Daily Market Review September 21



Earlier today the US dollar gained by 0.8 percent and settled higher than its major currency counterparts. The same trend is expected to continue until the announcement of the interest rate decision later today by the Federal Reserve. Elsewhere, the dices were thrown by the Bank of Japan today as the central bank kept rates unchanged, resulting into a weak Yen but boosting Japan’s stocks. Asian shares were seen higher earlier today and now all eyes are turned towards the Fed.

Though estimations have been quite high on the market regarding another rate hike for U.S., it is quite unlikely that Fed will do so. Keeping in mind the current economic turmoil, raising rates would not be a nice idea as U.S. upcoming elections are also being taken into consideration. Trading floors may turn quite volatile in the coming days if rates remain unchanged, as traders would expect a hike in November. Moving on, crude prices shed losses incurred a day before and gained by more than 1 percent.

An initial draw in U.S. crude inventories helped crude prices to soar higher earlier today and in addition to this, positive import data from Japan also helped to stabilize prices. U.S. West Texas Intermediate crude futures were seen up by 1.93 percent to settle at $44.90 a barrel, while the EIA crude inventory numbers are expected later today. If EIA inventory numbers also down like the API readings, then another rise in crude prices could be awaited later today.

Technical Analysis:
Losses may be around for the EURUSD pair as the Federal Reserve will announce the interest rate decision today. The trading session may either hike upwards if the dollar’s gains are curbed or it could worsen and the level 1.085 is the handle to watch today. However, the pair was last seen nearing to the 1.112 level earlier today. A look at yesterday shows that the pair EURUSD session was initiated at the 1.117 level to trade within a specific range in the early hours of trading. After hiking up to the 1.1201 level, the value of the pair was brought down to the 1.114 level where the session closed.

The USD is currently climbing higher than its counterpart, the Japanese Yen. The Bank of Japan updated its policy rates today but overhauled the rates, thus taking the Yen down. On this note, the USD found enough grounds to hike upwards. A glimpse at yesterday’s session shows that the session commenced at the 101.9 level and in the initial hours the pair was dragged lower to the 101.5 level. The session closed around 101.7 level and earlier today the pair went high up to the 102.6 level and is currently around the same vicinity. Any changes in the session is scheduled for tomorrow, while the pair could well return back to previous lows ahead of Fed’s rate announcement.
The slowest of all currencies is the GBP, which is taking way more time to recuperate previous gains. Problem is that this currency lingers in uncertainty due to changes taking effect as of ‘Brexit”. The GBPUSD was already trading lower and now due to the ascent seen for the US dollar, the pair GBPUSD may fall to new lows. The pair GBPUSD session commenced at the 1.303 level yesterday to first consolidate and then being pulled down to the 1.294 level. Last seen today, the pair traded around the 1.297 level and may be dragged lower if the USD surges after Fed’s decision today. Therefore, keep an eye on this pair.

 

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