Daily Analysis

Global Markets React to Inflation Data: Hong Kong Stocks Plummet, Europe and U.S. Grapple with Rising Prices

Hong Kong stocks plunged by over 2%, leading losses across the broader Asia-Pacific markets, as investors processed China's inflation and trade data for September.
In September, China's consumer price index remained flat, falling short of the 0.2% increase anticipated by analysts surveyed by Reuters. Additionally, China reported a 2.5% drop in its producer price index, slightly exceeding Reuters' estimated decline of 2.4%.
On a separate note, European stock markets opened lower on Friday, with market sentiment wavering due to fresh U.S. inflation data. In France, consumer price inflation in September stood at 4.9% year-on-year and 5.7% on an EU-harmonized basis, mirroring the previous month's figures. Meanwhile, Spanish annual inflation continued to rise for the third consecutive month, increasing from 2.6% in August to 3.5% in September.
In the United States, the consumer price index, a closely monitored inflation gauge, rose by 0.4% in the month and 3.7% from a year ago, according to a Labor Department report on Thursday. These figures exceeded the respective Dow Jones estimates of 0.3% and 3.6%. The primary driver behind the inflation increase was housing costs. This data has intensified concerns and cast doubt on persistent inflation and its implications for the upcoming Federal Reserve (Fed) meeting and decisions.


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EUR/USD Resilient Despite Positive US Data as Concerns of Economic Slowdown Weigh
EUR/USD displays resilience after a prior losing session, spurred by positive US economic data. Headline inflation exceeded expectations at 3.7%, while jobless claims remained slightly below forecasts. This data has reignited speculation of a Fed interest rate hike.
The euro's outlook is more cautious due to concerns about a potential economic slowdown and the possibility of a recession, dampening prospects for further ECB rate hikes. Investors will keep an eye on the US Michigan Consumer Sentiment Index and ECB President Christine Lagarde's comments for market cues.
EUR/USD is currently in an accumulation phase waiting for a possible reversal. If a reversal is confirmed, the next resistance area will be at 1.0750 while the next support level will be at 1.0500.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.0830 1.0750 1.0650 1.0500 1.0400 1.0200

1697187932542.png

GBP/USD Rebounds Despite Weak UK Data
The GBP/USD pair rebounded from losses driven by positive US economic data. US inflation, with an annual growth rate of 3.7%, exceeded expectations in September, while Initial Jobless Claims for the week ending October 6 showed slight improvement. This upbeat US data has raised questions about the Federal Reserve's monetary policy.
Conversely, the Pound Sterling faced pressure due to weak UK data. August's Manufacturing and Industrial Production figures fell short, with manufacturing production down 0.8% and industrial production declining by 0.7%. Although August's UK Gross Domestic Product (GDP) met expectations, the previous month was revised downward.
The Bank of England (BoE) lowered its growth forecast, hinting at limited rate increases. Market watchers are awaiting the US Michigan Consumer Sentiment Index and insights from BoE Governor Andrew Bailey's speech to understand the economic landscape in both countries.
Similar to EUR/USD, GBP/USD has retraced from its resistance and is currently stabilizing, entering an accumulation phase while awaiting a possible reversal. The next target if a breakout happens is at 1.2450.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2600 1.2450 1.2300 1.2200 1.2100 1.2000

1697187932561.png

USD/JPY Bulls Near 150.00 Following Inflation Concerns and Economic Data Disappointments
The USD/JPY pair continued its bullish recovery, nearing the 150.00 level, as the US Dollar strengthened amid risk-off sentiment due to concerns about higher US CPI inflation. This surge was driven by worries that the Federal Reserve might maintain elevated interest rates.
Currently at 149.83, the 150.00 level has the Bank of Japan's attention due to past FX interventions. Japan's economic data disappointed, with September's PPI falling by -0.3% instead of the expected 0.1% increase. Machinery Orders for August improved to a -0.5% decline from -1.1% but remained below the projected 0.4%.
In contrast, the US saw an annual CPI inflation rate of 3.7% for September, exceeding the 3.6% consensus. Initial Jobless Claims were slightly lower at 209K compared to the forecasted 210K.
These positive economic indicators and persistent inflation have raised concerns about the Fed maintaining higher interest rates longer than anticipated.
USDJPY continues hovering around the 150.00 area with a small correction. The next support level is at 146.80 followed by the 144.80. A possible reversal is the most awaited scenario.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
155.00 152.70 151.50 148.00 146.50 146.00
1697187932585.png

Gold Prices Surge to Two-Week High Amid Geopolitical Tensions and Weak Dollar
Gold price has rebounded from a seven-month low, reaching a two-week high amid geopolitical tensions, declining bond yields, and a weaker US dollar. The recent surge in gold's value is driven by Middle East conflicts, making it a preferred safe-haven asset, coupled with the depreciation of the US dollar. Falling global bond yields are also supporting the non-yielding precious metal.
The recent recovery has allowed gold to recoup over 30% of its September losses, despite a generally positive tone in equity markets. Speculations about the Federal Reserve nearing the end of its rate-hiking cycle suggest an upward trajectory for gold. However, traders are awaiting the US Consumer Price Index (CPI) report later in the North American session to gain fresh insights into the Fed's rate-hike path.
A decrease in US inflationary pressures could solidify expectations of the Fed maintaining its current policies in November, potentially leading to a rate cut in Q2 2024. This scenario could further weaken the US dollar and drive demand for gold. Conversely, a strong CPI report could keep the door open for another Fed rate hike by year-end, causing gold bulls to reconsider their positions.
Gold continues its recovery and is attempting to break the 1875-1880 resistance level, moving towards the 1900 target due to weakness in the dollar today.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1920 1900 1880 1875 1855 1830
 

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The week begins with the EUR/USD pair showing a positive start and bouncing back from Friday's decline to reach levels slightly below the key psychological threshold of 1.0500. Now, it appears that the pair has broken a two-day trend of losses. However, during the International Monetary Fund's annual meeting, ECB President Christine Lagarde noted over the weekend that economic growth could slow down if the impact of monetary policy turns out to be more significant than expected or if the global economy weakens further and geopolitical risks escalate. This serves as a reminder for EUR/USD bulls to exercise caution.

Today, the parity is hovering around 1.0535 level. On the upside, the parity could encounter resistance at the 1.0565 level. If that level is broken, we will follow 1.0610 as a firmer resistance. On the downside, it could push the pair down to around 1.0495, and then possibly to October’s lowest level 1.0450.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.0690 1.0610 1.0565 1.0495 1.0450 1.0425




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GBP/USD pair is maintaining a favorable position, hovering around 1.2160, benefitting from the recent weakness of the US dollar. Bank of England (BoE) Governor Andrew Bailey has indicated that interest rates are likely to stay in the vicinity of the current 5.25% level to bring inflation back to the target of 2%. Meanwhile, investors have already factored in the possibility of a rate hike by the Federal Reserve (Fed) before the year concludes. As we move forward, market participants will closely watch the release of UK employment data and US Retail Sales figures scheduled for Tuesday.

