Investors want 50 more from Fed

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Any setbacks should be well supported ahead of 1.2500.

• R2 1.3500 – Psychological – Strong
• R1 1.3430 – 25 September/2024 high – Medium
• S1 1.3248 – 23 September low – Medium
• S2 1.3145 – 18 September low – Strong

GBPUSD – fundamental overview

Absence of first tier UK data has kept the focus on the bigger picture of monetary policy divergence between the Fed and BOE, which has driven the Pound to yet another yearly high. Key standouts on Wednesday’s calendar come from some ECB speak and US new home sales.

USDJPY – technical overview

The market has entered a period of correction after extending the uptrend to a multi-year high through 160.00. Critical support comes in around 140.00, with only a monthly close below the barrier to compromise the bullish outlook. A higher low is ideally sought out above 140.00 in favor of a bullish continuation.

• R2 145.00 – Psychological – Medium
• R1 144.69 – 24 September high – Medium
• S1 141.74 – 20 September low – Medium
• S2 139.58 – 16 September/2024 low – Strong

USDJPY – fundamental overview

Japan services PPI came in slightly above forecast, though the market is still thinking about yesterday's comments from BOJ Ueda that the central bank is in no rush to raise interest rates. Ultimately, we've seen a lot of directionless chop in recent sessions. Key standouts on Wednesday’s calendar come from some ECB speak and US new home sales.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. A monthly close back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.7000 – Psychological – Strong
• R2 0.6909 – 25 September/2024 high – Medium
• S1 0.6737 – 19 September low– Medium
• S2 0.6622 – 11 September low – Strong

AUDUSD – fundamental overview

The Australian Dollar has been bid up to a fresh yearly high after the RBA left policy unchanged while maintaining its hawkish stance. Having said this, we are seeing some selling into the latest rally, perhaps on the back of the latest round of Aussie inflation data which came in on the cooler side. The monthly CPI reading for August showed inflation slowing to its lowest since August 2021. Key standouts on Wednesday’s calendar come from some ECB speak and US new home sales.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area, with a break to open a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3648 – 19 September high –Strong
• R1 1.3600 –Figure – Medium
• S1 1.3420 – 25 September low – Medium
• S2 1.3358 – 31 January low – Strong

USDCAD – fundamental overview

The Canadian Dollar is up big this week on the back of rallying commodities prices, higher equities and solid Canada economic data. Key standouts on Wednesday’s calendar come from some ECB speak and US new home sales.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6400 – Figure – Strong
• R1 0.6356 – 25 September/2024 high – Medium
• S1 0.6176 – 17 September low – Medium
• S2 0.6106 – 11 September low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar remains well in demand on the back of a clear monetary policy divergence between the Fed and RBNZ. The currency has also been supported on the accompanying surge in commodities and risk assets. Key standouts on Wednesday’s calendar come from some ECB speak and US new home sales.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5093, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.

• R2 5750 – Psychological– Strong
• R1 5746 – 25 September/Record high – Medium
• S1 5596 – 13 September low – Medium
• S2 5540 – 12 September low – Medium

US SPX 500 – fundamental overview

The US equities market remains exceptionally well supported in 2024 on the back of an ongoing expectation for more rate cuts than less going forward. Investors are feeling better about a soft landing in the US economy and this has also been accompanied by an accommodative adjustment of Fed policy. It will however be important to keep an eye on inflation, bigger picture economic data and geopolitical risk in the months ahead.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 2500-3000 area. Setbacks should now be well supported above 2300 on a monthly close basis.

• R2 2700 – Psychological– Strong
• R1 2671 – 25 September/Record high – Medium
• S1 2472 – 4 September low – Medium
• S2 2432– 15 August low – Medium

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.