2023-11-14 11:18

Euro Analysis (EUR/USD, EUR/JPY) Second data estimate points to stagnant European growth EUR/USD rise flatters the fundamentally depleted euro EUR/JPY climbs past prior resistance with 170 now insight, FX intervention threat re-emerges The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Second Data Estimate Points to Stagnant European Growth Europe has been the center of pessimistic fundamental data in recent months as the global growth slowdown advances. Elevated interest rates are helping to constrain economic activity in order to bring down inflation but it remains a delicate balancing act as policy makers intend to avoid throwing the economy into a recession. The euro area, according to two of the three estimates, contracted in Q3 of this year following a positive 0.2% expansion in Q2. However, the two quarters before that registered growth of 0% - highlighting the major headwinds for Europe. EUR/USD Rise Flatters the Fundamentally Depleted Euro EUR/USD attempts to trade higher whiles within the ascending channel, having risen above the significant 1.0700. The recent softening of US data positions EUR/USD in the prime position should we see weaker CPI and retail sales data this week. Headline inflation is expected to slow while core is anticipated to remain sticky but retail sales could provide the most impact of the two if consumer spending declines sharply. The impressive Q3 surprise was driven to some extent by healthy consumption and consumer spending and any change in this trend could add to pessimistic forecasts in the US for Q4, sending the dollar lower. The 200-day SMA and 1.0831 are the next levels of interest to the upside with 1.0700 as the immediate level of support, although, 1.0520 is a more significant support level. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow EUR/JPY climbs Past Resistance but FX intervention threat re-emerges EUR/JPY has quietly gone about its business, rising higher day by day as the yen fails to appreciate despite the BoJ allowing greater flexibility for higher yields. The rise in the pair has more to do with the weak yen than arguments behind a bullish case for the euro. Stagnant GDP growth in Europe continues to tell the story of a challenging internal and external environment. Perhaps the one positive is that ZEW sentiment data has turned more positive but it is a very small silver lining. The futures market now anticipate the possibility of ECB rate cuts as early as April next year despite ECB officials fiercely reluctant to even consider talking about the matter. EUR/JPY trades above 162.42 and now opens up the next level of resistance at 170.00. Support lies at the prior swing high of 159.75 with a more established level of support at 158.00. FX intervention talk has re-emerged after this latest spate of yen weakness but markets appear to have grown weary of incessant jawboning. Nevertheless, keep an eye out for updates around the BoJ asking banks for FX quotes as this preceded prior intervention efforts. EUR/JPY Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/euro-update-eur-usd-and-eur-jpy-could-stand-to-benefit-this-week-20231114.html

2023-11-14 10:00

Article by IG Chief Market Analyst Chris Beauchamp Dow Jones, CAC 40, Nikkei 225 Analysis and Charts Dow breaks trendline resistance The price continued to gain on Monday, moving above trendline resistance from the August highs. This now clears the way for a possible test of the September lower high around 35,000, and then beyond this on towards the August highs at 35,660. After consolidating over the past week around 34,000, the buyers appear to be in charge once again. It would need a reversal back below trendline resistance and below the 200-day simple moving average (SMA) to suggest a new leg lower could begin. Dow Jones Daily Chart Learn How to Trade Breakouts with our Free Guide Nikkei 225 consolidates around six-week high Shallow trendline resistance from the June highs appears to be the index’s next target.Having found support last week around the 100-day SMA the index has now resumed its move higher, moving above the high from the beginning of November and fighting off a revival of selling pressure on Monday. After trendline resistance, the index targets 33,500, the September high, and then on to 34,000. Nikkei 225 Daily Chart CAC40 back above 50-day moving average The recovery goes on here, with the index once more moving above the 50-day SMA. The index is now moving through the lows of the summer around 7100, and the next target becomes the 7170 zone which acted as resistance in late September and early October. A failure to close above 7100 and then a drop back below 7000 might signal that a lower high is in place. CAC40 Daily Chart See How Changes in IG Client Sentiment Can Affect Price Action https://www.dailyfx.com/news/dow-nikkei-225-and-cac-40-gains-slow-ahead-of-us-idow-nikkei-225-and-cac-40-gains-slow-ahead-of-us-inflation-datanflation-data-20231114.html

