17 September 2020 Morning Session Analysis
Fed to maintain low interest rate until inflation rebounds.
As widely expected, US Federal Reserve maintained their benchmark rate at 0.25% during policy meeting earlier this morning. However, Fed made a bold new promise: to keep interest rate low for a longer period of time until inflation is right on track to “moderately exceed” central bank’s target of 2% “for some time”. A shift in their tone marks adherence to their new guidance introduced last month which aimed to offset years of weak inflation and allow the economy to keep adding job for as long as possible. During press conference, Fed Chair Jerome Powell reiterates that monetary policy would remain highly accommodative until the economy is far beyond its recovery phase. However, Powell noted that the ongoing pace of economic recovery is expected to be slow and it requires continuous support from the Fed as well as further government spending. In addition, Fed has also upgraded its quarterly economic projections whereby GDP, unemployment and inflation forecasts receives positive revision as compared to June forecasts. Reacting to the hawkish sentiment with regards to future economic momentum, the dollar index rose 0.06% to 93.07.
In the commodities market, crude oil price rose 0.22% to $40.26 per barrel. According to Energy Information Administration, crude oil stocks for last week was down by -4.389 million barrels, significantly better than forecast of 1.271 million barrels. On the other hand, gold price slumped 0.02% to $1,959.56 a troy ounce due to strong greenback.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
12:30 JPY BoJ Monetary Policy Statement
15:00 JPY BoJ Press Conference
19:00 GBP BoE MPC Meeting Minutes
Today’s Highlight Economic Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 17:00 | EUR – CPI (YoY) (Aug) | – | -0.2% | -0.2% |
| 19:00 | GBP – BoE Interest Rate Decision (Sep) | – | 0.10% | 0.10% |
| 20:30 | USD – Building Permits (Aug) | – | 1.510M | 1.483M |
| 20:30 | USD – Initial Jobless Claims | – | 850K | 884K |
| 20:30 | USD – Philadelphia Fed Manufacturing Index (Sep) | – | 15.5 | 17.2 |
Technical Analysis
DOLLAR_INDX, H1: Dollar index was traded higher following prior rebound from the lower level. MACD which illustrate bullish signal suggests the index to extend its gains in mid-term.
Resistance level: 93.10, 93.35
Support level: 93.00, 92.75
GBPUSD, H1: GBPUSD was traded lower following prior retrace from the higher level. MACD which illustrate bearish signal suggest the pair to be traded lower in short-term as technical correction.
Resistance level: 1.2985, 1.3030
Support level: 1.2930, 1.2825
EURUSD, H4: EURUSD was traded lower while currently testing at 1.1800. MACD which illustrate bearish signal suggests the pair to extend its losses after closing below the support level.
Resistance level: 1.1835, 1.1895
Support level: 1.1800, 1.1760
USDJPY, H4: USDJPY as traded higher following prior rebound from 104.80. MACD which illustrate diminished downward momentum suggests the pair to experience short-term technical correction.
Resistance level: 105.30, 105.60
Support level: 104.80, 104.50
AUDUSD, H1: AUDUSD was traded lower following prior retrace from the top level. MACD which illustrate bearish signal suggests the pair to extend its losses in short-term.
Resistance level: 0.7330, 0.7365
Support level: 0.7300, 0.7275
NZDUSD, H1: NZDUSD was traded lower following prior retrace from the higher level. MACD which illustrate bearish signal suggests the pair to be traded lower in short-term.
Resistance level: 0.6745, 0.6760
Support level: 0.6715, 0.6695
USDCAD, H1: USDCAD was traded flat in between 1.3155 and 1.3195. Due to the lack of signal from MACD and price action, it is suggested to wait for a breakout before entering the market.
Resistance level: 1.3195, 1.3225
Support level: 1.3155, 1.3125
USDCHF, H4: USDCHF was traded higher following prior rebound from the lower level. MACD which illustrate bullish signal suggests the pair to extend its gains after closing above 0.9110.
Resistance level: 0.9110, 0.9145
Support level: 0.9050, 0.9005
CrudeOIL, H4: Crude oil price was traded higher following prior rebound from the lower level. MACD which illustrate bullish signal suggests its price to extend its gains after closing above 40.70.
Resistance level: 40.70, 41.90
Support level: 39.85, 39.00
GOLD_, H4: Gold price was traded lower following prior retrace from the higher level. MACD which illustrate bearish signal suggests its price to be traded lower in short-term.
Resistance level: 1966.00, 1990.40
Support level: 1941.70, 1911.55