• The S&P index closed at a new record level for the 45th time this year.
• The Dow industrial average also closed at a record today.
• The NASDAQ index closed higher today and is within 1.66% of it’s all time record close reached back on July 10 at 18647.45.
• The small-cap Russell 2000 was the biggest gainer today with a search of 2.10%. It is within 1.35% of it’s all time high close at 2263.67.

A snapshot of the closing levels currently shows:

• Dow industrial average +409.74 points or 0.97% at 42863.86.
• S&P index up 34.98 points or 0.61% have 5815.03.
• NASDAQ index up 60.89 points or 0.33% at 18342.94.
• Russell 2000 up 45.99 points or 2.10% at 2234.41.

For the trading week:

• Dow industrial average +1.21%
• S&P index up 1.11%
• NASDAQ index +1.13%
• Russell 2000 up 0.97%

Some big winners this week:

• Trump Media & Technology Group: +53.21%
• Uber Tech: +16.14%
• Super Micro Computer: +15.89%
• Robinhood Markets: +14.77%
• CrowdStrike Holdings: +9.57%
• Celsius: +9.02%
• Palo Alto Networks: +9.01%
• Palantir: +8.72%
• Snowflake: +8.12%
• Arm: +8.01%
• NVIDIA: +7.91%
• SoFi Technologies: +7.39%
• Wells Fargo & Co: +7.06%

Some big losers this week:

• Raytheon: -17.17%
• Tesla: -12.95%
• First Solar: -8.51%
• Nio A ADR: -7.89%
• Tencent ADR: -6.65%
• Alibaba ADR: -3.88%
• General Mills: -3.79%
• Worthington Industries: -3.68%
• ProShares UltraPro Short QQQ: -3.50%
• iShares Global Clean Energy: -3.18%
• Moderna: -3.17%
• Dollar Tree: -2.76%
• GameStop Corp: -2.76%

This article was written by Greg Michalowski at www.forexlive.com.

• Canada September employment change +46.7K vs +27.0K expected
• US PPI final demand August YoY 1.8% vs 1.6% est. Ex Food and energy 2.8% vs 2.7% est.
• US October UMich prelim consumer sentiment 68.9 vs 70.8 expected
• Bank of Canada business outlook survey says „demand is weak“
• Fed’s Logan: Less-restrictive policy will still cool inflation
• Baker Hughes oil rig count up +2 to 481
• Tesla shares fall 8% after robotaxi event panned for lack of details

Markets:

• Gold up $26 to $2655
• US 10-year yields down 1 bps to 4.08%
• WTI crude down 30 cents to $75.56
• NZD leads, JPY lags
• S&P 500 up 0.7%, touches fresh record

Friday turned into a classic risk-on day but it’s not entirely clear why. Stock futures were negative and the US dollar was steady in pre-market trading but big bids hit at the US equity open and FX followed the same pattern, with Treasury yields falling led by the front end.

Data was mixed with PPI following CPI slightly higher while UMich sentiment missed to the downside slightly. A more-likely culprit was bank earnings, including comments from J.P. Morgan that consumer spending was steady and not deteriorating. Earnings at JPM and Wells Fargo were also good, boosting financial shares broadly.

There is anticipation of announcements of further Chinese fiscal stimulus at press events on Saturday and Monday so that could dictate early-week trading.

Overall moves were small but the yen was a notable underperformer. That’s most-likely a product of the risk trade but there could also be some position squaring as we count down to the US and Japanese elections. The S&P 500 rose to record intraday and closing highs with small caps particularly strong today and the Russell 2000 up 2%.

The loone was a notable underperformer once again. The session high came before the strong jobs data and that led to a 50 pip decline initially. However that drop didn’t entirely last as buyers stepped in quickly and then more-strongly after the BOC business outlook survey. The Oct 23 BOC decision is likely to become a litmus test for global central bank easing. Current pricing is 50/50 for 25 bps or 50 bps. The loonie has now declined for eight straight days, which is ominous given the backdrop in oil and stocks in that time period.

Note that US bonds and Canadian markets are closed Monday for a holiday.

Have a great weekend.

This article was written by Adam Button at www.forexlive.com.

• Believes the neutral rate is higher than it used to be in the past
• The Funds rate is high relative to where inflation is currently
• Always want to keep monetary policy moving to where the economy is going.
• There is room to go in nominal funds rate before reaching the neutral rate.
• Fed has to be more forward-looking than the market
• I don’t think that much has changed in the economy
• A Fed policy maker time horizon is more longer term
• I would cut rates by 25 bps. A stop-and-go is not a good look for the Fed.
• The recent data has not changed the medium-term economic outlook

This article was written by Greg Michalowski at www.forexlive.com.

As the clock ticks to the election, expect more and more promises to sway the last voters.

The Democrat nominee Harris is now promising Republican representation in her cabinet.