2023-11-14 07:28

POUND STERLING ANALYSIS & TALKING POINTS UK wage data creates concerns around inflation battle. 4.2% unemployment level reiterates robust jobs market. GBP/USD trading above 50-day MA. GBPUSD FUNDAMENTAL BACKDROP It is important to remember the exclusions for this particular report (refer to graphic below) may dampen its validity in terms of monetary policy decisions. What is disappointing from an investor point of view is this jobs release will be the last before the Bank of England (BoE) December interest rate announcement. Without the complete picture, more significance will likely be placed on the upcoming UK CPI report later this week. Source: Office for National Statistics TECHNICAL ANALYSIS GBP/USD DAILY CHART Chart prepared by Warren Venketas, IG Daily GBP/USD price action gained upside impetus post-release but remains cautious ahead of US CPI later today. Key resistance levels: 200-day MA (blue) Flag resistance 1.2308 Key support levels: 50-day MA (yellow) 1.2100/Flag support 1.2000 1.1804 MIXED IG CLIENT SENTIMENT (GBP/USD) IG Client Sentiment Data (IGCS) shows retail traders are currently net LONG on GBP/USD with 67% of traders holding long positions (as of this writing). https://www.dailyfx.com/news/forex-uk-unemployment-and-upside-wage-pressures-dominate-jobs-report-wv-20231114.html

2023-11-13 22:45

USD/JPY, GBP/USD, AUD/USD FORECAST: The October U.S. inflation report will steal the limelight on Tuesday If actual CPI results deviate from consensus expectations by a wide margin, FX volatility can rise significantly This article explores pivotal technical levels for USD/JPY, GBP/USD and AUD/USD that may act as support or resistance in the coming trading sessions Most Read: US Inflation Preview - How Will Gold Prices, EUR/USD and the Nasdaq 100 React to Data? Traders should be on high alert on Tuesday, as the U.S. Bureau of Labor Statistics is expected to release October inflation figures in the morning. Against this backdrop, volatility is likely to pick up later this week, with market direction and underlying FX moves dependent on the strength or weakness of upcoming consumer price index data. In terms of consensus estimates, headline CPI is forecast to have risen 0.1% m/m and 3.3 % y/y. For its part, the core gauge is seen increasing 0.3% m/m and 4.1% y/y. Overall, inflation results that surprise to the upside by a wide margin should be bullish for the broader U.S. dollar. The reverse is also true: a weak CPI report that comes in below expectations will likely act as a headwind for the greenback. This article explores pivotal technical levels for USD/JPY, GBP/USD and AUD/USD that may act as support or resistance in the event of large price swings in the coming trading sessions. USD/JPY TECHNICAL ANALYSIS After a minor pullback earlier this month, USD/JPY has regained its poise, clearing a significant hurdle at 150.90 and ascending toward its 2022/2023 high, just shy of the psychological 152.00 mark. With the pair on an upward trajectory and flirting with a key level, traders should exercise caution as Tokyo may step in unexpectedly to prevent further yen weakness and suppress speculative activity. In the event of Japanese authorities intervening in the FX market, there is a risk of USD/JPY quickly breaking below 150.90 and sinking towards 149.00. Additional losses from here on out could shift the focus to 147.25. On the flip side, if Tokyo refrains from intervention and allows USD/JPY to push above 152.00, we could see a move towards the upper limit of a medium-term rising channel at 153.50. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView GBP/USD TECHNICAL ANALYSIS After encountering resistance at a Fibonacci level near 1.2460, GBP/USD has yielded ground, with prices now hovering above the 50-day simple moving average. Should the pair maintain its position above this technical indicator and initiate upward consolidation, there's potential for sentiment to recover, which could pave the way for a move towards 1.2325. On further strength, the focus shifts to 1.2460. Conversely, if sellers return with determination and spark a pullback, the first line of defense against a bearish assault emerges at 1.2250, followed by trendline support at 1.2140. A successful breach of this pivotal level holds the potential to reinforce downward momentum, ushering in a descent toward the 2023 lows around 1.2040. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView Interested in learning how retail positioning can shape the short-term trajectory of AUD/USD? Our sentiment guide explains the role of crowd mentality in FX markets. Grab a copy now! AUD/USD TECHNICAL ANALYSIS AUD/USD bounced on Monday off technical support in the 0.6350 zone following last week’s selloff, with the exchange rate making a move on the 50-day simple moving average located slightly below the 0.6400 handle. If the bulls manage to propel prices above this technical barrier, the possibility of a rally towards 0.6460 comes into view. On further strength, attention turns to 0.6500. Conversely, if sellers mount a comeback and trigger a bearish reversal, the primary support area to watch is at 0.6350. It is of paramount importance for the bulls to vigorously defend this floor – any failure to do so may rejuvenate downside pressure, setting the stage for a retracement towards 0.6310. Should weakness persist, retesting this year's lows becomes a potential scenario. AUD/USD TECHNICAL CHART AUD/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-setups-before-us-cpi-usd-jpy-gbp-usd-aud-usd-volatility-up-ahead-20231113.html

