BluetonaFX - Forex Weekly Recap
Hi Traders!
Forex Weekly Recap for 18–22 September, 2023:
Fundamentals
The Reserve Bank of Australia (RBA) released the Meeting Minutes of its September meeting. Key notes were:
They considered raising rates by 25 basis points or holding rates at the September meeting.
The economy still appears to be on a narrow path by which inflation returns to target and employment grows.
They are concerned about productivity growth not picking up as anticipated and service inflation remaining an issue.
The European Central Bank’s (ECB) Villeroy hinted that the ECB has currently finished hiking; other key mentions from him were:
The ECB will maintain interest rates at 4% for a sufficiently long time.
The current ECB rates are at a good level; it is better to be patient now.
Once inflation is back to around 2%, rates can start to fall again.
The Bank of Canada released the minutes of its September meeting. Key notes were:
The lack of improvement in underlying inflation is a major worry.
They anticipate that rising oil and gasoline prices will push inflation up in the coming months.
The balance between economic supply and demand will play a pivotal role in determining future core and total inflation.
The Federal Reserve kept interest rates unchanged in the range of 5.25% to 5.50%, as expected. At the following press conference, Fed Chair Powell spoke, and key notes from him were:
Growth in real GDP has come in above expectations.
Labour demand still exceeds supply.
Expects labour market rebalancing to continue, easing upward pressure on inflation.
Inflation remains well above their long-term goal of 2%.
Getting inflation down to the 2% target still has a long way to go.
The Fed is prepared to raise rates further if appropriate.
The Swiss National Bank (SNB) left interest rates unchanged at 1.75%, which came as a surprise as the market expected a 25 basis point hike to 2%.
The Bank of England (BoE) left interest rates unchanged at 5.25%, which also came as a surprise as the market expected a 25 basis point hike to 5.50%. The bank vote also came as a surprise, as the bank vote was 4-5 vs. 8-1 expected (Bailey, Broadbent, Dhingra, Pill, and Ramsden voted to hold).
Key Data
New Zealand Services PMI came in worse at 47.1 vs. 48.0 prior.
The US Housing Starts data came in worse, while Building Permits came in better.
Housing Starts came in worse at 1.238M vs. 1.440M expected and 1.447M prior (revised from 1.452M).
Building permits came in better at 1.543M vs 1.443M expected and 1.442M prior.
The UK CPI came in worse across the board:
CPI Y/Y came in worse at 6.7% vs. 7.0% expected and 6.8% prior.
CPI M/M came in worse at 0.3% vs. 0.7% expected and -0.4% prior.
Core CPI Y/Y came in worse at 6.2% vs. 6.8% expected and 6.9% prior.
Core CPI M/M came in worse at 0.1% vs. 0.6% expected and 0.3% prior.
The New Zealand Q2 GDP came in better across the board:
GDP Q2 Y/Y came in better at 1.8% vs. 1.2% expected and 2.2% prior.
GDP Q2 Q/Q came in better at 0.9% vs. 0.5% expected and 0% prior (revised from 0.1%).
The US jobless claims came in better across the board:
Initial claims came in better at 201K vs. 225K expected and 221K prior (revised from 220K).
Continuing claims came in better at 1662K vs. 1695K expected and 1683K prior (revised from 1688K).
The Australian Manufacturing PMI came in worse; however, the Services PMI came in better.
Manufacturing PMI came in worse at 48.2 vs. 49.6 prior.
Services PMI came in better at 50.5 vs. 47.8 prior.
The Japanese CPI came in mixed across the board:
Japan CPI Y/Y came in worse at 3.2% vs. 3.3% prior.
Japan Core CPI Y/Y came in better at 3.1% vs. 3.0% expected and 3.1% prior.
The UK August retail sales came in worse across the board:
Retail sales Y/Y came in worse at -1.4% vs. -1.2% expected and -3.1% prior (revised from -3.2%).
Retail Sales M/M came in worse at 0.4% vs. 0.5% and -1.1% prior (revised from -1.2%).
German PMIs came in better across the board:
Manufacturing PMI came in better at 39.8 vs. 39.5 expected and 39.1 prior.
