Fed members, including Mester and Bullard, are still firm on their hawkish stance. They are determined to pull inflation back to their target range and stated that the recent havoc in the UK would not sway them away from their tightening objectives. BoE carried out an intervention with a value of 72 billion USD to prevent the bond market from plunging following the recent controversial fiscal measures.

Most dollar-related assets must embrace the final wave of volatility for the month of September. The PCE Price Index, scheduled for 8.30 am EST today stays in the spotlight with the figure expected to increase by 0.5% MoM. If the actual print beats expectations,  the dollar may be boosted further while the stock markets suffer. 

EURUSD

EURUSD H4

The Euro has seen a significant recovery (+3.00% at the time of writing) against the greenback in the past 2 days. From a technical perspective, 0.9900 is the next key resistance for EURUSD. 

All eyes are on the Eurozone CPI data that is due in 45 minutes and the US PCE price index in 4 hours as they will shake up the currencies market, especially this pair with both Euro and US Dollar involved. 

The buyers may hope for a stronger CPI from Euro and weaker data from the US to support the bullish momentum on the fiber. 

Precious Metals

Gold

XAUUSD H4

Gold has had a strong correction after bouncing off 1616 support. Currently trading back into its previous consolidation range and approaching 1680 major resistance, PCE Price Index is in focus. A greater than expected reading will easily increase the Fed rate hike bets and undo this beautiful price retracement. 

If gold does break above 1680 prior to the new release, traders should watch out for 1707 as another potential resistance. On the downside, we are expecting gold to continue its bearish longer-term trend to retest the 1616 low. 

US Stocks 

SP500

SP500 Daily

The surprise BOE intervention gave little support to the wider stock market but the effect was short-lived. SP500 lost steam yesterday and went back down to test 3605 support. Again, pre-markets will react to the PCE price index and end the trading month of September and also ending Q3 2022. 

Regardless of the data, there will likely be high volatility and price whipsaws. If 3605 is broken, there will be plenty of space for SP500 to freefall until 3250 but I guess that would be the story for next month.

Energies

USOIL

USOIL H4

USOIL bounced off the $76 range amidst a correction on the dollar and a potential output cut by OPEC+ in their next meeting on the 6th of October. The good news for USOIL is they are well positioned for their first green week in 5 weeks. 

USOIL is still in a bearish market structure though, with $86.30 as the next resistance, coinciding with the upper trendline.

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