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XAU/USD Technical Outlook – 08, Nov

After Friday’s descending triangle formation-led big breakout, Gold price has entered into a phase of upside consolidation while defending the bearish 50-Daily Moving Average (DMA) at $1,673. So long as the abovementioned barrier is held, the bullish potential remains intact for the bullion, with a retest of Friday’s high at $1,683 likely to pave the way toward the $1,700 threshold.

The 14-day Relative Strength Index (RSI) is holding flat above the midline, supporting the recent rally in Gold price.

On a firm break below the 50DMA, sellers will target the triangle resistance-turned-support at $1,658. Further south, the horizontal 21DMA at $1,653 could come to the rescue of bulls.

EUR/USD Technical Outlook – 3, Nov

The EUR/USD pair closed a third consecutive day below the 0.9900 level and near a fresh weekly low of 0.9821, which lifts the risk of a bearish extension in the upcoming sessions. Technically speaking, the pair is breaking below the 50% retracement of its latest daily advance between 0.9630 and 1.0093 at 0.9856, another bearish hint. The daily chart shows that the pair is currently battling a flat 20 SMA while a bearish 100 SMA heads firmly lower at around 1.0065. Finally, technical indicators resumed their declines, with the Momentum just above its 100 level and the RSI already below its midline.

The 4-hour chart favors a bearish extension, particularly if the pair breaks below the 0.9800 price zone. Technical indicators have gained bearish strength within negative levels, supporting further declines, while a firmly bearish 20 SMA continues to reject buyers.

Support levels: 0.9800 0.9760 0.9615

Resistance levels: 0.9865 0.9910 0.9970

XAU/USD Technical Outlook – 3 Nov

From a near-term technical perspective, despite the 14-day Relative Strength Index (RSI) lurking below the midline, a dovish Fed rate hike could turn the table against bears, allowing XAU/USD bulls to recapture the bearish 21-Daily Moving Average (DMA) at $1,660 convincingly.  Gold bulls could flex their muscles towards the end-October high at $1,675 while gathering strength to challenge the $1,700 mark.

However, on a hawkish surprise, gold price could resume its broader downtrend, with the initial support seen at the recent range lows around $1,638. The next downside cap is aligned at the $1,620 round number, below which the October low at $1,617 could be threatened.

Forex Market Weekly Recap – 24 Oct – 28 Oct

News and Economic Events Update:

