Daily Analysis

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ECB Pause and Economic Concerns Pressure Euro, US Data Offers Contrast

Last week, the European Central Bank (ECB) announced that it would take a break from rate hikes and expressed concerns over economic growth. This week, the US calendar will include the Federal Reserve's monetary policy decision and the release of the Nonfarm Payrolls report.

There were various notable factors that affected financial markets last week. The euro took a hit on Tuesday after reports from S&P Global indicated a worsening economic contraction in the Eurozone. The German economy remained in contraction mode, and there were signs of weakness in activity and the labor market. The Eurozone's economic downturn also picked up pace, with the Composite PMI reaching its lowest level in nearly three years.
In contrast, data from the United States was more positive. Business activity expanded in October, with preliminary estimates of the Manufacturing PMI and services index exceeding expectations. The Composite PMI also reached its highest level in three months.

The US Dollar benefited from a risk-off environment, driven by mixed earnings reports and a retreat in government bond yields. However, the USD resumed its rally towards the end of the week.

Following the ECB's monetary policy decision, the EUR/USD pair came under selling pressure. The ECB kept rates unchanged and expressed concerns over economic growth, claiming that inflation remains high. They also indicated that additional rate hikes are still possible while rate cuts are not being considered.
Additionally, the US released the preliminary estimate of Q3 GDP, which showed a growth rate of 4.9% between July and September, surpassing previous expectations.

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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Pound Sterling Awaits BoE Interest Rate Decision

Investors are waiting for the Bank of England's (BoE) interest rate decision, causing the Pound Sterling to struggle to find direction on Monday. The GBP/USD pair is trading sideways as the market mood turns quiet. Investors are also keeping an eye out for new developments in the Israel-Palestine conflict before taking further action.

It is widely expected that the BoE will keep the status quo on November 2 due to subdued consumer spending and labor demand, which would not allow price pressures to accelerate further. However, guidance on where the bank sees the interest rate peak and inflation will be closely monitored. Market participants would like to know if the central bank shares UK Prime Minister Rishi Sunak’s view of halving headline inflation to 5.4% by the end of the year.

Due to soft labor demand, poor factory activity, weak consumer spending, and deepening geopolitical tensions, BoE policymakers are expected to maintain the current interest rate of 5.25%.

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


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Divergence in Monetary Policy Between US and Japan Pressures JPY/USD Pair

That said, the divergence in monetary policy between the United States and Japan is putting downward pressure on the Japanese Yen (JPY) relative to the US dollar (USD). There is some speculation that the Bank of Japan (BOJ) might make adjustments to its yield curve control (YCC) policy. According to a Reuters poll, analysts anticipate the BoJ ending its negative interest rate policy next year, with more now believing the central bank is getting closer to ending its highly accommodative monetary policy.

On the other hand, the Federal Reserve (Fed) is expected to keep interest rates unchanged at the conclusion of its two-day meeting on Wednesday, even though the Fed's preferred inflation gauge, the Core US Personal Consumption Expenditure Index (PCE), remains well above the 2% target. In September, the Core US PCE moderated to 3.7% YoY, down from the previous 3.8%, while the monthly Core PCE increased by 0.3%, up from the previous 0.1%. Additionally, the PCE Price Index for September arrived at 3.4% YoY, in line with expectations.

Nevertheless, Fed officials have noted that recent economic data indicate robust economic activity and a strong job market. These positive reports are raising expectations of further interest rate hikes at the December meeting, which could temporarily boost the value of the US dollar.

Looking ahead, the focus for this week will be on the monetary policy meetings of the BoJ and the Fed. Additionally, the US ISM Manufacturing PMI for October and Initial Jobless Claims data will be released on Wednesday and Thursday, respectively. Attention will shift to the US Nonfarm Payrolls report on Friday, which is expected to show the addition of 172,000 jobs in October.
The USDJPY is coming back today after a test of the 15.00 resistance level but the movement is still tight and the price hasn’t yet decided any clear direction. The possibility of a reversal down is the most probable.

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

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Gold Price Approaches Key Levels Following Central Bank Meetings

The price of gold (XAU/USD) rose above $2,000 on Friday, marking a third consecutive weekly gain and recording its highest level since May 16th. However, the strong performance of US Treasury bond yields - supported by the expectation of further monetary policy tightening by the Federal Reserve (Fed) - has boosted the US Dollar (USD) and kept XAU/USD bulls cautious below the $2,000 mark as we enter the European session on Monday.

On the other hand, the ongoing conflict between Israel and Hamas has provided some support for safe haven buying, which may limit any significant downward correction in the price of gold.

Traders may choose to be cautious and refrain from making aggressive bets on the direction of the gold price, opting to wait for key central bank events scheduled for this week. The Bank of Japan (BoJ) is set to announce its policy decision on Tuesday, followed by the Federal Reserve's (Fed) monetary policy update on Wednesday and the Bank of England (BoE) meeting on Thursday. Investors will also be closely watching the official Purchasing Managers' Index (PMI) data from China to gain insights into business activity in the world's second-largest economy.

Additionally, preliminary Eurozone GDP and Consumer Price Index (CPI) figures, along with the US nonfarm payrolls (NFP) report, are expected to provide further momentum for the price of gold.

Gold has reached the 2006 resistance level and is now trending towards the 2000 resistance level. The bullish momentum remains strong, and gold may continue to rise to the next resistance level in 2020.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2040
2020
2006
2000
1947
1920


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Oil Prices Unsettled Ahead of U.S. Federal Reserve Meeting and China's Economic Data Release

On Monday, oil prices fell by more than 1% as investors remained cautious ahead of the U.S. Federal Reserve's policy meeting and China's upcoming manufacturing data release. This decline countered the support from Middle East tensions. Last Friday, both Brent and WTI had risen by 3%, driven by increased Israeli ground incursions into Gaza, raising concerns about a potential conflict escalation in a region responsible for one-third of global oil production.

Investors are closely watching the U.S. Federal Reserve meeting, U.S. job data, and Apple earnings for signs of an economic slowdown that could affect global fuel demand. While the Federal Reserve is expected to keep interest rates stable, Britain and Japan's central banks are also set to review their policies.

China will report its October manufacturing and services PMIs this week, with investors hoping for signs of stabilization in the world's top crude-importing economy and improved fuel demand due to supportive measures from Beijing. Despite Middle East developments causing price fluctuations, both Brent and WTI experienced their first weekly decline in three weeks.

WTI is trading around $85 with no clear direction for the month, as volatility continues. A possible descending triangle pattern is forming but requires confirmation.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
98
94
90
84
82
78
 
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The Euro received a boost from positive Eurozone economic data, pushing the pair to a six-day high of 1.0625. The European Central Bank (ECB) is likely pleased with Germany's economic performance, as the third-quarter contraction was milder than expected at 0.1% quarter-on-quarter, compared to the projected 0.3%. Additionally, prior figures were revised upward, ending the technical recession from Q4 2022/Q1 2023. Preliminary data indicates that annual inflation in October decreased from 4.5% in September to 3.8%, falling below the expected 4%. More German data, including Retail Sales, is set to be released. Eurostat will also provide the Eurozone Harmonized Index of Consumer Prices and GDP data.

These developments support the expectation of the ECB maintaining its current stance. Meanwhile, the Federal Reserve (Fed) is expected to keep rates unchanged as it starts a 2-day meeting, despite strong economic performance, including a tight labor market and over 4% annualized GDP growth in Q3. Essential US data releases throughout the week will impact the US Dollar's momentum, which weakened due to improved risk sentiment on Monday.

EUR/USD is higher today where the next resistance level is at 1.0700. a possible reversal may occur if it breaks the 1.700 resistance level.

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


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The Pound Sterling (GBP) is experiencing a decline in value, primarily due to investors adopting a more risk-averse stance. This shift in investor sentiment is driven by heightened concerns regarding potential developments in Middle East tensions, occurring in anticipation of the Bank of England's (BoE) upcoming interest rate decision.