2023-11-13 18:00

GOLD, EUR/USD, NASDAQ 100 FORECAST Gold prices, EUR/USD and the Nasdaq 100 will be highly sensitive to the upcoming U.S. inflation report The U.S. Bureau of Labor Statistics will release October consumer price index data on Tuesday Headline CPI is seen rising 0.1% m-o-m and 3.3% y-o-y. Meanwhile, the core gauge is expected to clock in at 0.3% m-o-m and 4.1% y-o-y Most Read: US Dollar Outlook Hinges on US Inflation, Setups on EUR/USD, USD/JPY, AUD/USD The U.S. Bureau of Labor Statistics will release consumer price index numbers on Tuesday morning. With the Federal Reserve hypersensitive to incoming information and cognizant of upside inflation risks, the latest CPI report will carry additional weight in the eyes of financial markets. This could mean more volatility for gold prices, EUR/USD, and the Nasdaq 100 in the trading sessions ahead. In terms of estimates, headline CPI is forecast to have risen 0.1% on a seasonally adjusted basis in October. This should push the annual rate to 3.3% from 3.7% previously. Meanwhile, the core gauge, which excludes food and energy, is seen rising 0.3% in monthly terms, with the 12-month related reading unchanged at 4.1%. UPCOMING US DATA The Fed has embraced a data-centric stance and noted that it will “proceed carefully”. Despite this cautious approach, the institution has not entirely closed the door to additional policy firming, with Chair Powell indicating that officials are not confident that they have achieved a sufficiently restrictive stance to return inflation to 2.0% and that further progress on cooling price pressures is not guaranteed. Taken together, Powell’s comments suggest that the FOMC is not on a pre-set course and is ready to respond as appropriate to adverse developments that may hinder the fulfillment of its mandates. In this context, any upward deviation of the October CPI figures from consensus expectations could lead policymakers to favor another rate hike at one of their upcoming meetings. FOMC MEETING PROBABILITIES Source: CME Group If interest rate expectations shift in a more hawkish direction on account of a hot CPI report, U.S. yields should rise, boosting the U.S. dollar. This, in turn, might exert downward pressure on gold, the Nasdaq 100, and EUR/USD. The opposite is also true; a downside surprise in last month's inflation data should support precious metals, tech stocks, and the EUR/USD by restraining yields and undermining the higher-for-longer argument. 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! GOLD PRICE TECHNICAL ANALYSIS Gold reversed lower this month after failing to clear a key ceiling in the $2,010/$2,015 region. Following this pullback, the metal is nestled around the 200-day simple moving average, fluctuating in proximity to it. If prices resolve to the upside and consolidate above this technical indicator in a decisive fashion, initial resistance appears at $1,980, followed by $2,010/$2,015. On the flip side, should sellers reemerge and reignite downward pressure, the initial floor to watch rests at $1,935, located just above the 50-day simple moving average. While gold might establish a foothold in this area on a retrenchment, a breach to the downside could trigger a drop towards $1,920. Below this threshold, attention shifts to $1,900. GOLD PRICE CHART (FUTURES CONTRACTS) Gold Price Chart Created Using TradingView Curious about the expected trajectory for EUR/USD and the market drivers that should be on your radar? Discover key insights in the Q4 euro’s trading guide! EUR/USD TECHNICAL ANALYSIS After encountering resistance at a Fibonacci level at 1.0765, EUR/USD has conceded ground, with prices now hovering above the lower limit of a support range near 1.0650. Maintaining this floor is imperative for the bulls; a failure to do so might result in the exchange rate heading towards trendline support at 1.0555. Continued weakness increases the risk of revisiting the 2023 lows. Shifting the focus to a bullish outlook, if sentiment sees a sustained upturn and the bulls reassert control in the market, initial resistance is situated at 1.0765, an area where the 200-day simple moving average converges with the 38.2% Fibonacci retracement of the July/October slump. A successful breakout of this ceiling has the potential to bolster the upward pressure, leading to a rally towards 1.0840. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 broke out to the topside last week, clearing cluster resistance in the 15,400-15,500 area. If the breakout is sustained and the tech index remains above this range, which now represents technical support, we could see a move towards September’s high at 15,720. On further strength, the focus transitions to the 2023 peak at 16,062. Conversely, if sellers resurface and the bulls start to liquidate their long positions to book profits on fears of a potential correction following the recent bullish run, initial support lies at 15,500/15,400. Should this floor cave in, we could witness a pullback towards 15,200, followed by 14,850. Prolonged weakness increases the likelihood of a drop towards 14,600. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-inflation-preview-how-will-gold-price-eur-usd-nasdaq-100-react-to-cpi-data-20231113.html