Today, there's a possibility that the GBP could surpass 1.2250 and test 1.2295 level, but it's unlikely to reach the major resistance at 1.2395. Support levels are at 1.2160 and then 1.2035.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2395 1.2295 1.2250 1.2160 1.2035 1.1900



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The US Dollar (USD) had been doing well recently after the US Consumer Price Index (CPI) report, but now it's not so strong at the beginning of the week. This is affecting the USD/JPY pair. Some Federal Reserve (FED) officials have suggested that the FED might delay raising interest rates in November because treasury bond yields have gone up a lot, making it harder for people to borrow money. Because of this, people who like to buy USD are being careful, and this is making it tough for the USD/JPY pair. Additionally, there's talk that Japan might step in to help its currency (the Japanese Yen or JPY) from getting too weak. But on the other hand, the Bank of Japan (BoJ) is taking a careful approach and not planning to reduce its big financial support. This helps support the USD/JPY pair because it means people are less worried about Japan's currency getting weaker.

The pair is hovering around 149.55 level and still 148.75 level (21-Daily Simple Moving Average) could act as a support. If that level is broken, we are following 148.15 level. On the upside, 149.80/85 region is still as a resistance, next 150.15 level.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
152.15 150.15 149.85 148.75 148.15 147.15

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The price of gold (XAU/USD) reached a three-week high of approximately $1,932-$1,933 on Friday. This surge was attributed to the escalating Israel-Hamas conflict, causing investors to seek shelter in traditional safe-haven assets. Further, the belief that the Federal Reserve (Fed) is approaching the end of its interest rate increases further contributed to the rise in the value of gold, a non-yielding asset.
Today, gold price is trading around $1911 and technically $910-12 area (200-day exponential moving average) is followed as the first support. Then, the next support level will be 1900/1903 region. On the upside, the bull buyers wait for the $1932-33 region and then the momentum will increase till the $1948 level.



Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1948 1932 1923 1903 1885 1869
 

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View attachment 87303

The week begins with the EUR/USD pair showing a positive start and bouncing back from Friday's decline to reach levels slightly below the key psychological threshold of 1.0500. Now, it appears that the pair has broken a two-day trend of losses. However, during the International Monetary Fund's annual meeting, ECB President Christine Lagarde noted over the weekend that economic growth could slow down if the impact of monetary policy turns out to be more significant than expected or if the global economy weakens further and geopolitical risks escalate. This serves as a reminder for EUR/USD bulls to exercise caution.

Today, the parity is hovering around 1.0535 level. On the upside, the parity could encounter resistance at the 1.0565 level. If that level is broken, we will follow 1.0610 as a firmer resistance. On the downside, it could push the pair down to around 1.0495, and then possibly to October’s lowest level 1.0450.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.06901.06101.05651.04951.04501.0425




View attachment 87304

GBP/USD pair is maintaining a favorable position, hovering around 1.2160, benefitting from the recent weakness of the US dollar. Bank of England (BoE) Governor Andrew Bailey has indicated that interest rates are likely to stay in the vicinity of the current 5.25% level to bring inflation back to the target of 2%. Meanwhile, investors have already factored in the possibility of a rate hike by the Federal Reserve (Fed) before the year concludes. As we move forward, market participants will closely watch the release of UK employment data and US Retail Sales figures scheduled for Tuesday.

Today, there's a possibility that the GBP could surpass 1.2250 and test 1.2295 level, but it's unlikely to reach the major resistance at 1.2395. Support levels are at 1.2160 and then 1.2035.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.23951.22951.22501.21601.20351.1900



View attachment 87301
The US Dollar (USD) had been doing well recently after the US Consumer Price Index (CPI) report, but now it's not so strong at the beginning of the week. This is affecting the USD/JPY pair. Some Federal Reserve (FED) officials have suggested that the FED might delay raising interest rates in November because treasury bond yields have gone up a lot, making it harder for people to borrow money. Because of this, people who like to buy USD are being careful, and this is making it tough for the USD/JPY pair. Additionally, there's talk that Japan might step in to help its currency (the Japanese Yen or JPY) from getting too weak. But on the other hand, the Bank of Japan (BoJ) is taking a careful approach and not planning to reduce its big financial support. This helps support the USD/JPY pair because it means people are less worried about Japan's currency getting weaker.

The pair is hovering around 149.55 level and still 148.75 level (21-Daily Simple Moving Average) could act as a support. If that level is broken, we are following 148.15 level. On the upside, 149.80/85 region is still as a resistance, next 150.15 level.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
152.15150.15149.85148.75148.15147.15

View attachment 87302 The price of gold (XAU/USD) reached a three-week high of approximately $1,932-$1,933 on Friday. This surge was attributed to the escalating Israel-Hamas conflict, causing investors to seek shelter in traditional safe-haven assets. Further, the belief that the Federal Reserve (Fed) is approaching the end of its interest rate increases further contributed to the rise in the value of gold, a non-yielding asset.
Today, gold price is trading around $1911 and technically $910-12 area (200-day exponential moving average) is followed as the first support. Then, the next support level will be 1900/1903 region. On the upside, the bull buyers wait for the $1932-33 region and then the momentum will increase till the $1948 level.



Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
194819321923190318851869
 
Global Markets React to Economic Developments and Earnings Season

Shares in Asia-Pacific rose, led by South Korea's Kospi index, while Australian stocks advanced as investors analyzed minutes from the central bank's recent policy meeting. New Zealand's consumer inflation hit a two-year low in the third quarter, with a 5.6% increase in consumer prices from a year ago, slower than the 6% rise in the second quarter, but still above the central bank's target range of 1% to 3%. The Reserve Bank of Australia's minutes detailed why it maintained its benchmark lending rates at 4.1% during its October monetary policy meeting. Country Garden faces the risk of defaulting on its entire offshore debt if it fails to make a $15 million coupon payment when the 30-day grace period ends on Tuesday.

In European markets, there was a slight retreat on Tuesday as corporate earnings season began, and investors continued to evaluate the situation in the Middle East. Major European companies like Ericsson, Rio Tinto, and Publicis are set to announce quarterly results on Tuesday, ahead of Wall Street giants Bank of America and Goldman Sachs reporting before the U.S. market opens. Philadelphia Federal Reserve President Patrick Harker acknowledged on Monday that the central bank's interest rate hikes have played a significant role in the surge in home prices. He reiterated his belief that the Fed doesn't need to raise rates again in this cycle and expressed a commitment to fighting inflation.


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The EUR/USD pair rose on Monday, reaching 1.0554 before settling just below this peak at Wall Street's closing. The US Dollar initially strengthened due to ongoing Middle East tensions, but demand for it waned as the day progressed, causing it to weaken against major currencies.

