Daily Market Review September 22



Keeping U.S. interest rates unchanged was a wise decision or not will remain the main cause of volatility during this week. The Fed preferred to adopt the wait and see method so as to know when exactly policy rates can be altered and another reason evoked behind this step is also the U.S. elections being around the corner. Reaction on the market was such that shares in Asia gained earlier today with the Nikkei 225 seen climbing by 1.91 percent while the Shanghai Composite index rose by 0.77 percent.

U.S. interest rates did not really hurt indices as much as it hurt the US dollar, as U.S. stocks were higher yesterday being boosted by gains in oil, gas, utilities and basic material sectors. Stocks helped indices to be slightly higher after markets closed yesterday as the Dow Jones Industrial Average gained by 0.90 percent and the S&P 500 added 1.09 percent. Unfortunately for the USD, as expected the U.S. currency fell against its currency peers, mostly being dragged by the Japanese Yen.

The Euro and the British Pound looked steady earlier today after each of them amassed gains against the greenback. The fall of the USD obviously mean the rise of the EURUSD and the GBPUSD currency pairs. Traders are advised to look out for gains for the remaining days of this week as some call options could be made on short-term. Also note that today the Eurozone policy makers meet and later at 13:00 GMT, European Central Bank president Draghi will speak.

Technical Analysis:
The pair EURUSD was seen rising higher earlier today as the USD shed gains after the Federal Reserve kept rates unchanged. Yesterday the session for this pair commenced at the 1.115 level and initially fell to the 1.113 level. Later, the pair hiked upwards gaining enough momentum with several momentary jumps. The session came to a halt up above at the 1.119 level and earlier today the pair traded around the 1.123 level and traders are reminded that the pair last crossed above the 1.120 in August. Therefore currently this pair is deemed to be bullish.

The whole scenario for the USD changed as the Fed announced that rates would be kept unchanged, taking note of the current economic turmoil going on. The pair USDJPY turned extremely bearish as traders paid more attention to what could happen before and after Fed’s decision. After commencing the session at the 101.6 level, the pair USDJPY held on before climbing higher to the 102.6 level. From there on, the pair was dragged lower to the 100.6 level due to many pullbacks. The session came to a halt around the same region of the chart and has begun the session on the same bearish note today.
The British Pound soared higher, stepping away from previous prolonged bearish sessions but has not been able to cross above the 1.309 resistance level yet. This level should be watched closely as today the pair GBPUSD is expected to get higher today. Post the comments by the Fed, the pair has been able to climb up to the 1.306 level as seen earlier today. Yesterday, the pair commenced the session around the 1.298 level and with some pullbacks and momentary jumps, the pair upped higher to the 1.304 level, where the session closed. This pair looks bullish for today.

 

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