2023-10-30 12:28

RAND TALKING POINTS & ANALYSIS Geopolitics, Fed and Chinese factors at play. USD/ZAR rising wedge breakout now limited by support zone. 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 has been largely influenced by global external factors of recent including Federal Reserve interest rate expectations for the FOMC announcement later this week. With almost 100% certainty of a rate pause, other variables such as the war in the Middle East has negatively impacted the rand as investors seek out the safety of the US dollar. That being said, with the conflict being contained within the region, contagion fears are being quelled thus allowing for a rand pullback. TECHNICAL ANALYSIS USD/ZAR DAILY CHART Chart prepared by Warren Venketas, TradingView Last week’s weekly confirmation candle close below the rising wedge support zone (dashed black line) now keeps the pair around key support (red). This support zone has proven to be significant since March this year and a break below may expose the 200-day moving average (blue) and 18.5000 psychological handle respectively. Supplementing this downside bias is the Relative Strength Index (RSI) that has edged back below the 50 level, indicative of bearish momentum. Resistance levels: 19.5000 19.3000 19.0000/50-day MA Support levels: 18.7759 18.5000/200-day MA https://www.dailyfx.com/news/forex-usd-zar-price-forecast-rand-bulls-provoked-by-key-support-break-wv-20231030.html

2023-10-30 11:00

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, DAX 40, S&P 500 Analysis and Charts FTSE 100 tries to stabilize The FTSE 100 is trying to regain some of last week’s sharp losses which were due to risk-off sentiment surrounding the Middle East and the ‘rates higher for longer’ outlook.The decline took it to a two-month low at 7,258 with the early September and early October lows at 7,369 to 7,384 being back in sight for Monday’s recovery rally. This area might act as resistance, though. If not, Wednesday’s high at 7,430 could be back in the frame. If overcome on a daily chart closing basis, a medium-term bullish reversal in the seasonally favorable period until year-end could be in the making. Major support below Friday’s 7,258 low can be spotted between the 7,228 to 7,204 March-to-August lows. FTSE 100 Daily Chart DAX 40 tries to bounce off its seven-month low The DAX 40’s fall to 14,589 on Friday has been followed by a slightly more bullish sentiment on Monday morning with the index seen breaking through its October downtrend line at 14,756 as investors await key German preliminary Q3 GDP and inflation data and the Eurozone business climate report. A rise above Friday’s 14,825 high would put last week’s high at 14,945 back on the plate. If bettered on a daily chart closing basis, a medium-term bullish reversal may occur at the end of the year. Potential slips through Friday’s 14,589 low would open the way for the March trough at 14,459, though. DAX 40 Daily Chart See our Q4 Equities Forecast S&P 500 futures point to higher open after several dismal weeks Last week the S&P 500 slipped to its 4,104 late May low as investors worried about an escalation in the Middle East. This week all eyes are on the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting in the middle of the week and US employment data. The S&P 500 may rise to its accelerated downtrend line at 4,162 above which the early October low at 4,200 may also act as resistance. For any significant bullish reversal to gain traction not only the 200-day simple moving average (SMA) at 4,251 would need to be exceeded but also Tuesday’s high at 4,266, the last reaction high on the daily candlestick chart. A fall through 4,104 could lead to the next lower May low at 4,047 being back in sight, however. S&P 500 Daily Chart https://www.dailyfx.com/news/ftse-100-dax-40-and-s-p-500-try-to-kick-off-the-week-on-a-stronger-footing-20231030.html

2023-10-30 09:30

Gold (XAU/USD) Analysis, Prices, and Charts The outlook for gold remains positive Busy week on the economic calendar. The escalation of military action in Gaza continues to boost the price of gold, with the precious metal hitting a fresh five month high on Friday. The ongoing safe haven bid is set to continue and a re-test of resistance around $2,009/oz. is likely in the coming days. Gold is likely to consolidate on either side of $2,000/oz. before testing higher levels. The chart remains positive with support seen between $1,987/oz. and $1,971/oz. (23.6% Fibonacci retracement), while the 20-day sma breaking through the 50-dsma highlights the recent strength of the precious metal. A confirmed break above $2,009/oz. should leave the $2,050/oz. level as the next level of resistance. Gold Daily Price Chart – October 30, 2023 Chart via TradingView IG Retail Trader data 57.31% of traders are net-long with the ratio of traders long to short at 1.34 to 1.The number of traders net-long is 3.36% higher than yesterday and 10.77% lower from last week, while the number of traders net-short is 7.44% higher than yesterday and 11.99% higher 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-outlook-remains-positive-resistance-holds-first-attempt-20231030.html

