2023-11-07 13:30

GBP/USD Analysis and Charts Dovish BoE chatter sending UK bond yields sharply lower. Three 25 basis point rate cuts next year are now being priced in. The BoE’s chief economist Huw Pill said last night that UK inflation is likely to fall sharply in the coming months and that current market pricing of interest rate cuts next year are not ‘unreasonable.’ The market has taken Mr. Pill’s words to heart and is now pricing in three quarter-point rate cuts next year. The Bank of England last week left the UK Bank Rate unchanged as it continues to struggle with above-target inflation and a weak economy. The latest S&P Global CIPS Services data showed the UK economy declining for the third month in a row, and this Friday’s GDP release is expected to show the UK economy flatlining and heading for a technical recession. The yield on the interest rate-sensitive UK 2-year Gilt fell to a fresh five-month low this morning, before trimming some of its losses, while the yield on the 10-year benchmark is edging towards to a new multi-week low. UK 2-year government bond yields spiked to a 5.77% high on July 12th. UK 2-Year Gilt Yields Daily Chart Learn How to Trade GBP/USD with our Free Guide The recent GBP/USD rally has turned with the pair now back below 1.2300 after having touched a 1.2428 high on Monday. The US dollar is also weakening as traders begin to price in a series of rate cuts in the US next year. From a technical perspective, the 200-day sma acted as resistance at the start of the week ahead of horizontal resistance at 1.2447 and 50% Fibonacci retracement at 1.2471. The next level of support is seen around 1.2200. GBP/USD Daily Price Chart Charts using TradingView How GBP/USD Traders are Currently Positioned and What it Means for Price Action What is your view on the British Pound – 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/gbp-usd-slumps-back-below-1-2300-on-dovish-boe-rate-talk-20231107.html

2023-11-07 12:14

Commodity Update: Gold, Oil Analysis Gold heads lower on a stronger dollar and pulls back from overbought territory Gold volatility (GXZ) has witnessed a sharp decline after approaching levels synonymous with the banking turmoil earlier this year Brent crude oil drops as global growth outlook outweighs supply concerns The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Gold heads lower on a stronger dollar and recovers from overbought territory gold has put in an impressive performance rising just short of 11% when measured from the October swing low but has given back some of those gains more recently as the precious metal appears less sensitive to the ongoing conflict in the Middle East. Gold rose exponentially, bursting through the 200 simple moving average with ease but appears to have turned after tagging the $2010 level of resistance, with the latest move marking a 2-day decline. After dipping below $1985, the metal now looks to target the recent swing low and potentially the $1937 level which currently coincides with the 200 SMA - a widely observed yardstick for the long-term trend. gold is being influenced by a multitude of factors none more so than the conflict in the Middle East but recent developments have had very little effect in extending the prior bullish advance. It is with this observation that one may deduce that gold traders are potentially becoming desensitised to the potential threat of escalation in the region, or more realistically the decline could be attributed to a recovering U.S. dollar and a gold market that was due a correction after rising exponentially. $1985 is the immediate level of resistance while $1937 presents a convenient level of support coinciding with the 200 simple moving average. Gold (XAU/USD) Daily Chart Source: TradingView, prepared by Richard Snow 30-day implied gold volatility has fallen sharply, nearly reaching levels last witness in May when the regional banking turmoil reared its head once again. In the early days of the conflict, gold volatility ramped up as the Israeli Prime Minister warned that this would be a long war. The lower volatility suggests that gold prices would require another catalyst to see it retest the recent highs and the all-time high of $2081.80. 30-Day Implied Gold Volatility (DVZ) Daily Chart Source: TradingView, prepared by Richard Snow Brent Crude Oil Drops as the Global Growth Outlook Outweighs Supply Concerns Brent crude oil continues to plunge lower and now tests the October swing low. The energy commodity has been on the decline since mid-October as concerns around the global outlook have ramped up in recent weeks. The FOMC's hawkish message with a dovish undertone was the latest in a series of underwhelming fundamental data from the US. Markets no longer price in a realistic chance of another rate hike, and in fact, have anticipated potential rate cuts to be implemented as early as the end of Q2 next year. Global growth also continues to slow particularly in Europe where it appears as if Q3 brought on a contraction. Adding to this is the Fed’s very own forecast for Q4 which has been revised sharply lower to levels around 1.2%, down from figures around 4% previously. Something else to note recently from the October NFP print is that the job market is softening - something the Fed has welcomed as it has been calling for such an outcome for months to bring down inflation. $83.50 is the immediate level of support followed by $82. A breach of the 200 SMA may be cause for concern for oil bulls but will bode well for the Biden administration ahead of next year's presidential elections. Brent Crude Oil Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/gold-cools-as-volatility-subsides-oil-sinks-on-grim-global-outlook-20231107.html