Tensions in the Middle East escalated with Israel and Hamas, and Hezbollah's involvement. Israel's plans to enter the Gaza Strip led to evacuations, increasing uncertainty about the global economy and pressuring central banks.

In economic news, Germany's September Wholesale Price Index increased by 0.2% month-on-month but dropped 4.1% from the previous year. The Euro Zone's August Trade Balance showed a seasonally adjusted surplus of €11.9 billion, a marked improvement over the previous €3.5 billion surplus. In contrast, the US NY Empire State Manufacturing Index fell to -4.6 in October from 1.9 in September.

Upcoming, Germany will release the October ZEW Survey on Economic Sentiment, and the US will publish September Retail Sales, expected to rise by 0.3%. Later in the day, the US will release September Industrial Production, Capacity Utilization, and August Business Inventories.

EUR/USD is currently in an accumulation phase waiting for a possible reversal. If a reversal is confirmed, the next resistance area will be at 1.0750. while the next support level will be at 1.0500.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.08301.07501.06501.05001.04001.0200

GBPUSD1.png


The Pound Sterling (GBP) has experienced a decline following the release of weak wage data, which has dampened the outlook for consumer spending and raised expectations for the Bank of England (BoE) to maintain a neutral interest rate decision in its November monetary policy meeting. The GBP/USD pair is under pressure as the increasing energy prices could potentially lead to a resurgence of inflationary pressures in the United Kingdom's economy.

Following the labor earnings data, investors will closely monitor September's inflation data, which will set the tone for the BoE's policy direction. The UK's inflation rate is currently the highest among G7 economies, so a further decrease in consumer inflation would provide some relief for BoE policymakers. Additionally, market participants will keep a close watch on US President Joe Biden's visit to Israel, where discussions on defending against attacks from Palestine are expected.

The reading continues to be the same for the GBP/USD as it entering an accumulation phase while awaiting a possible reversal. Next target if a breakout happens is at 1.2450.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.26001.24501.23001.22001.21001.2000


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The USD/JPY pair is currently at 149.60 due to increased demand for the US Dollar and higher US treasury yields. Market focus is on the upcoming US Retail Sales data, expected to rise by 0.3% in September. However, dovish comments from Federal Reserve officials, like Austan Goolsbee and Patrick Harker, have restrained the pair's upside potential.

The US NY Empire State Manufacturing Index for October is at 4.6, surpassing market expectations but lower than the previous reading of 1.9. Last week's US Consumer Price Index (CPI) for September showed an annual figure of 3.7% and a monthly increase of 0.4%, both exceeding predictions.

As for the Japanese Yen (JPY), Finance Minister Shunichi Suzuki refrained from commenting on currency intervention statements by the IMF, stating that there's no need to delve into such details.

In the near term, the market will watch US Retail Sales, Industrial Production, and more Fed speeches. Japanese trade data is scheduled for release on Wednesday, followed by National Consumer Price Index (CPI) reports on Friday, potentially influencing the direction of the USD/JPY pair.

USDJPY continue hovering around the 150.00 area with a small correction. Next support level is at 146.80 followed by the 144.80. A possible reversal is the most awaited scenario.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
155.00152.70151.50148.00146.50146.00

aa.png



The Gold price (XAU/USD) struggled to gain momentum, slipping for the second day in a row following a late rebound from the $1,908 level on Tuesday. This decline was due to a positive risk sentiment and rising US Treasury bond yields, reflecting expectations of the Federal Reserve (Fed) tightening its policies. The ongoing Israel-Hamas conflict offered some support to gold's downside, along with the anticipation of the Fed keeping interest rates unchanged in November. This outlook also kept the US Dollar (USD) on the defensive, curbing losses for the USD-denominated gold. Traders appeared cautious, waiting for further Fed rate hike cues. The upcoming focus is Fed Chair Jerome Powell's Thursday speech, likely to influence the gold price's next move. Meanwhile, Tuesday's US economic data, including Retail Sales and Industrial Production figures, will be closely monitored for potential market impact.

Gold rebounded from the 200-day moving average (200MA) and the upper boundary of the long bearish channel. The recent correction is still in progress, and we are anticipating further development to confirm either a breakout towards the next resistance level at 1947 or a retracement back to the 1900 support level.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1980
1947
1930
1912
1900
1885
 
Global Economic Insights: Asian Stocks, Chinese Data, and Inflation Trends

Asian stocks declined despite a series of positive Chinese economic data, revealing ongoing fragility in sentiment. While growth and retail sales figures suggested the economy was gaining ground, the property market continued to be a drag.​

In September, China's retail sales surged, and the urban unemployment rate hit a near two-year low, according to Chinese government data. Additionally, China's third-quarter economic growth surpassed expectations, boosting hopes of reaching Beijing's annual targets for the world's second-largest economy.

However, Chinese property developer Country Garden Holdings expressed uncertainty about meeting its offshore debt obligations.

In Japan, the Bank of Japan unexpectedly initiated bond purchases after the nation's 10-year yield reached a ten-year high. This move followed renewed selling pressure on Japan's sovereign debt, fueled by speculation that the central bank might adjust its ultra-easy monetary policy sooner rather than later.

In European markets, Wednesday saw slight declines as traders monitored corporate earnings, Middle East developments, and crucial inflation data.

The U.K. experienced a 6.7% inflation rate in September, slightly exceeding expectations and remaining significantly above the Bank of England's 2% target. This highlighted the mounting inflationary pressures in the country and added complexity to the task of policymakers, who are expected to maintain unchanged interest rates at the upcoming meeting.

On the other side of the Atlantic, U.S. retail sales exceeded all forecasts, and industrial production strengthened last month. This provided fresh evidence of a robust American consumer whose spending is contributing to the stabilization of the manufacturing sector.


eurusd.png


The Euro is slowly rising, targeting the 1.06 level after recent gains, but it's facing challenges due to uncertainty. Yesterday's market performance was as expected, with a trading range of 1.05 to 1.06, reflecting cautious investor sentiment. Positive economic news from the Eurozone and the US had a stabilizing effect on stock markets and a slight increase in the S&P index, though it wasn't sustained.

Ongoing Middle East developments continue to be a global stability concern, affecting the global economic outlook. Today, events include President Lagarde's speech and Eurozone consumer inflation indicators. In the US, Building Permits and Housing Starts data will be released.

The Euro may struggle to hold the 1.06 level amidst uncertainty. The market is currently in a consolidation phase between 1.05 and 1.06, awaiting a catalyst for a significant move. For now, a cautious "wait-and-see" approach prevails, with potential plans to buy the Euro on a substantial dip.

