2023-11-15 07:29

UK Inflation Drops Across the Board UK headline CPI 4.6% vs 4.8 exp. Prior 6.7% UK core CPI 5.7% vs 5.8% exp. Prior 6.1% Largest contributors to CPI drop: housing and household services (energy) and food The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library UK inflation dropped on both the core (inflation ex volatile items like food and energy) and headline measures, bettering estimates for the month of October. The largest contributions to the decline came via encouraging drops in food and energy prices as goods inflation witnessed a massive decline from 6.2% to 2.9% when comparing October 2023 to the same time last year. The more closely monitored services inflation also witnessed a decline although it proved to be more modest, from 6.9% to 6.6%. The massive 12-month decline in headline inflation is notable on the chart below and will no doubt be lauded by the UK government ahead of next week’s Autumn (budget) Statement. Rishi Sunak promised the UK public that his government would halve inflation by the end of 2023. The latest move solidifies the notion that the Bank of England is done hiking interest rates but inflation, average earnings and services inflation still remain elevated. These areas have previously been identified by the BoE as areas to focus on but more recently average earnings have received less attention. UK Inflation Makes Positive Strides Towards 2% Goal Source: Refinitiv, prepared by Richard Snow Immediate Market Reaction The immediate market reactions was relatively tame in the moments that followed the release with yesterday's lower US CPI having propelled cable higher on the day. The better-than-expected move in UK inflation this morning threatens to eat into those gains but thus far the effect has been minuscule. GBP/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow The daily GBP/USD chart reveals the effect of yesterday's US CPI print, sending cable nearly 2% higher on the day and above the 200-day simple moving average (SMA). The positive UK inflation data remains secondary to the recent trend of softer US data which has prompted the futures market to bring forward expectations of interest rate cuts in 2024, sending the dollar lower. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/uk-breaking-news-uk-cpi-posts-massive-drop-gbp-offered-20231115.html

2023-11-14 22:30

US DOLLAR, EUR/USD, GBP/USD, NASDAQ 100, GOLD PRICE FORECAST The U.S. dollar slumps on falling yields following lower-than-expected U.S. inflation figures EUR/USD and GBP/USD break out to the topside, reaching multi-week highs Gold prices and the Nasdaq 100 also rally, flirting with key technical levels in both cases Most Read: US Inflation Cools to 3.2 % in October, US Dollar Sinks but Gold Gains U.S. Treasury yields plummeted on Tuesday after weaker-than-expected U.S. consumer price index data reduced the likelihood of additional central bank tightening and weakened the case for keeping interest rates at elevated levels for an extended period. The move in the fixed-income space sent the broader U.S. dollar reeling, with the DXY index plunging more than 1.5%, its worst daily performance since November 2022. Against this backdrop, the euro and British pound broke out to the topside, hitting multi-week highs against the greenback. Gold prices also posted solid gains and managed to consolidate decisively above the 200-day simple moving average, a bullish technical signal. For its part, the Nasdaq 100 catapulted to its best levels in almost four months, coming within a hair's breadth of reclaiming its 2023 peak. With traders declaring victory in the fight against inflation and already pricing in aggressive rate cuts for 2024, recent market moves may gain traction and consolidate in the near term. This could mean more downside for yields and the U.S. dollar, along with additional gains for precious metals and stocks. This piece scrutinizes EUR/USD, GBP/USD, the Nasdaq 100, and gold prices from a technical perspective. We delve into significant price levels that require attention following Tuesday’s noteworthy moves across key assets. EUR/USD TECHNICAL ANALYSIS EUR/USD soared on Tuesday, taking out Fibonacci resistance and the 200-day simple moving average. With momentum on its side and a positive shift in sentiment, the pair may extend its upward trajectory in the days ahead, with a potential target at 1.0960, the 61.8% Fib retracement of the July/October selloff. In the case where EUR/USD fails to hold onto gains and sellers regain dominance, the first technical support to monitor appears around the 1.0840 mark, followed by the psychological 1.0800 handle. Continued weakness increases the risk of revisiting the 1.0650 area. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView Interested in learning how retail positioning can shape the short-term trajectory of GBP/USD? Our sentiment guide explains the role of crowd mentality in FX markets. Request your free copy now! GBP/USD TECHNICAL ANALYSIS GBP/USD also blasted higher on Tuesday, surging past its 200-day simple moving average and breaching the 38.2% Fib retracement of the July/October slump. If this bullish breakout is sustained in the coming trading sessions, buyers could be emboldened to launch an attack on 1.2591 (50% Fib retracement). Conversely, if upward impetus fades and sentiment shifts in favor of sellers, initial support is identified between 1.2460 and 1.2450. Maintaining prices above this floor is necessary to instill confidence in the bullish outlook; a failure to do so might trigger a retreat towards 1.2320 and 1.2200 thereafter. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView If you're looking for in-depth analysis of U.S. equity indices, our Q4 stock market trading forecast is packed with great fundamental and technical insights. Get a free copy now! NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 rallied more than 2.2% on Tuesday on the back of falling U.S. yields following weaker-than-expected U.S. CPI numbers. With traders already discounting a dovish pivot at the Fed, sentiment could remain positive, creating the right conditions for equity market strength. In terms of key technical thresholds, the first resistance to watch corresponds to the July highs near the 16,067 level. On further strength, the focus shifts to last year’s peak. If a bearish reversal unfolds, initial support is located at 15,720, followed by 15,500/15,400. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Chart Created Using TradingView Eager to gain insights into gold's future trajectory and the upcoming market drivers for volatility? Discover the answers in our complimentary Q4 trading guide. GOLD PRICE TECHNICAL ANALYSIS After a few days of softness, gold executed a bullish reversal on Tuesday, bouncing off cluster support at $1,940/$$1,950. Should prices successfully build on this upward momentum, initial resistance lies at $1,975/$1,980. Upside clearance of this ceiling could open the door for a rally towards $2,010/$2,015. Conversely, in the event of sellers regaining control of the market, primary support stretches from $1,950 to $1,940. Although gold may establish a base in this range during a retracement, a breakdown could set the stage for a drop toward $1,920, followed by $1,900. GOLD PRICE CHART (FUTURES CONTRACTS) Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-in-freefall-after-us-cpi-setups-on-eur-usd-gbp-usd-nasdaq-100-gold-prices-xauusd-20231114.html