  • China’s exports grew by 5.7% y/y to $322.8B in September; it’s the slowest rate of growth since April. Imports inched up by 0.3% y/y vs. 1.0% y/y forecast
  • China GDP for Q3 was 3.9% y/y vs. 3.3% y/y forecast; the unemployment rate increased to 5.5% vs. 5.3% previous
  • CFTC Chair Rostin Behnam said on Monday that  he sees ether as a commodity — not a security.
  • Oil prices jumped on Wednesday on record high U.S. crude exports and strong refining demand; WTI crude broke back above $88/bbl while Brent crude jumped above $96/bbl
  • The Bank of Canada surprised markets with a smaller-than-expected rate hike of 50 bps vs. a 75 bps forecast
  • Russian President Putin said on Thursday that his nation has never discussed a nuclear strike, and that there was no necessity for Russia to attack Ukraine with nukes.
  • As expected, the European Central Bank raised the deposit rate to 2.00% vs. 1.25% previous
  • The International Monetary Fund lowered its economic projections for Asia to 4.0% for 2022 (vs. a 4.9% forecast back in April) on Friday.
  • North Korea fired two short-range ballistic missiles on Friday from the North’s eastern coastal Tongchon area
  • The U.S. Core PCE Price Index annualized read of 5.1% y/y came in slightly below expectations, taming inflation fears a bit during the Friday session.
  • U.S. Flash Manufacturing PMI for October: 49.9 vs. 52.0 in September; Services Index at 46.6 vs. 49.3; input cost pressures have increased; employment conditions mostly unchanged
  • U.S. Home Prices growth in August: +13.1% y/y vs. 16.0% y/y in July according to the S&P CoreLogic Case-Shiller Home Price Index
  • U.S. New home sales fell -10.9% y/y to 603K in September
  • U.S. GDP rebounded slightly in Q3 2022 with the advance read at +2.6% q/q vs. 2.3% q/q forecast
  • U.S. durable goods for September: +0.4% m/m vs. upwardly revised +0.2% m/m in August
  • U.S. weekly jobless claims: 217K vs. 214K previous
  • U.S. Core PCE Price Index came as expected at 0.5% in September, inline with the August read; the annualized read of 5.1% y/y was slightly below expectations
  • U.S. Personal income in September: +0.4% m/m vs. an upwardly revised August read of +0.4% m/m
  • U.S. UOM consumer sentiment for October: 59.9 vs. the preliminary read of 59.8, and above the September read of 58.6
  • On Monday, Rishi Sunak was elected as the new leader of the Conservative Party, making him the next prime minister of Britain.
  • U.K. Flash Manufacturing PMI for October: 45.8 vs. 48.4 previous; Services PMI at 47.5 vs. 50.0 previous; output and demand continue to weaken; political uncertainty added to inflationary pressures contributed to downbeat sentiment
  • U.K. bond prices rallied on Monday as traders bet that new Prime Minister Rishi Sunak will put an end to weeks of upheaval plaguing the nation’s markets and restore credibility to economic policy making
  • U.K. CBI manufacturing output for October -4%, the same as September, but sees output to increase over the next three months; firms seeing a shortage of skilled labor is at its highest level since 1973 at 49%; New orders fell -8% q/q vs. +11% q/q in July
  • The unveiling of a highly anticipated strategy for stabilizing the nation’s public finances was pushed back by Britain’s new Prime Minister Rishi Sunak on Wednesday to Nov. 17, two and a half weeks later than originally anticipated.
  • Germany Flash Manufacturing PMI for October: 45.7 vs. 47.8 previous; Services PMI at 44.9 vs. 45.0 previous
  • Eurozone Flash Manufacturing PMI for October: 46.6 vs. 48.4 in September; Services PMI at 48.2 vs. 48.8 previous; inflationary pressure remain due to high energy prices and rising wages
  • Germany Ifo business climate index in October ticked lower to 84.3 vs. a revised 84.4 read in September
  • Euro area M3 money supply growth for September: +6.3% y/y vs. 6.1% y/y in August; private loans increased by 5.5% y/y vs. 5.6% y/y in August
  • German GfK consumer climate index improved from -42.8 to -41.9 in Oct
  • Spanish jobless rate ticked higher from 12.5% to 12.7% in Q3 vs. 12.4% forecast
  • The European Central Bank raised the deposit rate from 0.75% to 1.50% as expected; future policy path will be decided during the upcoming meetings
  • Germany posted unexpected Q3 growth — up by 0.3% q/q vs. -0.2% q/q expected
  • France CPI for October; 7.1% y/y vs. 6.4% y/y forecast
  • Swiss KOF Economic Barometer fell from 92.27 in September to 90.93 in October
  • The Bank of Canada hike interest rates by 50 bps to 3.75% vs. an expectation of a 75 bps hike; the BOC sees growth slowing through the first half of 2023
  • Canada GDP for August: +0.1% m/m vs. 0.0% m/m forecast
  • RBNZ chief economist Paul Conway said on Tuesday that despite the fact that inflation in New Zealand was higher than anticipated in the third quarter, the central bank remains “hopeful” that it has peaked.
  • ANZ’s survey shows a 6 point drop in business confidence in October to -43; inflation pressures remain high with expectations at 6.13%
  • RBNZ Governor Adrian Orr warned on Thursday that the central banks efforts to slow inflation will likely slow down employment conditions in the near-term
  • New Zealand consumer confidence for October: unchanged at 85.4 vs. previous
  • Australia manufacturing PMI slows from 53.5 to 52.8 in October; Services PMI contracts from 50.6 to 49.0 in October
  • RBA Assitant Governor Christopher said on Monday that further rates are likely, but the timing and size wil depend on data
  • Australia’s annual inflation races from 6.1% y/y to a 32-year high of 7.3% y/y in September; CPI jumped 1.8% m/m vs. 1.6% m/m forecast
  • RBA’s trimmed mean CPI jumped from 4.9% y/y to 6.1% y/y, much higher than RBA’s 2% – 3% target
  • Australian import prices up by 3.0% q/q in Q3 vs. a projected 0.8% q/q uptick
  • Australia producer price index read for September quarter rose 1.9% q/q (1.4% q/q previous) and 6.4% y/y
  • Japan flash manufacturing PMI for October: 50.7 from 50.8 in September; Services PMI was higher at 53.0 vs. 52.2 in September, likely due to increasing travel volumes
  • Bank of Japan was suspected to have intervened again on Monday after the yen jumped against the dollar to 145.50 during the Asian session. Japan officials continued to refuse to make comments on any possible intervention actions.
  • BOJ core CPI read was up from 1.9% y/y in August to 2.0% y/y in September

XAU/USD Technical Outlook – 28, Oct

Nothing seems to have changed technically for Gold price, as it continues to extend its struggle below the 21-Daily Moving Average (DMA) at $1,669.  The 14-day Relative Strength Index (RSI) remains flatlined below the 50.00 level, suggesting that bears will likely retain control. Bulls need a weekly close above the 21DMA to revive the recovery momentum from monthly troughs. Monday’s high at $1,671 will then come into play.

