The main culprit for the US
Dollar strength lately has been the rally in long term Treasury yields. The
yield curve has been bear-flattening which is what you would expect with higher
growth and potentially higher inflation expectations.

There’s a good argument
that the markets have been already positioning for a Trump’s victory which is
expected to strengthen the higher growth and less rate cuts expectations.

As previously mentioned,
this is the trend for now and it’s generally a bad idea to fight such trends
without a strong catalyst. The US Dollar will likely remain supported unless
Harris wins the US elections and we get a correction in Treasury yields.

On the NZD side, the latest
New Zealand Q3 CPI missed expectations solidifying the
market’s view for another 50 bps cut at the upcoming meeting and even pricing 22%
chance of a 75 bps move. In 2025, the market expects four more 25 bps cuts.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD broke below the key 0.6050 support zone and extended the drop into new lows. From
a risk management perspective, the sellers will have a better risk to reward
setup around the support
turned resistance, while the buyers will want to see the price breaking
higher to start targeting the 0.6217 resistance next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish
momentum. The sellers will likely lean on it to position for new lows, while
the buyers will look for a break higher to increase the bullish bets into new
highs.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price broke above another minor trendline that was defining the
bearish momentum on this timeframe. The rally stalled at the most recent swing high
around the 0.60 handle.

The buyers will want to see
the price breaking above this level to increase the bullish bets into the major
trendline, while the sellers will likely step in around this level to position
for new lows. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US ADP and the US GDP. Tomorrow, we have the US PCE, the US
Jobless Claims and the US Employment Cost Index. Finally, on Friday, we
conclude the week with the US NFP and the US ISM Manufacturing PMI.

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

• 10-year Treasury yields stay in retreat after brief brush above 4.30% yesterday
• Euro pushes higher on German Q3 GDP beat, higher state inflation readings
• Germany Q3 preliminary GDP +0.2% vs -0.1% q/q expected
• Bavaria October CPI +2.4% vs +1.9% y/y prior
• UK budget preview: What to expect this time around?
• Eurozone Q3 preliminary GDP +0.4% vs +0.2% q/q expected
• France Q3 preliminary GDP +0.4% vs +0.3% q/q expected
• Italy Q3 preliminary GDP 0.0% vs +0.2% q/q expected
• Spain Q3 preliminary GDP +0.8% vs +0.6% q/q expected
• Spain October preliminary CPI +1.8% vs +1.8% y/y expected
• Germany October unemployment change 27k vs 15k expected
• Switzerland October KOF leading indicator index 99.5 vs 105.0 expected
• US MBA mortgage applications w.e. 25 October -0.1% vs -6.7% prior
• SNB chairman Schlegel: Ready to intervene in currency markets as necessary

Markets:

• JPY leads, GBP lags on the day
• European equities lower; S&P 500 futures up 0.1%
• US 10-year yields down 5.2 bps to 4.220%
• Gold up 0.2% to $2,780.24
• WTI crude up 1.2% to $68.00
• Bitcoin down 0.2% to $72,167

It was a packed session with plenty of economic data releases to work through. But ultimately, they didn’t do much to shake up the market landscape on the day.

With month-end approaching, that alongside upcoming US data releases continue to be key focus points in impacting trading sentiment on the week.

We got stronger inflation numbers from Spain and Germany for October but the ECB had already warned about that previously. Then, there was a surprise in German Q3 GDP as well. And put together, that saw EUR/USD nudge up slightly from 1.0835 to 1.0859 briefly.

However, large option expiries and the fact that one month’s worth of numbers are not enough to change the ECB outlook saw the pair retreat back to 1.0830 currently.

Instead, the dollar is weaker at the balance but it owes to a continued retreat in Treasury yields after the highs yesterday. 10-year yields briefly touched a high of 4.32% yesterday but are now down by roughly 10 bps to 4.22%. Month-end shenanigans in play?

In any case, that is weighing on USD/JPY, with the pair down 0.3% to 152.90 currently. Meanwhile, AUD/USD and NZD/USD are both up 0.2% to 0.6575 and 0.5985 respectively as well.

Elsewhere, the pound is the laggard as traders are positioning more negatively ahead of the UK budget announcement later. The fear is that chancellor Rachel Reeves might announce a budget that is deemed „fiscally irresponsible“ and that could weigh on the currency and upset the gilts market. So, there is a potential for a sterling recovery if she manages to thread the needle. But it’s definitely a fine line to work that out.

