2023-10-27 02:45

Japanese Yen (USD/JPY) Analysis USD/JPY goads Japanese officials after latest move above 150 Japanese government bond yields rise, prompting more buying from the BoJ US PCE data tomorrow and the Bank of Japan meeting concludes on Tuesday The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library USD/JPY Goads Japanese Officials after Latest Move Above 150 USD/JPY price action has been frustrating to watch as it essentially flatlined before the latest move into what many consider to be the threshold for FX intervention – the 150 level. The pair was trading around 150.50 before witnessing moderate selling pressure to bring it back below 150, only to return immediately. USD/JPY 5-Minute Chart Source: TradingView, prepared by Richard Snow The pair has, for the most part, heeded consistent warnings about undesirable moves that do not accurately reflect fundamentals. However, a recent run of better-than-expected US data and rising yields have pushed the dollar higher. The Bank of Japan has also stated it will not rush to change its accommodative monetary policy stance until the data suggests that inflationary pressures are being driven by demand side factors and not supply side effects. Therefore, with no anticipated movement on the interest rate front and no clear indication of adjustments to the yield curve, the yen exhibits few bullish drivers. The 50 simple moving average (SMA) has underpinned price action and can be seen as a dynamic level of support however, in the event officials intervene in the FX market they would be looking for a sizeable response – potentially seeing the pair trade below 146.50 and 145.00. Keep an eye out for a possible strengthening of language used by officials with more urgency. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow Japanese Government Yields Push Towards the 1% Marker Following in the footsteps of the US, Japanese government bond yields have been steadily rising, forcing the BoJ to step in and purchase bonds to keep government borrowing costs from spiraling. In a recent Reuters poll as many as two thirds of respondents anticipate the Bank of Japan will withdraw from negative interest rates in 2024. The BoJ Governor himself has said that the bank will have enough data by the end of 2023 to determine if a policy U-turn is needed. Therefore, expectations for next week’s meeting is for no change in rates but another tweak to the yield curve control policy can not be dismissed. 10-Year Japanese Government Bond Yield Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/fx-intervention-watch-usd-jpy-breaches-150-ahead-of-us-pce-20231026.html

2023-10-27 02:44

GBP/USD OUTLOOK: GBP/USD has been trending lower over the past three months or so After recent price action, cable appears compressed between trendline resistance and Fibonacci support This article presents important technical levels worth watching in the coming days Most Read: US Dollar Forecast - EUR/USD, AUD/USD on Shaky Ground. What Now? The British pound has been losing ground against the U.S. dollar since mid-July, with GBP/USD following a well-defined downtrend line and establishing impeccable higher lows and lower lows along its bearish trajectory, as shown on the daily chart below. Earlier in the week, cable made a push towards trendline resistance at 1.2275, but was swiftly rebuffed, reversing its course to the downside. This pullback suggests that sellers still have the upper hand in the market, as the greenback continues to ride a wave of bullish momentum in the broader FX space given elevated U.S. bond yields. Following its recent setback, GBP/USD is sitting above a critical support area near 1.2075, where the 38.2% Fibonacci retracement of the 2022/2023 rally aligns with several swing lows. It is imperative that this floor holds at all costs - any failure to do so may catalyze a slump towards the 1.1800 handle. In the event that prices bottom out and then start to rebound off current levels, dynamic resistance looms at 1.2225. Successfully piloting above this technical barrier could rekindle upward impetus, creating the right conditions for a move toward 1.2330. On further strength, the focus shifts to 1.2450, near the 200-day simple moving average. Curious to learn how retail positioning can shape the short-term trajectory of GBP/USD? Our sentiment guide has all the relevant information you need. Grab a free copy now! GBP/USD TECHNICAL CHART GBP/USD Chart Prepared Using TradingView For a complete overview of the British pound's technical and fundamental outlook in the coming months, make sure to grab your complimentary Q4 trading forecast now! https://www.dailyfx.com/news/forex-british-pound-forecast-gbp-usd-bounded-by-fib-support-trendline-resistance-20231026.html

