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Daily Pivots: (S1) 143.73; (P) 144.30; (R1) 144.69; More...

Intraday bias in USD/JPY remains neutral as consolidation from 145.89 is extending. Further rally is expected as long as 139.37 resistance turned support holds. Break of 145.89 will target 147.68 long term resistance. On the downside, however, decisive break of 139.37 will confirm short term topping. Deeper decline would be seen back towards 130.38 support.

In the bigger picture, up trend from 101.18 is still in progress, as part of the whole up trend from 75.56 (2011 low). Further rise should be seen to 147.68 (1998 high). For now, break of 130.38 support is needed to be the first indication of medium term topping. Otherwise, outlook will stay bullish even in case of deep pull back.

Daily Pivots: (S1) 0.9682; (P) 0.9824; (R1) 0.9902; More

Intraday bias in USD/CHF stays neutral for the moment. Outlook is mixed up a bit with deeper than expected retreat. Still, on the upside, above 0.9964 will resume the rally from 0.9369 to retest 1.0063 high. On the downside, break of 0.9694 support will extend the corrective pattern from 1.0063 with another falling leg.

In the bigger picture, current development suggests that up trend from 0.8756 (2021 low) is still in progress. Sustained break of 1.0063 will target 100% projection of 0.9149 to 1.0063 from 0.9369 at 1.0283, and then 1.0342 (2016 high). For now, this will remain the favored case as long as 0.9369 support holds, even in case of deep pull back.

Daily Pivots: (S1) 1.3527; (P) 1.3680; (R1) 1.3757; More...

Intraday bias in USD/CAD is turned neutral with current retreat, and some consolidations would be seen below 1.3831 temporary top. Downside of retreat should be contained above 1.3222 support turned resistance to bring another rally. Break of 1.3831 will resume recent up trend to 161.8% projection of 1.2005 to 1.2947 from 1.2401 at 1.3925. Firm break there will target 200% projection at 1.4285.

In the bigger picture, up trend from 1.2005 (2021 low) is still in progress. Based on current impulsive momentum, it could be resuming long term up trend from 0.9056 (2007 low). Whether it is or it isn't, retest of 1.4689 (2016 high) should be seen next. This will now remain the favored case as long as 1.3222 resistance turned support holds.

Daily Pivots: (S1) 0.6416; (P) 0.6473; (R1) 0.6583; More...

Intraday bias in AUD/USD is turned neutral with current recovery. Some consolidations could be seen first. But outlook will remain bearish as long as 0.6698 support turned resistance holds. Break of 0.6362 will resume larger down trend. Next target is 100% projection of 0.7660 to 0.6680 from 0.7135 at 0.6155.

In the bigger picture, down trend form 0.8006 (2021 high) is expected to continue as long as 0.7135 resistance holds. With 61.8% retracement of 0.5506 (2020 low) to 0.8006 at 0.6461 firmly taken out, next target is 0.5506 low. Medium term momentum will now be closely monitored to gauge the chance of break of 0.5506.

Dollar retreated notably overnight, following the rebound in US stocks and steep pull back in treasury yields. But it's so far staying as the second strongest for the week, next to Swiss Franc, while Euro is third. Sterling stabilized further with another recovery attempt in progress. Commodity currencies are on the weaker side, with New Zealand Dollar flaring worst, while Yen is extending its pull back.

Technically, the loss of upside momentum in Dollar is becoming more apparent. Yet, there is no clear sign of reversal. At least, some levels need to be taken out to confirm short term topping in the greenback, including 0.9863 support turned resistance in EUR/USD, and 0.6698 support turned resistance in AUD/USD.

In Asia, at the time of writing, Nikkei is up 0.75%. Hong Kong HSI is up 1.19%. China Shanghai SSE is up 0.27%. Singapore Strait Times is up 0.96%. Japan 10-year yield is down -0.0019 at 0.250. Overnight, DOW rose 1.88%. S&P 500 rose 1.97%. NADSAQ rose 2.05%. 10-year yield dropped sharply by -0.259 to 3.705.

