Home General Forex Monthly Overview – September 2014 (EURUSD, GBPUSD, USDCAD)

Forex Monthly Overview – September 2014 (EURUSD, GBPUSD, USDCAD)

The month of August saw the Greenback gaining momentum against the backdrop of an improved Q2 GDP data as speculation for the Fed’s rate hike continues to fuel the markets. With the QE tapering expected to end by October, markets are poised to subtle clues from the Fed on the timeline of an interest rate hike.

Most of the USD pairs lost ground, including the strong Sterling which has been in a downward spiral since July. The month of September is rife with lots of economic news being released which could bring quite some volatility into the currency markets.

The un-factored risks do come in the form of geo-political events from Ukraine/Russia and the ISIS crisis in the Middle-East

Below is the monthly overview of the major pairs in the FX Markets.

EURUSD Monthly Outlook & Technicals

  • The key risks to EURUSD comes from speculation on the ECB’s QE-style ABS purchase program
  • Markets are expecting to either see the ECB’s QE being announced at this month’s ECB’s press conference, or at the very least expect to hear from Draghi his plans on a Eurozone QE.
  • Germany seems to be clearly unhappy with the ECB’s plans of QE, going by the rhetoric of German finance minister Wolfgang Schaeuble and the Chancellor Merkel
  • A continued bearish run is likely to see some pullbacks to the downtrend, providing a good opportunity to sell the corrective rallies
  • The monthly candle closed on a very bearish sentiment, while the gap at 1.3241 is yet to be closed.

EURUSD Monthly Pivots

R3 1.3598
R2 1.3521
R1 1.3287
Pivot 1.3205
S1 1.2977
S2 1.2899
S3 1.2666

 

 

EURUSD Weekly Pivots

R3 1.3281
R2 1.325
R1 1.3194
Pivot 1.3163
S1 1.3107
S2 1.3076
S3 1.2995

 

GBPUSD Monthly Outlook & Technicals

  • The British pound lost steam after enjoying a great rally through the second quarter of this year. Considering the rally, the recent bearish moves are likely to be seen as a correction at this point in time
  • The week starts off with various PMI data from the UK being released. In terms of monetary policy, it was for the first time in August that the BoE was divided in its policy outlook, which was hitherto unanimous in their decision to keep interest rates unchanged.
  • Markets will be clearly looking to September’s MPC minutes for any further dissent within the BoE
  • Unemployment data, which has been causing a dent in the BoE’s rate hike plans will also be closed watched for any signs of improvement in the labour market slack, besides inflation which edged lower to 1.6%.
  • Markets will also be looking to the BoE’s inflation report hearing scheduled for 9th September and the quarterly bulletin

GBPUSD Monthly Pivots

R3 1.7133
R2 1.7013
R1 1.6776
Pivot 1.6656
S1 1.642
S2 1.63
S3 1.6063

 

 

GBPUSD Weekly Pivots

R3 1.6708
R2 1.666
R1 1.6631
Pivot 1.6583
S1 1.6554
S2 1.6506
S3 1.6477

 

 

USDCAD Monthly Outlook & Technicals

  • Bank of Canada is expected to remain neutral in this month’s monetary policy, thus keeping interest rates unchanged
  • Comparing to the Fed’s monetary policy tightening, the Canadian Dollar is likely to be weaker against the Greenback
  • The Canadian dollar was strong against most of its peers last month, especially against the Euro, while trading mixed with the US Dollar. Friday’s GDP monthly data saw the Canadian economy grow by 0.3%, modestly lower from previous month’s upward revision of 0.5% growth. The actual print was however better than the median estimates of 0.2%
  • USDCAD Weekly candlesticks show a bearish engulfing pattern along with the formation of an outside bar, which could see some weakness in this pair

USDCAD Monthly Pivots

R3 1.1154
R2 1.1076
R1 1.0967
Pivot 1.0889
S1 1.078
S2 1.0702
S3 1.0594

 

 

GBPUSD Weekly Pivots

R3 1.1161
R2 1.1083
R1 1.0976
Pivot 1.0893
S1 1.0789
S2 1.0706
S3 1.0602
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