Daily Market Analysis By zForex

[zForex]

EUR/USD Gains Ground as Dollar Weakens
EURUSD continues to rise as the Dollar Index (DXY) weakens. The European Central Bank (ECB) is expected to pause the interest rate tightening cycle. Also, DXY is losing momentum due to the multiple dovish statements from Fed officials.
Today, the parity is hovering around the 1.06053 level (21-daily moving average). On the upside, the parity could encounter resistance at the 1.0630 level. If that level is broken, we will follow 1.0690 as a firmer resistance.
If it moves downward, If the level is decisively broken, it could push the pair down to around 1.0540, and then possibly to 1.0500, which is the psychological level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0740	1.0690	1.0630	1.0540	1.0500	1.0450

Pound Holds Near 1.2300 as Dollar Weakens Due to Falling Bond Yields
The pound is maintaining its gains just below 1.2300, after stepping back from a nearly three-week high of 1.2304 level. The DXY is weakened by declining bond yields and a positive market sentiment, which is helping the pair. Traders are now keeping an eye on the US PPI data and the release of FOMC meeting minutes for potential market-moving cues.
Today, there's a possibility that the GBP could surpass 1.2330 and test the 1.2365 level, but it's unlikely to reach the major resistance at 1.2425. Support levels are at 1.2200 and then 1.2175.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2425	1.2365	1.2330	1.2200	1.2175	1.2140

USD/JPY Rebounds as Market Sentiment Improves
USD/JPY is going up for two days in a row, trading around 148.80 on Wednesday in Asia. This is because the pair rebounded in the previous session, influenced by positive market sentiment related to the Middle East conflict.
The pair is hovering around the 148.85 level and still 148.45 level (21-daily simple moving average) could act as a support. If that level is broken, we are following yesterday’s low level at 148.15. On the upside, the 149.00/20 region is still working as a resistance, next 149.55 level.
Traders should be aware that in the past, the Bank of Japan (BoJ) has shown interest in the USD/JPY exchange rate when it approaches the significant level of 150.00. The BoJ has used this level as a potential trigger for foreign exchange market interventions to safeguard the value of the yen.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
150.15	149.55	149.10	148.45	148.15	147.30

Gold Rises as Fed Rate Hike Expectations Diminish
The recent more cautious stance taken by US Federal Reserve (Fed) officials has led traders to reduce their expectations for an additional interest rate hike by the most influential central bank in the world before the end of the year. The likelihood of a Fed rate increase in November is now just 13%. Thus, gold continues to rise today and is hovering around the $1865 level.
Now, gold price is so close to overbought condition in terms of the RSI indicator, but the bullish momentum will continue ahead of the US PPI and Fed minutes. Technically, a break of the 1881 (21-day simple moving average) level will increase the buyer appetite and the next resistance we follow at $1902 (50-day simple moving average). On the downwards, yesterday’s low level of $1853 will be the first support, the next $1845.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1902	1881	1872	1853	1845	1833

 

[zForex]

Euro Trades Stably Near 1.06 Awaiting US Consumer Inflation Data
The euro is currently striving to stay above 1.06, exhibiting stability in a tight trading range while awaiting vital US Consumer Inflation updates. The Federal Reserve's recent meeting minutes didn't bring any surprises, leaving uncertainty about the possibility of a 25-point rate hike. As expected, the currency pair remained directionless near 1.06, aligning with previous predictions of consolidation after a dip to 1.0448.
Although the euro made modest gains, the technical outlook suggests a substantial uptrend is challenging without new macroeconomic data. Today's US inflation report is crucial, potentially introducing significant volatility. The economic agenda also includes US weekly initial jobless claims, closely watched for their impact on the economy.
Given these impending announcements, a cautious approach is advisable, and maintaining long euro positions may not be prudent in this uncertain environment.
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

Pound Maintains Bullish Stance Amid Weak UK Factory Data
The Pound Sterling (GBP) continues to hold its ground in spite of weak UK factory data for August. The GBP/USD pair remains bullish despite the Office for National Statistics (ONS) reporting that UK factory data contracted for the second consecutive month. This contraction was driven by UK firms operating at reduced capacity to enhance efficiency, which involved cutting inventory backlogs and labor forces due to declining demand.
This slowdown in demand and overall output poses concerns for Bank of England (BoE) policymakers as they prepare for the upcoming interest rate decision in November. While some, like BoE's Katherine Mann, lean towards tightening policy to curb inflation and bring it down to 2%, Swati Dhingra from the central bank supports a rate cut if the growth rate falls beyond expectations.
Concerns about potential inflation rebounds persist due to geopolitical tensions in the Middle East, which could keep the oil market tight until 2024. Additionally, the UK faces energy shortages due to supply chain disruptions, which could exacerbate headline inflation and challenge the government's commitment to halve it to 5.2%.
GBP/USD continued its advance toward the 1.2300 target and now the price facing some resistance at that level. A comeback will take the price toward the 1.2200 support level and a breakout up will take the price to the 1.2450 level.