Services PMI came in better at 49.8 vs. 47.2 expected and 47.3 prior.
The Eurozone Manufacturing PMI came in mixed across the board:
Manufacturing PMI came in worse at 43.4 vs. 44.0 expected and 43.5 prior.
Services PMI came in better at 48.4 vs. 47.7 expected and 47.9 prior.
The UK Services PMI came in mixed across the board:
Manufacturing PMI came in better at 44.2 vs. 43.0 expected and 43.0 prior.
Services PMI came in worse at 47.2 vs. 49.2 expected and 49.5 prior.
Technicals
A mixed week for the forex majors, a bad week for GBP, especially with another week of worse-than-expected data leading to more weakening for the currency.
AUDUSD 1W Chart
AUDUSD held strong above the support level at the yearlow low and is trading comfortably above the 0.64000 area. The market briefly went above the 0.65000 area, which has not been seen since the end of August.
USDJPY 1W Chart
USDJPY is quickly approaching 150. The market is now trading just above the 148 level. The 150-level line lines up perfectly with the top of the ascending channel.
EURUSD 1W Chart
EURUSD is still continuing to head downwards after the support break of the rising wedge. A doji candle has formed on the 1W, which signals indecision, so we must be wary of this.
GBPUSD 1W Chart
GBPUSD is continuing its bearish momentum after the wedge support break. The next support area is around the 1.22000 level.
The key focus for the upcoming trading week will be:
Monday: German IFO.
Tuesday: US Consumer Confidence
Wednesday: Bank of Japan Meeting Minutes, Australia Monthly CPI, US Durable Goods Orders
Thursday: Australia Retail Sales, US Q2 Final GDP, US Jobless Claims
Friday: Japan Tokyo CPI, Japan Unemployment Rate, Japan Retail Sales, UK Q2 Final GDP, Eurozone CPI, Canada GDP, US Core PCE
We will be back with another Forex Weekly Recap report next week.
Best of luck for the upcoming trading week. Trade safely and responsibly.
BluetonaFX
Forex Weekly Recap for 18–22 September, 2023:
Fundamentals
The Reserve Bank of Australia (RBA) released the Meeting Minutes of its September meeting. Key notes were:
They considered raising rates by 25 basis points or holding rates at the September meeting.
The economy still appears to be on a narrow path by which inflation returns to target and employment grows.
They are concerned about productivity growth not picking up as anticipated and service inflation remaining an issue.
The European Central Bank’s (ECB) Villeroy hinted that the ECB has currently finished hiking; other key mentions from him were:
The ECB will maintain interest rates at 4% for a sufficiently long time.
The current ECB rates are at a good level; it is better to be patient now.
Once inflation is back to around 2%, rates can start to fall again.
The Bank of Canada released the minutes of its September meeting. Key notes were:
The lack of improvement in underlying inflation is a major worry.
They anticipate that rising oil and gasoline prices will push inflation up in the coming months.
The balance between economic supply and demand will play a pivotal role in determining future core and total inflation.
The Federal Reserve kept interest rates unchanged in the range of 5.25% to 5.50%, as expected. At the following press conference, Fed Chair Powell spoke, and key notes from him were:
Growth in real GDP has come in above expectations.
Labour demand still exceeds supply.
Expects labour market rebalancing to continue, easing upward pressure on inflation.
Inflation remains well above their long-term goal of 2%.
Getting inflation down to the 2% target still has a long way to go.
The Fed is prepared to raise rates further if appropriate.
The Swiss National Bank (SNB) left interest rates unchanged at 1.75%, which came as a surprise as the market expected a 25 basis point hike to 2%.
The Bank of England (BoE) left interest rates unchanged at 5.25%, which also came as a surprise as the market expected a 25 basis point hike to 5.50%. The bank vote also came as a surprise, as the bank vote was 4-5 vs. 8-1 expected (Bailey, Broadbent, Dhingra, Pill, and Ramsden voted to hold).
Key Data
New Zealand Services PMI came in worse at 47.1 vs. 48.0 prior.
