2023-11-11 09:00

EUR/USD ANALYSIS Fed > ECB last week contributing to euro weakness. Euro & US CPI the main attraction this upcoming week. EUR/USD bears hopeful for downside breakout. EURO FUNDAMENTAL BACKDROP The euro has been largely impacted by central bank speakers last week with the Federal Reserve winning the hawkish battle. Fed Chair Jerome Powell pushed back against dovish talk and left the door open for additional interest rate hikes if necessary – a net gain for the US dollar over the course of the week. Poor Chinese economic data has not helped the euro with a continuing downward trend negatively impacting an already fading manufacturing sector within the region. Money markets have consequently priced in roughly 85bps of cumulative rate cuts by December 2024 vs the Fed’s 75bps, thus playing into the hands of the greenback via the carry trade. The USD remains favorable due in the current environment through a comparatively stronger economy as well as the ongoing war in the Middle East that plays into its safe haven allure. Source: Refinitiv TECHNICAL ANALYSIS EUR/USD DAILY CHART Chart prepared by Warren Venketas, IG The daily EUR/USD daily chart has once again failed to breach bear flag resistance and stays sandwiched between the 200-day moving average (blue) and 50-day moving average (yellow). Wlthough the pair is currently above the midpoint level of the Relative Strength Index (RSI), the technical pattern above suggests a bearish undertone should flag support break. Resistance levels: 1.0800/200-day MA Flag resistance 1.0700 Support levels: 1.0635 50-day MA 1.0600 Flag support 1.0500 IG CLIENT SENTIMENT DATA: BEARISH IGCS shows retail traders are currently neither NET LONG on EUR/USD, with 60% of traders currently holding long positions (as of this writing). https://www.dailyfx.com/news/forex-eur-usd-weekly-forecast-stern-powell-keeps-pressure-on-euro-wv-20231111.html

2023-11-10 13:38

USD/CAD PRICE, CHARTS AND ANALYSIS: Hawkish BoC Fails to Inspire CAD Bulls. A Rebound in Oil Today has Failed to Spark USDCAD into life, Will Fedspeak do the Trick? Taking a look at the IG client Sentiment Data and we can see that Retail Traders are Currently Net-SHORT with 72% of Traders Holding Short Positions. To Learn More About Price Action,Chart PatternsandMoving Averages, Check out theDailyFX Education Series. Read More: The Bank of Canada: A Trader’s Guide USDCAD has continued to rally after finding support around the 1.3650 mark on Monday. Since then, it has rallied close to 200 pips as the US Dollar Index inched higher as well and Oil prices continued to slide. BANK OF CANADA The Bank of Canada Deputy Governor Carolyn Rodgers has been vocal this week following the release of the summary of deliberations. The Deputy Governor warned that the period of super-low interest rates is likely over and that both businesses and consumers need to adapt. Rodgers stated that people are already feeling a strain of existing debt as delinquency rates on credit cards, car loans and unsecured lines of credit have returned to or have slightly surpassed their pre-pandemic levels. The Summary of Deliberations showed that some members felt that it was more likely than not that the policy rate would need to increase further to return inflation to target. Interestingly enough this was a similar message which we heard from Jerome Powell yesterday in his address at the IMF which sparked a bit of life into the US Dollar. Judging by the position of Central Banks now might be a good time to focus a bit more on the technical. US Dollar Index (DXY) Daily Chart Source: TradingView TECHNICAL ANALYSIS USD/CAD USDCAD failed at the 1.3900 resistance level two weeks ago before a selloff of some 270 pips before finding support at the 1.3650 support area. This area also had the 50-day MA which provided an extra confluence and has seen USDCAD rise to trade just above the 1.3800 handle at the time of writing. USDCAD is however flashing mixed signals with the daily candle close on Friday November 3 breaking the overall bullish structure as it closed below the previous higher low swing point around 1.3660. his would hint at a new lower high, shy of the previous high at 1.3900 before pushing to print a new lower low and break through support at the 1.3650 handle. In contrast to his development, we also have just seen a golden cross pattern develop as the 100-day MA crosses above the 200-day MA in a sign that the bullish momentum may yet continue. These are two completely different signals when it comes to the next mood for USDCAD and kind of reflects the reason indecisive nature of markets as a whole. I for one still prefer a bit of a correction to the downside with a potential retest of the 100 and 200-day MAs before a push to potentially break the 1.3900 handle. This of course is just a gut feeling but i will no doubt be monitoring the pair with interest in the coming days. Key Levels to Keep an Eye On: Support levels: 1.3758 1.3650 1.3500 Resistance levels: 1.3900 1.4000 1.4130 USD/CAD Daily Chart Source: TradingView, prepared by Zain Vawda IG CLIENT SENTIMENT Taking a look at the IG client sentiment data and we can see that retail traders are currently net SHORT with 72% of Traders holding short positions. Given the contrarian view adopted here at DailyFX toward client sentiment, Is USDCAD Destined to rise further and break the 1.3900 resistance level? For Tips and Tricks on How to use Client Sentiment Data, Get Your Free Guide Below https://www.dailyfx.com/news/usd-cad-technical-outlook-mixed-technical-signals-could-halt-upside-rally-20231110.html

