• 5%.. Ready or not? Here we go..
• Dollar keeps more mixed so far on the day
• Japan’s Kanda: It will become ’noise‘ if we announce every FX intervention
• Japan’s Kanda: It is normal not to announce FX intervention immediately after it is done
• Japan’s largest labour union says aiming for 5% wage hike or more next spring
• BOJ raises economic assessment for 6 of Japan’s 9 regions in latest Sakura report
• France October business confidence 98 vs 100 prior
• Switzerland September trade balance CHF 6.32 billion vs CHF 4.05 billion prior

Markets:

• EUR leads, NZD lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields up 6.2 bps to 4.979%
• Gold up 0.2% to $1,950.77
• WTI crude down 1.0% to $87.46
• Bitcoin up 0.6% to $28,438

It was a slower session in general as markets are waiting with bated breath for 10-year Treasury yields to hit the 5% mark. It has been the case since the handover from Asia trading, with 10-year yields hovering around 4.95% to 4.97% mostly during the session.

Despite that, the dollar is failing to take much of a hint as it trades more mixed across the board. USD/JPY is still unable to muster enough power to retest the 150.00 mark again amid Tokyo intervention fears. Meanwhile, EUR/USD is actually up 0.2% to 1.0557 although the range for the day is still rather limited.

GBP/USD is down 0.2% to 1.2115 while AUD/USD is down 0.4% to 0.6310 after a softer Australian jobs report earlier today.

In other markets, stocks are also keeping more defensive with US futures slightly lower. Meanwhile, European indices are down across the board as they build on the drop from Wall Street yesterday.

Looking to commodities, gold continues to keep steady and ignore the bond market developments as it keeps around $1,950. Meanwhile, oil is tracking lower and looks to erase its weekly gains as the back and forth continues.

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

If there is one word to describe price action in the dollar this week, sideways would be the best I reckon. The greenback is trading more mixed once again today, keeping an advance against the aussie and kiwi while sitting lower against the euro and franc. Meanwhile, the pound is a touch softer while the yen is mildly higher as USD/JPY continues to consolidate below 150.00:

Apart from a hiccup here, Tokyo intervention fears is still keeping the pair down despite a surge higher in Treasury yields this week. 10-year yields are closing in on the 5% mark but still, we are in the same spot as we were at the end of last week for USD/JPY.

EUR/USD on the other hand continues to hold in between 1.0500 and 1.0600 on the week, struggling to cement any dollar strength arising from higher yields. That might be the clearest indication that if and when yields retrace – which could happen upon touching 5% – then we might see a decent unwinding in dollar longs.

For now, all eyes remain on the bond market and we’ll see if there will be any further reaction to US data later today with the weekly jobless claims and Philly Fed manufacturing index coming up.

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

• The Fed left interest rates unchanged as expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell reaffirmed their data dependency but added that
  they will proceed carefully.
• The US CPI last week beat expectations on the
  headline figures, but the core measures came in line with forecasts and the
  market’s pricing barely changed.
• The labour market remains fairly solid as seen once again last week
  with the beat in Jobless Claims, although continuing claims surprisingly missed.
• The US PMIs
  recently showed that the US economy remains pretty resilient.
• The University of Michigan Consumer Sentiment report last Friday missed across the
  board with the inflation expectations figures spiking back up.
• The US Retail Sales this week beat expectations by a big
  margin with positive revisions to the prior figures.
• The Fed members continue to cite elevated long-term
  yields as a reason to proceed carefully and will likely pause in November as
  well.
• The market doesn’t expect the Fed to hike anymore.

UK:

• The BoE kept interest rates unchanged at the last meeting.
• The central bank is leaning more
  towards keeping interest rates “higher for longer”, although it kept a door
  open for further tightening if inflationary pressures were to be more
  persistent.
• The latest employment report showed a slowdown in wage growth
  and some job losses in September which could point to a softening labour
  market.
• The UK CPI yesterday slightly beat expectations but given
  the softening in the labour market it’s unlikely to change the BoE’s stance.
• The latest UK PMIs showed further contraction, especially in the
  Services sector.
• The market doesn’t expect the BoE to
  hike anymore.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the GBPUSD pair
rejected the key resistance around
the 1.2310 level where we had also the 38.2% Fibonacci retracement level
and the trendline for confluence. The
slight beat in the UK CPI hasn’t led to a rally in the pound as the market
doesn’t see it as game-changing. The bearish bias remains intact as the UK
labour market is starting to weaken while the US jobs data continues to
surprise to the upside.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair broke
out of the range between the 1.2120 support and the 1.2220 resistance. This
remains a sellers’ market, so the buyers should wait for some key upside
breakout. The sellers, on the other hand, should step in at every pullback and
target a break below the previous lows.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent breakout with the price rejecting the red 21 moving average before
making new lows. The bearish momentum looks to be strong but the sellers will
have a much better risk to reward setup if the price pulls back into the broken
support turned resistance where we can find the trendline and the red 21 moving
average for confluence. The buyers, on the other hand, will want to see the
price breaking above the trendline and the resistance to invalidate the bearish
setup and start targeting the resistance around the 1.2220 level.

Upcoming Events

Today we will get the latest US Jobless Claims
report and the market will want to see if the miss in Continuing Claims last
week was just a blip or the start of a trend. Later in the day, we will also
hear from Fed Chair Powell where the market will be focused on any hint about
the near-term policy outlook. Tomorrow, we will also see the latest UK Retail
Sales data.

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