The next relevant barriers are seen at the October 13 high of  $1,683 and the $1,700 mark. Rejection at 21DMA once again will reopen the downside towards Wednesday’s low at $1,650, below which the weekly low at $1,638 will be retested. The last line of defense for buyers is envisioned at the monthly low of $1,617.

EURUSD – Technical Overview 18, Oct

The EUR/USD pair has room to extend its gains according to the daily chart, as it managed to advance beyond a mildly bearish 20 SMA, now facing resistance around 0.9980, where a daily descendant trend line coming from the year high at 1.1494 stands. The same chart shows that technical indicators aim firmly higher, the Momentum well above its 100 level, but the RSI at around its 50 level.  

The 4-hour chart shows that the pair rallied above its 20 and 100 SMAs, with the shorter one about to cross above the longer one, both around 0.9750. The 200 SMA provides resistance at 0.9865, while technical indicators hold near overbought levels, supporting another leg higher in the near term.

Support levels: 0.979,0 0.9750, 0.9710

Resistance levels: 0.9865, 0.9900, 0.9940

XAU/USD Technical Outlook – 17, Oct

Following last week’s break below the rising trendline support, then at $1,670, sellers have remained in complete control. That level now coincides with the mildly bearish 21-Daily Moving Average (DMA).

Unless bulls manage to find a strong foothold above the latter, any recovery attempts in the bright metal from two-week lows of $1,640 appear a dead cat bounce.

The immediate upside barrier is seen at the $1,650 level above which the previous intermittent lows around $1,660 could enact strong resistance.

The 14-day Relative Strength Index (RSI) is trading flatlined below the 50.00 level, keeping the bearish potential intact.

Therefore, daily candlestick closing below the $1,640 demand area is needed for a fresh downswing towards the $1,600 mark.

Ahead of that, the September low of $1,615 will challenge the bearish commitments.

Forex Market Weekly Recap : 10, Oct – 14, Oct

News and Economic Update:

  • China Caixin services PMI fell to 49.3 in September from 55.0 in August.
  • Russia unleashed its most broad air assaults since the start of the Ukraine war on Monday, showering cruise missiles on cities during rush hour to avenge a blown-up bridge.
  • The IMF estimated that global GDP will drop to 2.7% next year, 0.2% lower than its July forecast, and that 2023 will feel like a recession for millions.
  • On Tuesday, G7 leaders began an emergency meeting to examine the latest round of missile attacks that Russian forces conducted against Ukraine.
  • Bank of England expanded its emergency purchase to include inflation-linked debt in an effort to stop a rapid sell-off in the 2.3 trillion pound market for British government bonds.
  • The Bank Of Korea has raised its key base interest rate 50 bps to 3.00% as expected
  • API reports surprise 7.05M build in oil stockpiles
  • EIA: U.S. crude supply up by 9.9 million barrels for the week ended Oct 7, the most since March 2021
  • The Central Bank of Chile hike its interest rate by 50 bps to 11.25% on Friday, but suggested that they may hold off on rate moves at their next meeting.
  • The Monetary Authority of Singapore tightened policy once again by re-centering its policy band
  • According to Chicago Federal Reserve President Charles Evans, as supply chain pressures ease, there are some indications that inflation is slowing down.
  • According to Fed Vice Chair Lael Brainard on Monday, the U.S. Federal Reserve is clear that restrictive monetary policy is necessary to reduce inflation, but the direction and rate of rate increases will remain “data-dependent.”
  • The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index improved to 92.1 this month, marking the second consecutive month of gains.
  • Fed’s Mester says there’s been no progress on inflation, so interest rates need to move higher
  • U.S. Producer Price Index for September: +0.4% m/m vs. -0.1% m/m previous; core PPI was +0.4% m/m vs. +0.2% m/m previous
  • U.S. mortgage interest rates rise to an average of 6.81%, the highest level since 2006; mortgage loan appliction volume fell -2.0% w/w and down -69% y/y
  • U.S. monthly headline CPI up by 0.4% in Sept vs. 0.2 expected, core CPI also higher at 0.6% vs. 0.5% estimates; Annualized U.S. inflation slows to 8.2% –the lowest in seven months – but still higher than 8.1% estimates
  • The Federal Reserve Open Market Committee (FOMC) meeting minutes from the most recent meeting showed that the FOMC members are surprised that inflation has been persistent and pulling back at a slower-than-expected pace.
  • The Bank of England announced an expansion of its emergency bond-buying operation on Tuesday. widening its buying of index-linked gilts from Oct. 11-14.
  • U.K. claimant counts increased in September at 25.5k vs. 4.2k forecast and 6.3k in August; the jobless rate ticked down from 3.6% to 3.5%; average earnings index popped higher from 5.5% to 6.0% vs. 5.9% forecast
  • U.K. GDP in August: -0.3% m/m vs. +0.2% m/m previous; manufacturing production fell -1.6% m/m
  • UK trade deficit widened to 7.1B GBP in August from a downwardly revised 5.4B GBP in July
  • Eurozone industrial production increased by 1.5% m/m in August vs. -2.3% m/m drop in July
  • erman final CPI unchanged at 1.9% m/m or 10% on year-over-year basis
  • August saw the euro zone’s goods trade deficit with the rest of the world rise to about 51 billion euros ($49.7 billion), the largest deficit the group has experienced since Lithuania joined in January 2015 as its 19th member.
  • Germany Wholesale prices jumped in September by 19.9% y/y and 1.6% m/m (vs. 0.1% m/m previous)
  • Swiss Producer and Import Price Index rose by 0.2% m/m in September and +5.4% y/y; The rise was mostly a result of higher prices for steel, raw milk and dairy products, as well as vegetables and potatoes. Products made of aluminum and petroleum, on the other hand, became less expensive.
  • Canada manufacturing sales for August fell -2.0% m/m to $70.4B vs. -0.6% m/m previous
  • Canada Wholesale sales for August: +1.4% m/m to $81.3B vs. -0.6% m/m previous
  • BusinessNZ: New Zealand’s manufacturing sector loses steam, drops from 54.8 to 52.0 in September
  • New Zealand Food Price Index for September: +0.4% m/m vs. 1.1% m/m
  • Australia AiG September services index 48.0 vs 53.3 in Aug.
  • Australia’s Westpac consumer sentiment retreated by 0.9% after earlier 3.9% gain
  • Australian NAB business confidence index slipped from 10 to 5 in Sept.
  • Australia Household Spending Index fell 0.5% m/m in September, Commonwealth Bank of Australia announced Tuesday.
  • The Household Spending Intentions Index fell 0.5% in September from a month earlier, Commonwealth Bank of Australia announced Tuesday.
  • Australia’s MI inflation expectations unchanged at 5.4%
  • Japan’s core machinery orders post -5.8% m/m decline, the biggest fall in 6 months. Core orders came in at +9.7% y/y vs. an expectation of +12.6% y/y
  • Japan Reuters Tankan index hits 5-month low of 5 in Oct
  • Japanese producer prices jumped from 9.4% to 9.7% y/y in Sept.