EUR/USD is currently in an accumulation phase, awaiting a potential reversal. If a reversal is confirmed, the next resistance area will be at 1.0750. Prior to reaching that target, 1.0630 serves as the immediate resistance level, while the next support level will be at 1.0500.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.08301.07501.06501.05001.04001.0200


gbpusd.png


The Pound Sterling is making a recovery attempt following the release of a stubborn UK inflation report. In September, both headline and core inflation exceeded expectations, reaching 6.7% and 6.1% respectively. This unexpected inflation could raise concerns about the Bank of England's potential policy tightening in its November meeting.

The persistence of high Consumer Price Index (CPI) figures may cast doubt on UK Prime Minister Rishi Sunak's promise to reduce inflation to 5.5% by year-end, with potential consequences for the already struggling housing sector due to increased borrowing costs.

Market sentiment is currently risk-off as investors await US President Joe Biden's visit to Israel, which could further escalate Middle East tensions.

In the United States, despite strong Retail Sales data for September, the US Dollar Index remains stable near 106.00. Investors are also keeping an eye on Federal Reserve Chair Jerome Powell's upcoming speech to gauge potential changes in interest rate policy.

The reading continues to be the same for the GBP/USD as it entering an accumulation phase while awaiting a possible reversal. Next target if a breakout happens is at 1.2450 but before that taget the 1.2300 is the next resistance level.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.26001.24501.23001.22001.21001.2000


jpyusd.png




BoJ’s new Core CPI forecast for the fiscal year 2023 is likely to approach 3%, up from 2.5% as of July, and be set at 2% or more in sight for the fiscal year 2024. A higher inflation forecast indicates that the BoJ is confident about an increase in wages, which would drive inflation higher.

The hopes of an intervention from the Japanese authority into the FX domain are diminishing. Japanese authorities are worried about further sell-off in the Japanese Yen and are holding volatile moves responsible for them. Historically, volatility spikes remain for days for a few weeks but the appeal for the Japanese Yen is weak from some quarters due to the adaptation of easy monetary policy by the BoJ. Therefore, the authorities cannot reverse the tide against weak appeal for the Japanese Yen backed by expansionary monetary policy.

USDJPY continue hovering around the 150.00 area with a small correction. Next support level is at 146.80 followed by the 144.80. The price pattern and accumulation indicating uncertainty.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
152.70151.50150.00148.00146.50146.00


gold111.png


The price of gold rose to around $1,940 per troy ounce during the Asian session on Wednesday, driven by rising geopolitical tensions between Israel and Hamas, increasing demand for gold as a safe-haven asset. Conflicting reports emerged about an Israeli air attack in Gaza, with Gaza authorities reporting casualties and Israel attributing the damage to a Palestinian attack.

Positive economic data from China further supported gold prices, as China's Q3 Gross Domestic Product exceeded expectations at 1.3%, and Retail Sales (YoY) rose by 5.5%. The US Dollar Index lost its intraday gains after these Chinese figures but US Treasury yields improved, reaching 4.83%.

US economic data also showed strength, with Retail Sales surpassing expectations at 0.7% MoM in September. Federal Reserve reports indicated Industrial Production improved by 0.3%. Fed officials expressed varying views on monetary policy, with some considering inflation and tightening measures. Investors awaited housing data and Fed speeches for further insights.

Gold is breaking the 1930 level in an attempt to break out of the long bearish channel from May. The recent correction is turning into a reversal with strong momentum, and we anticipate further progress towards the next resistance level at 1947.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2000
1980
1947
1920
1912
1900
 
eurus1.png



US Dollar Strengthens with Declining Market Sentiment

The US Dollar remains strong amidst declining market sentiment. Key US data to watch on Thursday includes the Philly Fed and Jobless Claims, along with a speech by Chairman Powell.

Chinese growth data initially boosted sentiment, but geopolitical concerns soon took over, weighing on risk sentiment and favoring the US Dollar. At the same time, higher Treasury yields provided additional support, with the 10-year Treasury yield reaching its highest level since 2007 at 4.92%.

On Thursday, US Jobless Claims data and the Philly Fed index will be released, and Fed Chair Powell is scheduled to speak at the Economics Club of New York.

The EUR/USD remains within a bearish dominant trend, with fundamentals favoring the US Dollar, limiting upside potential, and maintaining a downside risk for the pair.

EUR/USD is currently in an accumulation phase, awaiting a potential reversal. If a reversal is confirmed, the next resistance area will be at 1.0750. Prior to reaching that target, 1.0630 serves as the immediate resistance level, while the next support level will be at 1.0500.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.08301.07501.06501.05001.04001.0200


gbpusd.png


GBP/USD Struggles Following BoE Uncertainty and US Dollar Strength


The GBP/USD pair is struggling to gain momentum on Thursday, it’s hovering near the lower end of a one-week trading range as it awaits a new catalyst before making a significant move.

This is largely due to uncertainty surrounding the Bank of England's (BoE) next policy decision, which is weighing on the British Pound (GBP) and acting as a headwind for GBP/USD. Recent UK consumer inflation data, released on Wednesday, showed that the CPI remained at 6.7% in September, which was slightly higher than expected. This has led to speculation about a potential BoE rate hike in November.

The BoE's stance on interest rates is divided, with some members advocating for rate hikes while others warn against overtightening. This mixed sentiment is keeping traders cautious. Additionally, the strength of the US Dollar (USD), supported by expectations of higher interest rates from the Federal Reserve, is capping the GBP/USD's upside potential. The focus remains on a scheduled speech by Fed Chair Jerome Powell later in the day.

The reading continues to be the same for the GBP/USD as it is entering an accumulation phase while waiting for a clear direction. The short-term reading seems bearish going toward the next support at 1.2050.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.24501.23001.22001.20501.20001.1820


jpy.png


USD/JPY Hovers Near 149.80 with US Economic Data and Anticipation for Japanese Inflation Data


USD/JPY trades near 149.80, down 0.10%, influenced by US economic data and the Bank of Japan's report. US Building Permits exceeded expectations, but Housing Starts fell short. Notably, US Treasury bond yields have risen, with the 10-year yield at 4.966%. Japanese inflation data is eagerly anticipated, with an expected 2.7% YoY increase.

US housing data showed Building Permits at 1.475M, surpassing expectations, while Housing Starts stood at 1.35M, below the forecast. Fed Beige Book reported stable US economic conditions in early October.

Fed officials' views differ, with Waller hesitant on further policy action and Williams stressing the need for a restrictive monetary policy. Jerome Powell's speech could impact USD/JPY, particularly if it leans hawkish.

Bank of Japan noted a moderate recovery, though some regions reported stagnant exports and output. Japanese authorities may intervene if the Yen's safe-haven status leads to excessive market movements. Upcoming events include US Jobless Claims, the Philly Fed Index, and the Japanese National Consumer Price Index for September.