2023-11-07 10:30

Article by IG Chief Market Analyst Chris Beauchamp Dow Jones, Nasdaq 100, Nikkei 225 Analysis and Charts Dow steady around 34,000 The index saw its huge rally stall on Monday, perhaps unsurprisingly given the gains made last week and the lack of data during the session. The price finds itself above the 50- and 200-day simple moving averages (SMA), and sits right at the highs from early October. Trendline resistance from the July peak is the next area to watch, along with the 100-day SMA. A reversal below the 200-day SMA might indicate some short-term consolidation. Dow Jones Daily Chart See How IG Client Sentiment Can Help You When Trading Nasdaq 100 sits below trendline resistance The price has returned to the upper bound of the current descending channel, after its best week since January.In the short-term, the price will target the October highs at 15,330, and then on towards 15,540, the highs of late August and early September. A close back below 14,920 would bring a bearish view into play once again. Nasdaq 100 Daily Chart Nikkei 225 pulls back towards 100-day MA Like other indices, the Nikkei enjoyed an impressive rally last week, moving higher off the 30,500 zone. Further upside now targets trendline resistance from the June high, which may come into play near 33,000. Beyond this, the September highs at 33,500 are the next target. Sellers will need a move back below 32,000 to suggest a more serious pullback has developed, which would then target the 200-day SMA and the October lows around 30,500. Nikkei 225 Daily Chart https://www.dailyfx.com/news/dow-nasdaq-100-hold-firm-while-nikkei-225-drops-back-20231107.html

2023-11-07 08:10

Australian Dollar (AUD/USD) Prices, Charts, and Analysis RBA hikes rates as expected by 25 basis points to 4.35%. Australian dollar on the back foot against the US dollar. The Reserve Bank of Australia hiked rates by 25 basis points earlier today, as the central bank continues to struggle with above-target inflation. The move, widely expected, saw the Official Cash Rate raised to 4.35%. The RBA has kept rates unchanged at the last four policy meetings. In the accompanying statement, RBA Governor Michele Bullock noted that while inflation has passed its peak, it is still ‘too high and proving more persistent than expected a few months ago.’ Ms. Bullock added, ‘While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected. CPI inflation is now expected to be around 3½percent by the end of 2024 and at the top of the target range of 2 to 3 percent by the end of 2025. The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.‘ RBA Monetary Policy Statement The Australian dollar fell against its US counterpart after the release, paring some of its recent gains. US Treasury yields picked up again overnight after last week’s sell-off, as traders look to this week’s USD112 billion of bond sales. Today USD48 billion of 3-year notes are up for sale, tomorrow USD40 billion of 10-year notes are on the block, while on Thursday USD24 billion of 30-year bonds will be up for grabs. It looks likely that traders are trying to force yields higher this week ahead of these sales. Learn How to Trade AUD/USD The recent move higher in AUD/USD, on the back of a weaker US dollar and thoughts that the RBA would raise interest rates, pushed the pair away from a rough zone of prior trade between 0.6300 and 0.6500. The pair currently trade at 0.6425 and need to hold above the 50-day sma at 0.6393 and the 20-day sma at 0.6366 to continue last week’s bullish move. AUD/USD Daily Price Chart – November 7, 2023 What is your view on the Australian Dollar – 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/reserve-bank-of-australia-rba-hikes-rates-by-25bps-aud-usd-slides-lower-20231107.html

2023-11-06 22:30

NASDAD 100, USD/JPY FORECAST: Nasdaq 100 rises for the seventh straight day, but gains are capped by rising U.S. rates U.S. Treasury yields resume their advance after last week’s pullback Meanwhile, USD/JPY perks up, putting an end to a three-day losing streak, with the broader U.S. dollar benefiting from the move in bonds Most Read: US Dollar Setups - EUR/USD, GBP/USD and AUD/USD Muted as Bullish Momentum Wanes After struggling for direction for much of the trading session, the Nasdaq 100 finished the day slightly higher, but gains were contained by rising rates. Last week, Treasury yields fell after the Federal Reserve adopted a more cautious tone and macro data raised concerns about the state of the economy, but the move was overdone, prompting a large recovery today. The rally in yields boosted the broader U.S. dollar, paving the way for USD/JPY to reclaim the psychological 150.00 threshold. This article focuses on the Nasdaq 100 and USD/JPY from a technical perspective, examining critical price levels worth watching in the coming days. NASDAQ 100 TECHNICAL ANALYSIS The Nasdaq 100 rose for the seventh straight day after rebounding from confluence support at 14,150/ 13,930. Following this remarkable winning streak, prices have broken above key technical levels and are currently flirting with a major trendline at 15,230. If this ceiling is breached, a push towards cluster resistance at 15,400/15,475 becomes a tangible possibility. On further strength, the focus shifts to 15,740. On the flip side, if the bullish camp starts liquidating positions to take profits on the recent rally and sellers return, initial support stretches from 15,075 to 15,040. Below this area, attention transitions to 14,865, followed by 14,600. The tech index may establish a foothold around the 14,600 area on a pullback, but in the event of a breakdown, the bears may set their sights on the October lows. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Futures Chart Created Using TradingView For a comprehensive view of the Japanese yen's fundamental and technical outlook, grab a copy of our Q4 trading forecast today. It’s totally free! USD/JPY TECHNICAL ANALYSIS USD/JPY rebounded on Monday and ended a three-day losing streak, boosted by a rally in U.S. yields. If gains accelerate in the coming days, resistance lies at 150.90, followed by the 2023 peak located around the 152.00 handle. Successfully piloting above this ceiling could reinforce upward impetus, paving the way for a move towards the upper boundary of a medium-term rising channel at 153.000. On the other hand, if sellers regain control of the market and spark a bearish reversal from current levels, technical support appears at the psychological 149.00 mark, near the 50-day simple moving average. Should this floor cave in, we could witness a pullback towards 147.25 and 146.00 thereafter. Below those levels, the next area of interest is situated around 144.50. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView https://www.dailyfx.com/news/forex-nasdaq-100-goes-on-bullish-tear-usd-jpy-perks-up-as-us-yields-resume-rebound-20231106.html