2023-10-27 02:43

OIL PRICE FORECAST: Oil Slips on Demand Fears as US Exports and Imports are on a Steady Decline. Middle East Tensions Ease but Geopolitical Risk Remains and Will Keep Markets on Edge Moving Forward. IG Client Sentiment Shows Traders are 76% 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 have fallen today on resurgent demand fears which for now appear to be overshadowing the tensions in the Middle East. There appears to be growing belief that the US may be able to avert a full-scale military operation on the ground in Gaza which seems to have allayed fears of further escalation, even if it may prove temporary. At the moment this continued shift in sentiment is making it hard to predict future movements from a technical standpoint. US OIL IMORTS AND EXPORTS ON A STEADY DECLINE A report today looking into flows data and analysis of Oil revealed that US have seen waterborne imports of Crude Oil from OPEC+ members decline steadily over the past 12 months. Total US Crude imports for October 2023 are set to average 2.47 million barrels down from the 2.92 million barrels a day in September. Analysts have attributed a part of the fall to the end of the summer period in the US which tends to see a decline in demand but the other factors are a bit more concerning. There is a belief that the drop in barrels from Saudi Arabia are a sign that the Kingdom is looking to have a greater influence on Oil prices. All of this comes at a time when the US SPR is at multi decade lows with the US last week announcing its intention to replenish the reserves heading into the end of 2023. Looking at the export numbers from the US and it tells a similar story of a slowdown with the US exporting less Oil to Europe. Crude exports to Europe fell to 1.86 million barrels a day in September, down from the 2.01 million barrels a day in July. The drop doesn’t appear to have been influenced by the reason US-Venezuela deal as a spike in supply is yet to materialize. This was expected and discussed in my previous articles, Venezuela needs significant investment into its Oil infrastructure before any meaningful supply will return to markets. US GDP data and durable goods orders were released today pointing to a strong economy but Q4 may prove more challenging and could be adding to the uncertainty and lack of commitment from Market Participants. This coupled with the uncertainties in the Middle East at the moment is likely to see a lot of choppy price action in the days ahead. Next week brings the US FOMC meeting and other high impact data events which could stoke volatility. As one analyst put it “We are one headline away from a big rally in the market”, and it is likely that concern that is currently keeping both bulls and bears from committing to a directional bias at this stage. TECHNICAL OUTLOOK AND FINAL THOUGHTS From a technical perspective WTI enjoyed a bounce off support yesterday with a hammer candle close off support hinting at further upside. Today however, we have remained rangebound, struggling to take out the high or low from yesterday. A sign of the cautious approach we are seeing in many asset classes today as we approach the weekend and next week's Central Bank meetings. A daily candle close below the 83.00 mark can finally open up a possible return to the 80.00 psychological level. There are some hurdles however with the 100-day MA resting at the 80.86 while he previous swing low at 81.50 may provide a challenge as well. I know this may make me sound like a broken record given the amount of times this has been mentioned in the past two weeks, but the Geopolitical developments remain a risk. Any signs of escalation could renew buying pressure as mentioned above, we are one headline away from a potential rally in Oil prices. WTI Crude Oil Daily Chart – October 26, 2023 Source: TradingView Key Levels to Keep an Eye On: Support levels: 81.50 80.86 80.00 Resistance levels: 83.80 85.00 86.16 Brent Crude is a mirror image of the WTI chart at the moment. At the moment we have seen a death cross pattern develop yesterday which hints at downside ahead. An upside continuation will likely hinge on the Geopolitical developments as markets continue to fear a global slowdown in demand for Oil in Q4. Intraday Levels to Keep an Eye On: Support levels: 85.83 84.78 84.28 Resistance levels: 89.00 90.00 92.00 Brent Oil Daily Chart – October 26, 2023 Source: TradingView IG CLIENT SENTIMENT IG Client Sentiment data tells us that 76% of Traders are currently holding long positions. Given the contrarian view adopted at DailyFX, is Oil destined for a return to the psychological 80.00 mark? https://www.dailyfx.com/news/oil-price-forecast-wti-rangebound-as-demand-concerns-resurface-80-a-barrel-incoming-20231026.html

