Currency: EUR/USD
Resistance 2: 1.1640
Resistance 1: 1.1580
Spot price: 1.1555
Support 1: 1.1500
Support 2: 1.144
Although the market sentiment improved on Thursday, the EUR/USD trading near 1.1560 rose slightly. Following news that the US Senate Majority Leader Chuck Schumer announced that the debt ceiling would be increased by US$408 billion by early December, global stock markets rose. However, the improvement in market sentiment cannot offset the weakness of the euro, because the euro zone economic data is weak, and the euro/dollar remains weak. Germany announced its August industrial production, the monthly rate dropped by 4%, far below the expected value of -0.4%. The annual rate of industrial production in August was 1.7%, far lower than the expected value of 11.4%. The United States will release the number of non-agricultural jobs on Friday, and it is estimated that the number of new non-agricultural jobs in the United States will reach 488,000 in September. The unemployment rate was 5.1% in the future and 5.2% in the previous period. From a technical point of view, the daily chart shows that the euro/dollar still has a downside risk. The EUR/USD is far below all moving averages, and these moving averages maintain a firm bearish tendency. At the same time, the technical indicators consolidate in the negative zone. The 4-hour chart shows that the EUR/USD is still below the bearish 20 moving average, which is currently raising resistance near 1.1580. The momentum indicator is consolidating in the negative zone, but the relative strength indicator is close to oversold. EUR/USD needs to break through at least the 1.1640 price zone to attract bulls.
Currency: GBP/USD
Resistance 2: 1.3728
Resistance 1: 1.3645
Spot price: 1.3618
Support 1: 1.3525
Support 2: 1.3435
The currency pair faced selling pressure again on Wednesday and ended its four-day rise to a weekly high of about 1.3650. The combination of a series of factors has helped the dollar gain strong follow-up traction, which is regarded as a key factor that exerts heavy pressure on the pound against the dollar. The market expects that the Fed will begin to withdraw its stimulus measures during the large-scale epidemic as early as November. Market expectations continue to increase and the U.S. dollar will continue to gain support from them. Fearing that the continued surge in energy prices will trigger inflation, the market seems to have begun to digest the possibility of the Federal Reserve raising interest rates in 2022. In addition, the Evergrande crisis and the deadlock in the US debt ceiling have triggered a new round of global safe-haven transactions. This, coupled with the strong rise in U.S. Treasury yields, continued to provide a boost to the safe-haven dollar and prompted a new round of selling in the pound to dollar exchange rate. Britain and France are once again nervous about fishing rights after Brexit, which further drags down the pound. In the latest development, French Finance Minister Le Maire stated that France will formulate an action plan for the UK and fisheries on October 15. In addition, the continuing fuel crisis in the UK has further weakened the pound. The 1.3645 resistance position at the top is now more critical. If it can break through the rebound and upward space, it will be further expanded. On the contrary, the pound's decline will be difficult to change. The lower support is at 1.3525, which was the support line earlier this week. It is closely followed by the previous week's cornerstone of 1.3435, and then the 2021 low of 1.34.
Currency: AUD/USD
Resistance level 2: 0.7400
Resistance 1: 0.7330
Spot price: 0.7322
Support 1: 0.7266
Support 2: 0.7200
The Australian dollar benefited from market risk appetite, and the AUD/USD surged to 0.7323, a three-week high. Before the Asian market opened on Friday, the AUD/USD continued to rise, trading around 0.7310. Despite the lukewarm Australian data released this morning, the global stock index is positive, boosting the AUD/USD. The September AIG Service Industry Performance Index recorded 45.7, slightly better than the previous value of 45.6, but it is still in a contraction zone. On Friday, the Reserve Bank of Australia will release a financial stability review report, while the United States will release monthly employment data. Federal Reserve Chairman Jerome Powell has said that if the employment data is good, it may be enough to persuade him to reduce the amount of allowances, so the non-agricultural employment data will affect the Fed's prospects for reducing the amount of allowances. At the same time, it will have a greater impact on the currency pair. The AUD/USD has reached the 50% retracement of the daily decline and may continue its upward trend in the short term. The daily chart shows that the AUD/USD successfully broke through the 20 moving average. The same technical indicators hold steady upwards and are in the positive zone. If the AUD/USD breaks through the 0.7330 area, the support exchange rate will rise further, with the target aiming at 0.74-0.7480. The short-term 4-hour chart shows that despite the limited momentum of AUD/USD, the exchange rate risk is on the upside, and the support at 0.72 below is relatively strong.
These are personal views only, and do not represent the views of the institution where they belong.
Source: Bank of China's official website, Bank of China Guangdong Branch Wang Gang, original title: "Foreign Exchange Market Watch October 8, 2021"
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