2023-11-14 18:30

Japanese Yen Analysis (USD/JPY, GBP/JPY) Lower US CPI has knock on effects for the wider FX market USD/JPY dips after US CPI miss but the Yen struggles to appreciate GBP/JPY soars close on 2% ahead of UK CPI first thing tomorrow morning The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library US CPI Has Knock on Effects for the Wider FX Market With inflation heading in the right direction, forward-looking markets are already anticipating interest rate cuts sooner than before, potentially accelerating the dollar decline. The greenback has been propped up throughout the rate hiking cycle, buoyed mainly by rising rate expectations and more recently rising bond yields. If US data continues to soften, major currency pairs are likely to see a more prolonged period of relief against the most traded currency in the world. USD/JPY Dips after US CPI miss but the Yen struggles to appreciate The Japanese yen has depreciated against the US dollar for a number of weeks now as markets braced for the possibility of FX intervention from Japanese officials which has not yet materialized. Earlier this morning the Japanese Finance Minister Suzuki was not going to be drawn into comments around current FX levels but reaffirmed he is aware of the pros and cons of a weak yen. One thing to note now is that oil prices have eased considerably in the last three weeks, meaning a weaker yen is more tolerable. Oil reliant companies will see their fuel costs easing and the continued yen depreciation supports attractively priced Japanese exports. The USD/JPY pair printed a new yearly high yesterday, without much push back from Japanese officials. Markets have become more emboldened to trade above the 150 market for extended periods of time as the immediate threat of FX intervention has faded. The pair is down only 0.7% at the time of writing while GBP/USD is up more the 1.7% - revealing the inability of the yen to take advantage of the move. The pair heads towards 150 but the uptrend has been relentless, keeping well above the dynamic level of support shown by the blue 50-day simple moving average. In the absence of intervention, it would appear that a significant decline in USD/JPY will be a massive challenge even as US data eases. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow In recent weeks, US futures have not only brought interest rate cuts forward but they have also increased the number of hikes anticipated in 2024. Markets price in the possibility of a 25 basis point cut as early as May next year and factor in just under 100 basis points in total, or four cuts of 25 bps each). As such the dollar and US yields have sold off and trade a fair distance from their respective peaks. Implied Probabilities of US Rate Cuts Source: Refinitiv, prepared by Richard Snow GBP/JPY soars close on 2% ahead of UK CPI tomorrow GBP/JPY rose at an impressive rate after US CPI showed signs of improvement but tomorrow is the turn of the UK. UK inflation data is released at 7am UK time tomorrow with expectations of a massive drop in headline inflation and a lesser – but still encouraging – decline in the core measure. Should inflation print inline or lower than anticipated, the current advance may encounter some resistance, halting momentum around the 188.80 level – last seen in 2015. In addition, the market may soon become due for a pullback as the RSI nears overbought territory, meaning an extended move may be difficult in the absence of inflation surprising to the upside tomorrow. The next level of note to the upside would complete a full retracement of the major 2015 to 2016 decline around 195.30. Support lies back at 184.00 followed by 180.00. GBP/JPY Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/japanese-yen-update-lower-us-cpi-tames-usd-jpy-gbp-jpy-rises-20231114.html