2023-10-27 02:41

NASDAQ 100 OUTLOOK: Nasdaq 100 breaks down, falling to its lowest level since late May after breaching a key floor For sentiment to improve, cluster support in the 14,150/13,930 range must hold at all costs This article analyzes the key technical levels worth watching on the NDX in the coming days. Most Read: British Pound Outlook: GBP/USD Bounded by Fibonacci Support & Trendline Resistance The Nasdaq 100 broke down after breaching technical support located in the 14,600 area. This bearish development intensified the decline, pushing the technology index to its lowest level since late May and into correction territory, characterized by a pullback of more than 10% but less than 20% from its recent high. Mixed earnings from heavy hitters, such as Alphabet and Meta, coupled with elevated U.S. Treasury yields across the curve, have contributed to the prevailing atmosphere of pessimism, creating an unfavorable environment for risk assets. Positive economic data hasn't succeeded in boosting the mood. While activity remains extremely resilient today, investors are forward-looking and deem that the economy won’t be able to sustain its performance for much longer, especially with the Fed hell-bent on keeping rates high for an extended period as part of its fight against inflation. Taking a look at price action, the Nasdaq 100 has fallen towards an area of cluster support that extends from 14,150 to 13,930, where the lower boundary of the short-term descending channel aligns with the 200-day simple moving average and the 38.2% Fibonacci retracement of the Oct 2022/Jul 2023 rally. For sentiment to improve, it is imperative for confluence support in the 14,150/13,930 range to hold firm. Any failure to maintain this critical zone could trigger a large selloff, potentially taking the equity benchmark towards 13,270, which coincides with the 50% retracement of the move discussed above. In the event that dip buyers return and spark a bullish turnaround, initial resistance lies at 14,600. Upside clearance of this key ceiling could reignite upside momentum and set the stage for a move higher to 14,860. On further strength, the market focus will transition to 15,100. NASDAQ 100 TECHNICAL CHART Nasdaq 100 Futures Chart Created Using TradingView https://www.dailyfx.com/news/ndx-nasdaq-100-forecast-cluster-support-in-play-after-breakdown-more-pain-ahead-20231026.html

2023-10-27 02:39

ECONOMIC DATA, FOREIGN EXCHANGE TRADING, CENTRAL BANKS – TALKING POINTS All fundamental trading strategies are rooted in economic data But reactions to that data can be puzzling, and complex The likely effect of any number on monetary policy is often most important The foreign exchange market’s reaction to economic data is one of the most important subjects for traders to consider, but also one of the most vexed. The monthly round of official and private releases from around the world covers everything from inflation and employment to the forward-looking views of corporate purchasing managers. Together with central bank pronouncements, it forms what we might call the framework of foreign exchange trading. MAJOR ECONOMIC RELEASES CAN DOMINATE TRADE Markets may well hunker down, losing both volume and volatility, in the run-up to an eagerly anticipated number. Official US labor market statistics are perhaps the most obvious example here. When the trading community expects serious gains or crushing losses the session can be subdued from Asia’s open and right across Europe as participants nurse suspicions or hopes. Even when the market expects neither many traders will – in financial journalism’s enervating cliché – “wait and see.” This makes sense of course, enervating or not. Obviously, there’s a link between the economic performance of a country with a freely floating currency and the performance of that currency against its peers. At the most basic level a strong piece of economic data will boost a currency, a weaker one will tend to see it fall. However, to take the matter no further would be a grave error. For one thing, individual pieces economic data tend to influence currencies in a very fleeting way. The gains provided by even a blockbuster, expectation-shattering number can be undone by the end of a day’s session, and well before that in some cases. It may even mean no more than a few minutes’ spike one way or another. So, there’s clearly more to know about data and its effects. The first and perhaps most important thing is that, while data provide the rhythm, the world moves to a monetarist cadence and central banks will always play lead. So, ultimately, the longer-term effects any piece of economic news must be considered with a view to how it might change monetary policy. No single data release is ever likely to do that, and markets would have caused to worry if it did. Central banks like to be ahead of the numbers, ready to tighten or loosen policy as needed before trends turn. Therefore, we might see the markets only very briefly cheer strong retail sales, say, or powerful job creation. They might be great for the politicians, but, if inflation remains docile, they might not mean anything at all in terms of central bank policy changes. And if rates aren’t going up or coming down, then the longer-term effect of the data on the currency won’t amount to much. Of course, these days docile inflation is little more than a happy memory across much of the world as war in Ukraine boosts both food and fuel prices at a time when post-Covid supply chain storms are still raging. CURRENCIES CAN FALL EVEN WHEN INTEREST RATES RISE In July of this year, the United States Federal Reserve delivered a three-quarter point interest rate rise, something which would have been considered extraordinary monetary action for most of the past thirty years. And yet the US Dollar actually lost ground by the end of the session for, in its post-rate-hike remarks, the Fed left markets reasonably sure that future actions were going to be a lot more measured. So, we can on occasion see the phenomena of a ‘dovish’ rate hike, or even a ‘hawkish’ rate cut. That’s when a central bank takes action but strongly implies that it has finished doing so, or that the barrier to more is extremely high. Higher interest rates have not been terribly helpful to rare-breed Sterling bulls this year either. The United Kingdom’s political and economic turmoil has left the market wondering if its economy can bare higher borrowing costs. The US certainly looks much better placed to do so. With all this in mind, merely watching and reacting to pieces of economic news is unlikely to make for a satisfactory trading strategy. Indeed, the Dollar’s broad gains this year have rendered data watching all-but meaningless in many countries. Their currencies have fallen against the Greenback regardless of the numbers as the US currency reveals itself as the ultimate safe-haven play. Competent traders know where the market is focused and where in the business cycle we are. What that tends to mean in practice is which specific data releases are most likely to trigger changes in the monetary mood music. These can change dramatically over time. Older readers may well recall the days when western industrial production figures were the ones to watch for the best central bank steer. In more recent times unemployment figures took over. Policymakers were leery of wage inflation and, poised to “withdraw the punchbowl” if the labor market party showed any sign of getting out of hand. Now of course inflation figures themselves are perhaps the ones which traders look at most obsessively, with prices’ stubborn elevation. One day, the focus will move on again. It always does. But a nuanced approach to trading economic data should remain a constant. Written by David Cottle for DailyFX https://www.dailyfx.com/news/trading-economic-data-means-looking-past-the-numbers-20221026.html

