news commentary
At the beginning of the week, investors have something of the calm before the storm as they brace for monetary events risk.
The Bank of Japan is expected to hold rates unchanged on Tuesday, the BoJ may carry the most influence when it announces its latest monetary policy decision. This is because several reports have indicated that the central bank is considering a decrease in its stimulus program. a shift in this policy will not only lead to a spike in Japanese bond yields but it will also have a global effect that will lead to further tightening in credit conditions. However, the latest inflation report indicates that the BoJ might not make any significant changes on this front and will instead try to calm markets.
The Federal Reserve is also likely to leave rates unmoved when it announces its decision on Wednesday, with economists saying that recent comments from President Donald Trump will have no impact on policy and the Fed will continue sending the message that more rate hikes are on the way.
On Thursday, the Bank of England is expected to raise rates for the first time since November, But according to the recent fall in inflation and continued Brexit uncertainty, they might deliver a hike and hint that it’s the only one expected for 2018.
On another hand, Chinese Foreign Minister Wang Yi said his country would be willing to resume trade negotiations with the U.S. if the Trump administration “took a less combative” approach to talks.
President Trump said on Twitter yesterday that he would be willing to ‘shut down’ the government if Democrats do not support funding plans for his wall along the border with Mexico. The tweet came after a meeting last week in the White House between Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell to discuss how to avoid an Oct. 1 shutdown, a month before elections that will determine control of Congress.
chart analysis
US INDEX
On the daily chart, the price has bounced from the red resistance zone for the third time to shape the reversal triple top.
Price has recently formed another reversal pattern to assure the bearish bias with the wedge.
Followed by a break beneath an ascending trend on RSI, the index is settled down at the ascending trend line, if it’s broken, the price will have its way back to the support zone 93.2-92.6
AUD/USD
On the daily chart, the pair reached back the green support zone again to shape a double top pattern
Followed by divergence on RSI, our bullish view is still the same: if the price manages to still above the support area and the key level 0.7455, it will be heading towards the combination of levels of descending trend, ascending channel and resistance zone at 0.7655-0.774.
NZD/USD
On the daily chart, the price retested the green support zone 0.675-0.6695, followed by divergence in RSI.
An AB=CD harmonic pattern has been shaped to reinforce the bounce.
If the price could break above the key level at 0.6845, the price will be supposed to head back to the top of the descending channel with the resistance zone at 0.697-0.703 only if it manages to hold above the green zone
USD/CAD
On the daily chart, the price has broken main support areas, as it closed beneath the key support 1.309, and beneath the ascending trend line
A wedge has been shaped and successfully confirmed after breaking it, besides a GARTLEY harmonic pattern to assure the bearish momentum
Followed by divergence on RSI, the price is expected to reach the next support 1.289
USD/JPY
On the daily chart, the price is located at a good long-buy position according to the support of 111.3, the retest of the broken descending trend, 23.6% Fibonacci level and the ascending channel.
All these factors may boost the price further to go back to the level 113.15 and more if the price witnesses a suitable price action from these levels.