USDJPY continues hovering around the 150.00 area with a small correction. The next support level is at 146.80 followed by the 144.80. The price pattern and accumulation indicate uncertainty.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
152.70151.50150.00148.00146.50146.00

xau.png

Gold Price Surges with Geopolitical Tensions

The price of gold (XAU/USD) surged to its highest point since early August, reaching around $1,962-1,963 due to heightened Middle East conflict concerns. However, the rise in US Treasury bond yields, driven by expectations of the Federal Reserve (Fed) maintaining higher interest rates for an extended period, limited gold's gains, given its lack of yield. Additionally, increased demand for the US Dollar (USD) led to some profit-taking at higher price levels, resulting in a minor pullback.

Despite the retracement, the decline was brief, halting near the $1,938 range. Geopolitical tensions continued to draw safe-haven investments, sustaining gold's appeal for the third consecutive day on Thursday. As the European trading session commenced, gold remained in demand, with market participants focusing on Fed Chair Jerome Powell's upcoming speech for fresh guidance. Powell's statements will be closely examined for hints regarding the Fed's policy stance, which will subsequently impact the USD and XAU/USD pair.

The price of gold is currently experiencing a robust bullish trend, having broken through the previous resistance in 1947. We anticipate further advancement towards the next resistance level in 1979, provided that macroeconomic and geopolitical tensions continue to influence the risk-off sentiment.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2021
2000
1980
1947
1930
1912
 
Asia's Property Sector Concerns, Earnings Disappointments in Europe, and Global Interest Rate Trends

In Asia, concerns in the property sector caused declines in Chinese shares, and there were announcements of investigations into Foxconn Technology Group. At the beginning of Asian trading, the yen slipped to 150.11.
European stocks declined due to disappointing earnings, particularly from Volkswagen and Royal Philips. Treasuries and oil prices also fell. The US 10-year note yield increased to 4.98%, while oil dropped to $87 per barrel, and gold fell from a five-month high.
Traders were closely monitoring developments in the Middle East, which included the release of US hostages by Hamas and aid reaching Gaza through Egypt. However, Israel continued air raids on Gaza in preparation for the next phase of its conflict with Hamas.
During this week, traders were seeking hints regarding global interest rates, which included inflation data from Australia and Japan, as well as economic activity data from the US and Europe. Federal Reserve Chairman Jerome Powell was scheduled to give remarks, and the European Central Bank was set to make a policy decision later in the week.
Higher bond yields are posing challenges for equity valuations and may impact companies reporting earnings this week, such as Microsoft, Alphabet, Amazon, Meta, Intel, IBM, General Motors, and General Electric. No major data releases are scheduled for the day.


1698061723646.png
EURUSD

EUR/USD Holds Steady Near 1.0600 with Shifting Market Sentiment
The euro is showing slight strength against the US Dollar, with EUR/USD hovering around the 1.0600 region at the week's start. Meanwhile, the USD Index (DXY) is regaining stability, inching up towards the low 106.00s, influenced by a minor uptick in US yields and changing market sentiment toward riskier assets.
In the upcoming week, the Federal Reserve is expected to maintain its current interest rate stance, as reiterated by Fed Chair Jerome Powell. Simultaneously, the European Central Bank (ECB) is contemplating changes in its policy despite inflation exceeding targets and concerns about Eurozone economic stagnation.
On the economic front, the European Commission is set to release the Consumer Confidence gauge for the Eurozone for October. In the US, the Chicago Fed National Activity Index for September will be the only data release.
EUR/USD is currently in an accumulation phase, awaiting a potential reversal. If a reversal is confirmed, the next resistance area will be at 1.0750. Prior to reaching that target, 1.0630 serves as the immediate resistance level, while the next support level will be at 1.0500.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.0830 1.0750 1.0650 1.0500 1.0400 1.0200

1698061723662.png
GBPUSD

Pound Sterling Treads Cautiously Ahead of UK Employment Data
The Pound Sterling (GBP) is grappling with uncertainty as investors await the release of UK Employment data on Tuesday. The GBP/USD pair's outlook is precarious, with economists predicting a decline in employment levels for the three months up to August, indicating that companies are reducing their workforces due to a bleak demand outlook.
Increased interest rates by the Bank of England (BoE) and persistent price pressures have significantly reduced households' real income, thereby dampening demand. Additionally, escalating tensions in the Israel-Palestine region contribute to uncertainty and have the potential to drive up energy prices, further intensifying inflationary pressures. Given this situation, investors anticipate that the BoE will maintain its current interest rates for the second consecutive time in November.
The reading continues to be the same for the GBP/USD as it is entering an accumulation phase while waiting for a clear direction. The short-term reading seems bearish going toward the next support at 1.2050.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2450 1.2300 1.2200 1.2050 1.2000 1.1820

1698061723685.png

USD/JPY Nears the 149.90 Level Following BoJ Inflation Commitment
The USD/JPY pair is trading near 149.90, benefiting from Bank of Japan Governor Kazuo Ueda's reaffirmation of the central bank's commitment to a 2% inflation target and wage growth. The pair also received support from the recent victory of Japan's ruling Liberal Democratic Party (LDP) in the lower house election, although the House of Councilors poll saw an opposition-backed candidate win.
Japanese Prime Minister Kishida's approval ratings have hit a low, sparking speculation about a potential lower house dissolution and a general election. There are concerns about Japan intervening to prevent excessive JPY depreciation, which could hinder USD/JPY gains.
The US Dollar Index (DXY) is rebounding, possibly due to strong US economic data, with a spot price of around 106.30. Higher US Treasury yields, particularly the 10-year yield at 4.98%, up 1.30%, are also supporting the greenback.
Federal Reserve (Fed) officials have indicated no imminent interest rate hikes, although further tightening is possible with continued economic growth. US S&P Global PMI, Q3 GDP, and Japan's Consumer Price Index will be closely watched in the coming days.
USDJPY persists in the vicinity of 150.00 with a minor correction. The next support levels are 146.80 and 144.80. The price pattern and accumulation suggest a prevailing sense of uncertainty.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
152.70 151.50 150.00 148.00 146.50 146.00
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Gold Prices Pause with Ongoing Geopolitical Tensions
The recent rally in gold prices that began on October 17 has paused, with gold trading around $1,970 per. Geopolitical tensions, like those between Israel and Hamas, typically drive up demand for gold as a safe-haven asset, but the current risk-on sentiment poses challenges for gold prices.
Strong US economic data, particularly in job-related indicators, supports the US dollar. Initial Jobless Claims are at their lowest level since January, indicating a robust job market. However, the housing market faces challenges as existing home sales have dropped to their lowest point since 2010.
Federal Reserve officials have shared their views on interest rates. Atlanta Fed President Raphael Bostic indicated rate cuts are unlikely before the middle of next year. Fed Philadelphia President Patrick Harker prefers maintaining unchanged interest rates. Fed Cleveland President Loretta Mester suggested the Fed might be near the peak of the rate hike cycle but open to data influencing future decisions.
Federal Reserve Chairman Jerome Powell clarified that there are no immediate plans for a rate hike, emphasizing a willingness to respond to further signs of economic growth.
Investors will monitor the US S&P Global PMI on Tuesday and the Q3 Gross Domestic Product (GDP) on Thursday for potential impacts on market sentiment and insights into the US economic landscape.
The price of gold is currently experiencing a strong bullish trend, having broken through the previous resistance in 1980. We anticipate further advancement towards the next resistance level in 2000, provided that macroeconomic and geopolitical tensions continue to influence the risk-off sentiment.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2037 2021 2000 1980 1947 1930
 