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

Divergent Fed Views Impact USD/JPY as FOMC Minutes Awaited
The USD/JPY pair ended a two-day winning streak, trading around 149.00 in the Asian session, amid concerns over the Federal Reserve's rate-hike plans. Fed Governor Christopher Waller has expressed caution, suggesting that market tightening might suffice without immediate action. In contrast, Fed Governor Michelle Bowman leans toward more rate hikes, citing persistent inflation. The Federal Open Market Committee (FOMC) minutes reveal a divergence in views, emphasizing data-driven decisions.
The US Producer Price Index (PPI) rose in September, exceeding expectations at 2.2%. Attention now turns to the Consumer Price Index (CPI) release, forecasting a potential drop from 3.7% to 3.6%, and the upcoming Jobless Claims report.
The US Dollar Index (DXY) faces challenges around 105.50 due to subdued US Treasury yields. The Japanese Yen (JPY) weakens, as the Bank of Japan (BoJ) maintains an ultra-easy monetary policy, focusing on wage growth and inflation control. BoJ board member Asahi Noguchi supports flexibility under Yield Curve Control (YCC) to balance economic recovery and inflation management amidst rising inflation expectations.
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

Geopolitical Tensions and Weaker Dollar Propel Gold to Two-Week Highs
The price of gold 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 tries to break the 1875-80 resistance level going toward the 1900 target. Today's data will dictate the direction.

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

 

[zForex]

US INDICES:



S&P 500 and Nasdaq Futures Gain 0.4% as Inflation Data Awaited

S&P 500 and Nasdaq 100 futures gained nearly 0.4% each.

The consumer price report for September will be released Thursday morning. Economists surveyed by Dow Jones are forecasting a 0.3% month-over-month increase for September and a 3.6% rise from the prior year. Investors believe that the strength of inflation indicated in the report will play a key part in whether the Federal Reserve decides to maintain or raise interest rates at its two-day meeting beginning Oct. 31.

The data comes following a stronger-than-expected producer price index for September.

Atlanta Fed president Raphael Bostic and Boston Fed president Susan Collins will be giving remarks Thursday afternoon, which could give Wall Street more insight into the central bank’s stance.

On a daily basis, a possible descending triangle is forming. The support level is at 14,500, while the resistance level is at 15,300, where the median line of the long bullish channel and the downtrend line coincide. Whether there is a bounce from this level or a breakout will depend on current macroeconomic developments and the pricing of upcoming meetings.



USOIL

Oil Prices Rise Following Growing Concerns Over Israel-Palestine Conflict​

Oil prices are showing a gradual increase on Thursday, driven by concerns highlighted by the IEA regarding heightened market risks due to the escalating Israel-Palestine conflict. Additionally, OPEC producer Saudi Arabia has committed to maintaining market stability, aiming to prevent supply disruptions resulting from the Israel-Palestinian war.

According to the EIA, global oil demand is projected to rise by 3% to 10% from 2022 to 2030 and by 6% to 42% from 2022 to 2050. The most significant growth is anticipated in the scenario of high economic expansion, as outlined in the EIA's report.

Volatility is accelerating in the oil price and direction will be clearer after the geopolitical tensions calm down. 83 as support and 87 as resistance are right now in the price range.



Crypto

Cryptocurrencies Experience Sixth Consecutive Day of Losses as Bitcoin Falls Below $26,750

Bitcoin and various cryptocurrencies faced a sixth consecutive day of losses on Thursday, despite other risk-sensitive assets performing well. This marked a reversal from a recent bullish trend as cryptos returned to their usual trading ranges.

In the past 24 hours, Bitcoin's price dropped by 1.5% to fall below $26,750, reaching its lowest point this month after nearing $28,000 over the weekend.

Returning to the $26,000 range is concerning as Bitcoin had previously stagnated in this zone for over a month due to low volatility and waning investor interest. In late September, there was hope for a bullish streak pushing towards the psychologically important $30,000 level.

