Forex

Forex market was highly volatile throughout September following traders balancing US dollar dominance and individual currency narratives.

The US Bureau of Economic Analysis (BEA) confirmed the most recent inflation report, which showed that Core Personal Consumption Expenditures (PCE), that excludes volatile goods, climbed by 3.9% year on year, down from 4% in July. According to the same study, headline inflation was 3.5%.

The EUR/USD maintains its early advances after reaching the daily high of 1.0617, although offers have driven prices beneath the 1.0600 level. This occurred despite statistics from the United States (US) lowering the likelihood of a November rate hike by the Federal Reserve (Fed).

Given the fundamental context, it is possible that the EUR/USD may continue with the bearish rally in the upcoming month. A daily close below 1.0600 may strengthen the reason for the major to continue losing ground through the YTD low and toward the swing low of 1.0290 on November 30, 2022.

Prior to the September closing, the GBP/USD fell barely below the 1.2200 barrier, and the pair is still battling a strong negative trend.

The Bank of England (BoE) is still concerned about inflation, and the UK may be forced to continue dealing with high-interest rates. Interest rate reductions are still a distant dream for market participants wanting to lower their financing and funding expenses because prices are still rising over the BoE's aim.

The GBP/USD is falling down from the 200-day SMA, which is currently positioned just above 1.2400, according to daily candlesticks. If selling pressure continues, the pair is expected to continue falling into new six-month lows.

After the US Core PCE statistics show a 3.9% YoY rise, below the expected 4%, the USD/JPY bounces back to approximately 149.40, up 0.12%. Lower-than-expected US inflation figures and a dovish Bank of Japan lay the stage for potential future gains as the US Dollar gains strength over the Japanese Yen.

After Australian Retail Sales missed market expectations on September 28 and failed to inspire confidence in the Australian dollar. Australian Retail Sales came in below expectations by 0.3% and printed as 0.2%, missing the previous reading of 0.5%.

As investor apprehension over a potential US government shutdown lifted the US Dollar Index (DXY) across the board on September 30, the AUD/USD fell more than 65 pip to re-enter the 0.6430 region.

Commodities

Gold prices achieved a small rebound in September, but they remain on track for their worst monthly performance since February of this year, as several fundamental and technical variables make life difficult for bulls.

The XAU/USD had encountered a strong rejection from the 34-EMA, near $1,870.00. The price continued falling precipitously and quickly away from the 200-day SMA, which is considerably above the current price movement of $1,930.00. A further decline will cause Gold to lose all of its gains from 2023 and create a new annual low of somewhere around $1,800.00.

Meanwhile, the Head and Shoulders chart pattern's neckline, which is drawn from the silver price's low of $22.11 on June 23, experiences a robust rebound. On a daily basis, the asset displays an H&S chart pattern, which denotes a protracted consolidation whose breakdown results in a bearish reversal. With a price of $23.15, the white metal is trading below the 20-day EMA, indicating a bearish short-term trend.

The RSI dips below 40.00, showing no evidence of divergence and being oversold, indicating that there is still room for further fall.

A rise in crude oil price seems probable over time given the continued supply issues, suggesting an inherent upward tilt in this market. It is deemed advantageous to employ a buying-on-dips strategy, particularly if WTI drops to the $90 level.

The West Texas Intermediate Crude Oil market showed signs of trying to rise, but after initially attempting to rise, it fell. The $95 mark is a psychologically significant number that attracts much attention. A market downturn is plausible because it looks like crude oil has surged significantly, and traders may be looking to lock in gains. Given its size, roundness, psychological significance, and historical activity at this level, the $90 level is projected to provide some support.

Indices

The S&P 500 has climbed from its September low of 4237 and is now testing resistance at its August low of 4335. Buyers will need to regain this level to continue the rebound toward 4400, the 100-SMA. If 4335 is not retaken, the price might drop to 4237, the monthly low, and break below this level, exposing the 200-SMA at 4215.

As investor jitters increased over the prospect of longer-term increases in Fed's interest rates and a government shutdown, the Dow ended September and the third quarter down. The Dow Jones Industrial Average lost 0.5%, or 158 points, bringing its third-quarter losses to around 2.7% in September. Although they completed the quarter at roughly 3.6% and 3.7%.

The Nasdaq 100 futures' counterpart, the US Nas 100 Index, dropped below the 14,750 short- term support level and did in fact form the anticipated decline. Following that, it kept falling until printing an intraday low at 14,445.

Market Events

The US Non-Farm Employment Change report was published on September 4 which climbed to 187K, a 19% rise compared to the previous month. The Reserve Bank of Australia hold the cash rate at 4.10%, reported on September 5. UK’s GDP turned 0.03% lower than expectation (-0.2%) revealed on September 13 and reported a 5.25% official bank rate on September 21. Meanwhile, Fed announced an unchanged federal funds rate (5.50%) for the month. The US final GDP also remained unchanged (2.1%) published on September 28.