Fed Bostic wants rate at 4.25% to 4.5% by year end

Atlanta Fed President Raphael Bostic said yesterday, "the lack of progress thus far has me thinking much more now that we have to get to a moderately restrictive stance. And for me, that is in the 4.25% to 4.5% range for our policy. My preference is that we get there by year end."

Bostic said that his expects another 75bps rate hike in November, followed by 50bps in December. But he added that "I don't think it'll be appropriate for us to continue to tighten and increase your rates until inflation gets to 2%. That will be guaranteeing that we've gone too far and we'll take the economy into a negative space."

"I'm still in the place of not really thinking that a recession is a foregone conclusion as we battle this," he said. "So we can have some weakening, but I don't think it, at this point, will take us to the historical recessionary experience."

Fed Evans: Current interest rate not nearly restrictive enough

Chicago Fed President Charles Evans said while interest at 3-3.25% is restrictive, "with inflation as high as it is, and getting inflation under control being job one, it's not nearly restrictive enough."

"The risks continue to be high about more persistent inflation, and we just really need to get inflation in check," Evans said.

Evans added that he expects interest rate to reach top by March.

Australia monthly CPI slowed to 6.8% yoy in Aug on fuel costs

In its first monthly release, Australia CPI rose 6.8% yoy in June, accelerated to 7.0% yoy in July, and slowed to 6.8% yoy in August

Monthly CPI excluding fruit, vegetables and fuel rose 5.5% yoy in June, accelerated to 6.1% yoy in July, then 6.2% yoy in August.

David Gruen, Australian Statistician, said: " The slight fall in the annual inflation rate from July to August was mainly due to a decrease in prices for Automotive fuel. This saw the annual movement for Automotive fuel fall from 43.3 per cent in June to 15.0 per cent in August."

New Zealand ANZ business confidence rose to -36.7, a temporary reprieve

New Zealand ANZ Business Confidence rose from -47.8 to -36.7 in September. Own Activity Outlook rose from -4.0 to -1.8. investment intentions rose from -2.0 to 1.8. Employment intentions rose from 3.4 to 5.9. Pricing intentions rose from 68.0 to 70.1. Cost expectations dropped from 90.9 to 89.8. inflation expectations eased from 6.13 % to 5.98%.

ANZ said: "It's fair to say that demand has not yet rolled over as feared as the Reserve Bank has raised interest rates. But insofar as the RBNZ can just keep on going until they see the cooling in demand they need to tame inflation, that's likely to be a temporary reprieve, if not an outright double-edged sword for firms that have considerable debt."

"Inflation pressures are easing, but painfully slowly. It's not enough for the RBNZ to see inflation pressures top out and ever so gradually fall. They will be concerned about the chance that wage and price-setting behaviour will change in structural ways that make bringing inflation down more difficult. We expect that the RBNZ will need to deliver a policy rate closer to 5% than 4% to get on top of inflation pressures."

Looking ahead

Eurozone will release economic sentiment indicator and Germany will release CPI flash in European session. Later in the day, Canada monthly GDP, US Q2 GDP final and jobless claims will be featured.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6416; (P) 0.6473; (R1) 0.6583; More...

Intraday bias in AUD/USD is turned neutral with current recovery. Some consolidations could be seen first. But outlook will remain bearish as long as 0.6698 support turned resistance holds. Break of 0.6362 will resume larger down trend. Next target is 100% projection of 0.7660 to 0.6680 from 0.7135 at 0.6155.

In the bigger picture, down trend form 0.8006 (2021 high) is expected to continue as long as 0.7135 resistance holds. With 61.8% retracement of 0.5506 (2020 low) to 0.8006 at 0.6461 firmly taken out, next target is 0.5506 low. Medium term momentum will now be closely monitored to gauge the chance of break of 0.5506.