Interestingly, Bitcoin's performance has diverged from the stock market, which saw four consecutive days of gains in the Dow Jones Industrial Average and S&P 500. Some suggest crypto traders are becoming cautious due to potential conflicts in the Middle East affecting demand for high-risk assets, or it could be that Bitcoin has lost its allure.

The release of U.S. consumer-price index (CPI) data on Thursday may push Bitcoin above $27,000 or anchor it around $26,000, despite recent macroeconomic developments. Hopes of the Federal Reserve not raising interest rates have boosted stocks but had limited impact on cryptocurrencies, which often decline when borrowing costs rise.

Bitcoin continues hovering around the resistance level at the 100 and 200MA on the daily chart at the 28070 level. The price is forming a range indicating uncertainty. 25000 and 28000 are the support resistance of the actual range.

 

[zForex]

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

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

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

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

 

[zForex]

Markets Upbeat with Global Risk Appetite Recovery

Global markets experienced a negative trend on the final trading day of the week due to developments in the Israel-Hamas conflict. Despite strong balance sheets, U.S. indices lost value, primarily due to increasing geopolitical risks. Major U.S. banks released their third-quarter financial reports, surpassing analyst expectations in terms of earnings per share and revenue.
Wells Fargo Company reported a 6.91% year-on-year increase in the third quarter of 2023, with earnings per share of $1.48 on revenue of $20.85 billion. The consensus expectation was for the company to announce earnings per share of $1.25 on revenue of $20.15 billion. Notably, the net profit exceeded expectations by 17.89%, reaching $5.45 billion. Also, Citigroup reported earnings of $1.63 per share on revenue of $20.1 billion. Consensus expectations were for the company to announce earnings per share of $1.22 on revenue of $19.24 billion. The net profit also exceeded expectations, showing a remarkable 40% increase to $3.50 billion.
On the macroeconomic front, consumer sentiment data published by Michigan for October came at 63, compared to an expected level of 67. Similarly, consumer expectations data was lower than anticipated, at 60.7 versus an expected 65.7. The one-year inflation forecast, which was expected to be 3.2% in line with previous data, was announced at 3.8%, while the five-year inflation forecast exceeded the 2.8% expectation, reaching 3%.
Today, in the United States, we'll also see the release of the Empire State Manufacturing Index and Budget Balance data. It's anticipated that the NY Fed index, which stood at -5.0 in October, will continue to decline. Regarding budget balance data, there's an expectation for a significant drop, potentially moving from $429.8 billion in August to a billion-dollar level. Additionally, the markets will be keeping a close eye on trade balance data in the Euro area.


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

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

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

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

 

[zForex]

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.



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

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1980​	1947​	1930​	1912​	1900​	1885​

 

[zForex]

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

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2000​	1980​	1947​	1920​	1912​	1900​

 

[zForex]

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

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

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

 

[zForex]

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

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

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

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

 

[zForex]

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.



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

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

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

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	000	1980	1947	1930	1912

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

 

[zForex]

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.



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

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

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

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​

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​

 

[zForex]

US Q3 GDP Report Awaited as USD Seeks Direction

United States' Gross Domestic Product is forecast to grow at an annual rate of 4.2% in Q3. The pair is in a bearish corrective phase ahead of the release. After data released by the US Bureau of Economic Analysis, the market sentiment will determine USD direction.

The Gross Domestic Product (GDP) report for the third quarter, to be released by the Bureau of Economic Analysis (BEA) on October 26th, is expected to show an expansion of the US economy at an annualized rate of 4.2% after the 2.1% expansion recorded in the second quarter's GDP report.

The US Dollar (USD) has been easing against its major rivals after reaching fresh year tops in early October on the back of speculation the Federal Reserve (Fed) will refrain from hiking rates any further. Policymakers, Fed Chairman Jerome Powell included, had suggested that high government bond yields are tightening monetary conditions enough to prevent them from acting. Even further, Powell noted that a recession is no longer a base case scenario for the central bank when he announced the September monetary policy decision. However, financial markets remain concerned about economic progress, and the recent war between Israel and the Palestinian group Hamas has revived concerns about global growth.

EUR/USD is selling for the third day coming back toward the 10500-support level and continuing the price range started this month. Data this week and especially for today will dictate a possible comeback or a breakout.

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

Sterling Heads Towards Seven-Month Low with Ongoing Geopolitical Tensions

The Pound Sterling is declining toward a seven-month low as Israel-Palestine tensions dampen the market mood. Labor demand in the UK has started facing the repercussions of poor business activity. A steady interest rate decision is anticipated from the BoE to avoid a recession.

