2023-11-02 13:58

EUR/USD ANALYSIS Euro area economic situation stays weak but EUR bulls capitalize on US data. NFP and US ISM services PMI in focus tomorrow. EUR/USD stays within developing rising wedge. EURO FUNDAMENTAL BACKDROP US labor data through the jobless claims print showed an increase relative to forecasts that could signal the beginning of an unwinding jobs market. Although there is minimal correlation between this report and the Non-Farm Payroll (NFP) figure tomorrow, coupled with the miss on ADP employment change yesterday, markets may be expectant of a weaker overall NFP release tomorrow. Source: Refinitiv TECHNICAL ANALYSIS EUR/USD DAILY CHART Chart prepared by Warren Venketas, IG The daily EUR/USD daily chart remains within the pattern rising wedge (black) after testing wedge support yesterday. The lower long wick close yesterday naturally saw prices push higher today but this may be brief considering the weak economic data in the Euro area. Short-term directional bias hinges on tomorrow’s US NFP and ISM services PMI. Resistance levels: 1.0800 1.0700 Wedge resistance Support levels: 1.0635/50-day MA 1.0600 Wedge support 1.0500 1.0443 1.0300 IG CLIENT SENTIMENT DATA: BULLISH IGCS shows retail traders are currently neither NET LONG on EUR/USD, with 55% of traders currently holding long positions (as of this writing). https://www.dailyfx.com/news/forex-eur-usd-price-forecast-euro-progresses-as-markets-prep-for-nfp-wv-20231102.html

2023-11-02 12:25

British Pound (GBP) Analysis and Charts A mildly hawkish BoE helps underpin GBP/USD Cable pushes back above 1.2200 The Bank of England (BoE) left the Bank Rate unchanged today at 5.25%, for the second meeting in a row. Six members of the MPC voted to keep rates unchanged, while three members voted for a 25 basis point increase. The central bank expects to keep interest rates sufficiently restrictive to bring inflation down to target and will raise interest rates again if it is deemed necessary. The Bank of England noted signs of weakness in the UK labour market…. ‘The MPC continues to consider a wide range of data to inform its view on developments in labour market activity, rather than focusing on a single indicator. The increasing uncertainties surrounding the Labour Force Survey underline the importance of this approach. Against a backdrop of subdued economic activity, employment growth is likely to have softened over the second half of 2023, and to a greater extent than projected in the August Report. Falling vacancies and surveys indicating an easing of recruitment difficulties also point to a loosening in the labour market. Contacts of the Bank’s Agents have similarly reported an easing in hiring constraints, although persistent skills shortages remain in some sectors.’ ….while the central bank also expects headline inflation… ‘to continue to fall sharply, to 4¾% in 2023 Q4, 4½% in 2024 Q1 and 3¾% in 2024 Q2. This decline is expected to be accounted for by lower energy, core goods and food price inflation and, beyond January, by some fall in services inflation.’ Cable is trading at a fresh one-week high as traders price in a mildly hawkish central bank meeting. The pair are now in the middle of a range defined by the 78.6% Fibonacci retracement at 1.2089 and the 61.8% retracement at 1.2313. The driver of GBP/USD will be Friday’s US Labor Report (NFP) at 12:30 UK. GBP/USD Daily Price Chart Chart via TradingView IG Client Sentiment Shows You How GBP/USD Traders Are Currently Positioned 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/bank-of-england-leaves-rates-unchanged-gbp-usd-grabs-a-small-bid-20231102.html