2023-11-06 20:30

OIL PRICE FORECAST: Oil Prices Failed to Hold onto Early Gains as Saudi and Russia Re-Affirm Commitment to Supply Cuts. Venezuela Eyeing Deals with Private Companies to Speed Up Production Output. IG Client Sentiment Shows Traders are 79% Net-Long on WTI at Present. To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. Most Read: What is OPEC and What is Their Role in Global Markets? Oil prices are up around 1.3% at the time of writing as Saudi Arabia and Russia reiterate commitment to supply cuts. The two OPEC members confirmed their commitment to extra voluntary oil supply cuts to the end of 2023. OIL CUTS EXTENDED TO 2024? Given the signs of weakness we are starting to see in the US and have already seen in the majority of Europe (recent PMI data) there is a real chance the voluntary cuts may be extended into Q1 of 2024. As OPEC have continually stated their goal is to maintain price stability and balance and thus the cuts may be needed in 2024 If demand and global growth slows. VENEZUELA IN DISCUSSION WITH OILFIELD FIRMS TO REVIVE OUTPUT The recent lifting of sanctions (temporarily) has not had any material impact to markets as intimated by OPEC. The decline in standard and lack of maintenance to infrastructure have left the Venezuelan authorities in a pickle. Based on recent Baker Hughes rig count data, Venezuela only has 1 active drilling rig from 80 that were active in 2014. This was the reason cited by OPEC and discussed in previous Oil article as a stumbling block to rapidly expand production and have a material impact on Oil supply. The initial hope was that an influx of Venezuelan Oil may help lower prices given the shar rise we had over the past month. Source: Refinitiv, Baker Hughes International Rig Count According to reports Venezuelan officials have made proposals to small private Oil contractors to operate some PDVSA oilfields in order to improve output. According to sources some companies who have approached the PDVSA to reactivate business ties were referred to Camimpeg which is an oil and mining services firm owned by the Venezuelan military. Prior to the sanctions being eased by the US the PDVSA had apparently planned to recover well and rigs to increase output with local firm Operadora one of the leading firms tapped to rescue damaged and looted equipment. It will be interesting to keep an eye on how this develops over the coming weeks and whether the easing of sanctions is here to stay. DATA AND RISK AHEAD FOR OIL PRICES Data is a bit sparse this week, but we do have Chinese import and export data which will be closely monitored to gauge if the economy is moving in the right direction. Exports will be crucial as well and will point to the health of the Global economy as well given the importance of the Chinese export market in terms of Global trade. Last week saw poor factory data from China coupled with the miss by Apple on Chinese sales putting market participants on alert once more. What is intriguing though is despite the up and down nature of the Chinese economy in 2023, Oil purchases and demand have been through the roof as the Chinese looks to rebuild and replenish their stockpiles. This obviously means that any drop off in demand has not been felt yet but maybe felt once the Chinese are comfortable with their inventory levels. This could see the Oil purchases from China more reflective of the state of the economy and a drop-off in demand could push Oil prices lower. TECHNICAL OUTLOOK AND FINAL THOUGHTS From a technical perspective both, WTI has been trading in a tight range for the last 5 days but remains vulnerable below the 100-day MA. As it stands a break below the $80 a barrel mark will open up a potential test of the 200-day MA at $78.15. This is also the level where we had the beginning of the extended upside rally which reached the $95 a barrel mark and could be a key support level. Alternatively, a push higher here will face immediate resistance at $82.92before attention turns to the 20-day MA at 84.60 and the psychological $85.00 a barrel mark. WTI Crude Oil Daily Chart – November 6, 2023 Source: TradingView Key Levels to Keep an Eye On: Support levels: 80.00 78.15 76.95 Resistance levels: 81.71 82.92 84.60 IG CLIENT SENTIMENT IG Client Sentiment data tells us that 79% of Traders are currently holding short positions. Given the Contrarian View to Crowd Sentiment Adopted Here at DailyFX, is this a sign that Oil prices may continue to fall in the days ahead? https://www.dailyfx.com/news/oil-price-forecast-wti-remains-vulnerable-below-the-100-day-ma-20231106.html