The Pound Sterling (GBP) continues to face intense selling pressure as dismal market sentiment due to escalating tensions in the Middle East combines with a poor economic outlook for the United Kingdom. The GBP/USD pair continues its losing streak for the third trading session in a row as labor market conditions and business activity in the UK region are deteriorating due to a decline in new business orders.

A string of weak economic indicators from the UK economy have dented expectations of more interest rate hikes from the Bank of England (BoE). The central bank is expected to keep interest rates unchanged at 5.25% to avoid further economic casualties. The BoE is widely anticipated to keep interest rates unchanged as a further increase in borrowing costs could push the economy into a recession.

GBPUSD is approaching the critical support level at 1.2070, while it awaits today's developments for further guidance. 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 1	Support 2	Support 3
1.2450​	1.2300​	1.2200​	1.2000	1.1900	1.1800

Japanese Yen Gains Momentum, Testing 150.00 Against the US Dollar

10-year Japanese government bond yield reached a fresh 10-year high ahead of a central bank meeting next week, pushing the yen past 150 per dollar and raising the risk of intervention from authorities in Tokyo.

The USD/JPY pair fell sharply from 150.70 to 149.90 during the early European session on Thursday. The Japanese Yen soars against the US Dollar (USD) amid the suspect FX intervention by the Japanese authorities. At the press time, the USD/JPY pair is gaining 0.15% on the day to trade at 150.43.

On Thursday, Japanese Prime Minister Fumio Kishida said that the currency intervention is not a contradiction of the policy of shifting money away from savings towards investment. However, investors brace for a possible move if the yen breaches the 150.00 threshold against the USD.

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.

​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

Gold Price Resilient Following Geopolitical Concerns

Gold price attracts some buyers for the second straight day amid geopolitical concerns. Bulls seem rather unaffected by rising US Treasury bond yields and a stronger US Dollar. Investors look to the Advance US Q3 GDP growth figures for some meaningful impetus.

Gold price gains some positive traction for the second successive day on Thursday and maintained its bid tone near the weekly top during the early part of the European session. The precious metal remains well within the striking distance of its highest level since May 16 touched last Friday and continues to attract some haven flows in the wake of the risk of a potential escalation in the Israel-Hamas war. This, to a larger extent, offset a further rise in the US Treasury bond yields, bolstered by hawkish Federal Reserve (Fed) expectations, which pushes the US Dollar to a three-week high and tends to undermine the non-yielding yellow metal.

Moving ahead, investors now look forward to important macro releases from the United States for cues on the Fed's future rate-hike path, which will play a key role in determining the near-term trajectory of the gold price. The US economic calendar for Thursday prominently features the release of the Advance Q3 GDP figures, complemented by data on Durable Goods Orders, the customary Weekly Initial Jobless Claims report, and subsequent Pending Home Sales statistics. This, along with Fed Governor Christopher Waller's scheduled speech and the US bond yields, might influence the USD price dynamics and allow traders to grab short-term opportunities around the XAU/USD.

Gold has breached the $1,980 level, advancing towards the $2,000 mark and potentially targeting $2,020. This surge is partly attributed to the prevailing risk-off sentiment in the markets, which is bolstering gold's strong bullish momentum.

​

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

Oil Prices Fall on Increased US Crude Stockpiles and Dollar Index Boost

Investors monitor developments in the Israel-Hamas conflict. Oil prices fell on Thursday after a rise in U.S. crude stockpiles and a climb in the dollar index, giving up some ground gained a day earlier when prices jumped on Middle East tensions. The benchmark oil contracts had settled nearly 2% higher on Wednesday but fell back after the Wall Street Journal reported that Israel has agreed to delay an expected invasion of Gaza for now. Investors were also digesting a rise in U.S. crude inventories, indicative of weak demand. U.S. crude inventories climbed by 1.4 million barrels in the latest week to 421.1 million barrels, according to the Energy Information Administration, exceeding the 240,000-barrel gain expected. Crude runs in the U.S. fell by 207,000 barrels per day, while refinery utilization rates also edged lower by 0.5 percentage points to 85.6% of total capacity, EIA data showed. Macroeconomic concerns continued to weigh on the outlook for oil demand, as eurozone business activity data took a surprise downturn this month. The dollar index was also up slightly on Thursday, which helped pressure oil prices. A stronger dollar dampens oil demand as it makes the commodity more expensive for those holding other currencies.

