18 October 2021 Afternoon Session Analysis
Pound surged amid hawkish stance from BoE.
The pound sterling which traded higher against the dollar and other currency pairs have rose following recent hawkish comments from Bank of England (BOE). According to reports, Bank of England Governor Andrew Bailey stated that the U.K central bank is gearing up to raise interest rate for the first time in order to contain the risk of inflation. Bailey also added that recent surge in energy prices has pushed the inflation higher and may last longer, hence an early rate hike was necessary. Investors were speculating that the BoE might become the first of the world’s biggest central banks to raise rates, thus fueled up market sentiment toward pound sterling. On top of that, the pound also gain further support from potential tax cut on household bills. According to Reuters, British finance minister Rishi Sunak was considering to cut off 5% rate of value-added tax on household energy bills. The tax cutting on household bills is expected to boost the consumer spending in the region. As of writing, the pair of GBP/USD rose 0.03% to 1.3728.
In the commodities market, the crude oil price rose 1.16% to $82.85 per barrel as of writing amid positive oil demand outlook. Oil price continue to benefit from easing of fear of Covid-19 pandemic which could lead to recovery in fuel consumption. On the other hand, the gold price fell 0.02% to $1767.27 a troy ounce amid strengthening US dollar.
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Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded flat near the support level 93.70. However, MACD which illustrate diminishing bearish momentum signal with the formation of golden cross suggest the dollar to be traded higher towards the resistance level 94.45.
Resistance level: 94.45, 95.20
Support level: 93.70, 93.00
GBPUSD, H4: GBPUSD was traded lower following prior retracement from its high level. MACD which illustrate diminishing bullish momentum signal suggest the pair to extend its retracement towards the support level 1.3665.
Resistance level: 1.3820, 1.3915
Support level: 1.3665, 1.3555
EURUSD, H4: EURUSD was traded lower following prior retracement from the resistance level 1.1615. MACD which illustrate diminishing bullish momentum signal with the formation of death cross suggest the pair to extend its losses towards the support level 1.1530.
Resistance level: 1.1615, 1.1680
Support level: 1.1530, 1.1455
USDJPY, H4: USDJPY was traded higher while currently testing the resistance level 114.35. However, MACD which illustrate diminishing bullish momentum signal with the starting formation of death cross suggest the pair to experience a technical correction towards the support level 113.20.
Resistance level: 114.35, 115.80
Support level: 113.20, 112.00
AUDUSD, H4: AUDUSD was traded flat while currently testing the support level 0.7395. However. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to be traded lower after it breaks below the support level.
Resistance level: 0.7480, 0.7565
Support level: 0.7395, 0.7310
NZDUSD, H4: NZDUSD was traded higher while currently testing the resistance level 0.7080. However, MACD which illustrate diminishing bullish momentum signal suggest the pair to experience a technical correction towards the support level 0.6990.
Resistance level: 0.7080, 0.7155
Support level: 0.6990, 0.6910
USDCAD, H4: USDCAD was traded higher following prior rebound from the support level 1.2335. MACD which illustrate bullish momentum signal with the formation of golden cross suggest the pair to extend its rebound towards the resistance level 1.2500.
Resistance level: 1.2500, 1.2620
Support level: 1.2335, 1.2200
USDCHF, H4: USDCHF was traded flat near the support level 0.9215. However, MACD which illustrate bullish momentum signal with the formation of golden cross suggest the pair to extend its rebound towards the resistance level 0.9295.
Resistance level: 0.9295, 0.9370
Support level: 0.9215, 0.9140
CrudeOIL, H4: Crude oil was traded higher while currently testing near the resistance level 83.80. MACD which illustrate bullish bias signal suggest the commodity to extend its gains after it breaks above the resistance level 83.80.
Resistance level: 83.80, 88.40
Support level: 79.35, 75.85
GOLD_, H4: Gold price was traded higher following prior rebound from the support level 1769.30. MACD which illustrate diminishing bearish momentum signal suggest the commodity to extend its rebound towards the resistance level 1793.30.
Resistance level: 1793.30, 1812.80
Support level: 1769.30, 1748.55