2023-11-02 11:14

US Dollar (DXY) News and Analysis Fed holds interest rates but nods to ever tightening conditions Are U.S. treasuries signaling a peak in interest rates? Markets turn to fundamental data to gauge the effect of restrictive policy The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Fed holds interest rates but acknowledges Further tightening conditions Yesterday the Federal Reserve held interest rates steady at 5.25 - 5.50% for the second consecutive meeting. This was largely expected but markets had been pricing in the possibility of a one more rate hike before the end of the year after an impressive run of U.S. economic data which saw U.S. GDP canter to 4.9% (annualized) growth in Q3. In the FOMC statement The Fed upgraded its language describing the strong performance of the U.S. economy from “solid” to “strong”. In the ensuing press a conference Jerome Powell acknowledged that the economy was however starting to feel the effects of tighter monetary policy but that the committee still sees a greater chance of a further rate hike than it does rate cuts over the coming months. This makes sense as the Fed does not wish to provide a signal for the markets to go ahead and price in immediate rate cuts which would run the risk of loosening financial conditions, posing a risk to inflation. Immediately after the FOMC statement the dollar basket eased in similar fashion to U.S. yields which posted a notable decline in the run up to the meeting. The bar for an extended bullish continuation in the dollar still remains high despite the fact that U.S. data is strong, due to the continuing tightening thanks to elevated yields. US Dollar Basket (DXY) 30-minute chart Source: TradingView, prepared by Richard Snow Are US Treasuries Signaling a Peak in US Interest Rates? U.S. Treasury yields eased in the lead up to the FOMC announcement potentially suggesting a peak in U.S. interest rates. Longer dated U.S. yields have been extremely elevated through a number of weeks now placing further pressure on financial conditions and credit markets. US 10 Year Treasury Note Yield Source: TradingView, prepared by Richard Snow Fed funds futures have been rather telling, with recent moves suggesting a lesser likelihood of another rate hike before the end of this year. One month ago markets had priced in just under 40% chance of a rate hike in December and this has slowly been declining. Now it sits at just under 20%. FedWatch Tool Showing Market Implied Probabilities of Another Rate Hike Source: CME FedWatch tool Markets Turn to Fundamental Data to Gauge the Effect of Restrictive Policy U.S. data has generally been outperforming it's peers, but yesterday's ISM manufacturing PMI data missed estimates by some margin and the Atlanta feds very own ‘GDP Now’ forecast has come crashing down from around 4% to a mere 1.2% for fourth quarter growth – based on current data. It will take a lot to change the narrative of U.S. exceptionalism and these are only a couple of data points but what it does do is highlight the importance of future data as far as it refers to potential stresses within the US economy. Up next we get U.S. ISM services PMI and NFP. Atlanta Fed’s GDPNow Forecast for Q4 (Based on Current Data) Source: Atlanta Fed, prepared by Richard Snow US Dollar Reversed off Yesterday’s High The dollar reversed sharply after the intraday spike witnessed yesterday and continues the selloff in the London session today. Softer yields have contributed towards the decline along with the notion that interest rates have risen for the final time in this hiking cycle, at least, this is what the market is implying after digesting the statement and words of Jerome Powell. given all of this it is still difficult to sell be dollar which remains at elevated levels. in the absence of pockets of stress or dislocations appearing in the broader U.S. market conditions may favour a range bound approach, looking to fade USD strength at elevated levels. US Dollar Basket (DXY) Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/usd-price-update-dxy-drops-after-fomc-and-a-likely-peak-in-rates-20231102.html

2023-11-02 10:30

Article by IG Chief Market Analyst Chris Beauchamp Dow Jones, Nasdaq 100, CAC 40 Analysis and Charts Dow stronger in wake of Fed decision The index’s rally was given fresh impetus by the Fed decision last night, which saw a more balanced outlook from Jerome Powell. The index has climbed to its highest level in two weeks, continuing its rebound from the lower low. The next target is the 200-day SMA, followed by the 34,000 level. Sellers will need a reversal back below 33,000 to negate the short-term bullish view. Dow Jones Daily Chart See How IG Sentiment Affects the Outlook for the Dow Jones Nasdaq 100 rebound goes on The rally in this index gathered pace yesterday too. The upper bound of the current descending channel now comes into play as a potential near-term target.Beyond this, the early October high at 15,330 comes into view. This would then see the price back above the 50- and 100-day SMAs helping to revive the medium-term bullish view. A reversal back below 14,500 cancels out this view for now. Nasdaq 100 Daily Chart CAC40 sees fresh gains A solid rebound continues here, though from a lower low within the context of a broader downtrend from the July highs.Further gains target the 7170 area that marked resistance in late September and was previously support in late August. A failure to break above 7170 could mark a short-term top, and indeed a reversal below 7100 could also result in fresh selling pressure developing. CAC 40 Daily Chart https://www.dailyfx.com/news/dow-nasdaq-100-and-cac40-continue-to-rally-20231102.html