The US Housing Starts data came in worse, while Building Permits came in better.
Housing Starts came in worse at 1.238M vs. 1.440M expected and 1.447M prior (revised from 1.452M).
Building permits came in better at 1.543M vs 1.443M expected and 1.442M prior.
The UK CPI came in worse across the board:
CPI Y/Y came in worse at 6.7% vs. 7.0% expected and 6.8% prior.
CPI M/M came in worse at 0.3% vs. 0.7% expected and -0.4% prior.
Core CPI Y/Y came in worse at 6.2% vs. 6.8% expected and 6.9% prior.
Core CPI M/M came in worse at 0.1% vs. 0.6% expected and 0.3% prior.
The New Zealand Q2 GDP came in better across the board:
GDP Q2 Y/Y came in better at 1.8% vs. 1.2% expected and 2.2% prior.
GDP Q2 Q/Q came in better at 0.9% vs. 0.5% expected and 0% prior (revised from 0.1%).
The US jobless claims came in better across the board:
Initial claims came in better at 201K vs. 225K expected and 221K prior (revised from 220K).
Continuing claims came in better at 1662K vs. 1695K expected and 1683K prior (revised from 1688K).
The Australian Manufacturing PMI came in worse; however, the Services PMI came in better.
Manufacturing PMI came in worse at 48.2 vs. 49.6 prior.
Services PMI came in better at 50.5 vs. 47.8 prior.
The Japanese CPI came in mixed across the board:
Japan CPI Y/Y came in worse at 3.2% vs. 3.3% prior.
Japan Core CPI Y/Y came in better at 3.1% vs. 3.0% expected and 3.1% prior.
The UK August retail sales came in worse across the board:
Retail sales Y/Y came in worse at -1.4% vs. -1.2% expected and -3.1% prior (revised from -3.2%).
Retail Sales M/M came in worse at 0.4% vs. 0.5% and -1.1% prior (revised from -1.2%).
German PMIs came in better across the board:
Manufacturing PMI came in better at 39.8 vs. 39.5 expected and 39.1 prior.
Services PMI came in better at 49.8 vs. 47.2 expected and 47.3 prior.
The Eurozone Manufacturing PMI came in mixed across the board:
Manufacturing PMI came in worse at 43.4 vs. 44.0 expected and 43.5 prior.
Services PMI came in better at 48.4 vs. 47.7 expected and 47.9 prior.
The UK Services PMI came in mixed across the board:
Manufacturing PMI came in better at 44.2 vs. 43.0 expected and 43.0 prior.
Services PMI came in worse at 47.2 vs. 49.2 expected and 49.5 prior.
Technicals
A mixed week for the forex majors, a bad week for GBP, especially with another week of worse-than-expected data leading to more weakening for the currency.
AUDUSD 1W Chart
AUDUSD held strong above the support level at the yearlow low and is trading comfortably above the 0.64000 area. The market briefly went above the 0.65000 area, which has not been seen since the end of August.
USDJPY 1W Chart
USDJPY is quickly approaching 150. The market is now trading just above the 148 level. The 150-level line lines up perfectly with the top of the ascending channel.
EURUSD 1W Chart
EURUSD is still continuing to head downwards after the support break of the rising wedge. A doji candle has formed on the 1W, which signals indecision, so we must be wary of this.
GBPUSD 1W Chart
GBPUSD is continuing its bearish momentum after the wedge support break. The next support area is around the 1.22000 level.
The key focus for the upcoming trading week will be:
Monday: German IFO.
Tuesday: US Consumer Confidence
Wednesday: Bank of Japan Meeting Minutes, Australia Monthly CPI, US Durable Goods Orders
Thursday: Australia Retail Sales, US Q2 Final GDP, US Jobless Claims
Friday: Japan Tokyo CPI, Japan Unemployment Rate, Japan Retail Sales, UK Q2 Final GDP, Eurozone CPI, Canada GDP, US Core PCE
We will be back with another Forex Weekly Recap report next week.
Best of luck for the upcoming trading week. Trade safely and responsibly.
BluetonaFX
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