In other markets, European indices are selling off while US futures are marginally higher. The latter is feeling optimistic after Alphabet’s earnings beat with four more of the Magnificent 7 still to report this week. In the commodities space, gold continues to shine as it closes in on $2,800 in the bigger picture as the ascend continues.

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

• Prior -6.7%
• Market index 214.5 vs 214.8 prior
• Purchase index 137.8 vs 131.3 prior
• Refinancing index 630.0 vs 672.6 prior
• 30-year mortgage rate 6.73% vs 6.52% prior

After a sharp fall in mortgage applications in the previous two weeks, the latest reading is little changed but it’s important to look at the details. Refinancing activity took yet another sharp plunge as higher rates once again weighed on that particular component. The drop was only offset by a modest jump in purchases activity in the past week. The refinancing index is now at the lowest since the end of July.

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

The main culprit for the US
Dollar strength lately has been the rally in long term Treasury yields. The
yield curve has been bear-flattening which is what you would expect with higher
growth and potentially higher inflation expectations.

There’s a good argument
that the markets have been already positioning for a Trump’s victory which is
expected to strengthen the higher growth and less rate cuts expectations.

As previously mentioned,
this is the trend for now and it’s generally a bad idea to fight such trends
without a strong catalyst. The US Dollar will likely remain supported unless
Harris wins the US elections and we get a correction in Treasury yields.

On the AUD side, the latest
data has been pretty strong with the Australian labour market report last week beating expectations by a
big margin and today’s underlying
inflation figures remaining high. Although the data didn’t change much in
terms of interest rate expectations, it supports the RBA’s hawkish stance.

AUDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that AUDUSD broke through the 0.6622 level and extended the drop into new
lows. From a risk management perspective, the sellers will have a better risk
to reward setup around the 0.6622 level to position for further downside. The
buyers, on the other hand, will want to see the price breaking higher to start
targeting the 0.68 handle.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish
momentum. The sellers will likely keep on leaning on it to position for new
lows, while the buyers will want to see the price breaking higher to pile in
for a rally into new highs.

AUDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much more we can add as the sellers will look to lean on the trendline,
while the buyers will want to see the price breaking higher. The red lines
define the average daily range for today.

Upcoming
Catalysts

Today we get the US ADP and the US GDP. Tomorrow, we have the US PCE, the US
Jobless Claims and the US Employment Cost Index. Finally, on Friday, we
conclude the week with the US NFP and the US ISM Manufacturing PMI.

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

There’s no clear catalyst for the roughly 10 bps drop in yields from the highs yesterday. Perhaps month-end rebalancing flows are at play here? That’s definitely a consideration alongside the slew of US data for the week, which kicked off yesterday via the JOLTS job openings and consumer confidence data.

Coming up later, we’ll have the ADP employment change and Q3 advance GDP data to get through. And then tomorrow, there’s the PCE price index and weekly jobless claims. All that before the non-farm payrolls report on Friday.

Going back to yields, the 4.30% mark is a key threshold highlighted by Goldman Sachs here. So, perhaps that added some intrigue to the level in trading this week. But for now, yields are keeping above the 200-day moving average (blue line) still, seen at 4.183%. So, that’s one other key line in the sand to be mindful of.

I want to say that the fall in yields today have some part to do with month-end flows but we’ll only get a better sense of that come next week. And of course, depending on how the US data plays out in the days ahead.

But as yields are lower on the day, it is putting a stop to the recent dollar gains. USD/JPY especially is down 0.3% to 152.90 currently, with the antipodeans also sitting a little higher against the greenback now.

The pound is the main laggard on the day though but it owes to some nervous feels ahead of the UK budget announcement later. If the budget manages to avoid being fiscally irresponsible, that might trigger a relief rally for the quid. So, that’s something to look out for.

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

EURUSD: The EURUSD moved lower to start the US trading day yesterday, only to rebound higher into the European session and the start of the US session. The high prices yesterday moved up to once again test the 200-hour MA. On Friday, the price moved up to test that MA as well – and found willing sellers. The day closed with the price between the 100 hour MA below at 1.0802 and the 200-hour MA above near 1.08206. Something had to give.

And today, the „give“ did not happen until the European morning session. The price finally broke a MA target wth a break above the 200 hour MA, but instead of igniting more buying and a move to the upside, the initial move was higher but after reaching 1.08256 (the 200 hour MA was at 1.08179, the price reversed and starts the US session below the 100 hour MA at 1.08037. The buyers had their shot. The sellers are taking charge. The low yesterday reached 1.07814. The low from the early August reached 1.07767. Both are targets today.

