U.S. Dollar Index (USDX)
The dollar lost ground on Thursday as market participants reflected the expected hike of 75 bp. Additionally, markets are bracing for another hike as Fed’s statement hinted. Meanwhile, the dollar index dropped by 0.31% to 106.12, hovering just above its lowest mark since July 5.
The moves come after the Fed increased its policy target interest rate on Wednesday by three-quarters of a percent for the second month in a row. Traders focused in particular on statements from Fed Chair Jerome Powell, who dropped guidance on the size of the next rate rise. That, in turn, heightened the possibility that the central bank could soon slow the pace of hikes.
The U.S. Dollar index remained positive in the daily time frame, although it slightly slipped this morning. On the hourly chart, the index started recovering during the European session as markets are consolidating. Meanwhile, technical indicators signal a slight improvement on the hourly and continuation on the daily charts.
PIVOT POINT: 106.40
| SUPPORT | RESISTANCE |
| 106.00 | 107.00 |
| 105.90 | 107.40 |
| 104.50 | 107.70 |
Euro (EURUSD)
The common currency traded marginally higher against the dollar, up 0.04% to $1.0206, ahead of preliminary German inflation data scheduled for release later in the day. Traders will be eying for signs that price pressures in Europe’s largest economy – and the broader Eurozone – are starting to ease.
The pair hit a solid resistance at 1.02125 which led to the decline on the hourly chart. However, the daily chart shows a continuation of the downward pattern targeting the parity level. Meanwhile, technical indicators show declining signals.
PIVOT POINT: 1.01500
| SUPPORT | RESISTANCE |
| 1.0100 | 1.0270 |
| 0.9960 | 1.0350 |
| 0.9850 | 1.0470 |
Spot Gold (XAUUSD)
The precious metal gained around $20 per ounce overnight reaching the resistance at $1,740 amid the FOMC statement. Yesterday, the FOMC decided to lift interest rates by 75 basis points to 2.5% to control inflation levels. Although the majority of market participants expected the hike, some experts looked at it as a red flag for raising a recessionary alarm.
Additionally, the International Monetary Fund warned that the world economy may soon be on the verge of an outright recession. Monetary tightening, Europe’s energy shortages over Russia’s invasion of Ukraine and China’s property sector, and COVID curbs remain the headwinds to the global economic rebound.
The daily gold chart shows a tendency for a decline, but it also shows support above $1,715. Meanwhile, the hourly chart shows smaller candles and a shorter range, indicating a possibility of impulsive downwards movement. Technical indicators also confirm the possibility of the decline.
PIVOT POINT: 1,740
| SUPPORT | RESISTANCE |
| 1,715 | 1,742 |
| 1,710 | 1,745 |
| 1,700 | 1,751 |
West Texas Crude (USOUSD)
Oil rose more than $1 a barrel on Thursday, extending gains from the previous session, buoyed by improved risk appetite among investors as lower crude inventories and a rebound in gasoline demand in the United States supported prices.
Brent crude futures for September rose $1.13 to $107.75 a barrel, after gaining $2.22 on Wednesday. WTI Crude was at $98.53 a barrel 1.3% after rising $2.28 in the previous session.
On supplies, U.S. crude oil stockpiles fell by 4.5 million barrels last week, against expectations of a 1-million-barrel drop, while U.S. gasoline demand rebounded by 8.5% week on week, data from the Energy Information Administration showed.
PIVOT POINT: 98.50
| SUPPORT | RESISTANCE |
| 94.00 | 99.10 |
| 93.50 | 100.00 |
| 92.60 | 101.20 |