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Global Markets React to Business Activity Data and Economic Uncertainty

Asian-Pacific markets recovered from earlier losses, driven by the evaluation of private business activity surveys in Japan and Australia, along with South Korea's October producer price index. European markets cautiously opened higher on Tuesday, with investors monitoring the latest Eurozone business activity data.
In Japan, flash estimates from au Jibun Bank revealed a contraction in business activity in October, marking the first decline since December 2022. The composite purchasing managers index dropped to 49.9 from 52.1 in September, primarily due to a sharper decline in manufacturing activity. Australia also witnessed a decline in business activity, hitting a 21-month low in October, as reported by Juno Bank. The composite purchasing manager's index fell to 47.3 from 51.5 the previous month, with manufacturing PMI at a six-month low of 48.0 and services PMI at a 10-month low of 47.6.
Meanwhile, Treasuries are bouncing back after prominent market bears warned of an economic slowdown, raising expectations of Federal Reserve interest rate cuts. The erratic swings in government debt are unsettling investors due to the challenge of predicting when the Fed will halt rate hikes amid a resilient economy.
Preliminary Eurozone purchasing manager's index data for October is eagerly awaited, providing insights into the performance of the manufacturing and services sectors.
Bitcoin, on the other hand, started the week trading above the critical $30,000 resistance level, building on gains from the previous week, driven by optimism about the potential launch of the first spot Bitcoin ETF and a flight to safety.


1698148093518.png

German Economic Data Mixed as Eurozone PMI Dips
Germany's Manufacturing PMI for October exceeded expectations, reaching 40.7, up from the anticipated 40.0. However, the Services PMI disappointed, dropping to 48.0, lower than the expected 50.0.
The HCOB Preliminary German Composite Output Index for October came in at 45.8, falling short of the expected 46.7 and September's 46.4, reaching a two-month low.
Eurozone Composite PMI dropped to 46.5 in October 2023, down from September's 47.2 and falling short of the market consensus of 47.4, a preliminary estimate showed. The latest reading signaled the fifth consecutive month of falling business activity and the steepest decline since November 2020, as both service and manufacturing activity continued to contract. Excluding pandemic months, the fall in activity was the sharpest since March 2013. The European Central Bank (ECB) will hold its monetary policy meeting on Thursday, along with important US economic indicators such as GDP and the Federal Reserve's preferred inflation gauge.
The US 10-year Treasury yield initially rose above 5.00% but quickly reversed, falling sharply to 4.84%. This steep decline pushed the US Dollar index to 105.51, the lowest intraday level since September 22.
EUR/USD broke the resistance level at 1.0630 and touched the 1.0700 level yesterday. However, today, EU PMI data doesn't seem to be helping the pair advance further, and a return towards 1.0630 appears to be the most probable scenario.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.0930 1.0800 1.0700 1.0630 1.0500 1.0400

1698148093536.png

Pound Strengthens on Upbeat Employment Data as BoE Interest Rate Decision Looms
The British Pound (GBP) is gaining strength and pushing towards the key resistance level of 1.2300. This is driven by improved market sentiment and better-than-expected employment data. The UK Office for National Statistics (ONS) reported that the labor market experienced job losses for the third consecutive quarter up to August, although the actual number of jobs lost was lower than anticipated. Additionally, the Unemployment Rate dropped and remained below expectations, signaling stable labor market conditions.
The slowdown in labor demand in the UK is attributed to the challenging economic environment, which includes higher borrowing costs imposed by the Bank of England (BoE). The BoE has been aggressively increasing interest rates to control consumer inflation and bring it down to 2%. Investors are now closely watching for the upcoming BoE interest rate decision, scheduled for November 2. It is widely anticipated that the BoE will maintain interest rates at 5.25%, given the growing indications of economic weakening.
The GBPUSD price action shows a double-bottom pattern similar to the EURUSD pair. The resistance level at 1.2300 is the neck where a breakout from it represents a reversal that will take the price toward the next target at 1.2450.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2570 1.2450 1.2300 1.2200 1.2100 1.2000

1698148093556.png

Japan's Business Activity Contracts as Yen Awaits US-Japan Yield Divergence
Japan, flash estimates from au Jibun Bank revealed a contraction in business activity in October, marking the first decline since December 2022. The composite purchasing managers index dropped to 49.9 from 52.1 in September, primarily due to a sharper decline in manufacturing activity.
The difference in rates between the US and Japan has been the reason behind the yen's swift depreciation over the past few months. US Treasury 10-year yields have come back toward the 4.80% level after reaching above 5.0% on Monday, while Japanese 10-year yields are at 0.83%. Closing the gap will benefit the Japanese Yen against the dollar.
The Bank of Japan is standing firm with its ultra-loose monetary policy. Governor Ueda said on Friday that the central bank would “patiently” maintain policy but warned that the economic outlook was highly uncertain.
USDJPY is retracing after reaching the 150.00 resistance level due to a dollar selloff and decreasing US yields. The pair's movement remains quite narrow, with the next support located at 148.00.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
152.70 151.50 150.00 148.00 146.50 146.00
1698148093573.png

Gold Prices Surge on Weakening US Dollar and Geopolitical Tensions
The price of precious metals is rising due to a weakening US Dollar caused by declining US Treasury yields. The US Dollar Index (DXY) is on a four-day losing streak, currently at around 105.50, as the 10-year Treasury yield dropped to 4.84% from its 5.02% peak. If US bond yields continue to fall, it could support gold prices reaching $2,000.
Geopolitical tensions between Israel and Hamas usually boost gold demand as a safe-haven asset. However, recent efforts to ease tensions and a reduced market risk aversion due to a risk-on sentiment could challenge gold prices. Yet, there's growing talk of a potential ground invasion of Gaza, which could affect the situation.
China's plan to issue over 1 trillion yuan in additional sovereign debt has improved market sentiment. Positive discussions between the US and China's economic working group have also boosted sentiment, putting pressure on the safe-haven US Dollar and increasing gold's price.
Gold encountered resistance at the 1980 level, and a minor correction occurred yesterday. However, the momentum remains strong, and the overall trend appears healthy. A correction down to the 1947 support level is possible, given the strong price movement observed over the last two weeks.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2021 2000 1980 1947 1930 1912