2023-11-13 16:39

S&P 500 News and Analysis Two-week winning streak threatened by potential US government shutdown Is the trend of softer US data upon us? US CPI, retail sales next IG client sentiment provides a mixed bias due to inconsistent daily and weekly positioning The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Two-Week Winning Streak Threatened by Potential US Government Shutdown In just his first few weeks on the Job, new House Speaker Mike Johnson has a battle on his hands as he attempts to get another crucial funding bill over the line before Friday’s deadline. It feels like just the other day the US government was doing this same dance and yet here we are again – validating the general view held from ratings agencies that the US exhibits political polarization and lacks the political will to deal with expanding US debt. On Friday Moody’s shifted its outlook for US debt from ‘stable’ to ‘negative’, and unlike the other two agencies, maintains US debt at AAA status. The downgrade did little to impact US yields, dollar or the S&P 500. The potential Government shutdown is unlikely to be resolved until the last minute, if past exercises are anything to go by, with the potential to weigh down market sentiment this week. S&P 500 Weekly Chart Source: TradingView, prepared by Richard Snow Is the Trend of Softer US Data Upon US? US CPI, Retail Sales Next US stocks (mainly mega-caps) have surged after a spate of softer US data beginning with a softer NFP print and a tick higher in the unemployment rate. Other sentiment-based indicators like US PMI data has also disappointed in the recent print while the University of Michigan consumer sentiment also missed the mark of Friday. While US CPI is the headliner this week, it would be prudent to keep a watchful eye on US retail sales, given the sizeable contribution of domestic consumption to Q3’s positive surprise. Markets will be looking for confirmation of softer US data and a disappointing print could embolden US equity bulls, at least momentarily as the potential Government shutdown is only likely to be resolved late on Friday. S&P 500 Daily Chart Source: TradingView, prepared by Richard Snow IG Client Sentiment Offers Few Clues Ahead of CPI Data Source: IG, DailyFX, prepared by Richard Snow US 500:Retail trader data shows 41.48% of traders are net-long with the ratio of traders short to long at 1.41 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests US 500 prices may continue to rise. The combination of current sentiment and recent changes gives us a further mixed US 500 trading bias. IG client sentiment is a powerful tool that can be used to inform your trading process. Find out how to read it and apply it by reading the dedicated guide below: https://www.dailyfx.com/news/s-p-500-to-be-weighed-down-by-potential-government-shutdown-20231113.html