Daily Market Review September 20



The Bank of Japan will hold a comprehensive policy review meeting scheduled as at September 20-21. This meeting’s main focus will be the on the current policy rates and measures needed to boost the economy. Bank of Japan governor Kuroda has been adopting a quantitative and qualitative easing program since 2013 which have had mixed effects up till now. During the same period, the Federal Reserve will also release its interest rate decision expected to bolster the markets. Trading will get volatile.

Many assets will be hot for trading on that particular day and traders are reminded that volatility has already set on most trading floors. Things are getting even more buoyant by the side of the Wall Street, as seen for most indices. Recovery in oil prices resulted into a rise in Dow Jones Industrial Average and the S&P 500 futures. Both added 0.43 percent and 0.42 percent respectively. Following the same trend, the NASDAQ rose by 0.38 percent.

In the wake of a prolonged wait pertaining to BoJ and the Fed’s policy rates decisions, Gold prices rebounded higher than expected. Gold prices edged higher by 0.11 percent on the Comex division of the New York Mercantile Exchange to settle at $1,319.15 a troy ounce. Elsewhere, oil prices gains were curbed earlier today as traders focused more on profit taking due to dovish comments that a freeze in output could be possible. Brent crude fell by 0.26 percent today to trade at $45.83 a barrel.

Technical Analysis:
As markets resumed from weekend gap yesterday, the EURUSD pair was seen trading in a specific range the whole day. Starting the session at the 1.115 level, the pair upped slightly higher to the 1.117 level in the early trading hours. Later the pair maintained the same trajectory not moving higher than the 1.118 level and not edging lower than the 1.114 level. Earlier today, the pair EURUSD was seen taking the same trading trend and there is no certainty that the pair might move higher today. Last seen today, the pair hovered near the 1.117 level and as important data surge from the U.S., trading pattern may change.

The USDJPY pair is settling lower than the expected level as markets resumed yesterday. A slow and bearish move was seen throughout the whole day for this pair which is also a result of anticipations that the Bank of Japan could lower rates. This is now a dangerous mode for both the USD and the JPY as all eyes also set on the Fed for a hike in policy rates. Starting the session at 102.3 level yesterday, the pair USDJPY closed the session at the 101.9 level. The Ichimoku cloud indicator also hovers above the candles suggesting a bearish trend to continue, with no change signaled ahead for today. Keep an eye here.
As major currencies take the lead and limelight, the GBP struggles to find grounds. Despite the USD being down, the Pound Sterling cannot find the right momentum to hike upwards, reason also being that economic indicators in UK point towards a slight slowdown in the economy. Brexit aftermath effects have also been prolonged and all put together have no good effect on the GBP. Yesterday, the GBPUSD pair trading started at the 1.301 level to hike slightly up to the 1.305 level. After some pullbacks and momentary jumps, the session came to a halt at the 1.303 level. This pair is likely to consolidate.

 

Economic Calendar