FED remains on pause yet signals that the bank may not be done hiking just yet

The Fed remain on pause during their monetary policy decision yesterday, as was widely expected. However, the Fed Chair hinted that there may be another rate hike down the line and that there may be fewer rate cuts next year than what anticipated by market analysts, as such we may see the greenback strengthening following yesterday’s comments despite the Fed remaining on pause. On another note, we highlight that the tensions within the Republican party appear to be increasing, as the US government for a second time this year, nears a government shutdown scenario which could be as early as September 30th. In the US Equities markets, we highlight that the United Auto Workers are still at strike with Detroit’s big 3, which includes Ford (#F) and General Motors (#GM), as they continue to discuss the UAW’s demands which according to Reuters includes a 40% rate hike, a 32-hour work week and an end to a tiered wage structure upon which newer workers are paid less. Should the strike continue into Friday, we may see more and more plants made up from UAW members from across the nation, going on strike in order to increase their bargaining position. In such a scenario, we may see stocks prices of Ford (#F) and General Motors (#GM) moving lower, as further strikes could disrupt supply lines and as such delay deliveries or orders for customers. Over in Europe, we highlight the numerous central bank interest rate decisions which are due out today, yet traders may be more interested in the BOE’s interest rate decision, in addition to the number of member who are expected to vote for the bank to remain on pause, as it could hint at divisions in the BOE over the banks policy, as market participants are roughly expecting a 50% probability for the bank to remain on pause or to hike by 25-basis points, highlighting the uncertainty in the market.

On a technical level, we note that USD/JPY appears to be moving in a upwards fashion, having broken above resistance turned support at the 148.00 (R1) resistance level. We maintain a bullish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart, which is currently near the 70 figure, implying a strong bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 150.10 (R1) resistance level, with the next possible target for bulls being the 151.90 (R2) resistance ceiling. On the other hand, for a bearish outlook we would like to see a clear break below the 148.00 (S1) and the 146.10 (S2) support levels, with the next possible target for the bears being the 144.55 (S3) support base.

GBP/USD appears to continue moving in a downwards fashion with the pair currently testing support at the 1.2310 (S1) support level. We maintain a bearish outlook and supporting our case is the RSI indicator below our 4-Hour chart which currently registers a figure near 30, implying a bearish market sentiment in addition to the downwards moving trendline which was incepted on the 1 of September. For our bearish outlook to continue, we would like to see a clear break below the 1.2310 (S1) support level, with the next potential target for the bears being the 1.2185 (S2) support base. Whereas for a bullish outlook, we would like to see a clear break above our downwards moving trendline, in addition to a clear break above the 1.2485 (R1) resistance level, with the next potential target for the bulls being the 1.2665 (R2) resistance ceiling.

その他の注目材料

Today we make a start with France’s Business climate figure for September. In the American session, we note the US weekly Initial jobless claims figure and the Philly Fed business index figure for September and closing of the day with the Eurozone’s Preliminary consumer confidence figure. In tomorrow’s Asian session, we highlight New Zealand’s trade balance figure for August, Australia’s Preliminary Judo Bank Manufacturing PMI figure for September, Japan’s CPI rates for August and the JibunBK Preliminary Manufacturing PMI figure for September. On a monetary level, we note the monetary policy decision by the SNB, Riksbank,Norway, the BOE and Turkey during today’s session , in addition to the speech by ECB member Lane and the BOE’s votes for hike, pause and cut and on Friday during the Asian session, we note the BOJ’s interest rate decision.