USDJPY: The USDJPY had a volatile up, down and back up trading day yesterday closing higher on the day (the price did gap higher following Japan’s election, where the ruling coalition (LDP/Komeito) lost its majority. The pair rose by about 100 pips at the end of the day.

Technically, the pair in the US session moved up to test the 61.8% of the move down from the July high at 153.40 and found sellers. The high price in the US session stalled at 153.37, just 3 pips short of the retracement level. Sellers leaned.

In trading today, the USDJPY dipped modestly in the Asian session after Japan employment rate came in at 2.4% vs 2.5% last month (and 2.5% estimate), and continued that move into the early European session. The low reached 152.749, which like yesterday, approached the 100-hour MA, but still was quite short of the MA level. On Friday, the price moved to that MA and found willing buyers increasing that MAs level going forward. On the move back higher, the price is now trading back above and below the 61.8% retracement (at 153.40). Buyers and sellers are stalling new that retracement level and waiting for the next shove. The tilt is to the upside, but it needs that push with the high price from yesterday at 153.88 the next obvious target. It would open the door for more upside momentum.

Perhaps the best way to look at the market is if the price can stay above last week’s high at 153.18, the buyers are in firm control. Move below, and the buyers might give up and look for rotation back down toward the 100-hour moving average again.

GBPUSD: The GBPUSD buyers had their shot yesterday when the price moved above the 200-hour MA (green line on the chart below) but could not sustain momentum. The shot missed.

A week ago on Monday and the week before also saw the buyers take shots on the break of the 200-hour MA only to miss. Sp although the 200-hour MA has been moving lower and making it easier for buyers to take control, there still is an upside apprehension. Next week, the BOE meets with expectations for a cut in rates.

The failure gave the sellers the go-ahead to push lower (and they did). However, the low price in the US session stalled did move below the 100-day MA at 1.29723, but could not get below the 100-hour MA at 1.2967. I guess both buyers and seller had their shot and both missed. Today, the sellers tried to break lower with the 100-hour MA broken in the late Asian session, but that failed too. The price has moved back above the 200-hour MA (green line) again. The price action remains uncommitted with a failed break in the European session but buyers are trying again in the early US session. The high yesterday yesterday near 1.3000 (and from Friday too) if broken would give the buyers more confidence and have traders looking toward the 100 bar MA on the 4-hour chart at 1.30246. Get above it and 1.30488 would be eyed (50%). Fail….and the 100-day/100 hour MA restarts the „wash and rinse cycle“ seen recently. UGH.

USDCHF: The USDCHF moved higher in sympathy with the rising USDJPY in the Asian session yesterday and pushed above its 100-day MA in the process at 0.86841. The high reached 0.86995 – just short of the natural resistance target at 0.8700 and after moving back below the 100-day MA at 0.8641, turned buyers to sellers and closed near the low for the day.

The low from last week stalled at the broken 38.2% of the move down from the July high at 0.86318. Staying above that retracement level is key technically for the buyers if they are to keep some control.

In trading today, the price in the European session has extended higher. The price is back above the high from 2-weeks ago at 0.8668. The 100-day MA at 0.86843 is the next target to get to and through again to shift more of the bias to the upside. Support at 0.8649 and the 38.2% at 0.86318.

USDCAD: more

AUDUSD: more

NZDUSD: more

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

• Iranian revolutionary guards threaten Israelis with surprises they have never seen before
• UK September mortgage approvals 65.65k vs 65.00k expected
• China mulls approving fresh fiscal package worth over ¥10 trillion next week
• DIHK warns that German economy is set to stagnate in 2025
• European equities hold higher to start the session
• What are the main events for today?
• BlackRock CEO says Fed will cut at least by 25 bps before year-end
• Eurostoxx futures +0.2% in early European trading
• Germany November GfK consumer sentiment -18.3 vs -20.5 expected
• US futures stay more muted so far on the day
• US reportedly have been declining to change language when discussing Taiwan independence
• Another light one on the data docket in Europe today
• FX option expiries for 29 October 10am New York cut
• UK reportedly open to restarting key trade dialogue with China
• Heads up: It’s a big week on the earnings calendar

Markets:

• GBP leads, CHF lags on the day
• European equities higher;
  S&P 500 futures down -0.12%
• US 10-year yields up 1 bps to 4.300%
• Gold
  up 0.28% to $2,749
• WTI
  crude up 1.44% to $68.35
• Bitcoin up 2.15% to $71,444

It’s been a slow session in terms of data releases and market moves. The main highlight is the news about China mulling to approve a new fiscal package next week worth over 10
trillion yuan which is expected to be bolstered further if Trump wins the
US election. That gave copper and chinese stocks a boost.