1698148093589.png



Oil Prices Decline Amidst Israel-Hamas Conflict Concerns and Potential Supply Disruptions
Oil prices continued the losses on Tuesday, continuing losses experienced the previous day. Concerns among investors regarding the Israel-Hamas conflict potentially escalating into a broader conflict in the oil-exporting region, which could disrupt the oil supply is the most factor shaping price movements and volatility. On Monday, WTI oil had fallen by more than 2% as diplomatic efforts in the Middle East aimed to defuse tensions between Israel and Hamas, alleviating worries among investors about potential supply disruptions.
While there have been no direct impacts as of now, the underlying risk to the market remains constant. An escalation of the conflict throughout the region could potentially disrupt up to 20 million barrels per day of oil, both directly and through obstructed logistics.
Moreover, a preliminary Reuters poll on Monday suggested that U.S. crude stockpiles were expected to have increased last week, while distillate and gasoline inventories decreased.
In the context of WTI price action, it's evident that prices have been on a downward trajectory for the past three days, heading toward the next support level at $84. Ongoing price volatility makes predicting oil prices a challenging endeavor.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
98 94 90 84 82 78
 

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Global Markets React to Business Activity Data and Economic Uncertainty

Asian-Pacific markets recovered from earlier losses, driven by the evaluation of private business activity surveys in Japan and Australia, along with South Korea's October producer price index. European markets cautiously opened higher on Tuesday, with investors monitoring the latest Eurozone business activity data.

In Japan, flash estimates from au Jibun Bank revealed a contraction in business activity in October, marking the first decline since December 2022. The composite purchasing managers index dropped to 49.9 from 52.1 in September, primarily due to a sharper decline in manufacturing activity. Australia also witnessed a decline in business activity, hitting a 21-month low in October, as reported by Juno Bank. The composite purchasing manager's index fell to 47.3 from 51.5 the previous month, with manufacturing PMI at a six-month low of 48.0 and services PMI at a 10-month low of 47.6.

Meanwhile, Treasuries are bouncing back after prominent market bears warned of an economic slowdown, raising expectations of Federal Reserve interest rate cuts. The erratic swings in government debt are unsettling investors due to the challenge of predicting when the Fed will halt rate hikes amid a resilient economy.

Preliminary Eurozone purchasing manager's index data for October is eagerly awaited, providing insights into the performance of the manufacturing and services sectors.

Bitcoin, on the other hand, started the week trading above the critical $30,000 resistance level, building on gains from the previous week, driven by optimism about the potential launch of the first spot Bitcoin ETF and a flight to safety.

EURUSD1.png


German Economic Data Mixed as Eurozone PMI Dips

Germany's Manufacturing PMI for October exceeded expectations, reaching 40.7, up from the anticipated 40.0. However, the Services PMI disappointed, dropping to 48.0, lower than the expected 50.0.

The HCOB Preliminary German Composite Output Index for October came in at 45.8, falling short of the expected 46.7 and September's 46.4, reaching a two-month low.

Eurozone Composite PMI dropped to 46.5 in October 2023, down from September's 47.2 and falling short of the market consensus of 47.4, a preliminary estimate showed. The latest reading signaled the fifth consecutive month of falling business activity and the steepest decline since November 2020, as both service and manufacturing activity continued to contract. Excluding pandemic months, the fall in activity was the sharpest since March 2013. The European Central Bank (ECB) will hold its monetary policy meeting on Thursday, along with important US economic indicators such as GDP and the Federal Reserve's preferred inflation gauge.

The US 10-year Treasury yield initially rose above 5.00% but quickly reversed, falling sharply to 4.84%. This steep decline pushed the US Dollar index to 105.51, the lowest intraday level since September 22.

EUR/USD broke the resistance level at 1.0630 and touched the 1.0700 level yesterday. However, today, EU PMI data doesn't seem to be helping the pair advance further, and a return towards 1.0630 appears to be the most probable scenario.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.09301.08001.07001.06301.05001.0400

gbpusd 2.png


Pound Strengthens on Upbeat Employment Data as BoE Interest Rate Decision Looms


The British Pound (GBP) is gaining strength and pushing towards the key resistance level of 1.2300. This is driven by improved market sentiment and better-than-expected employment data. The UK Office for National Statistics (ONS) reported that the labor market experienced job losses for the third consecutive quarter up to August, although the actual number of jobs lost was lower than anticipated. Additionally, the Unemployment Rate dropped and remained below expectations, signaling stable labor market conditions.

The slowdown in labor demand in the UK is attributed to the challenging economic environment, which includes higher borrowing costs imposed by the Bank of England (BoE). The BoE has been aggressively increasing interest rates to control consumer inflation and bring it down to 2%. Investors are now closely watching for the upcoming BoE interest rate decision, scheduled for November 2. It is widely anticipated that the BoE will maintain interest rates at 5.25%, given the growing indications of economic weakening.

The GBPUSD price action shows a double-bottom pattern similar to the EURUSD pair. The resistance level at 1.2300 is the neck where a breakout from it represents a reversal that will take the price toward the next target at 1.2450.

Resistance 3
Resistance 2
Resistance 1
Support 1Support 2Support 3
1.2570
1.2450
1.2300
1.22001.21001.2000

jpyusd 3.png


Japan's Business Activity Contracts as Yen Awaits US-Japan Yield Divergence


Japan, flash estimates from au Jibun Bank revealed a contraction in business activity in October, marking the first decline since December 2022. The composite purchasing managers index dropped to 49.9 from 52.1 in September, primarily due to a sharper decline in manufacturing activity.

The difference in rates between the US and Japan has been the reason behind the yen's swift depreciation over the past few months. US Treasury 10-year yields have come back toward the 4.80% level after reaching above 5.0% on Monday, while Japanese 10-year yields are at 0.83%. Closing the gap will benefit the Japanese Yen against the dollar.

The Bank of Japan is standing firm with its ultra-loose monetary policy. Governor Ueda said on Friday that the central bank would “patiently” maintain policy but warned that the economic outlook was highly uncertain.

USDJPY is retracing after reaching the 150.00 resistance level due to a dollar selloff and decreasing US yields. The pair's movement remains quite narrow, with the next support located at 148.00.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
152.70151.50150.00148.00146.50146.00

xauusd 4.png

Gold Prices Surge on Weakening US Dollar and Geopolitical Tensions

The price of precious metals is rising due to a weakening US Dollar caused by declining US Treasury yields. The US Dollar Index (DXY) is on a four-day losing streak, currently at around 105.50, as the 10-year Treasury yield dropped to 4.84% from its 5.02% peak. If US bond yields continue to fall, it could support gold prices reaching $2,000.

Geopolitical tensions between Israel and Hamas usually boost gold demand as a safe-haven asset. However, recent efforts to ease tensions and a reduced market risk aversion due to a risk-on sentiment could challenge gold prices. Yet, there's growing talk of a potential ground invasion of Gaza, which could affect the situation.