The GBP/USD pair is encountering selling pressure, and this trend is expected to persist as the BoE is likely to maintain its current interest rate at 5.25%. This decision will result in continued policy divergence between the BoE and the Federal Reserve (Fed).

The rationale behind this expectation of a stable monetary policy from the BoE is rooted in growing concerns about the United Kingdom's economy falling deeper into recession. Inflation remains significantly below the target rate of 2%, and there is a substantial risk of persistent price pressures, particularly given the potential for escalating energy prices due to the ongoing conflict in the Middle East.

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 strength of the dollar and the pound's weakness.

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

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The USD/JPY pair has surged back to the 150.00 mark, following a statement by Bank of Japan (BoJ) Governor Kazuo Ueda, who conveyed a dovish outlook on monetary policy. Ueda emphasized the BoJ's willingness to implement additional easing measures as needed to maintain inflation comfortably above the 2% threshold.

During the latest monetary policy decision, the BoJ, as anticipated by market participants, decided to keep interest rates at a negative 0.1%. While Japan has been successful in consistently maintaining inflation above 2%, this achievement is primarily attributed to external factors driving price pressures. The BoJ's focus is on sustaining inflation comfortably above the 2% target, and achieving this relies heavily on maintaining an expansionary policy stance and fostering higher wage growth.

In a move to enhance flexibility, the BoJ adjusted its Yield Curve Control (YCC) by redefining 1.0% as an "upper bound." This adjustment allows for greater maneuverability and is expected to continue the practice of large-scale bond purchases. Governor Ueda expressed the view that improving YCC flexibility was the right course of action, and he is confident that the central bank is steadily approaching its inflation target.

The USDJPY is breaking the 150.00 mark, indicating a potential intervention by the Bank of Japan (BOJ). The outlook appears uncertain, even though the pair fundamentally suggests a higher direction. Exercising caution around these levels is crucial.

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


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Gold prices (XAU/USD) briefly dipped to $1,990 before rebounding to a new daily high in the early European session. However, they remain below the $2,000 psychological level, influenced by expectations that the Federal Reserve (Fed) may consider an additional 2023 rate hike to achieve its 2% inflation target. This more hawkish stance is boosting US Treasury yields, revitalizing the US Dollar (USD), and possibly capping gold's gains, given its lack of yield.

Israel's measured approach in Gaza has reduced concerns about a broader Middle East crisis, lessening gold's safe-haven appeal. Yet, the risk of further escalation in the Israel-Hamas conflict and uncertainties surrounding China's economic recovery continue to support buying interest in gold around the $1,990 mark. The emergence of dip-buying urges caution before anticipating a significant correction.

Traders may also stay on the sidelines ahead of a two-day FOMC monetary policy meeting starting this Tuesday. The Fed is expected to announce its decision on Wednesday, likely keeping interest rates between 5.25% and 5.50%, the highest in 22 years. Investors will closely monitor hints about future rate hikes, impacting the USD and potentially guiding gold prices. Meanwhile, Tuesday's US economic data releases may influence market sentiment.

Gold has reached the 2006 resistance level and is now trending towards the 2000 resistance level. The bullish momentum remains strong, and Gold may continue to rise to the next resistance level in 2020.


Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2040
2020
2006
2000
1947
1920

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WTI oil prices are currently under pressure due to rising tensions in the Middle East, raising concerns about potential disruptions in oil supply. The World Bank has predicted that global oil prices will average $90 per barrel for this quarter, with the possibility of soaring to $140 to $157 in a "large disruption" scenario caused by the ongoing geopolitical conflicts.

Moreover, apprehensions regarding further interest rate hikes by the Federal Reserve (Fed) may exert downward pressure on WTI prices. While the Fed is expected to maintain current rates, the possibility of an additional rate hike remains, as mentioned by Fed Chair Jerome Powell.

In the near term, oil traders will closely monitor the API and EIA weekly Crude Oil stock reports for the week ending on October 27 and the upcoming Fed monetary policy meeting, both scheduled for Wednesday. Additionally, US economic indicators, including the ISM Manufacturing PMI for October and Nonfarm Payrolls, will provide insights that can significantly impact USD-denominated WTI prices, guiding trading decisions in the oil market.

WTI is trading around $85 with no clear direction for the month, as volatility continues. A possible descending triangle pattern is forming but requires confirmation.

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


 
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EUR/USD Exchange Rate Faces Uncertainty with Inflation Slowdown
Eurostat's recent report indicated a substantial slowdown in Eurozone inflation from 4.3% to 2.9% year-on-year in October, marking the lowest rise in consumer prices since July 2021 and likely halting further ECB interest rate hikes. Additionally, recession concerns may weigh on the euro, potentially limiting EUR/USD gains.
Conversely, the USD catches its breath after a robust rally, with markets awaiting the Federal Reserve's policy meeting outcome before making new bets. The Fed is expected to hold rates but may leave room for a year-end hike. Investors will closely watch the policy statement and Chair Jerome Powell's press conference for interest rate clues, which could steer USD and EUR/USD direction.
Preceding the central bank events, the ADP employment, ISM Manufacturing PMI, and JOLTS Job Openings data from the U.S. will offer short-term trading cues for the EUR/USD pair, with US bond yields and overall risk sentiment influencing the demand for the USD. However, fundamental indicators suggest a likely downward trend for the pair.
EUR/USD is coming back continuing its range indicating uncertainty. With today's events and the possible volatility the big support is at 1.0460 and the resistance at 1.0700.

Resistance 3 Resistance 2 Resistance 1 Support 1 SupportSupport 3
1.0930 1.0800 1.0700 1.0630 1.05001.0400

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GBP/USD Awaits Central Bank Decisions with Uncertain Economic Outlook
On Wednesday, the British Pound (GBP) exhibited subdued activity, with market participants awaiting key interest rate decisions from the US Federal Reserve (Fed) and the Bank of England (BoE). The GBP/USD exchange rate is in a state of anticipation, with consensus leaning towards the BoE maintaining the current interest rate levels.
Investor confidence in the Pound is tepid, with the prevalent sentiment that the BoE will opt for a rate hold due to concerns over a potential downturn in the UK's economic performance, despite persistent inflationary pressures. Investors are not just focused on the immediate policy decision but are also seeking clarity on the future trajectory of interest rates and the inflation forecast. UK Prime Minister Rishi Sunak's January pledge to cut inflation to 5.4% by the end of the year faces headwinds, as the annual inflation rate stood firm at 6.7% in September, showing little change since July.
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 strength of the dollar and the pound's weakness. Volatility will be high today and tomorrow for the pair.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2450 1.2300 1.2200 1.2000 1.1900 1.1800

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USD/JPY Retraces Gains as BOJ and China Data Weigh on Yen
During Wednesday's Asian trading, USD/JPY retreated from its peak, following the Bank of Japan's (BoJ) policy shift on its 10-year bond yield cap. BoJ Governor Kazuo Ueda took a dovish tone, signaling concerns that inflation may not consistently meet the bank's targets.
Japan's Chief Cabinet Secretary Hirokazu Matsuno hinted at possible interventions to stabilize the yen, underscoring the need for currency values to align with economic fundamentals and his aversion to abrupt FX market shifts.
Compounding pressures on the yen, China's Caixin Manufacturing PMI dropped unexpectedly to 49.5 in October, suggesting a contraction and exacerbating concerns for the regional economy.
The Federal Open Market Committee's (FOMC) communication after its meeting is eagerly awaited for indications of future rate directions, with the December outlook adding to the market's suspense.
Upcoming U.S. ADP Employment and ISM Manufacturing PMI data are also on traders' radar, poised to influence market sentiment and USD/JPY movements.
The USDJPY broke the 150.00 mark and touched its resistance level at 152.00 while coming back now as a correction. An intervention from the BOJ seems imminent and coming back to levels lower than 150.00 is awaited while volatility will be the highest.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
155.00 153.50 152.00 150.00 148.00 146.50
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Gold Prices Face Uncertainty Ahead of Federal Reserve Decision
Gold prices have declined to a new weekly low of around $1,975 during Wednesday's early trading. Despite a recovery from earlier losses, investors are cautious ahead of the Federal Reserve's policy decision, which is expected to maintain current interest rates. Traders are also watching for key U.S. economic reports, including the ADP employment figures, ISM Manufacturing PMI, and JOLTS Job Openings, for further direction.
Meanwhile, easing tensions from the Israel-Hamas situation and expectations of a hawkish Federal Reserve stance continue to weigh on gold, a non-yielding asset, for the third consecutive day. However, the absence of continued selling pressure suggests traders should be wary of adopting a strongly bearish outlook.
Gold's safe-haven appeal finds some support amid concerns over China's economic recovery as the new quarter begins. The World Gold Council reports indicate a potential dampening in India's gold demand during the festive season and a mixed investment picture, despite central banks' buying falling short of the previous quarter's record.
Gold is at its important support level representing the last resistance level which is a solid historical level. The Fed meeting will impact gold, but the general outlook is bullish.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2040 2020 2006 1947 1920 1.1800

