Dollar Firmer On Risk-Off Sentiment, Cryptos Tumble – Action Forex | Jewelry Dukan

Markets are relatively calm today as Japan and the UK have public holidays. Sentiment is risk-off ahead of the central bank’s rate hikes later in the week. The more notable moves can be found in the cryptocurrency sell-off. The dollar is solid along with the Swiss franc and the euro. Aussie and Kiwi are softer along with Sterling. Yen is mixed waiting for the next move. Still, most major pairs remain within Friday’s range.

Technically, focus is on whether the US 10-year Treasury yield would pick up for another challenge at the 3.483 resistance. A crucial break there will confirm the resumption of a larger uptrend. In that case, USD/JPY could also shoot through the 144.98 resistance towards 147.68, the 1998 high.

In Europe, the DAX is down -0.29% at the time of writing. CAC is down -0.94%. Germany’s 10-year yield is up 0.0218 to 1.780. Britain is on vacation. Earlier in Asia, Hong Kong HSI fell -1.04%. China Shanghai SSE fell -0.35%. The Singapore Strait Times fell -0.37%. Japan was on vacation.

Bundesbank: Inflation is likely to reach double digits in the next few months

The Bundesbank said in the monthly report that there were “increasing signs that the German economy is sliding into a recession”. “The high inflation and the uncertainty about the energy supply and its costs not only affect the gas and electricity-intensive industry and its export business and investments, but also private consumption and the service providers dependent on it.”

The gas supply situation is expected to “remain extremely tense in the coming month”. For Q4 and Q1, economists expect a “noticeable decline in economic output” and the outlook is “extremely uncertain”.

On inflation, the Bundesbank said the fiscal stimulus package will not be reflected in consumer prices until early next year. “The bottom line is that inflation should move into double digits over the next few months,” she added.

NZ BusinessNZ services jumped to 58.6, how long are they bouncing?

The New Zealand BusinessNZ Performance of Services Index rose to 58.6 from 54.4 in August. Looking at some details, activity/revenue increased from 54.4 to 67.1. Employment rose to 50.8 from 49.3. Orders/business increased to 66.5 from 53.4. Shares/stocks rose to 59.6 from 53.8. Supplier shipments increased to 49.6 from 47.6.

Doug Steel, senior economist at BNZ, said: “Overall, the combination of August’s strong PSI and last week’s firmer PMI produces a composite index (PCI) that suggests annualized GDP growth of up to 5% in the third quarter of 2022 . We are currently forecasting more than 5% strength for this period is primarily a function of the very weak base period. If the PCI really jumps, the key question is how long?”

Ethereum falls, Bitcoin follows

Ethereum continues to crash today and the post-merge surge decline is stretching. A deeper decline is expected as long as the minor resistance at 1474.00 holds. The next short-term target is a 100% forecast 2028.90-1418.47 from 1787.45 at 1177.02. A firm break there could see an acceleration down through 878.5 to 161.8% projection at 799.77.

The development of Bitcoin is even worse. A deeper decline is expected as long as 20167 resistance holds down to 17575 low. Break there aims for a 100% projection from 25198 to 18518 from 22764 to 16084.

GBP/USD daily outlook

Daily Pivots: (S1) 1.1355; (P) 1.1418; (R1) 1.1485; More…

GBP/USD intraday bias remains on the downside this week. Current downtrend should target 61.8% forecast 1.3748 – 1.1759 from 1.2292 at 1.1063. On the upside, minor resistance above 1.1479 will neutralize the intraday bias first. But a break of 1.1737 resistance is needed to signal a near-term bottom formation. Otherwise, the outlook remains bearish in the event of a recovery.

Overall picture based on recent momentum decline from 1.4248 (2018 high) is likely to continue the long-term downtrend from 2.1161 (2007 high). A sustained break of 1.1409 targets a 61.8% view of 1.7190 (2014 high) to 1.1409 (2020 low) from 1.4248 (2021 high) at 1.0675. This will remain the preferred case for now as long as 1.2292 resistance holds.

Update of economic indicators

Greenwich Mean Time Ccy events Indeed forecast previous Revised
10:30 p.m CHF Business NZ PSI 08 58.6 51.2 54.4
10:00 a.m EUR German Buba monthly report
12:30 p.m CAD Industrial Product Price M/M Aug -1.20% 0.20% -2.10%
12:30 p.m CAD Commodity price index 8.8 -4.20% 3.20% -7.40%
14:00 USD NAHB housing market index Sept 48 49

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