Market Roundup
•Australia Aug Weighted mean CPI (YoY) 2.70%, 2.70% forecast, 3.50% previous
• Japan BoJ Core CPI (YoY) 1.8%, 1.8% forecast, 1.8% previous
Looking Ahead Economic Data(GMT)
• 08:00 Switzerland Sep ZEW Expectations -3.4 previous
• 10:00 France Aug Jobseekers Total 2,808.4K previous
Looking Ahead Events And Other Releases (GMT)
•12:30 EUR ECB McCaul Speaks
Currency Forecast
EUR/USD: The euro advanced against the dollar on Wednesday after weak U.S. macroeconomic data overnight boosted the case for a second super-sized interest rate cut at the Federal Reserve's next meeting. U.S. consumer confidence fell sharply in September, marking the largest decline in three years, amid growing concerns about the labor market. Despite this, more households expressed intentions to buy a home in the next six months. The Conference Board's consumer confidence index dropped to 98.7 this month from an upwardly revised 105.6 in August. The decline was the largest since August 2021. Economists polled had forecast the index rising to 104.0 from the previously reported 103.3. Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: The pound held near two-and-a-half years on Wednesday after U.S. data indicating a decline in consumer confidence .Sterling was further boosted by China's central bank announcing its largest stimulus package since the pandemic, aimed at supporting the economy. Beijing’s new measures include a planned 50 basis point reduction in banks' reserve requirements and hints at additional easing in lending rates. Sterling rose by as much as 0.38% to a high of $1.3423 , its strongest since March 2022. It was last down 0.15% on the day at $1.3392 Immediate resistance can be seen at 1.3417(23.6%fib), an upside break can trigger rise towards 1.3449(Higher BB).On the downside, immediate support is seen at 1.3335(38.2%fib), a break below could take the pair towards 1.3274(50%fib).
AUD/USD: The Australian dollar pared some of its gains after data on Wednesday after showed domestic consumer prices slowed to a three-year low in August. Australian consumer price inflation fell to a three-year low in August, driven by government rebates on electricity, while core inflation reached its lowest level since early 2022, indicating positive progress that may lead to potential rate cuts. Data from the Australian Bureau of Statistics revealed that the monthly consumer price index (CPI) rose at an annual rate of 2.7% in August, down from 3.5% in July and in line with market expectations. The Australian dollar still came off its 1-1/2-year high and was last flat at $0.6891. Immediate resistance can be seen at 0.6902(23.6%fib), an upside break can trigger rise towards 0.6927(Higher BB).On the downside, immediate support is seen at 0.6836(38.2%fib), a break below could take the pair towards 0.6814(ASep 24th low).
USD/JPY: The dollar edged lower against the yen on Wednesday as dollar weakened after over night data showed U.S. consumer confidence fell in September . The Conference Board's consumer confidence index fell to 98.7 this month, down from an upwardly revised 105.6 in August, marking the largest decline since August 2021 The Federal Reserve last week cut interest rates by 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, which Fed Chair Jerome Powell said was meant to demonstrate policymakers' commitment to sustaining a low unemployment rate. Traders await Fed Chair Jerome Powell's remarks on Thursday and U.S. inflation data on Friday for further policy cues. The jobless rate is currently at 4.2%. Strong resistance can be seen at 144.73 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 141.70(23.6%fib), a break below could take the pair towards 140.36(Lower BB).
Equities Recap
Japan's Nikkei share average closed lower on Wednesday amid choppy trading, despite gains from technology and China-related stocks, as profit-taking set in.
The Nikkei closed down 0.19% at 37,870.26, snapping a four-session winning streak
Commodities Recap
Oil prices fell on Wednesday as investors reassessed the ability of China's stimulus plans to boost the economy enough to drive more fuel demand growth in the world's largest crude importer.
Brent crude futures dropped 17 cents, or 0.2%, at $75 a barrel by 0415 GMT. U.S. West Texas Intermediate crude fell 24 cents, or 0.3%, at $71.32 per barrel.
Gold surged to a record high on Wednesday, fueled by a weaker U.S. dollar and expectations of additional interest rate cuts.
Spot gold was steady at $2,658.08 per ounce, as of 0557 GMT, after hitting an all-time high of $2,670.43 earlier.U.S. gold futures gained 0.2% to $2,682.10.