Week Ahead in FX: 19, Sep – 23, Sep

Major News & Economics Events:

FOMC interest rate hike (Sept 21, 11:30 pm IST) – Surprisingly higher and stickier inflation in August led some market players to price in a 100 basis point interest rate hike from the Fed last week.

BOJ’s policy announcement (Sept 22, Asian session) – Markets don’t expect the Bank of Japan (BOJ) to make monetary policy changes this week.

SNB’s monetary policy decision (Sept 22, 01:00 pm IST) – A report printed earlier this month showed Switzerland’s annualized inflation at 3.5% in August, still higher than Swiss National Bank’s (SNB) “less than 2% per year” target.

BOE’s interest rate hike (Sept 22, 04:30 pm IST) – Recall that the Bank of England’s (BOE) Monetary Policy Committee (MPC) postponed its decision by a week to observe the death of Queen Elizabeth II.

Other notable central bank events – Other non-decision central bank events that may cause ripples in the central bankers’ local currencies include RBNZ Gov. Orr’s climate change-themed speech today at 08:30 am IST, RBA’s meeting minutes on Sept 20, 07:00 am ISTECB President Lagarde’s speech on Sept 20, 10:30 pm IST, and FOMC Gov. Powell’s opening remarks on Friday at 10:30 pm IST


Market Headlines Update – 15, Sep

  • GBP/USD testing key level as UK and US inflation remain hot
  • To Halt Yen’s Plunge, Japan Gets Ready to Sell Foreign Exchange Reserves Instead of Hiking Interest Rates. Won’t Work for Long
  • Japanese Yen Gained After BoJ Hinted Intervention
  • Australian Bureau of Statistics data shows about 900,000 people had more than one job in June quarter - the highest on record
  • Yen Steadies as Traders Weigh Impact of Japan Intervention Threat
  • New Zealand Dollar Aims Higher on GDP Surprise as China Eases Lockdowns
  • Japan’s opposition leader calls for more fiscal stimulus, not rate hike to cope with weak yen
  • Steel prices extend recovery as supply squeezes in Europe, China announces more stimulus
  • Asian Stock Market: Mixed concerns over China, Fed tests bulls
  • USD/IDR Price News: Rupiah remains firmer below $15,000 on upbeat Indonesia trade data
  • Fed to keep rolling with another 75 bps hike next week – Wells Fargo


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