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WTI Crude Oil Prices Slip Below $81 Due to Supply Worries
WTI crude oil prices extend their downtrend, trading below $81 per barrel amid reduced concerns over supply disruptions despite Middle East tensions. OPEC's increased output and a record high in U.S. production, as reported by the EIA, exacerbate fears of oversupply. Concurrently, contracting manufacturing activity in China, as shown by both official and Caixin PMIs, hints at a potential demand slump from the top oil consumer, pressuring prices further.
Investors exhibit caution, opting to await the Federal Reserve's policy decision and subsequent statements from Fed Chair Jerome Powell for direction. These remarks are anticipated to clarify the future interest rate landscape, which could influence the dollar and, in turn, oil prices. The current market stance suggests restraint, with traders on the lookout for cues that could dictate near-term commodity price movements.
WTI is trading around $85 with no clear direction for the month, as volatility continues. A possible descending triangle pattern is forming but requires confirmation.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
94 90 85 82 78 74
 

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EUR/USD Rebounds Above Key Support Level as Dollar Weakens Due to Uncertainty
The EUR/USD rebounded in the American session, surpassing the 1.0570 level, mainly due to the weakening US Dollar. Although the euro still faces challenges, it has managed to stay above a significant support level, indicating potential for further gains as the Asian session nears.
The Federal Reserve (Fed) decided to keep interest rates unchanged at its October 31/November 1 meeting, signaling a low likelihood of future rate hikes. The direction of US data, especially inflation metrics, will be pivotal in shaping market expectations.
Recent data reveals that the ADP Employment Report showed a rise of 113,000 private payrolls in October, slightly below the anticipated 150,000 but an improvement from September's 89,000. The unexpected drop in the ISM Manufacturing PMI to 46.7 in October raised concerns. However, the JOLTS Jobs Opening data exceeded expectations at 9.55 million. Upcoming releases include the weekly Jobless Claims on Thursday and the NFP on Friday.
Despite these developments, the market's response has been limited, and the overall sentiment remains unchanged. The US Dollar lost momentum as yields declined further, while Wall Street continued to extend its weekly gains.
EUR/USD continues its uncertain direction by moving inside a range of price and waiting for a reversal of breakout even if the Dollar is awake today giving some advantage to the euro.

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

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Bank of England to Announce Monetary Policy Decision
The Bank of England's Monetary Policy Committee (MPC) will meet this week to determine the future of monetary policy and announce its decision on Thursday, November 2. Alongside the decision, the central bank will release the Monetary Policy Report, which includes economic analysis and inflation projections used by the MPC to inform interest rate decisions.
The BoE focuses on three key data figures when making policy decisions: private-sector wage growth services inflation, and the vacancy-to-unemployment ratio. Like other major central banks, the BoE has adopted a "higher for longer" approach, aiming to keep benchmark rates elevated for an extended period to manage inflationary pressures.
In October, UK shop price inflation eased to 5.2%, the lowest rate in over a year, primarily due to falling prices of homegrown food. The Consumer Prices Index (CPI) rose by 6.7% over the previous 12 months, unchanged from August. Every month, CPI increased by 0.5% in September 2023, the same as in September 2022.
Regarding the US Federal Reserve (Fed), they recently maintained rates at 5.5%, which had a limited impact on financial markets. Fed Chair Powell's statements were mixed, indicating that rate cuts are not being considered but questioning the need for additional hikes. Powell also mentioned that policymakers are committed to achieving a sufficiently restrictive stance but could not determine if that point had been reached.
GBPUSD is touching the last support at 1.2070 waiting for more developments to find direction. The pair formed a descending triangle which is a bearish signal but today's BoE meeting will determine better the direction. If it breaks down then the 1.1900 will be the target.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2450 1.2300 1.2200 1.2000 1.1900 1.1800

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USD/JPY Retraces as Fed's Dovish Signals Impact Dollar
The USD/JPY pair, which recently touched a high near 151.70, has retraced and is now hovering just above the 150.00 psychological level, down by over 0.50% for the day. This decline comes as expectations of the Federal Reserve nearing the end of its tightening policy weigh on the US Dollar (USD). Despite the Fed leaving key interest rates unchanged and indicating the possibility of future rate hikes due to unexpected US economic resilience, Fed Chair Jerome Powell's remarks about the impact of rising borrowing costs have led to speculations that rate cuts may begin by June next year.
Furthermore, speculation of Japanese intervention to prevent the yen's depreciation and the Bank of Japan's (BoJ) dovish stance contribute to the negative sentiment surrounding the USD/JPY pair. The BoJ's minor policy adjustments suggest a slow shift away from massive stimulus, contrasting with the relatively hawkish Fed. However, the attractiveness of Japanese government bonds remains low.
The market is keeping an eye on upcoming US economic data, including Weekly Initial Jobless Claims and Factory Orders, as well as US bond yields, for further direction. Additionally, broader risk sentiment and the highly anticipated US Non-Farm Payrolls (NFP) report on Friday will influence short-term trading opportunities for the USD/JPY pair.
The USDJPY corrects back toward the 150.1 level from the 151.70 resistance level as the dollar is weak and also as BoJ's possibility of intervention is high. Volatility is still possible to be high especially as the price is beyond 150.00.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
155.00 153.50 152.00 150.00 148.00 146.50
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Gold Prices Rebound with Equity Market Optimism
Gold price (XAU/USD) builds on the previous day's bounce from the $1,970-1,969 region, or a one-week low and gains some follow-through traction on Thursday. The precious metal touched a fresh daily high during the first half of the European session, though remains below the $2,000 psychological mark. A generally positive tone around the equity markets is seen as a key factor acting as a headwind for the precious metal and warrants caution for bulls.
That said, declining US Treasury bond yields and the prevalent US Dollar (USD) selling bias, led by bets that the Federal Reserve (Fed) will not hike interest rates any further, might continue to act as a tailwind for the non-yielding gold price. Apart from this, the risk of a further escalation in the Israel-Hamas conflict, along with the worsening economic conditions in China, supports prospects for a further appreciating move for the safe-haven yellow metal.
Gold rejects the support level representing the last resistance level which is a solid historical level. The long trend is more bullish and solid to continue especially with Treasuries yields are down.


Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2040 2020 2006 1980 1947 1920

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WTI Oil Prices React to FOMC Decision and Weaker Chinese Data
WTI has broken a three-day losing streak following the Federal Open Market Committee (FOMC) decision to maintain interest rates unchanged on Wednesday. Nevertheless, concerns arise as weaker Chinese data may adversely affect the outlook for oil demand.
As expected, the FOMC opted to leave interest rates untouched during its Wednesday meeting. During the press conference, Fed Chair Jerome Powell emphasized the committee's reliance on data and its commitment to a cautious approach. While the FOMC has left the door open for potential rate hikes, the market sentiment suggests that the rate-hiking cycle has concluded, leading to a decline in the US Dollar value against various currencies.
Furthermore, the rising tensions in the Middle East could exacerbate the existing disruptions in the energy market caused by Russia's conflict in Ukraine.
On a different note, Chinese manufacturing PMI figures for October have dipped below the critical 50-point mark due to reduced production and weaker demand. This unfavorable data raises doubts about the recent optimism regarding the recovery of the world's second-largest economy. It's important to highlight that China holds a prominent position as the world's largest oil consumer, and any negative economic outlook could exert downward pressure on oil prices.
Looking ahead, oil traders will closely watch the US weekly Initial Jobless Claims on Thursday. On Friday, attention will shift to the US Nonfarm Payrolls report, which is expected to show an increase of 180,000 jobs in October compared to 336,000 in September. These events are likely to have a significant impact on the USD-denominated WTI price. Oil traders will use the data as a basis for identifying trading opportunities within the WTI market.
WTI is trading at its lowest level nearing 82. The trend is bearish, and the next target is 78.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
94 90 84 80 78 74
 

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USD Sells Off as Fed Maintains Rates and Powell Strikes Cautious Tone
In its recent decision, the Fed chose to maintain the policy rate within the 5.25%-5.50% range, as expected. However, the USD experienced a sell-off due to Chairman Jerome Powell's cautious stance on further tightening measures. While Powell did not rule out potential rate hikes, his remarks were perceived as less hawkish than anticipated. Powell acknowledged the need to address inflation but suggested it might require a slowdown in economic growth and labor market activity.
The Automatic Data Processing (ADP) report earlier this week revealed a rise of 113K in US private sector payrolls for October, slightly below the 150K estimate. The Job Openings and Labor Turnover Summary (JOLTS) data showed an increase in job openings to 9.553M, indicating ongoing labor market tightness.
A strong October NFP report could revive expectations of a Fed rate hike, despite the market currently pricing in only a 20% probability of a December increase. There is now speculation of potential rate cuts in 2023, with expectations of up to 85 basis points (bps) of cuts, potentially beginning as early as June.
EUR/USD continues its uncertain direction by moving inside a range of price and waiting for a reversal of breakout even if the Dollar is awake today giving some advantage to the euro.

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

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GBP Trades in Narrow Range with Stagnant UK Economic Growth Prospects
The Pound Sterling (GBP) is currently trading within a narrow range, experiencing some support from improved market sentiment. However, its potential gains are limited due to the stagnant growth prospects for the UK economy. The GBP/USD pair's short-term performance hinges on how the UK economy performs in the fourth quarter of 2023.
Recent data regarding the UK economy suggests that the manufacturing sector has continued to decline in October, primarily due to increased borrowing costs and the ongoing cost-of-living crisis. This has cast a negative shadow on the growth expectations for the period from October to December.
The Bank of England (BoE) opted to keep interest rates unchanged at 5.25% for the second consecutive time on Thursday, aiming not to hinder the limited economic growth. Signs suggest the economy is narrowly escaping recession as business optimism has fallen to a 10-month low, prompting employers to significantly reduce payrolls, purchasing, and inventories. Regarding inflation, BoE Governor Andrew Bailey expresses confidence that the central bank can bring it down to the target of 2% within two years.
GBPUSD is touching the last support at 1.2070 waiting for more developments to find direction. The pair formed a descending triangle which is a bearish signal. If it breaks down then the 1.1900 will be the target.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2450 1.2300 1.2200 1.2000 1.1900 1.1800


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Japanese Government's Intervention Measures Aim to Curb Yen Depreciation
The Japanese government to prevent the domestic currency's sustained depreciation has constrained spot prices. Market participants are awaiting the release of the highly anticipated US monthly employment report (NFP) during the early North American session. The downside for the USD/JPY pair seems limited due to the Bank of Japan's (BoJ) dovish stance, as the BoJ has committed to maintaining its accommodative policy until achieving the 2% price target.
Furthermore, the BoJ's slight adjustment to its yield curve control (YCC) policy signals a gradual departure from its longstanding accommodative approach. This, combined with the ongoing risk-on sentiment, could weaken the safe-haven Japanese Yen (JPY) and provide support for the USD/JPY pair. However, it's prudent to exercise caution, as spot prices are still poised for modest weekly gains, and the overall fundamental backdrop suggests that aggressive bearish trading should be approached with care. Waiting for strong confirmation of a near-term peak around the 151.70 level, observed on Tuesday and the highest since October 2022, would be wise.
The USDJPY corrects back toward the 150.1 level from the 151.70 resistance level as the dollar is weak and also as BoJ's possibility of intervention is high. Volatility is still possible to be high especially as the price is beyond 150.00.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
155.00 153.50 152.00 150.00 148.00 146.50
1699014224796.png

Gold Prices Find Support with Speculation of Fed's Policy Shift
Expectations that the Federal Reserve (Fed) might be approaching the conclusion of its tightening cycle, possibly followed by rate cuts in June 2024, have pushed US Treasury bond yields lower. This trend continues to weigh on the US Dollar (USD) and provides some support to gold, although buying interest remains subdued.
Geopolitical tensions in the Middle East and concerns about a slowdown in the Chinese economy contribute to the positive sentiment surrounding XAU/USD. Nevertheless, the absence of strong buying interest suggests caution among bullish traders. The upcoming US monthly jobs data (NFP report) may influence the Fed's future policy decisions, with an expected addition of 180K jobs in October, a decline from the previous month's 336K, and a steady jobless rate of 3.8%. Any significant deviation from these expectations could introduce volatility into financial markets and increase demand for the safe-haven metal. Despite overall positive risk sentiment, ongoing conflicts in the Middle East and China's economic challenges continue to support gold.
Gold rejects the support level representing the last resistance level which is a solid historical level. The long trend is more bullish and solid to continue especially with Treasuries yields down.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2040 2020 2006 1980 1947 1920

1699014224810.png

WTI Crude Oil Prices Gain Following Fed's Interest Rate Decision
On Friday, WTI is trading at approximately $82.60. WTI prices have remained in positive territory for the second consecutive day due to increased market risk appetite and a weaker US Dollar (USD).
During its November meeting, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged at 5.25%-5.50%, as widely expected. The market anticipates that the FOMC has reached the peak of its interest rate hiking cycle, which caused WTI prices to rise and put pressure on the USD.
Geopolitical tensions between Israel and Hamas have also contributed to the rise in WTI prices. However, there is concern that the conflict could spread across the region and potentially disrupt oil supplies.
China's economic indicators have mixed results. While the Services PMI for October exceeded market expectations, the Caixin Manufacturing PMI fell below estimates. Additionally, both the NBS Manufacturing PMI and Non-Manufacturing PMI were worse than expected. Given that China is a major consumer of oil, a negative economic outlook for the country could impact oil prices.
Later on Friday, oil traders will closely monitor the US employment data, specifically the Nonfarm Payrolls (NFP) report, which is expected to show an increase of 180K jobs in October. The unemployment rate is anticipated to remain unchanged at 3.8%. These data points will have a significant impact on the USD-denominated WTI price, and oil traders will use them to identify potential trading opportunities.
WTI continues its volatile price action where a clear direction is hard to forecast with the actual geopolitical tensions. 78 seems to be the next support level while 86 is the next resistance.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
94 90 84 80 78 74
 

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Euro Strengthens Amid Dwindling Rate Hike Expectations in the United States

Friday's news, while not necessarily negative, had a significant impact on market sentiment due to falling short of expectations, casting doubts on the strength of the US currency.

As a result, the likelihood of another 25-basis point rate hike by the Federal Reserve has diminished further, with most analysts concurring that the era of interest rate hikes has likely concluded.

This shift in sentiment, coupled with improving conditions in global stock markets, has provided support for the European currency. Despite ongoing tensions in the Middle East, there are currently no immediate signs of escalation.

