The Week Ahead 25th – 29th September: While the FED and BOE keep interest rates unchanged, inflation data looms in both the US and the EU.
<p>Welcome to Key to Markets preview of the Week Ahead.</p>
<h2>Currency Pair Performance</h2>
<p>5-day performance as of <strong>September 21, 2023. 12:30 GMT.</strong></p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25790 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1-3.png" alt="" width="602" height="285" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1-3.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-1-3-300×142.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: finviz.com</p>
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<h2>10 Big Stories Last Week</h2>
<p>In case you missed it…</p>
<p><strong>The Fed left rates unchanged, as expected.</strong> The US central bank left rates at 5.25%-5.5%, a 22-year high, but signaled that rates would stay higher for longer.</p>
<p><strong>BoE unexpectedly left rates unchanged.</strong> The UK central bank left rates at 5.25%, defying expectations of a 5.5% increase after UK inflation unexpectedly cooled to 6.7% YoY and amid signs of a slowing economy.</p>
<p><strong>Instacart floated at $30 per share.</strong> The grocery delivery business debuted on the Nasdaq, rising 13% on its first day of trading before the share price fell back to $30.</p>
<p><strong>SNB left rates unchanged.</strong> The central bank defied expectations of a 25-basis point rate hike, leaving the benchmark lending rate at 1.75%. USD/CHF jumped to 0.9050.</p>
<p><strong>Disney announced spending plans.</strong> Disney said it will spend $60 billion on its theme parks and cruise line business over the next decade. Theme parks are set to generate $10 billion in profit this year, up from $2.2 billion a decade ago.</p>
<p><strong>US treasury yield hit a 16-year high.</strong> Treasury yields soared with the Fed in focus. The 10-year yield hit i4.433%, and the 5-year yield rose to 4.524%, both at 16-year highs.</p>
<p><strong>Oil closed in on $100 per barrel.</strong> Oil prices continued to rise on the back of Saudi Arabia and Russian production curbs. Oil rallied to $95 per barrel, reaching the highest level since November.</p>
<p><strong>OECD upwardly revised US GDP outlook.</strong> The Paris-based organization now sees the US economy growing 2.2% in 2023, up from the 1.6% forecast in June.</p>
<p><strong>Arm lost momentum.</strong> The chip maker lost ground for four straight sessions following its IPO. It has fallen from a high of $69 back to the IPO price of $51.</p>
<p><strong>EUR/USD falls to a 6-month low.</strong> The pair dropped to its lowest level since March after the FOMC rate decision and after the ECB hinted last week that the hike could be its last.</p>
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<h2>Chart of the Week</h2>
<p><img decoding="async" class="alignnone wp-image-25793 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2-3.png" alt="" width="602" height="296" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2-3.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-2-3-300×148.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>The Fed left interest rates on hold, marking the second pause in this hiking cycle, but signaled higher rates for longer.</p>
<p>12 of 19 Fed officials favoured another 25 basis point hike before the end of the year. Moreover, the Fed projected less easing in 2024. The Fed now sees rates being cut to 5.1% by the end of next year, up from 4.6% projected in June.</p>
<p>While the end of rate hikes is in sight, the September meeting’s clearly hawkish bias supported the Fed’s higher-for-longer stance and highlighted its determination to bring rates back to 2%.</p>
<p>Following this month’s FOMC meeting, the question has changed from “how high?” to “how long?”.</p>
<p>The hawkish stance combined with the resilience of the US economy compared to peers has lifted the USD, which is on track for its 10th straight weekly rise. A rally of this magnitude hasn’t been seen in a decade.</p>
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<h2>5 Things to Watch This Week</h2>
<p><strong>1. Core PCE</strong><br />
Core PCE, the Federal Reserve’s preferred gauge for Inflation, Is due to be released on Friday, September 29th. The July core PCE gauge posted the smallest back-to-back increase since late 2020, rising 0.2% in July for a second straight month. The subdued inflation figures highlighted the Fed’s progress in taming inflation. Another small monthly increase in core PCE would support the Fed’s decision to keep interest rates on hold.</p>
<p><strong>2. Eurozone inflation</strong><br />
Eurozone inflation is due to be released on Friday, September 29th. Recent inflation figures from the region have shown a steady cooling in consumer prices. However, the pace of that cooling has slowed significantly as oil prices have rallied persistently higher across the summer. Meanwhile, core inflation continues to cool. The data comes after the ECB raised interest rates by 25 basis points earlier in the month in what could have been the last hike of the cycle. Cooler inflation data would support the view that the ECB’s hiking cycle has ended.</p>
<p><strong>3. German data</strong><br />