2023-11-14 15:30

US Crude Oil Analysis and Charts • Crude prices remain above recent lows • Demand forecasts have been tweaked higher • Strong downtrend still dominates the daily chart Crude oil prices gained a little in Europe on Tuesday following the rare recent sight of two straight daily sessions of strong gains. The market managed to get back into the green after United States inflation data came in a little weaker than expected, raising hopes alive that interest rates may not rise again anytime soon. The International Energy Agency raised its own oil demand growth forecasts during the session. The agency’s forecast for this year was upped to 2.4 million bpd, from 2.3, with 2024’s expectation despite tipping slower growth across almost all major economies.This didn’t have a lasting effect on prices, suggesting that the market remains extremely wary after rises already seen. Those were largely inspired by November’s monthly report from The Organization of the Petroleum Exporting Countries which did a little to counter the market’s prevailing gloom. OPEC laid the blame for the heavy falls seen since September squarely at the doors of speculators and ‘overblown’ negative sentiment in a fundamentally strong market. It also increased its forecast for overall oil demand this year by 20,000 barrels per day and stuck to its relatively bullish call for 2024 (2.25 million bpd). Still, oil prices have been under severe pressure for the past two months with investors worried about the likely extent of demand. Those worries focus primarily on both the US and China but also take in other major economies still contending with interest rates higher than have been seen for a generation. OPEC is clearly doing what it can to push back against this thesis, pointing out that overall oil market supply remains pretty tight, but it’s probably too early to call an end to the bearish rethink that’s taken place since September. Prices have also reportedly been boosted by signs that the United States is cracking down on sanctions-busting by Russia. Reuters reported that the US Treasury has asked ship-management companies for details of a hundred vessels it suspects of violating Western measures against the movement of Russian oil. However, the market could shortly see increased supply from major producer Iraq. Its oil minister has reportedly said that talks to restart supply pipelines through Turkey from its Kurdish regions could soon reach an agreement. This could see an additional half million barrels per day on stream. The next major oil-specific economic data release will come on Wednesday. That day will bring the US Energy Information Administration’s look at inventory levels for crude oil and other petroleum products. US Cude Oil Technical Analysis US West Texas Intermediate Daily Chart Compiled Using TradingView Prices have bounced quite strongly, having retreated late last week into a trading band not seen in mid-July It’s bounded by July 13’s top of $77.34, which now acts as near-term support and July 17’s low of $74.03 which guards the path lower to the next significant Fibonacci retracement level at $73.08. Recent gains have pushed prices back above the previous retracement of $77.78 but the market remains very close to that level and it’s probably too soon to say that it can comfortably remain above that point. A very steep downtrend line from October 19 still dominated this market, itself an acceleration of the slide seen since the peaks of September 28 above $95. That downtrend line offers bulls a tempting near-at-hand target of $79.31 with an inability to crack that level into this week’s close likely to prove quite bearish. It’s notable that Monday’s gains came despite sliding overall market volume and open interest which may cast doubts on their durability. IG’s own sentiment data finds the market overwhelmingly net long at current prices, to an extent that may argue for a contrarian call now. --By David Cottle for DailyFX https://www.dailyfx.com/news/us-crude-ticks-up-after-us-cpi-holds-most-opec-inspired-gains-20231114.html