2023-11-10 12:00

Gold (XAU/USD) Analysis, Prices, and Charts Powell not confident that the Fed has done enough to get inflation down to target. US 30-year bond sale floundered, sending yields sharply higher. Federal Reserve Chair Jerome Powell sent risk markets spinning lower, and bond yields higher after he said that the US central bank was not confident that the current monetary policy was restrictive enough to bring inflation down to target (2%). ‘If it becomes appropriate to tighten policy further, we will not hesitate to do so,’ Powell said, before adding that the Fed ‘will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening.’ In recent weeks financial markets have been pricing out further US interest rate hikes and Powell’s comments were seen as a reminder to the market that the Fed will do whatever is necessary if it believes that inflation will remain at elevated levels. US Treasury yields jumped sharply higher late Thursday after a USD24 billion 30-year bond sale met with tepid demand. The lack of demand left primary dealers holding nearly 25% of the sale on their books, a substantially higher percentage than usual. The yield on the bond jumped around 17 basis points to 4.80% after the results came out, wiping out this week’s move lower in longer-dated yields. US Treasury 30-Year Yield Daily Chart Chair Powell’s hawkish commentary and the move higher in US Treasury yields are weighing further on the price of gold. After hitting a multi-month peak of $2,009/oz. on October 27th, the precious metal has drifted lower and now changes hands at $1,950/oz. A prior level of resistance around $1,961/oz. is now back in play with the 23.6% Fibonacci level at $1,971/oz. the next level of resistance. A zone of support between $1,932/oz. and $1,940/oz. should hold in the short term. Gold Daily Price Chart – November 10, 2023 Charts via TradingView IG Retail Trader data show 59.79% of traders are net-long with the ratio of traders long to short at 1.49 to 1.The number of traders net-long is 2.46% lower than yesterday and 1.70% higher than last week, while the number of traders net-short is 1.33% higher than yesterday and 1.42% higher than 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-slips-lower-after-fed-powell-s-warning-ust-30-year-bond-sale-flop-20231110.html

2023-11-10 10:30

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, S&P 500, Russell 2000 Analysis and Charts FTSE 100 recovery runs out of stream The FTSE 100 has come off Thursday’s 7,466 high amid hawkish comments by the US Federal Reserve (Fed) Chair Jerome Powell and as the British economy stalls in the third quarter. So far the blue chip index remains above Thursday’s low at 7,363, though. As long as it does, overall upside momentum should remain in play. On a rise above this week’s high at 7,466 last week’s high at 7,484 and the 55-day simple moving average at 7,503 would be back in the picture. These levels would need to be overcome for the early September high at 7,524 to be back in focus. Minor support can be seen between the early September and early October lows at 7,384 to 7,369 ahead of this week’s low at 7,363. Were it to be slipped through, though, a drop toward the October low at 7,258 may ensue. The 7,258 low was made close to the 7,228 to 7,204 March-to-August lows which represents significant support. FTSE 100 Daily Chart S&P 500 comes off mid-October high at 4,398 The sharp 6% rally in the S&P 500 finally ran out of steam near the 4,398 mid-October peak as Jerome Powell stated that it is too early to definitely announce the conclusion of the Fed’s interest rate hiking cycle and following a disappointing US 30-year bond auction which pushed bond yields higher and equities lower. The 55-day simple moving average (SMA) at 4,351 is currently being tested ahead of Thursday’s 4,339 low and the 4,337 August low. Were it to give way, the late June low at 4,328 may act as support. Further potential support comes in along the mid-October 4,311 low. A rally above 4,398 would confirm a major medium-term bottoming formation and would put the 4,540 September peak back on the cards. S&P 500 Daily Chart Russell 2000 gives back half of its recent gains The Russell 2000, the great underperformer of US stock indices with a 3.5% negative performance year-to-date, is seen slipping back towards its one-year low at 1,642 whilst giving back half of last week’s gains to 1,773. The index is still expected to level out above its major 1,633 to 1,631 September and October 2022 lows as the US Fed is expected to near the end of its hiking cycle. It may do so ahead of or around minor support at the 23 October low at 1,663. Minor resistance can be spotted at the 1,707 early October low and also at the 1,713 mid-October low, ahead of last week’s 1,773 high. Russell 2000 Daily Chart https://www.dailyfx.com/news/ftse-100-s-p-500-and-russell-2000-come-off-this-week-s-highs-on-hawkish-fed-comments-20231110.html