Today's economic agenda is relatively light, with notable items including the investor confidence index for the European economy and the performance of the manufacturing and services sectors in the Eurozone. Meanwhile, there are no significant announcements scheduled from the United States.

With the exchange rate breaking free from the 1.05 to 1.07 range it had been confined to for an extended period, the possibility of further gains for the euro is promising. However, given the uneventful agenda for today, there is a chance that Friday's scenario could repeat itself.

EUR/USD is at its reversal movement advancing toward the next resistance level at 1.8000 where the 100/200MA is placed as a solid resistance level.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.10401.09301.08001.07001.06301.0550


gbpusd.png


Bank of England MPC Decision and GBP/USD Exchange Rate Impact


The Bank of England's Monetary Policy Committee (MPC) will meet this week to determine the future of monetary policy and announce its decision on Thursday, November 2. Alongside the decision, the central bank will release the Monetary Policy Report, which includes economic analysis and inflation projections used by the MPC to inform interest rate decisions.

The BoE focuses on three key data figures when making policy decisions: private-sector wage growth services inflation, and the vacancy-to-unemployment ratio. Like other major central banks, the BoE has adopted a "higher for longer" approach, aiming to keep benchmark rates elevated for an extended period to manage inflationary pressures.

In October, UK shop price inflation eased to 5.2%, the lowest rate in over a year, primarily due to falling prices of homegrown food. The Consumer Prices Index (CPI) rose by 6.7% over the previous 12 months, unchanged from August. Every month, CPI increased by 0.5% in September 2023, the same as in September 2022.

The US Federal Reserve (Fed) recently left interest rates at 5.5%, which only had a limited impact on the financial markets. Fed Chairman Powell's comments were mixed: he indicated that rate cuts are not being considered but questioned the need for further rate hikes. Powell also mentioned that policymakers are keen to adopt a sufficiently restrictive stance but could not determine whether this point has already been reached. GBPUSD is following the majors as a solid correction is happening after the dollar selloff the next resistance level is at 1.2450.

Resistance 3
Resistance 2
Resistance 1
Support 1Support 2Support 3
1.2600
1.2550
1.2450
1.23001.22601.2200

usdjpy1.png



USD/JPY Recovers from Recent Dip Following Mixed Central Bank Policies


The USD/JPY pair is showing signs of dip-buying as the week begins, pausing a three-day correction from its recent peak around 151.70, the highest since October 2022. It currently trades slightly above the mid-149.00s, up around 0.15% for the day. The US Dollar (USD) is making a modest recovery, supported by rising US Treasury bond yields, bouncing back from a six-week low after disappointing US jobs data.

The Bank of Japan's dovish stance and the prevailing risk-on sentiment are weighing on the Japanese Yen (JPY), benefiting the USD/JPY pair. The BoJ has made minor adjustments to its yield curve control policy, indicating a gradual move away from its long-standing accommodative monetary policy.

However, the Fed maintains a relatively hawkish outlook, leaving room for further US rate hikes. Investors expect the Fed to maintain its current stance in December, reinforced by softer-than-expected US employment data released on Friday. Speculation of Japanese intervention in the foreign exchange market to counteract a weakening domestic currency adds caution for USD/JPY bullish traders amid a lack of significant US economic releases.

The USDJPY continues the correction right now supported by the 200MA on the 4H. The pair is affected by the selloff on the dollar that started on Friday the next support is at 148.00.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
153.50152.00150.00149.3148.00146.50
xauusd 1.png


Gold Prices Weaken with Risk-On Sentiment and Dollar's Six-Week Low

The price of gold (XAU/USD) started the new week on a weaker note, continuing the decline that began on Friday after reaching a multi-day high of $2,004. This retracement was in response to softer jobs data from the United States (US). The decline in gold prices can be attributed to the prevailing risk-on environment, which is characterized by a strong rally in the equity markets. Investors are favoring riskier assets, leading to reduced demand for safe-haven options like gold. Additionally, the modest increase in US Treasury bond yields is also contributing to the outflow of funds from gold, as it is a non-yielding asset.

On the other hand, the US Dollar (USD) is trading near a six-week low due to expectations that the Federal Reserve (Fed) will not raise interest rates further. This expectation acts as a limiting factor on substantial increases in US bond yields, benefiting USD bears. As gold is denominated in US dollars, the weaker dollar provides some support for the price of gold, preventing it from falling further. Furthermore, the ongoing conflict between Israel and Hamas adds to the uncertainty in the market and may limit the downward movement of the XAU/USD. Therefore, caution is advised for those considering a bearish position on gold, as a significant correction from the year-to-date peak reached on October 27 may be unlikely at this time.

Gold is in a volatile movement on the 4H waiting for more direction for breaking the 2000 resistance area to tackle the next target of 2020. The trend continues to be solid and bullish.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2040
2020
2006
1980
1947
1920

Oil1.png


Oil Prices Rebound as Saudi Arabia and Russia Extend Supply Cuts


Oil prices saw an increase on Monday, recovering from a week where both Brent and WTI futures experienced approximately a 6% decline by November 3. This rebound came as top oil exporters, Saudi Arabia and Russia, reiterated their commitment to maintain additional voluntary oil supply cuts until the end of the year.

Saudi Arabia confirmed on Sunday its intention to continue the extra voluntary cut of 1 million barrels per day (bpd) in December, to keep output at approximately 9 million bpd. Russia also announced its decision to prolong the additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.

However, potential gains in oil prices may have been restrained by a reduction in crude oil processing at Chinese refineries. Refinery operations are declining from the record levels seen in the third quarter, primarily due to shrinking profit margins and a shortage of export quotas for the remainder of the year, as reported by Reuters sources.

Investor attention will now focus on upcoming economic data from China, as the world's second-largest oil consumer released disappointing factory data for October last week.

WTI is trading at its lowest level close to the 82. The trend is bearish, and the next target is 78. While the movement in the short term is unclear.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
94
90
84
80
78
74


 
1699364064478.png

USD Index Rebounds from 8-Week Low, Impacting EUR/USD Pair
The USD Index (DXY), measuring the US dollar against various currencies, rebounded from an eight-week low, impacting the EUR/USD pair. This was influenced by mixed signals from Federal Reserve (Fed) officials regarding future rate hikes, leading to higher US Treasury bond yields and prompting some short-covering in the USD.
Fed Governor Lisa Cook suggested that the current interest rate is sufficient to achieve the Fed's 2% inflation target but stressed the importance of remaining vigilant. In contrast, Minneapolis Fed President Neel Kashkari leaned towards a more cautious approach, suggesting he'd prefer overtightening to ensure inflation returns to the target.
This divergence in views adds uncertainty to the Fed's next policy moves. Investors increasingly believe that the Fed is approaching the end of its rate-hiking cycle, particularly after softer US jobs data last Friday. Market pricing even suggests a possibility of rate cuts in June 2024. Consequently, all eyes are on Fed Chair Jerome Powell's upcoming appearances for further insights into the central bank's stance.
EUR/USD retraced after reaching the 1.0750 level, which was a correction following a significant bullish movement on Friday. The 1.0700 level may act as support before seeing a potential uptrend. The market is currently experiencing uncertainty as it awaits speeches from members of both the Fed and ECB. The 1.0800 level remains a major resistance target.



Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.1040 1.0930 1.0800 1.0700 1.0630 1.0550
1699364064497.png

GBP Faces Selling Pressure Following Concerns of UK Economic Slowdown and Rising Cost
The British Pound (GBP) is encountering selling pressure attributed to concerns surrounding a UK economic slowdown driven by the Bank of England's (BoE) tightening monetary policy. The GBP/USD pair, previously on an uptrend, now hovers around 1.2330 without robust support for the Pound.
The recent resurgence in the GBP/USD pair was fueled by improved market sentiment, stemming from expectations of a pause in interest rate hikes by the Federal Reserve (Fed) and reduced tensions in the Middle East. Nevertheless, the UK economy faces the risk of recession, with sectors like manufacturing, services, and housing struggling to adapt to higher BoE interest rates. The already weak consumer spending is poised to worsen due to escalating living costs.
A survey conducted by Accenture and YouGov revealed that a significant portion of UK adults, approximately two-thirds, are disinterested in partaking in Black Friday, Cyber Monday, or Boxing Day discounts due to the ongoing cost of living crisis. According to S&P Global's report, all sectors, including manufacturing, services, and construction, continue to languish below the 50.0 threshold, indicating ongoing economic challenges.
On the 1D chart, GBPUSD is in a corrective phase after touching the 200MA. The first support is at 1.2300 followed by 1.2260. A breakout of the 200MA would take the price to the next target of 1.2600.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2600 1.2550 1.2450 1.2300 1.2260 1.2200

1699364064516.png


USD/JPY Traders Await Fed Official Speeches
Traders adjust their positions in anticipation of speeches by key Federal Reserve (Fed) officials, including Fed Chair Jerome Powell. There is growing speculation that the Fed may soon conclude its rate hike cycle and even consider rate cuts in June 2024, following a weaker-than-expected US jobs report.
The comments from Fed officials have been mixed, with Fed Governor Lisa Cook expressing confidence in the current interest rate's ability to achieve the Fed's 2% inflation target. In contrast, Minneapolis Fed President Neel Kashkari advocates a more cautious approach to expedite reaching the inflation target, leading to a rebound in US Treasury bond yields and supporting the USD/JPY pair.
Meanwhile, the Japanese Yen (JPY) is under pressure due to the Bank of Japan's (BoJ) dovish stance and minor adjustments to its yield curve control policy. However, the potential for further USD/JPY gains is limited due to concerns about potential Japanese intervention in the forex market to prevent prolonged Yen depreciation. Traders should closely monitor Fed officials' remarks for potential market-moving events in the absence of significant US economic releases.
The USDJPY has gained some ground, recovering from the losses it incurred on Friday. Technically, the pair appears uncertain in terms of direction but there is a possibility of reversal if the BoJ intervenes. The market doesn't seem to believe that the pair will continue to advance, so a more cautious approach is being taken.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
153.50 152.00 150.00 149.3 148.00 146.50
1699364064531.png

Gold Prices Face Selling Pressure Due to Dollar Recovery and Geopolitical Factors
The gold price (XAU/USD) remains under selling pressure, reaching a two-week low below the $1,970 level. The continued recovery of the US Dollar (USD) from its lowest level since September 20 is contributing to the downtrend. In addition, the lack of major developments in the conflict between Israeland Hamas is driving flows away from the safe-haven metal. However, the risk of a wider crisis in the Middle East and economic uncertainties in China and Europe are holding investors back and giving gold some support. Furthermore, the decline in US Treasury bond yields, fueled by expectations that the Federal Reserve (Fed) will maintain the status quo in December, should limit losses for the non-yielding asset. The upcoming release of US Trade Balance data and speeches by influential FOMC members, along with Fed Chair Jerome Powell's appearances, will provide further insights into the Fed's rate-hike path and influence the near-term dynamics of the USD. Geopolitics and overall market sentiment will also play a role in determining gold's direction.
Gold is coming back as a result of the yields and dollar advances. The next support level is at 1960, followed by 1947.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2040 2020 2006 1980 1947 1920

1699364064545.png

WTI Crude Oil Retreats on Weak Chinese Economic Data Despite Production Cuts
During Asian trading hours, Western Texas Intermediate (WTI) crude oil trades lower around $79.80 per barrel. The retracement is driven by downbeat economic data from China, offsetting the positive impact of production cuts by Saudi Arabia and Russia. China's Trade Balance data for October showed a reduced surplus balance of $56.53 billion, with exports declining by 6.4%. UBS analysts suggest the production cuts may extend into Q1 2024 due to seasonally weaker oil demand. Global manufacturing PMIs indicate a slowing economic growth, which could limit oil prices as demand decreases. Concerns about a warmer-than-expected winter in the northern hemisphere also weigh on crude oil prices. The US Dollar's recovery, driven by improved bond yields, dampens the value of crude oil. Traders expect the US Federal Reserve to pause its monetary policy tightening, with potential rate cuts by the end of 2024. The focus will be on China's Consumer Price Index for October.
WTI is expected to break down to $78, a confluence point.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
94 90 84 80 78 74
 

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Global Market Insights: Volatility, Corporate Earnings, and Inflation Concerns

In the Asia-Pacific region, most markets declined in volatile trading on Wednesday. South Korea's main index erased over half of its earlier gains this week, while investors absorbed a positive business sentiment survey from Japan.
Meanwhile, European markets are set to open negatively, continuing a downward trend that began at the beginning of the week. Corporate earnings reports are playing a significant role in driving individual share prices in Europe. Companies like Commerzbank, Credit Agricole, Marks and Spencer, Telefonica, Adidas, and ABN Amro all released their results on Wednesday.
The Reuters Tankan poll indicated an improvement in Japanese manufacturers' business confidence for the first time since August. The service sector also saw its mood rise for a second consecutive month, highlighting the challenges in an uneven economic recovery.
In New Zealand, the inflation forecast for the fourth quarter dropped to a two-year low according to a survey by the Reserve Bank of New Zealand. The RBNZ's two-year inflation expectations, considered a timeframe for the central bank's monetary policy impact on prices, decreased from 2.83% in the previous quarter to 2.76%.
In Germany, the Consumer Price Inflation rate for October 2023 was confirmed at 3.8% year-on-year, a significant drop from the previous month's 4.5%. This reading marked the lowest level in over two years, with food inflation reaching its lowest point since February 2022.
Fed Bank of Minneapolis President Neel Kashkari expressed concerns that the fight against inflation is ongoing, and further tightening measures may be considered if necessary. His counterpart in Chicago, Austan Goolsbee, emphasized the importance of not making premature decisions on interest rates.
Some of the more hawkish members of the US central bank signaled that the cumulative tightening of financial conditions since July, including a more than 100 basis point increase in 10-year Treasury bond yields, could potentially dampen economic growth. Fed Governor Christopher Waller described the surge in yields as an "earthquake" for the bond market.
1699450833885.png

EUR/USD Faces Resistance with Risk-On Sentiment and Falling US Bond Yields
EUR/USD faced resistance despite a steady US dollar on Wednesday. The market's risk-on sentiment and falling US bond yields hindered the USD's recent recovery. The European Central Bank's (ECB) apparent pause in rate hikes weighed on the euro, limiting EUR/USD gains.
US bond yields dropped and strong equities failed to improve the US Dollar, partly due to uncertainty regarding the Federal Reserve's rate hike plans. The Fed hinted that current financial conditions may be tight enough to combat inflation, possibly pausing rate increases. A softer US jobs report also suggests a rate hold in December, but some Fed officials remain hawkish.
Traders await Fed Chair Jerome Powell's speech, while weak German Industrial Production data and ECB rate hike uncertainty constrain the euro. As the market eyes Eurozone Retail Sales data in Germany, the Consumer Price Inflation rate for October 2023 was confirmed at 3.8% year-on-year, a significant drop from the previous month's 4.5%, along with the broader market sentiment, for EUR/USD trading cues.
EUR/USD continued to decline on its third day. A short-term level of support doesn't seem clear, but the 1.0550 level may hold the price.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.1040 1.0930 1.0800 1.0630 1.0550 1.0450

