• Sees 10-year Treasury yields at 3.7% by the end of 2024
• The pain coming from higher rates has been postponed
• It will come next year and in 2025
• Markets are overlooking the risk of a ‚bad surprise‘ on inflation
• Does not think that markets are prepared for inflation to change course

That is certainly something to watch out for and as far as curveballs go, this is one that markets should be bracing for in case. And it is one reason that perhaps would work in the dollar’s favour to counter the argument that we’re now poised for an imminent demise in the currency heading into next year.

This article was written by Justin Low at www.forexlive.com.

Copper broke out of the
triangle in the first part of the week and triggered a rally into the next
resistance defined by a trendline. The recent positive Chinese activity data
could have been the catalyst for the breakout which triggered momentum buyers
to join the bullish wave. Overall, the picture is still murky, and the global
growth outlook is more likely to weaken with the central banks keeping monetary
conditions tight.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper broke
out of the triangle in the
first part of the week and rallied into the trendline formed
with the fakeout from last August. The price got rejected at the first try as
the rally was a bit overstretched and needed a bit of a pullback. We can expect
the sellers to keep leaning on this trendline to position for a drop back into
the 3.55 support.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that after the
rejection the price bounced on the upward trendline where there was also the
50% Fibonacci retracement level
for confluence. The
buyers will want to see the price breaking above the major downward trendline
to increase the bullish bets into the 3.90 level. The sellers, on the other
hand, will want to see the price breaking lower to increase the bearish bets
into the 3.55 support.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action. We will likely see some consolidation inside
these key levels with market participants waiting for a breakout. The playbook
looks clear though: a break to the upside is likely to lead to a rally into the
3.90 level, while a break to the downside should trigger a correction at least
into the 3.75 support.

Upcoming Events

Today the US will be on holiday for Thanksgiving Day
and therefore the liquidity in the market will be thinner. Tomorrow, we
conclude the week with the US PMIs where weaker data is likely to put some
pressure on Copper, while strong figures should support it in the short-term.

This article was written by FL Contributors at www.forexlive.com.

And that is pared back from around the middle of next year before this. So, what changed? I detailed some thoughts earlier in my post about GBP/USD:

„For one, there are a couple of things to be mindful of with the UK headlines today. With regards to the PMI data, the economy looks to be in better shape than feared in Q4 and that will give the BOE more breathing room on rates. Besides that, the data also highlights more stubborn inflation pressures and that will see the central bank stick with a more hawkish rhetoric for as long as they can get away with it. And if the economy continues to hold up, who is to say that we might not see another rate hike? Other than that, we also had Ofgem announce a higher price cap on energy prices and that will feed into inflation pressures too in the bigger picture.“

This article was written by Justin Low at www.forexlive.com.

The pound is finding comfort from the better-than-expected UK PMI data earlier here, with GBP/USD now rising up by 0.5% to 1.2550 levels. The thing to note about the rise today is that perhaps buyers are looking to be able to shake off key resistance around 1.2500 with the 100-day moving average (red line) also resting nearby.

That has kept price action more contained so far this week but we might just finally get a breakout today after the better data. The question is, can the break hold and is the data significant enough to warrant that?

I reckon that it just might. For one, there are a couple of things to be mindful of with the UK headlines today. With regards to the PMI data, the economy looks to be in better shape than feared in Q4 and that will give the BOE more breathing room on rates. Besides that, the data also highlights more stubborn inflation pressures and that will see the central bank stick with a more hawkish rhetoric for as long as they can get away with it. And if the economy continues to hold up, who is to say that we might not see another rate hike?

Other than that, we had Ofgem announce a higher price cap on energy prices and that will feed into inflation pressures too in the bigger picture.

So, these are decent developments that could turn the picture around for the pound; in the sense that it is going to keep a firmer BOE outlook on rates at least. And that might be enough for cable to contest a move higher amid a technical break, as the dollar remains weak across the board as well.

This article was written by Justin Low at www.forexlive.com.

USD

• The Fed left interest rates unchanged as
  expected at the last meeting with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The recent US CPI missed
  expectations across the board bringing the expectations for rate cuts
  forward. 
• The labour market is
  starting to show weakness as Continuing Claims are now
  rising at a fast pace and the recent NFP report
  missed across the board, but yesterday the US Jobless Claims beat
  forecasts giving the USD a short-term boost.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin,
  followed by a disappointing ISM Services PMI,
  although the latter remained in expansion.
• The recent US Retail Sales beat
  expectations, while the US PPI missed
  forecasts by a big margin.
• The recent Fedspeak has been leaning on
  the hawkish side, but last week’s inflation report pretty much confirmed that
  the Fed might be done for the cycle.
• The market doesn’t
  expect the Fed to hike anymore.

CAD

• The BoC left interest rates at 5.00% as expected at the last meeting but
  remains prepared to raise rates further if needed.
• BoC Governor Macklem delivered a less hawkish speech in
  the press conference compared to his previous remarks.
• The recent Canadian CPI missed expectations across the
  board and the underlying inflation measures eased, which was a welcome
  development for the BoC.
• On the labour market side, the latest report missed expectations
  across the board with negative figures in full-time employment and slowing wage
  growth, which is going to be another positive outcome for the central bank.
• The market doesn’t expect the BoC to
  hike anymore.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD has
finally reached the key trendline around
the 1.3650 level. This is where we can expect the buyers to step in more
aggressively with a defined risk below the trendline to position for a rally
back into the highs and eyeing a break to the upside. The sellers, on the other
hand, will want to see the price breaking lower to increase the bearish bets
into the 1.34 handle.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have some
key support and
resistance zones. The buyers should pile in at the support zone around the
1.3650 level with a defined risk below it. If we see a bounce, the sellers will
lean on the resistance zone around the 1.3750 level where we will also find the
downward trendline for confluence.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bullish setup around the major trendline and the support zone at
1.3650. A break below this zone should invalidate the bullish setup and
increase the bearish momentum into the 1.34 handle. On the other hand, a break
above the resistance zone and the trendline should increase the bullish
momentum as the buyers will add even more to their upside bets and the sellers
will likely fold.

Upcoming Events

Today the US will be on holiday for Thanksgiving Day
and therefore the liquidity in the market will be thinner. Tomorrow, we
conclude the week with the Canadian Retail Sales and the US PMIs.

This article was written by FL Contributors at www.forexlive.com.