2023-10-30 08:07

POUND STERLING ANALYSIS & TALKING POINTS Global external factors weighs on GBP. UK housing and credit data under the spotlight today. Technical analysis favors more pound weakness. GBPUSD FUNDAMENTAL BACKDROP The British pound ended the previous week on the backfoot as inflationary pressures in the UK via the labor market softened in conjunction with weak PMI preliminary data. The ongoing war between Israel-Hamas remains volatile and will ultimately safe haven currencies like the USD over sterling. Cracks in global stock markets have also contributed to souring risk sentiment as corporate earnings disappoint. With the Bank of England (BoE) and Federal Reserve interest rate decisions in focus this week, of which none of the respective central banks are expected to hike rates. Emphasis will be placed on revised forecasts and guidance in terms of possible policy shifts. BOE INTEREST RATE PROBABILITIES Source: Refinitiv TECHNICAL ANALYSIS GBP/USD DAILY CHART Chart prepared by Warren Venketas, IG GBP/USD price action holds above the 1.2100 psychological level for now with trendline support nearby. After the death cross (blue) formation earlier this month, downside has been slight but can breakdown further if the aforementioned support zones are breached. Last week’s weekly candle closed with a long upper wick and may add to the bearish bias short-term. Key resistance levels: 200-day MA (blue) 50-day MA (yellow) 1.2308 1.2200 Key support levels: 1.2100 Trendline 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 72% of traders holding long positions (as of this writing). https://www.dailyfx.com/news/forex-pound-price-forecast-upcoming-boe-expectations-keep-gbp-subdued-wv-20231030.html

2023-10-30 05:04

EURO FORECAST: EURO FORECAST: NEUTRAL Dollar Index (DXY) Remains Key for EURUSD as a Host of Data Awaits from the US Just as Geopolitical Tensions Ratchet Up Ahead of the Weekend. Big Week on the Data Front as We Have Central Bank Meetings, NFP, Euro Area Inflation and GDP Data. The BoJ Interest Rate Decision Due Next Week as Well. WIll We Get Any Further Clarity on FX Intervention? WEEK IN REVIEW It’s been a lackluster week for the Euro to say the least with the European Central Bank (ECB) monetary policy decision turning into somewhat of a ‘non-event’ this week. No significant change in the ECB outlook as President Lagarde reiterated the key talking points that have become all too familiar of late. The only slight change from President Lagarde was a more cautious tone when speaking about the economic outlook moving forward while she stressed the higher for longer narrative a bit more strongly than the September meeting. Looking broadly at the pause and comments from the ECB and I would have to say it does give me an impression of a dovish pause which could continue to weigh on the Euro moving forward. President Lagarde did refer to the recent macro data and signs of weakening in the labor market as disappointing. The President further stated that she expects monetary policy to continue to transmit to the economy in Q4 and into next year which opens the door for downward revisions in the ECB staff projections at the December meeting. Interestingly enough the Euro did not lose a lot of ground following the ECB decision with EUR/USD gaining after a brief decline. This could also be down the dynamics of the US Dollar at present but following the significant selloff in the Euro of late, the question is how much lower can we go? THE WEEK AHEAD: CENTRAL BANK MEETINGS, EURO AREA INFLATION AND GDP DATA Give the diminishing growth prospects for the Euro Area the dovish outlook is not unwarranted but there are risks to inflation which could prompt a rethink from the Central Bank. The week ahead brings the Flash Inflation data for October as well as the QoQ GDP growth rate. Inflation will be key given the recent uptick in inflation could force the ECB to rethink their position or at least adopt a more hawkish rhetoric heading into the December meeting. Inflation is expected to have fallen with the MoM also set for a drop based on analyst forecasts. Source: DailyFX Calendar GDP will be an intriguing one as the Euro Area does appear to be grappling with stagflation at present. Market expectations are for a contraction of -0.1% QoQ with the YoY print expected to come in at 0.2%, down from the previous print of 0.5%. If the print comes in a lot worse than expected this could really add to the Euro Areas woes. Other factors that could affect EUR/USD and EUR/JPY in the week ahead will come courtesy of the Federal Reserve monetary policy meeting. There should not be any surprises from the FOMC meeting especially given the spike in treasury yields. As mentioned by policymakers the rise in Yields is likely to do part of the Feds job which means we are likely in for another lackluster Central Bank meeting. There is also the belief that some of the tightening by the Fed has yet to be fully transmitted through to the economy. The NFP number will also be interesting following the massive beat last month, yet more important will undoubtedly be the average earnings number. Markets are expecting a drop off in the average earnings number which should be a positive for the Fed and provide another sign that price pressures are easing. EUR/JPY will also face the interest rate decision from the Bank of Japan (BoJ) with no change expected in policy but further tweaks to YCC may still happen. We could also hear more on the potential FX intervention which continues to hang over Japanese Yen pairs. Comments are unlikely to cut it however, as we have heard the same comments from policymakers for months now which seems to have worn off. For all market-moving economic releases and events, see the DailyFX Calendar TECHNICAL OUTLOOK AND FINAL THOUGHTS Looking at the technical perspective and EURJPY has been rangebound for the best part of 3 months between the 156.70-159.70 areas. Now this is a 300-odd pip range but EURJPY can do that in a day or two in a normal market environment. The threat of FX intervention has kept the Yen supported during this period while Euro weakness also played its part. At this stage we do need some form of catalyst for a breakout whether in the form of FX intervention from the BoJ or any sign of a bullish resurgence in the Euro. Friday's daily candle is on course for a shooting star candle close which could hint at some bearish price action to start the week. In the absence of this i fear EURJPY may remain rangebound with short-term positions remaining the most appealing. EUR/JPY Daily Chart – October 27, 2023 Source: TradingView Key Levels to Keep an Eye On: Support Levels 157.94 157.00 155.72 Resistance Levels 158.40 159.00 160.00 EURUSD EURUSD is more interesting even with a bunch of fundamentals in the week ahead. Since bottoming out on October 4 around the 1.0450 mark we have printed higher highs and higher lows while breaking the long-term descending trendline which was in play since the Mid July highs. Friday's daily candle looked set for a hammer close which would have resulted in a morningstar candlestick pattern and making a recovery toward the 1.0700 mark look more appealing. However, the US Dollar seems to be getting a bid late on Friday as Israel has officially announced a ground invasion into Gaza ramping up the risk of a wider conflict. This is helping the US Dollar thanks to its safe-haven appeal. This now adds a further dimension for the pair heading into next week and is a risk that cannot be ignored. If EURUSD is able to hold above the 1.0500 mark then a return to resistance around the 1.0700 mark may be achievable in the week ahead with a break above facing resistance at 1.0747 and the 1.0800 marl respectively. Alternatively, a break below the 1.0500 mark has to navigate support at 1.450 before attention will turn to the 1.0300 mark. EUR/USD Daily Chart – October 27, 2023 Source: TradingView https://www.dailyfx.com/news/euro-weekly-forecast-eur-usd-eur-jpy-remain-vulnerable-following-lackluster-ecb-meeting-20231028.html