2023-11-10 09:17

AUD/USD News and Analysis RBA struggling to judge inflation risks as the RBA restarts hikes for second time AUD/USD continues to move lower after rate hike was largely priced in Futures market anticipates no rate cuts next year with potential for one more hike The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library RBA Still Struggling to Judge Inflation Risks The RBA has paused and resumed rate hikes twice this year with this month seeing another 25 bps hike despite discussions of another pause having taken place. In the end, it was decided that a hike would provide greater assurances that inflation risks are being delt with seriously. Australia’s core measure of inflation for Q3 (trimmed mean) revealed a move higher from 0.9% to 1.2% - motivating the committee to raise rates one more time. However, AUD was unable to build on this as a hike was largely expected and had been priced in at the same time the US dollar sold off. The level of resistance around 0.6520 provided the perfect pivot point for AUD/USD, sending price action sharply lower. Immediate support appears at 0.6365 and appears to be faltering after Jerome Powell added a boost to recent USD gains with his hawkish comments yesterday. Failure to hold 0.6365 would see 0.6272 appear as the next level of support – which marks the yearly low. The Aussie dollar is yet to feel the positive effects of China’s $1 trillion stimulus which it is likely to trickle down into the end of the year. Resistance lies at 0.6460 but the bearish MACD crossover suggests momentum remains to the downside for now. The longer-term outlook favours a recovery in AUD/USD as US data appears to be softening. When upside risks to US inflation decline on a material basis and weakness is being observed on a consistent basis across economic data points and the labour market, the greenback is likely to come under pressure. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow While other central banks are facing expectations of rate cuts on the horizon, the futures market is not seriously anticipating the need to cut rates in Australia and is actually revealing the real possibility of another hike being required before the end of Q2 2024. A lot will depend on how inflation progresses over the coming months but the latest projections from the RBA make room for one more hike as they anticipate a future rate of 4.5%. Implied Basis Point Rises for the Australian Interest Rate Source: Refinitiv, prepared by Richard Snow https://www.dailyfx.com/news/rba-minutes-reveal-the-prospect-of-another-hike-aud-fails-to-respond-20231110.html

2023-11-10 07:31

POUND STERLING ANALYSIS & TALKING POINTS Don’t be fooled by UK GDP beat! Low growth environment weighs negatively on pound. GBP/USD bears eye bear flag breakout. GBPUSD FUNDAMENTAL BACKDROP Bank of England (BoE) interest rate expectations (refer to table below) stay in favor of a rate pause in the December meeting but should markets witness subsequent weak economic data, we may see a stronger dovish bias despite pushback from the BoE’s Governor Andrew Bailey. BOE INTEREST RATE PROBABILITIES Source: Refinitiv TECHNICAL ANALYSIS GBP/USD DAILY CHART Chart prepared by Warren Venketas, IG GBP/USD price action extends its recent downtrend post-GDP and now looks to test the 1.2200 psychological handle once more. The bear flag (black) pattern is still under consideration but will need to see additional downside towards flag support. Key resistance levels: 200-day MA (blue) Flag resistance 1.2308 50-day MA (yellow) Key support levels: 1.2200 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 70% of traders holding long positions (as of this writing). https://www.dailyfx.com/news/forex-gbp-breaking-news-0-growth-for-uk-in-q3-wv-20231110.html