1699450833906.png

GBP Under Pressure Ahead of BoE and Fed Speeches
Traders are cautious ahead of speeches by Bank of England (BoE) Governor Andrew Bailey and Federal Reserve (Fed) Chair Jerome Powell. The UK's bleak economic outlook and expectations of a BoE rate cut in August 2024 are weighing on the GBP.
Investors are also watching Powell's comments for hints about future rate hikes, as the Fed recently indicated it might be done with its tightening policy. Despite some hawkish statements from FOMC members, the USD has seen a retracement due to lower US jobs data and declining US Treasury bond yields.
Overall, the fundamental backdrop favors bearish sentiment for GBP/USD, with a potential rate cut by the BoE and uncertainty around the Fed's rate-hike path. Technical levels are closely monitored.
The GBPUSD selloff persists, with the next support levels at 1.2260 and 1.2200, while the 1.2100 level is expected to provide strong support for the price.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
1.2600 1.2550 1.2450 1.2300 1.2260 1.2200

1699450833921.png


USD/JPY Rises as Bank of Japan Adopts Dovish Stance
The Japanese Yen (JPY) continues with its relative underperformance in the wake of a more dovish stance adopted by the Bank of Japan (BoJ), which, in turn, is seen acting as a tailwind for the USD/JPY pair. The US Dollar (USD), on the other hand, stalls its goodish recovery move from a multi-week low touched on Monday and caps the upside for the major. Furthermore, traders opt to remain on the sidelines ahead of Federal Reserve (Fed) Chair Jerome Powell's speech later during the early North American session.
Bank of Japan (BoJ) Governor Kazuo Ueda is back on the wires on Wednesday, commenting on the central bank's exchange-traded funds (ETFs) buying to stabilize the market.
Today, the USDJPY exhibits a bullish trend, surging past the 150.00 mark due to the dollar's recovery. There is the possibility of BoJ intervention, which could introduce heightened volatility.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
153.50 152.00 150.00 149.3 148.00 146.50
1699450833942.png

Gold Prices Under Pressure as Dollar Rises with Fed Caution
Gold prices remained below $1,970 per ounce on Wednesday after declining for two consecutive days, as the dollar continued to rise. Traders are anticipating US Federal Reserve Chair Jerome Powell's speech later today and are cautious due to the possible impact on gold prices.
In the latest central bank commentary, Minneapolis Fed President Neel Kashkari stated that it is too early to declare victory over inflation. Fed Governor Michelle Bowman reiterated her view that the central bank would likely need to raise short-term rates again.
The demand for gold decreased due to the waning geopolitical risk premium related to the Israel-Hamas war. Israeli authorities have announced temporary pauses in fighting to allow for humanitarian needs.
Gold is currently finding support at the 1963 level. If it falls further, the next support levels are at 1960 and 1947. Despite recent fluctuations, gold is still considered to be fundamentally bullish, with many supportive factors in play. From a technical standpoint, it may experience a temporary drop toward the 1947 level before resuming its bullish trend. This drop is due to the strong momentum that was observed for an entire month without a significant correction.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
2040 2020 2006 1963 1947 1920

1699450833958.png

Crude Oil Prices Waver Amid Supply Signals
Crude oil prices fluctuate while the US Dollar tries to recover. In Asian trading, WTI is trading at $77.20 per barrel. Recently, oil prices have been falling due to increased supply signals, including a significant increase in US crude inventories.
The American Petroleum Institute (API) reported a nearly 12 million barrel increase in US crude oil stocks last week. Meanwhile, the Energy Information Administration (EIA) indicated a slight reduction in crude oil production and a decline in demand in the United States for this year. The EIA postponed the release of weekly inventory data and now expects a 300,000 barrels per day decrease in total petroleum consumption in the US, which is a reversal of its earlier forecast of a 100,000 barrels per day increase.
In addition, OPEC crude exports have risen by approximately 1 million barrels per day, driven by lower domestic demand in the Middle East. However, mixed economic data from China, the second-largest oil consumer, is adding to uncertainty. While China saw strong growth in oil imports in October, there was a simultaneous contraction in total exports of goods and services, raising concerns about global energy demand.
WTI is expected to break down to $78, a confluence point.

Resistance 3 Resistance 2 Resistance 1 Support 1 Support 2 Support 3
90 84 82 77 74 68
 

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German CPI at 3.8%, Signals ECB Tightening Cycle Likely Completed

The final reading of the German Consumer Price Index (CPI) revealed an annual rate of 3.8%, the lowest since August 2021, with inflation slowing and the economy teetering on the brink of recession. This suggests that the European Central Bank (ECB) has likely completed its tightening cycle, aligning with market expectations despite recent comments from ECB policymakers like Philip Lane, who cautioned against drawing too much comfort from recent inflation figures. Lane emphasized the need for continued efforts to combat inflationary pressures, urging both companies and governments to contribute to avoiding stricter policies. U.S. Federal Reserve Bank of Philadelphia President Patrick Harker supported the Fed's recent decision to keep interest rates unchanged and cautioned against premature market reactions. Philip Lane of the ECB is also set to address the audience again on Thursday, along with President Lagarde.

EUR/USD is currently moving with uncertainty, awaiting further guidance. A clear short-term support level is not evident, but the 1.0550 level may provide price support.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.10401.09301.08001.06301.05501.0450


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UK's Q3 GDP Data to Influence BoE's December Monetary Policy


Investors are waiting for the release of Q3 Gross Domestic Product (GDP) data on Friday at 07:00 GMT, which will have a significant impact on the Bank of England's (BoE) monetary policy in December. The Pound Sterling (GBP) has been stagnant, and the GBP/USD pair is currently uncertain. The economic performance of the UK in July-September seems to be bleak, with declining consumer spending, poor Services PMI, delayed housing demand, and shrinking hiring. If the GDP report confirms this, it could lead to dovish expectations from BoE policymakers, particularly Swati Dhingra, who supports rate cuts in case of weaker growth. According to the GDP report, employment, and inflation data will be released next week.

Investors are anticipating UK factory data and Q3 GDP figures, and Pound Sterling is consolidating below the 1.2300 resistance level. Factory data is expected to show modest improvements, which could alleviate concerns about a slowdown in the UK economy. However, the key event to watch is the Q3 GDP data. Economists predict a nominal contraction due to underutilized production capacities and reduced consumer spending, especially in the service industry. BoE Chief Economist Huw Pill has suggested rate cuts in mid-2024 if the GDP report is weak.

The GBPUSD continues its downward trend, with the next support levels at 1.2260, followed by 1.2200. The solid support for the price is expected to be at 1.2100.

Resistance 3
Resistance 2
Resistance 1
Support 1Support 2Support 3
1.2600
1.2550
1.2450
1.23001.22601.2200


usdjpy.png


USD/JPY Pair Surges, Raises Questions About Japanese Intervention

There has been a recent increase in the USD/JPY pair, leading to speculation that Japanese authorities might intervene in the Forex market. This, along with the cautious market mood, is causing the safe-haven Japanese Yen (JPY) to gain some support. Additionally, the recent decline in US Treasury bond yields and the uncertainty over the Federal Reserve's (Fed) rate-hike path has caused a modest US Dollar (USD) downtick, which is further pressuring the major.

However, the dovish stance taken by the Bank of Japan (BoJ) is limiting the downside for the USD/JPY pair. BoJ Governor Kazuo Ueda reiterated on Wednesday that the central bank will continue with ultra-loose policy until cost-push inflation transitions into price rises driven more by strong domestic demand and higher wages. This is a significant divergence from a relatively hawkish Fed.

The USDJPY is continuing its bullish trend beyond 150.00. The BoJ may intervene, creating volatility.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
153.50152.00150.00149.3148.00146.50
gold.png


Gold Prices Hover at $1,950 with Fed Rate Hike Uncertainty

Gold prices experienced a decline on Thursday as it entered a bearish consolidation phase and traded within a narrow range during the early part of the European session. Currently, it's hovering around $1,950, just above its lowest level since October 19, which it reached yesterday. This decline is primarily due to uncertainty about future interest rate hikes by the Federal Reserve. Additionally, concerns about the Israel-Hamas conflict, which had been affecting market sentiment earlier in the week, have somewhat eased.

