Welcome to the Weekly Market Update!
In this edition, we bring you the latest highlights and insights from the world of finance. We will cover the week’s top stories, provide market analysis, highlight economic developments, discuss upcoming events to watch, and present technical analysis. Let’s delve into the key information you need to stay informed and make informed financial decisions.
Top Stories of the Week
- Instacart’s Nasdaq Debut: The grocery delivery service floated at $30 per share, initially rising 13% before settling back to its IPO price.
- SNB Defies Rate Hike Expectations: Contrary to a predicted 25-basis point hike, the Swiss central bank kept its benchmark rate at 1.75%, causing USD/CHF to jump to 0.9050.
- Disney’s Big Spending Plans: Disney plans to invest $60 billion in its theme parks and cruise lines over the next decade, expecting $10 billion in annual profits, up from $2.2 billion.
- ARM Loses Steam: After its IPO, the chipmaker’s stock fell from a high of $69 back to its initial $51 price.
- EUR/USD Hits 6-Month Low: The currency pair reached its lowest point since March following the FOMC decision and ECB hints at ending rate hikes.
Market Analysis
- Oil Prices Near $100/Barrel: Brent crude closed at $94 per barrel, its highest since mid-November 2022. Rising demand from China and production cuts by Saudi Arabia and Russia are driving up oil prices. RAC warns of tough times at the pump, with diesel prices expected to jump per liter. Retailers are also taking higher margins, keeping petrol prices artificially high.
Economic Highlights
- Fed Holds Rates Steady, Signals Future Hike: The Federal Reserve maintained interest rates at 5.25%-5.5%, a 22-year high, but indicated one more hike this year. The decision weighed on markets, with the S&P 500 and Nasdaq falling. Fed Chair Jerome Powell emphasized the need for more progress in the fight against inflation.
Upcoming Events to Watch
- Core PCE Data (Sep 29): The Fed’s favored inflation metric is set for release, following a modest 0.2% increase in July. A similar uptick would validate the Fed’s decision to maintain interest rates.
- Eurozone Inflation (Sep 29): After the ECB’s recent 25-basis point rate hike, new inflation data will be crucial. A continued cooling in consumer prices could signal the end of the ECB’s hiking cycle.
- German Economic Data: This week features German IFO, GFK, and inflation data. Amid warnings from the Bundesbank and a struggling manufacturing sector, these figures could offer insights into Germany’s economic health.
- Nike Q1 Earnings (Sep 28): With shares down 41% this year, Nike’s Q1 results are eagerly awaited. Wall Street has lowered earnings estimates, citing weaker demand and high inventory levels.
- Micron Technologies Earnings (Sep 27): As the chipmaker’s share price trends upward, quarterly earnings are due. Expectations are for a loss per share of $1.18 on $3.91 billion revenue.
Technical Analysis
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
EUR/USD
EUR/USD: The pair is in a bearish trend, posting lower highs and lower lows beneath the 50-day SMA. The RSI is in oversold territory, signaling bearish momentum. After breaking below the May ’23 support level, the outlook suggests a long-term slide towards 1.05. A close above 1.08 is required to invalidate the bearish bias.
GBP/USD
GBP/USD: This currency pair is also bearish, carving out lower highs and lower lows below the 50-day SMA. The RSI has entered oversold conditions. The pair recently breached its May low intraday, and a close above the 1.25 resistance level is needed to flip to a bullish stance. The U.S. Dollar Index remains elevated, keeping GBP/USD in a bearish search for a bottom.
XAU/USD
XAU/USD: Gold is on a bearish trajectory this week, following the Fed’s rate hold, notching lower highs and lower lows below the 50-day SMA. The RSI is neutral. The $1900 support level has been a strong floor, staving off further declines. A recent rejection at the $1948 resistance level with a long-legged doji suggests a retest of the $1900 support is imminent.
XUS500
XUS500: The index is consolidating within a broader uptrend, hovering around the 50-day SMA. The RSI is neutral. Despite breaking below the swing lows at 4450, the medium-term trend remains bullish unless there’s a break below the 4325 neckline, forming a potential Head & Shoulders top. Market indices are in decline due to U.S. inflation, and interest rates are projected to rise in the short to medium term.
Thank you for reading! Wishing you successful trades ahead!
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