2023-11-02 07:58

RAND TALKING POINTS & ANALYSIS MTBPS, manufacturing PMI and vehicle sales data paint a poor picture of the local economy. US jobs data in focus later today. USD/ZAR finds resistance at 18.50 and 200-day MA. USD/ZAR FUNDAMENTAL BACKDROP Macro-economic fundamentals underpin almost all markets in the global economy via growth, inflation and employment – Get you FREE guide now! The South African rand rallied yesterday and this morning against the US dollar after the Federal Reserve decided to keep interest rates on hold (expected). Markets viewed the pause in a dovish light despite Fed Chair Jerome Powell eluding to strong economic data – GDP, high inflation and a strong labor market. ZAR strength followed amongst weaker South African and Chinese manufacturing PMI’s showing the influence of the US economy on the local currency. Furthermore, total vehicle sales in South Africa fell reaching two month lows. Yesterday, the Medium-Term Budget Policy Statement (MTBPS) highlighted some of the country’s headwinds including weak economic growth, increasing debt levels and ongoing blackouts (loadshedding). The impact on the rand was minimal but will keep traders wary of the vulnerable economic backdrop within South Africa. TECHNICAL ANALYSIS USD/ZAR DAILY CHART Chart prepared by Warren Venketas, TradingView As mentioned in my prior analysis, a break below the zone in and around the 18.7759 level would open up the 200-day moving average (blue) and 18.5000 psychological handle respectively. This key area of support could slowdown ZAR bulls as the Relative Strength Index (RSI) approaches oversold territory. Resistance levels: 19.0000 50-day MA 18.7759 18.5000/200-day MA Support levels: 18.0000 https://www.dailyfx.com/news/forex-usd-zar-price-forecast-rand-bolstered-by-weaker-dollar-wv-20231102.html

2023-11-01 22:00

EUR/USD & GOLD PRICE FORECAST Gold prices and EUR/USD could gain ground in the near term, but the broader trend may hinge on incoming U.S. economic data Attention will be on the ISM services PMI and the U.S. labor market report later this week This article looks at XAU/USD and EUR/USD’s key levels to watch in the coming days Most Read: Fed Stays Put, Keeps Hiking Bias; Gold & US Dollar Display Limited Volatility The Federal Reserve today concluded its penultimate meeting of 2023. As expected, the institution led by Jerome Powell decided to maintain its benchmark interest rate unchanged at its current range of 5.25% to 5.50%. In terms of forward guidance, the central bank stuck to the script and kept the door open to further policy firming in case a more restrictive stance is needed later on to curb inflation. Despite the FOMC’s tightening bias, Powell failed to steer market pricing toward another hike, as he has done in the past when economic conditions warranted a more aggressive stance. Although his press conference contained some hawkish elements, a strong conviction in the need to continue raising borrowing costs was absent, a sign that the normalization cycle may have already ended. With policymakers seemingly more cautious, perhaps aware that the full effects of past actions have yet to be felt, the U.S. dollar could soon be topping out. However, to have confidence in this assessment, incoming data will have to confirm that the outlook is beginning to deteriorate rapidly in response to increasingly restrictive financial conditions. Traders will have a chance to gauge the health of the overall economy later this week when the ISM services PMI survey and October U.S. employment figures are released. If both reports surprise to the downside by a wide margin, as the ISM manufacturing indicator did, there could be scope for a large pullback in the broader U.S. dollar. This scenario would boost EUR/USD and gold prices (XAU/USD). UPCOMING US ECONOMIC REPORTS EUR/USD TECHNICAL ANALYSIS EUR/USD was on course for a moderate drop on Wednesday, but then reversed course after bouncing off medium-term trendline support. Despite recent price action, the underlying bias remains bearish, but to be confident that the losses will accelerate, the bears need to push prices below 1.0535. Should this scenario unfold, we could see a move towards the 1.0500 handle. On further weakness, the focus shifts to 1.0355. Conversely, if the bulls return in force and manage to drive the exchange rate decisively higher, initial resistance lies between 1.0670 and 1.0695. Upside clearance of this technical ceiling could reignite upward impetus, paving the way for a rally towards 1.0765, the 38.2% Fibonacci retracement of the July/October descent. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, grab a free copy today! GOLD PRICE (XAU/USD)TECHNICAL ANALYSIS Gold (front-month future contracts) has rallied sharply since its October lows, but has struggled to clear resistance in the $2,010/$2,015 range. Attempts to breach this area in recent weeks have been met with downward rejections every single time, a sign that the bulls have not mustered the required strength to spark a breakout. To gain insight into XAU/USD’s outlook in the short term, it's essential to monitor how prices progress in the coming trading sessions, taking into account two potential scenarios. Scenario 1: If the yellow metal manages to take out the $2,010/$2,015 barrier, bullish momentum could gather pace, creating the right conditions for a move towards last year’s high around $2,085. Scenario 2: If sellers engineer a strong comeback and push gold prices below support at $1,980, losses could accelerate, paving the way for a possible test of the 200-day simple moving average at $1,945. Below this threshold, attention turns to $1,920. GOLD PRICE CHART (FRONT-MONTH FUTURES) Gold Futures Chart Created Using TradingView https://www.dailyfx.com/news/forex-eur-usd-gold-forecast-powell-fails-to-steer-markets-toward-another-hike-what-now-20231101.html