Equal time to GOP nominee Trump, some of his recent promises:

• Interest on car loans will be fully tax-deductible.
• Intends to invoke the six-year renegotiation provision of the US-Mexico-Canada Agreement (USMCA).
• No Chinese EVs will ever drive on American roads
• Proposes a “detailed plan to save the American auto industry.”
• Vows to end double taxation for Americans living abroad. He is encouraging expats to register to vote.
• Promises to eliminate taxes on tips, Social Security benefits, and overtime pay.
• Proposes lifting the $10,000 cap on state and local tax deductions.
• Plans to extend individual income and estate tax provisions of the 2017 tax cuts law.

The problem with the interest on car loans is it applies to those that itemize deductions. Most American’s do not itemize deductions but take the lump sum amount each year.

This article was written by Greg Michalowski at www.forexlive.com.

The NZDUSD traded above and below the 100-day MA this week but above the 200-day MA (green line) into the mid-week RBNZ rate decision. The central bank cut rates by 50 basis points and that sent the pair below the 61.8% but buyers came in against the 61.8% retracement. The subsequent bounce off the low on Wednesday saw the price move back to the 200-day MA where sellers leaned, putting a lid on the pair.

There was one last move lower which took out the 61.8% and the low for the week, but quickly failed.

That led to a run back higher and back between, the 200-day MA at 0.6095, and the 100 day MA above at 0.61215. That is where the price is now.

Coming into the this week, the 100 and 200-day moving averages were key levels on the downside. As we end the week and look to next week, the same 100/200 day MAs will be key levels once again.

If the price moves above the 100-day MA on the topside, I would expect more upside probing with traders targeting 0.6167 to 0.61795 as the next target area. Move above and there will be more upside momentum.

Conversely, if the 200-day MA is broken on the downside, I woudl expect more downside mometum with traders once again targeting the 61.8% retracement at 0.60509. Move below and there should be more downside momentum.

This article was written by Greg Michalowski at www.forexlive.com.

The ranges
of estimates are important in terms of market reaction because when the actual
data deviates from the expectations, it creates a surprise effect. Another
important input in market’s reaction is the distribution of forecasts.

In fact,
although we can have a range of estimates, most forecasts might be clustered on
the upper bound of the range, so even if the data comes out inside the range of
estimates but on the lower bound of the range, it can still create a surprise
effect.

Distribution
of forecasts for PPI

PPI Y/Y

• 1.8%
  (4%)
• 1.7%
  (29%)
• 1.6%
  (48%) – consensus
• 1.5% (19%)

PPI M/M

• 0.2%
  (10%)
• 0.1%
  (69%) – consensus
• 0.0%
  (21%)

Core PPI Y/Y

• 2.7%
  (67%) – consensus
• 2.6%
  (28%)
• 2.5%
  (5%)

Core PPI M/M

• 0.2%
  (84%) – consensus
• 0.1%
  (14%)
• 0.0% (2%)

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

Even with the dollar having strengthened and traders scaling back to pricing in a 25 bps move for the Fed in the past week or so, it hasn’t really fazed gold prices whatsoever. There was a mild dip back towards $2,605 earlier this week but that didn’t last with prices rebounding in the past two days. Now, gold is up another 0.3% today to $2,638 and holding near 28% gains year-to-date.

After the rise earlier in the year, gold saw some consolidation around mid-April to June. All that before another run higher and so far this year, there hasn’t really been any looking back for gold. It’s been a stunning ride to fresh record highs on multiple occasions in 2024.

The case for buying gold can be put in very simple terms. Adam made a good post on that here. And it all still rings true.

But even as a gold bull, what has surprised me the most throughout the year has been the resilience and how nonchalant gold has been behaving in light of the many changes in global economic developments.

The most compelling case coming into this year was that we are going to see lower rates. And even though Fed rate cut expectations got pushed back, that didn’t stop gold from tracking higher. Sure, central bank buying is a key part of the narrative. But you could hardly find a meaningful dip on the charts in gold.

The pace and scale of the rise is really the standout in my view, with ETF positioning also not really matching up to that.

Despite all the recent narratives, I’m still a big fan of gold. But as I have mentioned before, it’s tough to be advocating for something with such one-sided movement in the past ten months or so.

I’ve said it before and I’ll say it again. I really would like to see a healthy pullback in gold in the weeks ahead before we get into the seasonal buying months in December and January.

Otherwise, it’s getting rather dicey even if the reasons for staying long are still largely in place.

I mean, China reportedly pausing on gold purchases would’ve been a good reason to take some off the top. But then again, I guess it’s China. And how reliable really is the reporting, we can’t be exactly sure.

But still, even with the changes in Fed pricing in the past week and higher dollar/rates, it has barely scratched the gold armor. That’s quite something. Safe haven bids amid the events in the Middle East might be negating all this but then, we’re not seeing such moves faded as has been the case throughout the year.

Until now, the best reason I can argue for a pullback in gold would be a technical one. We might be overdue a squeeze with some form of trigger point. However, there has been numerous times in the past few months for that to happen yet here we are.

What are your thoughts on gold as the year winds down before we get to the seasonal rush in December and January? Is gold overdue a pullback/correction? If so, what’s the trigger that you’re looking for?

