Daily Market Analysis – Interest Rate Announcements are Today’s Big Events

As I said in yesterday’s review, many of the key markets were resting at support. Those levels weren’t strong enough to hold and many of the equities and currencies broke to the downside. Today’s schedule is also heavy with market moving announcements. So far today the German IFO Business Climate Index reported data that was disappointing to the market.  With ECB President Draghi speaking plus the FOMC Statement later today, it won’t be a boring day in the market. For those interested in a more in depth analysis, we at CM trading are here to assist those who are interested in profiting from the financial markets.

 EURUSD

The market broke support yesterday and is currently trading at 1.2926. Its next level down is 1.2870 and below that is a very strong support level at 1.2805.  On the upside, the first target to reach is 1.2990 and then 1.3030. There are several key events to watch that could heavily impact the pairs direction. First, ECB President Draghi, who is known to have more influence than any other person over the EUR value, is speaking at 7:45 and then again at 10:00. US New Home Sales data is being released at 10:00. More important than this data is the Federal Reserve’s interest rate announcement at 14:15 which is a key determinant is currency valuation. Be very careful if trading around this announcement.

Resistance	R1: 1.2995	R2: 1.303	R3: 1.3075
Support	S1: 1.2930	S2: 1.289	S3: 1.2840

NZDUSD

The pair is trading at .8131 and the .8073 will become the first level to watch on the downside. If this level is broken, the next major level of support will become .7970. On the upside, levels to watch are .8170 and then .8236. As I said before, short term interest rates are a primary factor in currency valuation. For this reason, FX traders will be paying close attention to the RBNZ Rate Statement at 16:00. If this rate is higher than expected, it will be bullish for the NZD. Be very cautious when trading around this announcement.

Resistance	R1: .8140	R2: .8215	R3: .8252
Support	S1: .8119	S2: .8051	S3: .8001

  

USDCAD

The pair remains above major resistance and is trading at .9916. After reaching .9974, it could be in a consolidative phase after rising all the way from .9774 just last week. The question of whether the pair is going to continue its run to the upside could be determined by both the  BoC Monetary Policy Report at 10:30 plus BoC Governor Carney speaking at 11:15. Targets on the downside are at .9870 and then at .9810.

Resistance	R1: 0.9935	R2: 0.9975	R3: 1.00
Support	S1: 0.9845	S2: 0.9870	S3: 0.99

 

Gold

Shifting our analysis from the currencies, we can see that support at $1722 gave way and Gold is now resting at its next support level at $1708.60. It’s next level of support comes in at $1694.14 and then at $1685.30. On the upside, it will first need to get to $1724.77 and then $1737.80.

Resistance	R1: 1722.30	R2: 1731.50	R3: 1739.44
Support	S1: 1698.75	S2: 1690.14	S3: 1681.80

 

Daily Calendar for Wednesday, October24

Time	Currency	Event	Actual	Forecast	Previous
4:00 EST	EUR	German IFO Business Climate Index	100.0	101.50	101.40
7:45 EST	EUR	ECB President Draghi Speaks
10:00 EST	USD	New Home Sales		385K	373K
10:00EST	EUR	ECB President Draghi Speaks
10:30EST	CAD	BoC Monetary Policy Report
11:15EST	CAD	BoC Gov Carney Speaks
14:15EST	USD	Interest Rate Decision		0.25%	0.25%
16:00EST	NZD	RBNZ Interest Rate Decision		2.50%	2.50%

Successful Trading!

Jacob Fendrich
Senior Market Analyst

http://www.CMTrading.com 

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