WTI rebounded from the 82-support level and stands now at the first resistance level at 85.4. The price of oil continues its volatility without a clear direction for this month.

​

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

 

[zForex]

ECB Holds Steady as Euro Weakened
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 emphasized that inflation remains elevated, affirming that rates will remain elevated as necessary, with no alterations to prior guidance. Following the meeting, the euro lost strength.
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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0930	1.0800	1.0700	1.0630	1.0500	1.0400

GBP/USD Range-Bound Following Hawkish Fed and BoE Expectations
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.
GBP/USD is currently testing the final support level at 1.2070, awaiting further developments to determine its course. The pair is displaying bearish tendencies, 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 1	Support 2	Support 3
1.2450	1.2300	1.2200	1.2000	1.1900	1.1800

USD/JPY Nears Key Resistance with Potential Japanese Intervention
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 the largely positive data, it did not provide substantial support for 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.
The Japanese yen (JPY) is receiving backing from the potential intervention by the Japanese Ministry of Finance (MoF) as the USD/JPY rate breached the historically defended 150 level.
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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

Geopolitical Tensions Increased Gold Prices Despite Fed's Tightening Expectations
Gold prices have been rising for three consecutive days and are approaching a multi-month high. This increase can be attributed to the ongoing conflict in the Middle East which has led to an increase in demand for safe-haven assets. However, the gains are limited due to expectations of further policy tightening by the Federal Reserve. The gold price has seen buying interest but is still below its five-month high that was achieved last week. Traders are cautious and prefer to wait for the release of the US PCE Price Index, which will impact the Fed's policy decision and subsequently influence the USD and gold. Despite this caution, modest gains are expected for the third straight week. The geopolitical tensions continue to support gold prices, although the expectations of the Fed are tempering bullish bets.
The gold broke in 1980 pushing toward the 200 targets followed by 2020. The geopolitical tensions and the risk-off sentiment in the markets are helping gold to maintain the solid bullish momentum.

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

Oil Prices Stall Despite Middle East Tensions and Supply Dynamics
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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
98	94	90	84	82	78

 

[zForex]

Global Economic Concerns Mount as Markets Reflect a $12 Trillion Loss​

Investors eagerly awaited significant economic data from the Asian-Pacific markets as the week began with a mixed start. Meanwhile, investors closely watched the latest inflation figures from Spain and Germany, anticipating a mixed opening for European markets on Monday.

The global stock market has suffered a significant loss in value of $12 trillion since the end of July. This decline has raised concerns about the sustained "higher-for-longer" interest-rate policies of central banks, which could potentially lead the global economy toward a recession.

The Bank of Japan initiated its two-day monetary policy meeting, leading to an 11-year high in 10-year government bond yields. Nearly two-thirds of economists anticipate that the Bank of Japan will end negative rates in 2024, which could lead to higher Japanese yields and present additional challenges to the Treasury market.

Australia reported a 0.9% month-on-month increase in seasonally adjusted retail sales for September, indicating growth in the retail sector.

China Evergrande Group, the world's most indebted developer, experienced a decline in its shares. However, the company gained some breathing space as a Hong Kong court postponed a winding-up hearing to December 4.

The director-general of the World Trade Organization has warned that the ongoing Israel-Hamas war could significantly impact global growth if it spills into the broader Middle East region.

The core personal consumption expenditures (PCE) price index, a closely watched inflation measure by the Federal Reserve, increased by 0.3% in September, aligning with Dow Jones forecasts. The core PCE rose by 3.7% year-over-year, consistent with expectations. Inflation expectations also experienced a significant swing in the final revision of the University of Michigan consumer sentiment survey for October, which was released on Friday.

Bitcoin is expected to record its strongest week since June, following a substantial rally earlier in the week that broke it out of the tight trading range it had been stuck in for most of this year.




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

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

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

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

 

[zForex]

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

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
152.70	151.50	150.00	148.00	146.50	146.00

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

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

 

[zForex]

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	Support 2	Support 3
1.0930	1.0800	1.0700	1.0630	1.0500	1.0400

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

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

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

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

 

[zForex]

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

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

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

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

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

 

[zForex]

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

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

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

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

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

 

[zForex]

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1040	1.0930	1.0800	1.0700	1.0630	1.0550

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
153.50	152.00	150.00	149.3	148.00	146.50

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

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

 

[zForex]

​

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1040	1.0930	1.0800	1.0700	1.0630	1.0550

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

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 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
153.50	152.00	150.00	149.3	148.00	146.50

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

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