However, the downside for gold is being supported by the belief that the US central bank is unlikely to raise interest rates further. This expectation has led to a decrease in US Treasury bond yields, putting pressure on the US Dollar (USD) and providing some support for gold. Furthermore, concerns about China's economic situation and overall cautious market sentiment are also helping to limit the decline in the precious metal's price. Traders are awaiting more clarity on the Fed's future policy decisions, with a particular focus on Fed Chair Jerome Powell's upcoming speech during the US session.

Gold is currently undergoing a correction before continuing its upward trend. This correction is important as it can establish the old resistance level as a new support level.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2040
2020
2006
1963
1947
1920

Oil.png



Oil Prices Show Modest Gains Following Demand and Deflation Concerns


On Thursday, the price of oil slightly increased despite the deflationary signs in China. Investors awaited more information on the demand status from the world's two largest oil consumers. The prices had fallen over 2% on Wednesday, as concerns over the possible supply disruption in the Middle East eased and worries over the US and Chinese demand rose.

Furthermore, inflation data from China, published on Thursday, showed that the CPI for October decreased by 0.2% YoY, while PPI data fell by 2.6% YoY. It was largely in line with Reuters' poll that expected a decline of 0.1% in CPI and 2.7% in PPI. The customs data earlier in the week showed that China's total exports of goods and services contracted faster than anticipated, but its crude imports for October were robust.

On the other hand, Pan Gongsheng, the central bank governor, stated that China is expected to achieve its annual growth target of 5% this year, which is positive news for oil demand. However, inventory data from the US might indicate a weakening in demand. Sources revealed that the US crude oil inventories increased by 11.9 million barrels from the week to November 3. If confirmed, it would represent the largest weekly build since February. The weekly oil inventory data from the US Energy Information Administration (EIA) has been delayed until November 15 due to system upgrade.

WTI had more selloff and breaking solid support at the 87 and now continuing toward the next target at 74.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
90
84
82
77
74
68


 
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EUR/USD Downturn Continues Following Powell's Remarks on Fed Policy and Inflation

The EUR/USD took a decisive downturn after Federal Reserve Chair Jerome Powell's comments, moving toward weekly lows and showing a bearish trend. Although European Central Bank (ECB) officials briefly supported the euro, the market expects unchanged interest rates with debate focusing on the timing of a potential rate cut. This ECB support is likely to weaken as long as the US economy outperforms the Eurozone. US fundamentals favor the dollar, as emphasized by Powell's recent remarks.

Powell expressed the Federal Open Market Committee's (FOMC) lack of confidence in current monetary policy's ability to curb inflation to 2%. He also warned of potential inflation "head fakes," resulting in a stronger US dollar and surging bond yields.

US yields had already been rising before Powell's speech, possibly marking the end of a bond rally. The market will continue to assess Powell's speech, while the University of Michigan Consumer Sentiment survey adds to Friday's economic data.

EUR/USD experienced a sell-off yesterday and is relatively subdued today. The outlook remains uncertain, with a lack of clarity on short-term support levels. However, there is a possibility that the 1.0550 level could provide support, while the next resistance level stands at 1.0750.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
1.10401.09301.08001.06301.05501.0450

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UK GDP Grows by 0.6% Annually, Beating Expectations


The Office for National Statistics (ONS) reported that the UK's Gross Domestic Product (GDP) grew by 0.6% on an annual basis in the third quarter, matching the second quarter's growth and surpassing the market expectation of 0.5%. However, the UK's GDP only increased by 0.2% monthly and remained unchanged on a quarterly basis.

Additionally, data from the UK indicated positive growth in Industrial Production (1.5%) and Manufacturing Production (3%) on a yearly basis in September. On the other hand, Total Business Investment contracted by 4.2% on a quarterly basis in the third quarter.

The strength of the dollar today can be attributed to Powell's recent speech, where he emphasized that the Federal Reserve (Fed) is still in its tightening cycle and may consider further rate hikes if necessary. This statement dashed market hopes for a policy shift and strained the pound-dollar pair, leading to more selling pressure.

The GBPUSD maintains its downward trend, with the next support levels identified at 1.2260 and later 1.2200. A robust support level for the price is anticipated at 1.2100.

Resistance 3
Resistance 2
Resistance 1
Support 1Support 2Support 3
1.2550
1.2450
1.2300
1.22601.22001.2100

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USD/JPY Extends Winning Streak on Powell's Hawkish Remarks, Intervention Concerns Arise

The USD/JPY currency pair has been on a winning streak for the last five days. It reached around 151.40 in early European trading, thanks to unexpected hawkish remarks made by Fed Chair Jerome Powell. Powell expressed concerns about inflation during an IMF event, which raised US Treasury yields and strengthened the USD against the JPY. This has led Japanese authorities to consider intervening to limit the USD/JPY pair's rise.

The US Dollar Index (DXY) surged to around 106.00, and the 10-year US bond yield increased to 4.62% due to Powell's statements. Meanwhile, the Bank of Japan (BoJ) remains dovish on their monetary policy, with Governor Kazuo Ueda emphasizing a cautious approach to exiting ultra-loose monetary policy.

The Japanese Yen is under pressure as lower wage growth may delay plans to exit the easy monetary policy. Decent wage growth is crucial for the BoJ to consider policy changes. Traders are closely watching the Fed's Logan speech and the preliminary Michigan Consumer Sentiment Index for November for trading cues in the USD/JPY pair.

The USDJPY is continuing its bullish trend beyond 151.00. The BoJ may intervene, creating volatility.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
153.50152.00150.00149.3148.00146.50
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Gold Prices Show Modest Recovery with Hawkish Fed Remarks

Gold price (XAU/USD) experienced a modest recovery on Thursday, ending a three-day losing streak that had brought it to its lowest level since October 18, around $1,944. However, the recovery lacked follow-through buying, and during the European session, the precious metal slid back to the $1,955 area. This week, several influential members of the Federal Open Market Committee (FOMC) took a more hawkish stance while Fed Chair Jerome Powell mentioned on Thursday that policymakers are encouraged by the slowing pace of inflation but uncertain if the current policy is restrictive enough to maintain momentum. This has allowed the yield on the 10-year US government bond to rise from a one-month low, supporting the USD and putting pressure on the non-yielding gold. The easing concerns over the Israel-Hamas conflict have also contributed to the decline in demand for gold, although worries about China's worsening economic conditions may help limit the downside. Traders are now focusing on the release of the Michigan US Consumer Sentiment Index, which could impact the dynamics of the USD price. Overall, the broader risk sentiment and these upcoming factors should provide short-term trading opportunities in the gold market.

Gold faced rejection at the 1950 level, which serves as a significant confluence point for solid support and resistance. There is potential for a continuation upward in the market.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
2040
2020
2006
1963
1947
1920


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WTI Crude Oil Prices Face Third Consecutive Weekly Loss


West Texas Intermediate (WTI) Crude Oil prices climbed to $76.00/barrel during the Asian session, attracting some buyers. However, the commodity remains near its lowest level since July 21, indicating a potential third consecutive week of losses.

Investors anticipate that the Federal Reserve (Fed) will need to maintain higher interest rates for longer to address persistent inflation, raising concerns about economic headwinds from rising borrowing costs. Manufacturing sectors in the US, Europe, and China have reported worsening business conditions, further dampening crude oil demand.

Reduced risk premium over Middle East supply disruptions and increased US and Iranian crude production suggest oil markets may not be as tight as expected. Commitments from major producers Russia and Saudi Arabia to maintain supply cuts until year-end offer little support to crude oil prices.

The recent US Dollar (USD) recovery, driven by expectations of another Fed rate hike, supports a potential near-term depreciation for the USD-denominated commodity. Technical indicators suggest the path of least resistance for crude oil prices is downward. Any recovery could be viewed as a selling opportunity with limited staying power.

WTI had more selloffs and broke solid support at 87 and now continuing toward the next target at 74.

Resistance 3Resistance 2Resistance 1Support 1Support 2Support 3
90
84
82
77
74
68


 
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