Market Update - 02 November 2022

The index loses further momentum and approaches 111.00. US ADP report next of relevance in the docket. The Fed is expected to hike rates by 75 bps later on Wednesday. The USD Index (DXY), which tracks the greenback vs. a bundle of its main rival currencies, adds to Tuesday’s retracement and returns to the low-111.00s midweek. (FXStreet)

A combination of factors prompts fresh selling around USD/CAD on Wednesday. Rising oil prices underpin the loonie and exert pressure amid a modest USD slide. The downside seems cushioned as investors keenly await the key FOMC decision. (FXStreet)

Tuesday’s marked decline in prices of the natural gas was against the backdrop of increasing open interest and volume, hinting at the idea that further losses could lie ahead in the very near term. In such a scenario, the next support of note is seen at the October low near the $5.20 level per MMBtu (October 24). (FXStreet)

GBP/USD edges higher on Wednesday amid softer USD, though lacks follow-through. The recent pullback constitutes the formation of a descending channel on hourly charts. Traders seem reluctant to place aggressive bets ahead of the central bank event risks. (FXStreet)

Silver finds some support near 100-day SMA, though struggles to attract any buyers. The setup still favours bullish traders and supports prospects for additional gains. A sustained break below the $19.00 mark is needed to negate the positive outlook. (FXStreet)

USD/TRY grinds higher around all-time peak amid mixed concerns. Turkish inflation problem versus CBRT’s resistance for rate hike propels the prices. Sluggish yields and indecision over Fed’s move from December challenge buyers. Wednesday’s FOMC, Thursday’s Turkish CPI will be crucial for near-term directions. (FXStreet)

NZD/USD attracts fresh buyers on Wednesday after mostly upbeat domestic employment details. Hopes for a less hawkish Fed keep the USD bulls on the defensive and also contribute to the uptick. Investors now look to the highly-anticipated FOMC decision before placing fresh directional bets. (FXStreet)

EUR/JPY breaks five-week-old support line during three-day downtrend. MACD prints the biggest bearish signal in a month. A daily closing below September’s peak becomes necessary for the buyers to leave the table. (FXStreet)

AUD/USD grinds higher while bracing for the biggest daily gains in a week. One-month-old symmetrical triangle restricts immediate moves amid price-positive oscillators. 100-EMA, weekly resistance line act as additional trading filters. (FXStreet)

USD/INR struggles for a clear directions despite pushing back bears. RBI’s likely inaction jostles with Fed’s 75 bps dovish hike to challenge traders, Reuters’ poll signals more pain for INR. Cautious optimism, sluggish yields test upside momentum ahead of FOMC. (FXStreet)

EUR/USD stays mildly bid, extending the November-start rebound from one-week low. ECB policymakers back further rate hikes despite citing recession fears. DXY fades US data-led rebound as yields remain pressured amid fears of slower rate hikes from December. US ADP Employment Change, second-tier EU/German data will offer intermediate directions. (FXStreet)

Gold appears to have found a short-term floor and could settle in a range with a modest upward bias in the coming days. The yellow metal continues to flirt with key converged support: a horizontal trendline from 2021 at about 1675-1680, roughly coinciding with the 200-week moving average. While losses stalling recently could be interpreted as a sign of rejection at lower levels (that is, a lack of conviction below the September low of 1614), it could well be a matter of time before XAU/USD resumes its next leg lower. In this regard, tonight’s US Federal Reserve rate decision and the accompanying tone would be closely watched. (DailyFX)

Tuesday’s retreat from key intraday resistance has raised the odds of a minor setback in USD/JPY. Notwithstanding the recovery in the New York session, USD/JPY continues to hold below key resistance at the October 25 high of around 149.00. This follows a solid bearish reversal on October 21, which came about from a major resistance area: the 1998 high of 147.65, coinciding with the 200-quarter moving average and the upper edge of a rising channel from 2012 (DailyFX)

WTI rebound off technical support in focus into November open New to Oil Trading? Get started with this Free How to Trade Oil- Beginners Guide Crude oil rallied more than 8% in October with WTI building on the September rebound off critical support. The recovery is in focus heading into November with oil poised for a possible test of downtrend resistance. These are the updated targets and invalidation levels that matter on the oil price weekly technical chart (DailyFX)

Source: FXStreet, DailyFX

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