ruled out.”

“However, the forint is the only currency in the area now supported by a growing interest rate difference, and in the event of good news from the European Commission, we should see a HUF rise back below EUR/HUF 400. The forint will continue struggle, and this is definitely not a concern for the next days.

Please click here for the Market News Updates from 24 Aug, 2022.

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