Technical Outlook 12 Oct 2022

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Analysis as of 06:00am GMT

(4-hour chart)

Overview

  • Global recession warning from International Monetary Fund as they slash the growth forecast for the global economy to 2.7% and state that central banks must continue to raise interest rates to combat inflation

  • Warning from Bank of England as emergency intervention ends in 3 days. The bank states fund managers must rebalance their funds by Friday to secure price stability. Value of the pound dropped after the statement and at 6am trading below $1.10

  • Latest GDP figures show the UK economy has contracted by 0.3%

  • USA is re-evaluating relationship with Saudi Arabia following Opec oil production cut

  • Japanese policymakers kept up their warnings against investors selling off the Japanese currency as the dollar rose to a fresh 24-year high against the Yen on Wednesday, raising speculation about a second round of intervention.

USD/JPY - Bullish

Price continues on a tight trading range and is still on a bullish trend on the 4-hour chart. It is also still above the Ichimoku cloud. If bullish momentum continues, we expect price to get close to the third resistance around 146.50 today. Alternatively, if it breaks through the 1st support of 145.56 it could head to the second support of 145.26.


Trading Range for Consideration

Open

High

Low

Close

Pivot Point

145.72

145.91

145.43

145.86

145.73

1st

2nd

3rd

Resistance Level

146.03

146.20

146.50

Support Level

145.56

145.26

145.09

USD/JPY 4-hour chart


EUR/USD - Bearish

Price is trading within a sideways direction around the pivot point with a slight bearish momentum. Price is testing the first support at 0.9661. If it breaks through this, it will head to the second support at 0.961. Alternatively, the price may bounce and break through the first resistance at 0.9764 and head towards the second resistance of 0.9822.


Trading Range for Consideration

Open

High

Low

Close

Pivot Point

0.9695

0.9776

0.9673

0.9707

0.9719

1st

2nd

3rd

Resistance Level

0.9764

0.9822

0.9867

Support Level

0.9661

0.9616

0.9558

EUR/USD 4-hour chart


GBP/USD - Bearish

On the 4-hour chart the price has rejected the first resistance and is testing support at yesterday's low around 1.0952. If it breaks through this, it will head towards the 1st support at 1.0887. Alternatively, it may bounce off the support and head up to the 1st resistance at 1.1115.

Please note, a lot of data has been released about the UK economy and so fundamentals may impact the direction of the pound today.


Trading Range for Consideration

Open

High

Low

Close

Pivot Point

1.1056

1.1180

1.0952

1.0968

1.1033

1st

2nd

3rd

Resistance Level

1.1115

1.1261

1.1343

Support Level

1.0887

1.0805

1.0659

GBP/USD 4-hour chart


USD/CHF - Bullish

Price continues on a bullish trend on the 4-hour chart. It is also still above the Ichimoku cloud, indicating a bullish trend. If bullish momentum continues, we expect price to get close to the first resistance around 1.0021 today. Its currently slightly above the first support. Alternatively, it may retrace to the second support at 0.9863.


Trading Range for Consideration

Open

High

Low

Close

Pivot Point

0.9997

1.0022