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4 Global Market Updates- 29 September, 2022

In this article, we have covered the highlights of global market news about the USD/CNH, AUD/USD, GBP/USD and USD/JPY.

USD/CNH Price Analysis: Fades off weekly support at 7.2000.

Early on Thursday morning in Europe, USD/CNH reverses the day’s loss from the record high despite recent inactivity around 7.1880.

As a result, the offshore Chinese yuan (CNH) pair bounces off a horizontal region made up of many lows noted since Monday while RSI remains stable (14). The pair’s upward momentum is hampered by negative MACD indications and the buyer’s failure to control the price above the psychological level of 7.2000.

However, it should be noted that any retreat movements below the indicated immediate support around 7.1460-50 are expected to be met with resistance from an upward-sloping support line from September 13 that is, as of the time of the press, near 7.1280.

The vicinity of 7.1125 on the 50-SMA level also functions as a downward filter.

The swing high at 7.1060 on September 22 and the psychological magnet at 7.1000 may serve as the final line of defence for the USD/CNH buyers even if the quote falls below 7.1125.

As an alternative, recovery advances must continue above the 1.2000 level in order to persuade buyers to go for the several obstacles close to 1.2500.

After that, attention will turn to the recently flashed record high at 7.2600 and the 7.3000 psychological magnet.

AUD/USD: Risk-aversion, weaker be fore the US GDP, Australian inflation sends bears to the sub-0.6500 zone.

As traders wait for new information to support recent retracement movements, the AUD/USD currency pair narrows intraday losses around 0.6490 after recently rebounding from daily lows.

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Nevertheless, the Australian dollar was under pressure early on Thursday due to disappointing readings of Australia’s monthly Consumer Price Index (CPI) and the risk-off atmosphere. In order to support the previous day’s recovery from the two-year low, the same joined stronger US Treasury rates.

According to the Australian Bureau of Statistics’ (ABS) first monthly CPI statistics, headline price pressure decreased from 7.0% in July to 6.8% in August. The Reserve Bank of Australia (RBA) recently made some cautionary words in an effort to chastise AUD/USD purchasers after the publication of the data.

The risk-on sentiment of Wednesday and China’s measures to boost domestic markets in an effort to allay concerns about a recession seem to support the recent recovery in US Treasury rates as well as the US currency. The People’s Bank of China (PBOC) intends to issue 2.5 trillion yuan in government bonds in Q4 and may raise the onshore yuan fix for the first time in nine days along these lines.

GBP/USD trades sideways around 1.0800, with attention shifting to US/UK GDP figures.

In the Tokyo session, the GBP/USD pair is performing mediocrely. After falling from the important threshold of 1.0900, the asset has since turned sideways in a constrained range of 1.0782-1.0800. A failed effort to breach the barriers at 1.0900 caused the cable to correct, although a bullish impulsive advance after the end of a pullback cannot be ruled out.

The unexpected decision by the Bank of England (BOE) to implement a bond-purchase programme in an effort to stabilize the financial markets has begun to manifest its effects. It is important to note that risk-sensitive currencies are doing well right now since the US dollar index (DXY) has reached an erratic high of around 115. Sterling’s gains, nevertheless, remain modest when compared to those of other currencies.

To protect the economy from the financial instability, the BOJ would buy long-dated bonds totaling GBP 5 billion in a series of purchases over a 13-day period. Simply increasing liquidity might have a huge positive impact when people in the UK are already feeling the effects of greater price pressures and BOE officials are already working tirelessly to contain inflation.

USD/JPY Price Analysis: Inventory adjustment is underway, with the 50-EMA serving as a major support.

After falling to a level close to 144.00, the USD/JPY pair has now begun to recover. The asset is broadly probing the downward breach of the charted area, which is displayed in a constrained range between 144.40 and 144.90. The upward trend is showing clear and obvious signs of weariness, and the dollar bulls may soon relinquish control.

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The major is auctioning in an inventory adjustment procedure on a four-hour scale, indicating a somewhat lengthier consolidation time. It is crucial to note that institutional investors are accumulating or distributing funds as part of the adjustment process. Given that the asset is showing symptoms of momentum loss, the odds are in favor of an inventory distribution.

The 50-period Exponential Moving Average (EMA), which is now around 113.80 at the time of writing, has served as a significant safety net for the supporters of the dollar. A volatile occurrence once interrupted the peace, but fortunately it was overstepped again. The dollar will decline if the 50-EMA continues to capitulate.

The long-term trend is still strong, as seen by the 200-EMA scaling higher at 141.20.

Please click here for the Market News Updates from 28 September, 2022.

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