• Weekly update on interest rate expectations
• Gold Technical Analysis – Yet another all-time high
• USD/JPY lower on the day but buyers stay in control for now
• Japan’s largest union group Rengo targets wage hikes of at least 5% for next year
• BOJ governor Ueda remarks that Japanese economy is recovering moderately
• UK September retail sales +0.3% vs -0.3% m/m expected
• Eurozone August current account balance €31.5 billion vs €39.6 billion prior
• North Korean troops reportedly shipped to Russian bases for training and likely for combat

Markets:

• GBP leads, CHF lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields up 1.2 bps to 4.108%
• Gold up 0.6% to $2,709.82
• WTI crude down 0.4% to $70.40
• Bitcoin up 0.6% to $67,809

It was another quiet session with some light market moves at best before we get into the final stretch of the week.

The dollar is slightly on the softer side but remains in prime position to try and build on the gains so far in October. EUR/USD is up slightly by 0.2% to 1.0850 while GBP/USD is up 0.3% to 1.3045 on the day. The latter was helped by stronger UK retail sales data as well, with the pair briefly touching a high of 1.3071 earlier.

Besides that, USD/JPY saw a quick whipsaw from 149.85 to 149.58 on the back of some BOJ headlines which reaffirmed that the central bank will stay sidelined in October. The pair was then quickly bought back up to keep around 150.00 now, down 0.1% on the day.

The antipodeans are also up slightly with Chinese stocks having rallied back alongside the yuan earlier in the day. A more positive risk mood is also helping, with European indices pulled higher alongside US futures during the session.

There weren’t any major headlines to guide markets, so this is all roughly a continuation of sentiment during the month. Take gold for example, as it runs up above $2,700 to fresh record highs once more.

The dollar might be down slightly but it doesn’t take away from the upside momentum in the weeks before, at least not yet.

Have a great weekend, everyone.

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

When put into context to the near-term chart below, the quick 30 pip drop earlier isn’t that meaningful. As our reader Alex pointed out, there were some headlines noting that the BOJ is said to see „little need to rush an October rate hike“ and that they are „mulling a change to their view on upside price risks“. But here’s a look at how things are playing out on the hourly chart for the pair:

Sellers did try to wrestle back some momentum earlier in the week but were thwarted in their attempts to push below 149.00. Since then, the 100-hour moving average (red line) has returned back to be a key near-term support level for the pair. And it looks to be doing the job again now amid the drop earlier.

Hold above and buyers will continue to keep a more bullish near-term bias. But break below and sellers will start to come back into the picture again. But just be wary that we are closing in on key resistance points as well the longer price action holds up here.

The 100-day moving average is seen at 150.81 currently and has already made a crossover back under the 200-day moving average as noted here at the time.

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

The bullish momentum in the
US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another
set of strong US data. In fact, the US Retail Sales beat expectations across the board
by a big margin and the US Jobless Claims came out much better than expected.

One caveat is that the
market has now priced out the aggressive rate cuts expectations and it’s almost
perfectly in line with the Fed’s projections. Therefore, we will likely need stronger
US data and especially signs of a pickup in inflation to see the market pricing
in an earlier pause in the Fed’s easing cycle.

The next big risk events
will be in November when we get the October data, the FOMC policy decision and
the US election.

On the NZD side, the New
Zealand Q3 CPI this week missed expectations solidifying the market’s view
for another 50 bps cut at the upcoming meeting and even pricing 12% chance of a
75 bps move.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD is consolidating around the key 0.6050 support zone. This is where we can expect the buyers
to step in with a defined risk below the support to position for a rally into
the 0.6217 resistance. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 0.5850 support next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action as the bearish momentum waned. We
have the 0.61 handle acting as resistance here so a break above it will likely
see the buyers increase the bullish momentum into the 0.6217 resistance.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much more we can glean from this timeframe as the market participants will
likely keep on playing the range until we get a breakout. The red lines define
the average daily range for today.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Just a bit of a geopolitical update as it looks like North Korea is now getting involved with the war between Russia and Ukraine. It is being reported that North Korean troops have been shipped to Russian bases in the far east for training and adjustment. Following which, they will likely be subsequently „deployed for combat“.

Besides that, North Korea is also said to have sent artillery shells, anti-tank rockets and ballistic missiles to Russia.

Earlier in the day, Ukraine president Zelensky warned that North Korea will be sending „about 10,000 soldiers“ for the cause.

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

The bullish momentum in the
US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another
set of strong US data. In fact, the US
Retail Sales beat expectations across the board by a big margin and the US
Jobless Claims came out much better than expected.

One caveat is that the
market has now priced out the aggressive rate cuts expectations and it’s almost
perfectly in line with the Fed’s projections. Therefore, we will likely need stronger
US data and especially signs of a pickup in inflation to see the market pricing
in an earlier pause in the Fed’s easing cycle.

The next big risk events
will be in November when we get the October data, the FOMC policy decision and
the US election.

On the GBP side, we got the
UK CPI report this week where the data missed
expectations across the board and prompted the market to expect another 25 bps
cut in December. This morning, we got strong UK
Retail Sales figures which boosted the GBP.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD failed to break below the 1.30 handle and eventually bounced
higher despite strong US data. The buyers are stepping in around these levels
to position for a rally back into the 1.3265 level. The sellers will want to see
the price breaking lower to extend the drop into the major trendline.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we got a nice spike upward this morning following the UK retail sales
data but got rejected from the downward trendline. The buyers will need the price
to break above the trendline to start targeting new highs, while the sellers
will likely continue to lean on it to position for new lows.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price is bouncing around a strong support zone around the 1.3035
level where we can find the confluence of the previous swing level and a minor
upward trendline.

The buyers will likely pile
in around these levels to target a break above the major downward trendline,
while the sellers will look for a break lower to increase the bearish bets into
the 1.29 handle. The red line define the average daily range for today.

This article was written by Giuseppe Dellamotta at www.forexlive.com.