Market Update - 07 November 2022

EUR/USD meets support around the 0.9900 zone on Monday. German 10-year bund yields extend the move to multi-day highs. Germany Construction PMI improves to 43.8 in October. EURUSD adds to Friday’s advance and flirts with the 0.9970 region at the beginning of the week. (FXStreet)

The index recoups part of the ground lost on Friday. The bounce in the dollar looks propped up by higher yields. Consumer Credit Change, Fedspeak next on tap in the US docket. The USD Index (DXY), which gauges the greenback vs. a bundle of its main competitors, manages to reverse part of the recent pessimism and regains the 111.00 barrier and above at the beginning of the week. (FXStreet)

USD/JPY regains positive traction on Monday amid the emergence of some USD buying. Elevated US bond yields, the Fed-BoJ policy divergence remains supportive of the move. Intervention fears could offer support to the JPY and keep a lid on any meaningful upside. (FXStreet)

GBP/USD opens with a modest bearish gap, though lacks strong follow-through selling. Elevated US bond yields, a softer risk tone underpins the USD and acts as a headwind. Diminishing odds for a more aggressive Fed rate hikes caps the USD and lends support. (FXStreet)

USD/CAD licks its wounds after initially picking up the bids. Covid headlines, mixed US data weigh on sentiment and propel the pair. Retreat in the WTI Crude Oil prices adds strength to the pair’s recovery moves. Contradiction between the US and Canadian jobs report highlights a speech from BOC Governor Macklem, US CPI. (FXStreet)

NZD/USD opens with a modest weekly bearish gap amid the emergence of some USD buying. Elevated US bond yields and a weaker risk tone help revive demand for the safe-haven buck. Bulls might wait for a sustained move beyond the 0.5935-0.5940 area before placing fresh bets. (FXStreet)

AUD/USD licks its wounds after a downbeat start to the week. Oscillators suggest further downside, weekly resistance line challenge buyers. Fortnight-old horizontal support region restrict short-term AUDUSD downside. Buyers need validation from October’s peak to retake control. (FXStreet)

USD/IDR clings to mild gains while defending the week-start gap to the north. Indonesia’s Q3 GDP rose past previous readings but missed market forecasts on YoY. Covid woes from China, mixed concerns over the Fed also underpin the upside moves. US inflation data will be crucial for near-term trade directions. (FXStreet)

USD/INR picks up bids to snap two-day losing streak. China’s defense of zero covid policy weighs on market sentiment. WTI Crude Oil prices jumped the most in six months before the bulls took a breather around the key resistance. Risk-off mood, and fears of high US inflation can keep buyers hopeful. (FXStreet)

Silver meets with a fresh supply on Monday, though lacks any follow-through selling. Friday’s breakout through the $20.00 mark supports prospects for additional gains. Bulls await a sustained strength beyond the 200-day EMA before placing fresh bets. (FXStreet)

Prices of natural gas charted a strong advance on Friday against the backdrop of rising open interest and volume. That said, further upside now appears on the cards, with the next up barrier at the October high near the $7.20 mark per MMBtu (October 6). (FXStreet)

Gold price treads water after a downside start to the key week. US dollar fails to cheer China-linked risk aversion amid indecision over Fed’s next move. US inflation data, Fedspeak will be crucial for near-term XAU/USD directions as pivot talks amplify. Gold price (XAU/USD) clings to half a percent intraday loss while making rounds to $1,670 heading into Monday’s European session. (FXStreet)

Oil prices have declined as China’s epidemic concerns have resurged. Weak China Trade Balance data have dented the sentiments of market participants. More optimism in Fed’s rate slowdown chatter may bring oil bulls back in power. West Texas Intermediate (WTI), futures on NYMEX, dropped to near $90.20 in the Tokyo session. The oil prices have delivered a marginal rebound to $91.00, but still are prone to more downside as China has tightened its lockdown curbs further due to a resurgence in Covid-19 cases. (FXStreet)

The sharp fall in USD/CNH on Friday suggests that the Chinese Yuan’s (CNH) seven-month slide against the US Dollar is running out of steam, at least in the short term. In the past two weeks, each time USD/CNH has risen above 7.35, it was sold off quite quickly -- and sharply on two occasions (on Friday and on October 26). The peak at 7.35 marks major resistance, near the 2019 and 2020 highs at 7.1965, and coinciding with the upper edge of a slightly upward-sloping channel from 2018. This follows a negative divergence (rising price associated with stalling or weakening momentum) on the monthly, weekly, and daily charts indicating that the seven-month rally is showing signs of fatigue (DailyFX)

Source: FXStreet, DailyFX

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