Weekly Market Review September 19

The main event to watch out for this week is the Federal Reserve interest rate decision expected on September 21. Anticipations revolving around this data release have been growing since the past two months, which has also resulted in a much volatile market. Many of the major currency pairs will be subject to important changes and main assets to watch out for will be Gold, U.S. bank stocks and the USD. As markets resume after weekend gap today, assets may take some time to pick up momentum.

Elsewhere, crude oil prices held on to important gains amassed on Friday as prospects for a freeze in output finally seemed likely to occur. A deal by major crude producers signaled towards an effort to curb the oversupply issues soon but since this issue has been on the table too many times, this may also not take effect. Brent crude for November delivery soared by 1.70 percent to trade at $46.55 a barrel while on the New York Mercantile Exchange crude climbed by 1.83 percent to trade at $44.42 a barrel.

Note that financial markets in Japan are closed for a holiday today. As markets resume slowly today, not much is happening this Monday. On Tuesday, U.S. building permits will be released at 12:30 GMT, while on Wednesday Japan’s interest rate decision and a press conference by the Bank of Japan is awaited at 06:30 GMT. Note that the Japan’s interest rate decision is still tentative. On the same day, important events by the side of U.S. are expected to bolster the markets, with FOMC economic projections, FOMC statement and Fed interest rate decision expected at 18:00 GMT. Janet Yellen speech is awaited right after at 18:30 GMT. Moving on, ECB president Draghi is expected to speak on Thursday at 13:00 GMT and U.S. existing home sales data is awaited at 14:00 GMT. On Friday, the Eurozone will be in the limelight with the German manufacturing PMI expected at 07:30 GMT and Eurozone’s manufacturing PMI to be released at 08:00 GMT.

Technical Analysis:
The EURUSD pair looks likely to maintain losses incurred since last Friday and banged against the 1.125 level to eventually fall. The mini resistance level at the said point curbed gains of the EURUSD and adopted the same trend it did as seen at the start of September. On Friday, the pair EURUSD commenced the session around the 1.124 level and fell momentarily to the 1.122 level within the first few hours of trading. Later on, the pair fell to the 1.114 level due to several pullbacks. Last seen today, the pair traded around the 1.117 level and may take time to bounce higher as markets resume slowly after weekend.
It’s a critical time for the USDJPY pair as the Federal Reserve readies for the next interest rate decision this week. This decision has been much awaited on the whole market and is expected to create much volatility. As of last Friday, the session for the pair USDJPY was initiated at the 101.9 level and consolidated to trade around the same vicinity. Later the pair hiked upwards to the 102.4 level with the help of little momentary jumps. Last seen today, the pair traded around the 102.0 level, which shows that the session is taking time to resume from earlier losses due to the gap of the weekend.

Volatility is not just being created for the USD but for many other major currency pairs as well. The GBPUSD pair was seen edging lower on Friday incurring a streak of losses. After climbing up higher near the 1.328 level, the pair cam way down to the 1.300 level and closed the session at the same point on Friday. After commencing the session at 1.324 level on Friday, many pullbacks dragged this pair way down to the 1.299 level. The 1.298 level is another previous support line for this pair but traders need to wait for the market to pick up momentum today, especially after the weekend gap.
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