Other than that, we didn’t get anything notable. The playbook in the markets remains the same as we head into the US election with Treasury yields pushing higher and the US Dollar remaining supported. The US stock market continues to display a rangebound price action while gold, and especially bitcoin, keep pushing into new highs.

In the American session, the US Job Openings and the US Consumer Confidence will be the data to watch alhough given the market’s focus on the election, weak data might be faded, while strong data could add more fuel to the Trump trade.

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

• Iranian revolutionary guards threaten Israelis with surprises they have never seen before.
• Threaten to deliver more „crushing“ strikes to Israel in coming days.

Crude oil is ticking higher on the news. I have a feeling that the Trump trade we’ve been seeing in other markets have also spilled into the crude oil market on higher supply fears. Nonetheless, the big gap lower we got on Monday open did look like an overreaction, so this news might provide a pullback to fill the gap.

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

The main culprit for the US
Dollar strength lately has been the rally in long term Treasury yields. The
yield curve has been bear-flattening which is what you would expect with higher
growth and potentially higher inflation expectations.

There’s a good argument
that the markets have been already positioning for a Trump’s victory which is
expected to strengthen the higher growth and less rate cuts expectations.

As previously mentioned,
this is the trend for now and it’s generally a bad idea to fight such trends
without a strong catalyst. The US Dollar will likely remain supported unless
Harris wins the US elections and we get a correction in Treasury yields.

On the CAD side, the BoC cut interest rates by 50 bps as expected recently and
signalled more rate cuts to come with the size of the cuts being guided by
incoming data. The market sees a 90% probability of a 25 bps cut in December (10%
for a 50 bps cut) and then three more 25 bps cuts in 2025.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD extended the rally into the 1.39 handle as it continues to
approach the 2-year high at 1.3977. At this point the market might need to see
the US election result to break the 2-year high but the momentum is still
favourable for the greenback.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely lean on it to position for a rally into a new high,
while the sellers will look for a break lower to start targeting the 1.38
handle.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we now have a counter-trendline defining the current pullback. The
buyers will want to see the price breaking higher to increase the bullish bets
into new highs, while the sellers will likely lean on to ride the pullback into
the major trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Job Openings and the US Consumer Confidence report.
Tomorrow, we get the US ADP and the US GDP. On Thursday, we have the US PCE,
the US Jobless Claims, the US Employment Cost Index and the Canadian GDP data.
Finally, on Friday, we conclude the week with the US NFP and the US ISM
Manufacturing PMI.

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

The main culprit for the US
Dollar strength lately has been the rally in long term Treasury yields. The
yield curve has been bear-flattening which is what you would expect with higher
growth and potentially higher inflation expectations.

There’s a good argument
that the markets have been already positioning for a Trump’s victory which is
expected to strengthen the higher growth and less rate cuts expectations.

As previously mentioned, this
is the trend for now and it’s generally a bad idea to fight such trends without
a strong catalyst. The US Dollar will likely remain supported unless Harris
wins the US elections and we get a correction in Treasury yields.

USDCHF Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF is approaching a key resistance zone around the 0.8730 level where
we can also find the trendline for confluence.

That’s where we can expect
the sellers to step in with a defined risk above the trendline to position for
a drop into the 0.8333 level. The buyers, on the other hand, will look for a
break higher to increase the bullish bets into the 0.89 handle next.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that that the price has been making almost textbooks higher highs and
higher lows with the price retesting the previous resistance
turned support before making a new high. Right now, the price is testing
the 0.8668 level.

The buyers will want to see
the price breaking higher to extend the rally into the 0.87 handle, while the
sellers will look for a break below the 0.8641 level to target a drop into the
0.86 handle next.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a very noisy price action between the 0.8668 and 0.8641 levels.
We will likely need a breakout to see a more sustained trend but for now the
market participants might keep on playing the range by buying at support
and selling at resistance. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Job Openings and the US Consumer Confidence report.
Tomorrow, we get the US ADP and the US GDP. On Thursday, we have the US PCE,
the US Jobless Claims and the US Employment Cost Index data. Finally, on
Friday, we conclude the week with the Swiss CPI, the US NFP and the US ISM
Manufacturing PMI.

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