China's plan to issue over 1 trillion yuan in additional sovereign debt has improved market sentiment. Positive discussions between the US and China's economic working group have also boosted sentiment, putting pressure on the safe-haven US Dollar and increasing gold's price.

Gold encountered resistance at the 1980 level, and a minor correction occurred yesterday. However, the momentum remains strong, and the overall trend appears healthy. A correction down to the 1947 support level is possible, given the strong price movement observed over the last two weeks.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2021
2000
1980
1947
1930
1912

نفت.png



Oil Prices Decline Amidst Israel-Hamas Conflict Concerns and Potential Supply Disruptions


Oil prices continued the losses on Tuesday, continuing losses experienced the previous day. Concerns among investors regarding the Israel-Hamas conflict potentially escalating into a broader conflict in the oil-exporting region, which could disrupt the oil supply is the most factor shaping price movements and volatility. On Monday, WTI oil had fallen by more than 2% as diplomatic efforts in the Middle East aimed to defuse tensions between Israel and Hamas, alleviating worries among investors about potential supply disruptions.

While there have been no direct impacts as of now, the underlying risk to the market remains constant. An escalation of the conflict throughout the region could potentially disrupt up to 20 million barrels per day of oil, both directly and through obstructed logistics.

Moreover, a preliminary Reuters poll on Monday suggested that U.S. crude stockpiles were expected to have increased last week, while distillate and gasoline inventories decreased.

In the context of WTI price action, it's evident that prices have been on a downward trajectory for the past three days, heading toward the next support level at $84. Ongoing price volatility makes predicting oil prices a challenging endeavor.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
98
94
90
84
82
78




 

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As expected, the European Central Bank (ECB) kept its policy unchanged on Thursday, marking the first pause since mid-2022. Market analysts see the 4.00% deposit rate as the current terminal rate, given slowing inflation and a looming Eurozone recession. ECB President Christine Lagarde maintained that inflation remains high, and rates will stay elevated as needed, with no change in previous guidance. The Euro weakened after the meeting.

US data released on Thursday showed third-quarter GDP growth at 4.9%, surpassing expectations. However, the Core Personal Consumption Expenditure (PCE) only rose by 2.4%, below the expected 2.5%. Continuing Claims rose to 1.79 million, signifying a strong US economy.

Surprisingly, the US Dollar failed to gain from the positive GDP data as US Treasury yields declined, boosting EUR/USD. Fundamentals favor the US Dollar, potentially limiting its declines. The upcoming monthly US Core PCE release on Friday remains important.

EUR/USD is in a muted movement today where the next support level is the 10500-where continuing the price range started this month. 1.0450 is the last level in the area of support EURUSD will need to break for more selloff.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.09301.08001.07001.06301.05001.0400

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The GBP/USD pair is directionless, hovering within a narrow range. Expectations of a hawkish Fed are bolstering the USD and limiting gains. Anticipations that the BoE will maintain its status quo in November are acting as a headwind. Despite a slight rebound from the 1.2070 area, the pair struggles to gain momentum, with spot prices staying above 1.2100. Easing US inflationary pressures overshadowed strong GDP growth, keeping the USD under pressure but unlikely to decline significantly due to the Fed's hawkish stance. Strong US economic data supports the Fed's high-interest rate policy, maintaining USD strength. The BoE's anticipated decision to keep rates at 5.25% on November 2 could hinder GBP gains. Traders may wait for further confirmation of a bottom and keep an eye on the US PCE Price Index for future Fed rate hike expectations, impacting the GBP/USD pair ahead of central bank events next week.

GBPUSD is touching the last support at 1.2070 waiting for more developments to find direction. The pair is bearish, and more selloffs can come with the actual strength of the dollar and the weakness of the pound.

Resistance 3
Resistance 2
Resistance 1
Support 1Support 2Support 3
1.2450
1.2300
1.2200
1.20001.19001.1800

A graph of stock marketDescription automatically generated with medium confidence



US data on Thursday shows an unexpected rise in America’s GDP to 4.9% in Q3 on an annualized basis, solidly beating consensus estimates of 4.2%. US Durable Goods Orders rose 4.7% versus estimates of 1.5% and Initial Jobless Claims increased to 210K versus 208K expected. Despite being mostly positive, the data fails to help the Dollar,

In Tokyo, the headline inflation rate for October came in at 3.3%, a faster rate of growth compared to the 2.8% seen in September. Core inflation, which excludes fresh food prices, stood at 2.7%, slightly higher than the 2.5% expected by economists polled by Reuters.

JPY is supported by probable intervention from the Japanese Ministry of Finance after the USD/JPY rate crossed the 150 defensive line – a level traditionally defended by the MoF.

The USDJPY is trying to break 150.00 while the volatility is high at this level between a dollar that is strong and a BOJ that is ready for intervention to help the Yen. The market seems convinced the BOJ and Minister of finance will not let the Yen go beyond the 15.00 level.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
152.70151.50150.00148.00146.50146.00

A graph of a stock marketDescription automatically generated




The GBP/USD pair is currently trading within a narrow range, without a clear direction. While the USD is receiving support from the expectations of a hawkish Fed, the lack of BoE action in November is acting as a headwind. Although the pair has rebounded slightly from the 1.2070 area, it is struggling to gain momentum, with spot prices remaining above 1.2100. The USD is under pressure due to easing US inflation, but a sharp decline is unlikely as the Fed maintains a hawkish stance. Strong US economic data supports the Fed's high-interest rate policy, keeping the USD relatively strong. The expected decision by the BoE to maintain a 5.25% rate on November 2 may hinder GBP appreciation. Traders may await further confirmation of a bottom and watch for the impact of the US PCE Price Index on future Fed rate hike expectations, which could affect the GBP/USD pair ahead of next week's central bank events.

The gold broke the 1980 pushing toward the 200 targets followed by 2020. The risk-off in the markets is helping gold to maintain the solid bullish momentum.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2021
2000
1980
1947
1930
1912

A graph of a stock marketDescription automatically generated



Despite escalating tensions in the Middle East and improving market fundamentals, the recent oil price rally has stalled. Brent crude and WTI both fell by around 1.8%, with Brent crude trading at $88.49 per barrel and WTI at $83.88 per barrel. The decrease in oil prices has been attributed to concerns about the global economy and energy demand, which have led to a 7.0% decline in Brent and a 4.8% drop in WTI over the past week. However, despite these concerns, the conflict between Israel and Hamas has supported oil prices. Although the US has seen record shale production, there has been a global tightening of oil supply with significant decreases in crude oil and gasoline inventories. Commodity analysts predict that oil markets will continue to tighten over the coming months. Despite the surge in US production, the market has experienced a downward drift with higher volatility due to geopolitical tensions and supply dynamics.

WTI rebounded from the 82-support level yesterday and continues hovering today around the 85 level. The price of Oil continues its volatility without a clear direction for this month.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
98
94
90
84
82
78


 

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