2023-10-30 05:02

JAPANESE YEN OUTLOOK: Bank of Japan and Federal Reserve monetary policy meetings to take center stage in the week ahead Volatility could pick up for the U.S. dollar and Japanese yen, with several risk events on the calendar This article looks at the key technical levels for USD/JPY worth watching in the near term The Bank of Japan and the Federal Reserve will hold their penultimate meeting of 2023 next week. These high-profile events could trigger elevated FX market volatility, which could mean sharp moves for the USD/JPY exchange rate in the coming days. To avoid getting caught on the wrong side of the trade, the retail crowd should follow both proceedings closely, paying special attention to forward guidance from both institutions. BANK OF JAPAN DECISION The Bank of Japan is broadly expected to keep interest rates unchanged at -0.10%, continuing its policy of negative borrowing costs. In terms of the inflation outlook, the institution led by Kazuo Ueda is seen revising its 2024 forecast for the consumer price index to 2.2% from 1.9% previously, marking the third consecutive year in which headline CPI will exceed the official target of 2.0%. To offset a higher CPI projection and safeguard credibility, it is possible that the BoJ could adjust its yield curve control program, allowing long-term government bond rates to moderately drift above the current cap of 1.0%. Such a YCC tweak is likely to have a positive effect on the yen, even if policymakers refrain from framing it as a step toward ‘policy normalization.’ FEDERAL RESERVE DECISION On Wednesday, it will be the Federal Reserve's turn to announce its decision. Markets largely expect the FOMC to stand pat on monetary policy, keeping its benchmark rate in a range between 5.25% and 5.50%. This means that the focus will be on forward guidance, especially on Chairman Powell's comments during his press conference. In September, the central bank left the door open to further policy firming in 2023, but conviction around another hike has been waning in recent weeks, with several policymakers indicating that the bond market is doing the work for them by tightening financial conditions via higher yields. Traders should pay attention to what Powell has to say about this. If Powell leans towards delivering another quarter-point hike this year, the U.S. dollar could rally sharply against the Japanese currency as traders reprice higher the Fed’s terminal rate. With the economy still firing on all cylinders and inflation showing high degree of stickiness, this scenario should not be ruled out entirely just yet. On the other hand, if the central bank chief embraces a more cautious posture and signals that the aggressive tightening cycle that began in 2022 is over, we could see USD/JPY retrace some of its recent gains, but any pullback will likely be limited given the divergence in monetary policy between the Fed and the Bank of Japan. USD/JPY TECHNICAL ANALYSIS On a long-term horizon, USD/JPY remains entrenched in a solid uptrend. On a shorter timeframe, however, the pair has been coiling inside a rising wedge, a bearish pattern composed of two converging upward sloping lines that connect a series of higher highs and higher lows. Confirmation of the rising wedge occurs when prices successfully breach its lower trendline, which is considered a dynamic technical support. In the case at hand, the area to watch is at 149.50. A break below this floor could see a pullback towards the 148.00 handle. On further softness, the focus shifts to 146.00. In the event of renewed strength, resistance for USD/JPY first appears around 150.75, the 2023 high. Upside clearance of this key ceiling could reinforce upward momentum, setting the stage for a rally towards last year’s peak at 151.95. Beyond that level, attention turns to channel resistance near 152.70. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView https://www.dailyfx.com/news/forex-japanese-yen-forecast-bank-of-japan-and-fed-decision-to-shape-usd-jpy-path-20231028.html