(MENAFN- DailyFX)
- Unlikely to Intervene any Further in FX Markets Unless Volatility Returns.
- 145.00 Resistance Remains the Key.
- A Host of Fed Policymakers Scheduled to Speak Today.
Fundamental Backdrop
continued its rally higher on what proved to be an interesting Monday for markets as a whole. The was firmer across the board as the printed fresh highs around the 114.50 area. The has thus surrendered around 75% of the gains achieved on the back of the FX intervention last week, with the pair reaching a high of 144.810.
D Chart- September 27, 2022
Source: TradingView
As we enter Q4 we have seen the remain an outlier in the global tightening race while the has continued to stick by its hawkish rhetoric. The Fed expects to continue raising rates with a year-end target of 4.5-4.75% as per the forward guidance from last weeks meeting. Yesterday brought comments from policymaker Loretta Mester who reiterated the need for higher rates to keep inflation in check, while fellow policymaker Charles Evans confirmed earlier today that inflation is job number one for the Fed with a tougher rate environment to persist for a while. Later in the day we have Fed Chair Jerome Powell speaking followed by policymakers James Bullard and Neil Kashkari with rhetoric expected to remain unchanged.
For all market-moving economic releases and events, see the
Bank of Japan and Potential for Further Intervention
Governor Haruhiko Kuroda in his forward guidance following last week's meeting stated that there will be no change in forward guidance for two to three years. This saw a spike in volatility in the Yen which resulted in the Finance Minister's decision to for the first time in 24 years. Despite this both Governor Kuroda and Finance Minister Shunichi Suzuki have reiterated that they are not looking to defend price levels but deal with heightened volatility and excessive moves. As long as the weakens at a gradual pace without spikes in volatility the chance of further intervention remains slim.
Four-Hour Chart – September 27, 2022
Source: TradingView
From a technical perspective, we have had two days of bullish price action with yesterday's daily candle closing as a , an indication that further upside may be ahead. We continue to trade within the range from 141.50 to the 145.00 area, with a four-hour candle close above 145.00 needed if we are to push on. We currently trade above the which should provide support should we see a slight pullback in price. A bullish move above the 145.00 level should see us test 1998 highs at 147.75 or push toward the .
Key intraday levels that are worth watching:
Support Areas
•143.50
•142.60
•141.50
Resistance Areas
•145.00
•147.75
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Written by: Zain Vawda, Markets Writer for
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