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DAILY ANALYSIS

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Forecasting Strategy for Short Term Trade

EUR/USD

EUR/USD broke below a key uptrend that has been in play since November and fell to fresh one-month lows in the 1.1220 in response to the latest Fed policy announcement.

The Fed left rates at 0.0-0.25%, doubled the pace of its QE taper to $30B a month from January (though maintaining flexibility to adjust at a later date) and lifted its 2022 inflation forecast all as expected. EUR/USD fell toward 1.1200 after the Fed announced that it will increase the reductions in asset purchases to $30 billion per month. EUR/USD erases Fed-inspired losses, approaches 1.1300.

USD/JPY

The USD/JPY reclaims the 114.00 figure as the Fed decided to keep rates at the 0 to 0.25% range while increasing the bond-taper speed. According to the Summary of Economic Projections (SEP), the Federal Reserve Board members, the median view of the Federal Fund Rates in 2022 is at 0.9%, in 2023 at 1.6%, and by 2024 at 2.1%.

US bond yields are rising in the bond market, with the US 10-year Treasury yield advancing two basis points, sitting at 1.46%, while the US Dollar Index rises some 0.11%, at 96.68. USD/JPY takes a U-turn from intraday high to challenge the previous two-day uptrend, down 0.03% on a day around 113.70 during the initial Tokyo trading on Wednesday. 

GBP/USD

The GBP/USD edged lower during the New York session after the Fed decided to keep interest rates unchanged at the 0-0.25% range. Further, it decided that a faster bond taper is needed, reducing its bond purchases by $30 Billion, in line with the market’s expectations.

GBP/USD reversed its direction after falling below 1.3200 and turned positive on the day near 1.3250. The US Dollar Index lost its traction with FOMC Chairman Powell noting that there won't be a rate hike before the taper is over. GBP/USD recovers to around 1.3200 as dollar loses interest.

AUD/USD

Federal Reserve's chair, Jerome Powell, has noted that inflation will run above goal well into 2022 in the presser. This leaves the downside in play for AUD/USD. The bear wick could be targetted on a hawkish and bullish Fed's Powell. The US dollar would be expected to strengthen and this will expose the downside below 0.7090 towards 0.7050 and then 0.7030 as per the prior structure. 

The Australian dollar stabilized above 0.71 against the US dollar on Wednesday, buoyed by strong Chinese factory output data, while remaining vulnerable to omicron-related headlines and expectations of further policy tightening by the Federal Reserve.

XAU/USD

Gold made a sharp U-turn from the two-month low it set at $1.753 and turned positive on the day above $1.770. Although the 10-year US T-bond yield is edging higher toward 1.5%, the greenback is struggling to find demand amid Powell's cautious remarks. 

Gold, XAU/USD, has reversed course dramatically since the Federal Reserve statement and an initial spike in the greenback that drove gold to fresh New York session lows. now trading at $1.780, the price is around 1.6% higher than the lows of the session where $1.753 was printed on the back of an uber hawkish statement and dot plot.  

WTI

Oil prices turned positive on Wednesday following the Federal Reserve’s statement, snapping three straight days of losses. Brent crude futures jumped 18 cents, or 0.24%, to settle at $73.88 per barrel, after losing 69 cents on Tuesday. U.S. West Texas Intermediate (WTI) crude futures settled 14 cents, or 0.2%, higher at $70.87 a barrel, after losing 56 cents in the previous session.

Earlier in the day both contracts had been negative on growing signs that supply growth will outpace demand next year, and as the World Health Organization said COVID-19 vaccines may be less effective against the Omicron variant.

#AAPL

Apple's stock on Tuesday morning was hovering just below the threshold required to reach a market capitalization of $3 trillion, a milestone no publicly traded U.S. company has ever reached.

Shares for the iPhone maker hit an all-time high Monday during intraday trading before opening slightly lower Tuesday at $175.25 per share, roughly 4% shy of the $182.86 required to reach the historic mark.

#QCOM

On Wednesday, QCOM price is once again pushing to a new all-time high above $184. This tells us that despite Tuesday's unexpected surge, bulls are not done yet with this swing high. It is important to remember that QCOM stock is now up more than 50% from when it touched a triple bottom on October 13. That was a triple bottom due to QCOM price bouncing off the area around $123 in March, May and again in October. 

With November's surge pushing QCOM up so far above the longer-term moving averages, they can be shunted to the side. Support sits in the $160s where there is a demand/consolidation zone from last week's pullback. Until there is any more pattern creation or structure to QCOM price, there is no certainty where the stock will meet resistance. It does seem, however, that bulls are likely to push at least to the average price target at $194.91.$160s where there is a demand/consolidation zone from last week's pullback. Until there is any more pattern creation or structure to QCOM price, there is no certainty where the stock will meet resistance. It does seem, however, that bulls are likely to push at least to the average price target at $194.91.

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