Economic Indicators Update

New Zealand ANZ Business Confidence rose from -47.8 to -36.7 in September. Own Activity Outlook rose from -4.0 to -1.8. investment intentions rose from -2.0 to 1.8. Employment intentions rose from 3.4 to 5.9. Pricing intentions rose from 68.0 to 70.1. Cost expectations dropped from 90.9 to 89.8. inflation expectations eased from 6.13 % to 5.98%.

ANZ said: "It's fair to say that demand has not yet rolled over as feared as the Reserve Bank has raised interest rates. But insofar as the RBNZ can just keep on going until they see the cooling in demand they need to tame inflation, that's likely to be a temporary reprieve, if not an outright double-edged sword for firms that have considerable debt."

"Inflation pressures are easing, but painfully slowly. It's not enough for the RBNZ to see inflation pressures top out and ever so gradually fall. They will be concerned about the chance that wage and price-setting behaviour will change in structural ways that make bringing inflation down more difficult. We expect that the RBNZ will need to deliver a policy rate closer to 5% than 4% to get on top of inflation pressures."

Full release here.

In its first monthly release, Australia CPI rose 6.8% yoy in June, accelerated to 7.0% yoy in July, and slowed to 6.8% yoy in August

Monthly CPI excluding fruit, vegetables and fuel rose 5.5% yoy in June, accelerated to 6.1% yoy in July, then 6.2% yoy in August.

David Gruen, Australian Statistician, said: " The slight fall in the annual inflation rate from July to August was mainly due to a decrease in prices for Automotive fuel. This saw the annual movement for Automotive fuel fall from 43.3 per cent in June to 15.0 per cent in August."

Full release here.

Chicago Fed President Charles Evans said while interest at 3-3.25% is restrictive, " with inflation as high as it is, and getting inflation under control being job one, it's not nearly restrictive enough."

"The risks continue to be high about more persistent inflation, and we just really need to get inflation in check," Evans said.

Evans added that he expects interest rate to reach top by March.

Atlanta President Fed Raphael Bostic said yesterday, "the lack of progress thus far has me thinking much more now that we have to get to a moderately restrictive stance. And for me, that is in the 4.25% to 4.5% range for our policy. My preference is that we get there by year end."

Bostic said that his expects another 75bps rate hike in November, followed by 50bps in December. But he added that "I don't think it'll be appropriate for us to continue to tighten and increase your rates until inflation gets to 2%. That will be guaranteeing that we've gone too far and we'll take the economy into a negative space."

"I'm still in the place of not really thinking that a recession is a foregone conclusion as we battle this," he said. "So we can have some weakening, but I don't think it, at this point, will take us to the historical recessionary experience."

Key Highlights

• Gold price extended losses below the $1,650 support.
• A major bearish trend line is forming with resistance near $1,650 on the 4-hours chart.
• EUR/USD and GBP/USD might start a fresh downward move.
• USD/JPY could clear the last high at 145.90 and continue higher.

Gold Price Technical Analysis

Gold price remained in a bearish zone below the $1,688 resistance against the US Dollar. The price declined below the $1,665 support level to move into a bearish zone.

The 4-hours chart of XAU/USD indicates that the price extended losses below the $1,650 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The price even spiked below the $1,625 level and traded as low as $1,620. It is now consolidating losses above the $1,620 level. On the upside, the price might face sellers near the $1,646 level. There is also a major bearish trend line forming with resistance near $1,650 on the same chart.

The next major resistance is near the $1,662 level. Any more gains might send the price towards the $1,688 resistance level.

On the downside, an initial support is near the $1,620 level. The next major support is near the $1,600 level, below which the price could accelerate lower. In the stated case, the price may perhaps decline towards the $1,580 level.

Looking at EUR/USD, the pair is facing resistance near the 0.9680 and 0.9700 levels. If the bears remain in action, the pair could decline below 0.9550.

Economic Releases to Watch Today

• US Pending Home Sales for August 2022 (YoY) - Forecast -1.4%, versus -1.0% previous.
• Federal Reserve Chair Jerome Powell Speech.