This week sees the release of German IFO business climate data, GFK consumer confidence data, and German inflation figures. The data will provide fresh clues into the health of the German economy, the sick man of Europe. The Geman economy is struggling amid a slowdown in the manufacturing sector, slowing growth in China, a key trading partner, and higher energy costs. Last week, the Bundesbank warned that the German economy is expected to shrink this quarter.</p>
<p><strong>4. Nike earnings</strong><br />
Nike is due to release Q1 earnings after the closing bell on September 28th. The results come with shares trading down 41% so far this year and 37% over the past 12 months. Wall Street earnings estimates have been lowered ahead of the Q1 earnings report amid concerns over weaker guidance due to a slowdown in demand across categories and price points. Nike’s high inventory position and the worsening FX backdrop could also impact the full-year outlook.</p>
<p><strong>5. Micron Technologies earnings</strong><br />
Micron Technology is due to announce quarterly earnings on Wednesday, September 27th. Earnings come as the share price continues in the uptrend, within which it’s been in for most of this year. The chip maker has been supported as the demand picture improves and as previous excess inventory levels in the supply chain appear to be behind it. Expectations are for a loss per share of $1.18 on revenue of $3.91 billion.</p>
<p><strong>Economic Calendar Highlights</strong></p>
<p><img decoding="async" class="alignnone wp-image-25796 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3-3.png" alt="" width="602" height="412" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3-3.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Chart-3-3-300×205.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: FXStreet.com</p>
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<h2>Technical Analysis:</h2>
<p>TA of the major asset classes (Forex – Commodities – Indices…).</p>
<p><strong>EUR/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25828 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-100-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>EUR/USD is in a downtrend, making lower highs and lows below the 50 SMA. RSI is in a bearish position and is oversold. Price has consolidated since its close below the May ‘23 low. Our base case scenario is a long-term breakdown towards 1.05 and lower, with a close over 1.08 needed to nullify the bearish bias.</p>
<p><strong>GBP/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25802 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/GBPUSD-14-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>GBP/USD is in a downtrend, forming lower lows and lower highs beneath the 50 SMA. RSI is now oversold. Price has made a new bearish impulse, taking out the May low on an intraday basis. A close over 1.25 would be needed to turn bullish.</p>
<p><strong>USD/JPY (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25805 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/USDJPY-14-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>USD/JPY is in an uptrend, making higher highs and lows above the 50 SMA. RSI is on its third test of the 65 level. Price continues to hover around the top of its recent range with a small breakout over 148, suggesting a likely upwards continuation. A break below 145 is needed to turn bearish.</p>
<p><strong>Gold (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25808 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XAUUSD-14-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XAU/USD is in a downtrend, making lower lows and highs below the 50 SMA. RSI is neutral. 1900 recently held and is the biggest support that has held up further declines since June. Price was rejected at 1948 with a long-legged doji, suggesting another test of the bottom of the recent range near 1900.</p>
<p><strong>Brent Oil (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25811 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XBRENT-14-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XBRENT is in an uptrend, making higher highs and lows above the 50 SMA. RSI has come out of overbought territory. A 3-day pullback is testing 91, and the prior Swing high from Sept 6. 100 is the logical target bigger picture. A move under 90 would be needed to turn short term bearish.</p>
<p><strong>US500 (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25814 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/XUS500-14-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XUS500 is in a consolidation of a bigger uptrend near the 50 SMA. RSI is neutral. Price has broken below swing lows at 4450, but the medium-term bias is bullish unless there is a break below 4325, the neckline to a possible H&S top.</p>
<p>Thank you very much for reading – and have a great week trading!</p>
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<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/the-week-ahead-25th-29th-september-after-the-increase-of-the-interest-rate-in-the-usa-what-will-happen-in-the-eu-25789/">The Week Ahead 25th – 29th September: While the FED and BOE keep interest rates unchanged, inflation data looms in both the US and the EU.</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>
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