2023-10-27 02:38

Euro, EUR/USD, US Dollar, Trend Breakout, Candlestick, Bollinger Band - Talking Points Euro bulls were rewarded earlier this week before a pullback surfaced The technical set-up from the recent rally might see Euro bears re-enter the fray The squeeze higher appears to have been rejected for now. Will EUR/USD go lower? EUR/USD TECHNICAL ANALYSIS EUR/USD cleanly broke through the topside of a descending trend channel last week and continued higher to briefly pierce minor resistance levels near 1.0680 to make a high at 1.0695. The price action on the day that the price made that high saw a Bearish Engulfing Candlestick formation emerged and it has gone lower in the proceeding days. A Bearish Engulfing Candlestick opens at, or above the previous candle’s close. The length of the bearish candle ‘engulfs’ the previous green candle and it then closes below the prior candle’s open. This reversal might signal that the descending trend may re-emerge. The recent rally broke above the upper band of the 21-day simple moving average (SMA) based Bollinger Band. On the same day that Engulfing Candlestick materialised, the price closed back inside the band. This potentially adds weight to the perspective that a reversal could be in play. A bearish triple moving average (TMA) formation requires the price to be below the short-term SMA, the latter to be below the medium-term SMA and the medium-term SMA to be below the long-term SMA. All SMAs also need to have a negative gradient. When looking at any combination of the 21-, 34-, 55- and 100-day SMAs, the criteria for a TMA have been met and might suggest that bearish momentum is evolving. To learn more about trend trading, click through on the banner just below. On the downside, nearby support might lie near the previous lows and breakpoints in the 1.0480 – 1.0495 area ahead of the lows seen in December 2022 and October 2023 near 1.0445. On the topside, the 55-day SMA is currently near the recent peak and there might be a resistance zone ahead of 1.0700. The next resistance levels could be at the breakpoints and previous highs near 1.0740, 1.0770, 1.0835 and 1.0945 ahead of a cluster zone of potential resistance in the 1.1075 – 1.1100 area. EUR/USD DAILY CHART Chart Created in TradingView https://www.dailyfx.com/analysis/euro-technical-outlook-trend-break-might-be-short-lived-for-eur-usd-20231027.html