2023-11-14 14:00

OCTOBER US INFLATION KEY POINTS: October U.S. inflation clocks in at 0.0% month-over-month, bringing the 12-month reading to 3.2% from 3.7% previously, one-tenth of a percent below expectations in both cases Core CPI increases 0.2 % m-o-m and 4.2 % y-o-y, also below estimates Lower than expected inflation numbers will give the Fed cover to embrace a less hawkish stance Most Read: US Dollar Setups: USD/JPY, GBP/USD and AUD/USD, Volatility Up Ahead Inflation in the U.S. economy softened last month thanks in part to the Fed’s hawkish hiking campaign and interest rates sitting at multi-year highs, a sign that policymakers are making progress in their quest to restore price stability. According to the U.S. Bureau of Labor Statistics, the consumer price index was unchanged in October on a seasonally adjusted basis, with the flat reading facilitated by a 2.5% drop in energy costs. This brought the 12-month pace down to 3.2% from 3.7% previously, representing a slow but welcome improvement for the Fed, which targets an inflation rate that averages 2% over time. Economists surveyed by Bloomberg News had expected headline CPI to print at 0.1% m/m and 3.3% y/y. Excluding food and energy, so-called core CPI, intended to reveal longer-term economic trends while minimizing data fluctuations caused by the volatility of some items in the typical consumer's basket, increased 0.2 % m/m, surprising to the downside by one-tenth of a percent. Compared with one year ago, the underlying gauge grew by 4.2%, a step down from September's 4.3% advance. Overall, inflationary forces are moderating, but the process is clearly slow and painful for consumers. Today's report, however, should reinforce the Fed’s decision to proceed carefully, reducing the likelihood of further tightening during this cycle. The data may also give officials the cover they need to start embracing a less aggressive posture - an outcome that could weigh on U.S. yields and, therefore, the U.S. dollar. This could be positive for gold prices. Eager to gain insights into gold's future path and the catalysts that could spark volatility? Discover the answers in our Q4 trading forecast. Get the free guide now! US INFLATION RESULTS INFLATION CHART Source: BLS Immediately after the CPI report was released, the U.S. dollar, as measured by the DXY index, took a tumble, sinking more than 0.7% on the day, dragged lower by the steep downturn in U.S. Treasury yields. Meanwhile, gold prices advanced, climbing about 0.5% in early trading in New York. Benign inflation numbers, if sustained, should weigh on rates heading into 2024. This could create the right conditions for a sharp downward correction in the U.S. dollar, which would stand to benefit precious metals such as gold and silver. MARKET REACTION – US DOLLAR, YIELDS AND GOLD Source: TradingView https://www.dailyfx.com/news/forex-usd-inflation-cools-to-3-2-in-october-us-dollar-sinks-but-gold-gains-20231114.html

2023-11-14 12:30

Gold (XAU/USD) Analysis, Prices, and Charts US inflation report the next driver for gold’s price action. The 200-day simple moving average provides short-term support. Learn How to Trade Gold with our Complimentary Guide The latest US inflation report is released at 13:30 GMT today and is expected to show y/y core inflation remaining unchanged at 4.1%, while the annual headline reading is seen falling to 3.3% from 3.7% in September. Headline inflation has fallen sharply from a peak of 9.1% in June last year but has picked up from this June’s low of 3%. Fed Chair Jerome Powell will be hoping that inflation resumes its move lower, despite his recent warning that not enough was being done to bring inflation down to target. Current market pricing suggests that the Federal Reserve is done with hiking interest rates and will pivot to cutting interest at the end of H1 next year. Current pricing shows 75 basis points of cuts next year, with a strong possibility of 100 basis points in total. Gold continues to move lower after hitting a $2,009/oz. peak in late October. The move lower, despite the ongoing military action in the Middle East, is being driven by a general risk-on sentiment that has pushed safe haven markets lower. As long as this remains the case, gold will struggle to push higher. The technical picture is mixed with a negative series of short-term lower highs and lower lows meeting a positive reaction from the 200-day sma that is currently supporting the precious metal. The CCI indicator shows gold as oversold, but not in extreme territory. Today’s inflation report will steer gold in the coming days. Gold Daily Price Chart – November 14, 2023 Charts via TradingView IG Retail Trader data show 66.87% of traders are net-long with the ratio of traders long to short at 2.02 to 1.The number of traders net-long is 1.13% lower than yesterday and 22.23% higher from last week, while the number of traders net-short is 10.98% higher than yesterday and 24.37% lower from last week. What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-sitting-on-technical-support-as-us-inflation-report-nears-20231114.html