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

Fundamental
Overview

Yesterday, the USD got a
boost from a higher than expected US CPI report but gave back the gains pretty quickly.
There are two reasons for such a reaction.

The first is that at the
same time of the US CPI release we got the US Jobless Claims figures which
jumped to the top of their yearly ranges. The culprit was attributed mainly to
Hurricane Helene and the strikes.

The second reason is that
the market was already positioned for a higher than expected reading as we’ve
been seeing consistent upside in Treasury yields and the US Dollar in the days
leading up to the release. Therefore, we got kind of a “sell the fact” reaction.

On net, it was a slightly
hawkish report but it looks like the market needs some more reasons to keep
bidding the US Dollar now that the market’s pricing is back in line with the
Fed’s projections.

On the GBP side, the market
continues to expect the BoE to deliver at least one more rate cut by year-end
with a 25 bps cut in November priced at 80% probability. Next week, we will get
key data from the UK with the release of the labour market and CPI report.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD bounced near the 1.30 handle following the US CPI release. That’s
where the buyers stepped in with a defined risk below the level to position for
a rally back into the 1.3250 level. The sellers will want to see the price
breaking below the 1.30 handle to increase the bearish bets into the major trendline
next.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the bearish momentum waned as the price approached the 1.30 handle
with the lower lows getting shallower. We have now a key level at 1.3093 as it’s
the high set following the US CPI release.

The buyers will want to see
the price breaking above it to increase the bullish bets into the 1.3175 level
next. The sellers, on the other hand, will likely pile in around these levels
with a defined risk above the 1.3093 level to position for a drop into new
lows.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action. There’s not much else to add here as
the buyers will want to see the price breaking above the 1.3093 level, while
the sellers will look for a break below the 1.30 handle to extend the drop into
the major trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US PPI and the University of Michigan
Consumer Sentiment survey.

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

Fundamental
Overview

Yesterday, the USD got a
boost from a higher than expected US CPI report but gave back the gains pretty quickly.
There are two reasons for such a reaction.

The first is that at the
same time of the US CPI release we got the US Jobless Claims figures which
jumped to the top of their yearly ranges. The culprit was attributed mainly to
Hurricane Helene and the strikes.

The second reason is that
the market was already positioned for a higher than expected reading as we’ve
been seeing consistent upside in Treasury yields and the US Dollar in the days
leading up to the release. Therefore, we got kind of a “sell the fact” reaction.

On net, it was a slightly
hawkish report but it looks like the market needs some more reasons to keep
bidding the US Dollar now that the market’s pricing is back in line with the
Fed’s projections.

On the EUR side, the market
has fully priced in a back-to-back 25 bps cut in October from the ECB following
the weak data and dovish comments from ECB officials.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD bounced around the 1.09 handle following the US CPI release and
it’s now looking like we could get a pullback into the 1.10 handle where we can
find the confluence
of the broken trendline and a key swing level.

That’s where we can expect
the sellers to step in with a defined risk above the 1.10 handle to position
for a drop into the 1.08 handle next, while the buyers will look for a break to
the upside to increase the bullish bets into the 1.12 handle.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we had a downward trendline that was defining the bearish momentum.
The price broke above the trendline this morning in a potential signal of more
upside to follow.

The buyers will likely pile
in around these levels to position for a pullback into the 1.10 handle. The
sellers, on the other hand, will want to see the price falling back below the
trendline to position for new lows.

EURUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor resistance
around the 1.0955 level which is the high set on the US CPI reaction. A break
above this level will likely give the buyers more confidence to target the 1.10
handle.

The sellers, on the other
hand, will likely pile in around these levels with a defined risk above the
resistance to position for a drop into new lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US PPI and the University of Michigan
Consumer Sentiment survey.

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

There is a light extension to the narrow range today with the pair now clipping 1.0950. That being said, it is still keeping within a ~23 pips range only for the day. There are some large option expiries as well at 1.0930 and 1.0950 that should likely keep price action locked, before we get to US trading.

With that in mind, what is the chart telling us in the bigger picture?

I outlined some key fundamental developments in the pair yesterday here. And things haven’t changed whatsoever on the technical side as well.

EUR/USD continues to be pinned down near the 100-day moving average (red line) and that is the key support level in play currently. The level is seen at 1.0934 at the moment.

Hold above that and buyers are still hanging on to a small chance of a rebound. They would have to reverse sentiment in the near-term chart to convince of anything stronger. In that lieu, the 100-hour moving average is seen at 1.0957 and 200-hour moving average at 1.1000. So, there is some work to be done.

Otherwise, the downside pressure continues to persist with the momentum siding with sellers. But they have some key levels to chew through themselves now as the week winds down.

The 100-day moving average above is one before the 50.0 Fib retracement level of the swing higher since April, seen at 1.0907.

With the dollar having made a comeback in the last two weeks, it turns trading sentiment towards one key question now. Which economy will fare better in the next three to four months; the US or the Eurozone?

The answer to that is likely to fuel the next key directional move in EUR/USD, guided by the technicals.

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