US:

• The Fed left interest rates unchanged as
  expected at the last meeting.
• The macroeconomic projections were revised higher
  as the economy showed much stronger resilience than expected and the Dot Plot
  showed that the majority of members still expects another rate hike by the end
  of the year with less rate cuts in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully as
  they are trying to find the optimal level of rates. Powell also added that the
  soft landing is not the base case at the moment, although they are aiming for
  it.
• The latest US Core PCE
  came
  in line with expectations with disinflation continuing steady.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also last
  week with a strong beat in Jobless Claims and this
  week with the beat in Job Openings.
• The ISM Manufacturing PMI beat
  expectations while the ISM Services PMI came in
  line with forecasts in another sign that the US economy remains resilient.
• The miss in the ADP report
  yesterday led to some USD weakness which might continue if the data in the next
  couple of days misses as well.
• The market doesn’t expect the Fed to hike again at
  the moment.

UK:

• The BoE kept interest rates unchanged at the last meeting.
• The central bank is leaning more
  towards keeping interest rates “higher for longer” but it kept a door open for
  further tightening if inflationary pressures were to be more persistent.
• Key economic data like the latest employment report showed a very high wage growth
  despite the rising unemployment rate, but the latest UK CPI missed expectations across the board.
• 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
pulled back yesterday into the blue 8 moving average where
it’s finding some resistance. From a risk management perspective, the sellers
would have a much better risk to reward setup if the price pulled back all the
way up to the 1.2398 resistance where we
can find the confluence with the trendline, the
38.2% Fibonacci retracement level
and the red 21 moving average. The buyers, on the other hand, will need the
price to break above the trendline to turn the trend around.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the latest leg
lower diverged with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we got a pullback into the minor trendline around the
1.2180 level where we can also find the Fibonacci retracement levels. The price
started to struggle here as the sellers are stepping in with a defined risk
above the trendline and positioning for more downside. The buyers will need the
price to break above the trendline to pile in with greater conviction and
target the resistance around the 1.2308 level.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
market structure on this timeframe is bullish as the price made a new higher
high yesterday. The buyers are likely to pile in around the 1.2100 support with
a defined risk below it to target a break above the trendline and ultimately
the 1.2308 resistance. More conservative buyers may want to wait for the price to
take out the trendline first before joining the rally. The sellers, on the
other hand, will want to see the price breaking below the 1.2100 support to
position for further downside and new lows.

Upcoming Events

Today we have the Jobless Claims report, which
continues to show a solid labour market and given the reaction to the miss in
the ADP yesterday, we can expect a rally in case of a miss and a drop in case
of a beat. Tomorrow, it will be the time for the NFP report which is the only
one the Fed will see before its next rate decision.

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

• Prior 75.15k

US-based employers announced 46,457 job cuts last month, down roughly 37% from the 75,151 job cuts announced in August. However, this is still a roughly 58% increase in layoffs compared to September last year and continues the trend of rising job cuts i.e. early signs of softening in the labour market.

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

US:

• The Fed left interest rates unchanged as
  expected at the last meeting.
• The macroeconomic projections were revised higher
  as the economy showed much stronger resilience than expected and the Dot Plot
  showed that the majority of members still expects another rate hike by the end
  of the year with less rate cuts in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully as
  they are trying to find the optimal level of rates. Powell also added that the
  soft landing is not the base case at the moment, although they are aiming for
  it.
• The latest US Core PCE
  came
  in line with expectations with disinflation continuing steady.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also last
  week with a strong beat in Jobless Claims and this
  week with the beat in Job Openings.
• The ISM Manufacturing PMI beat
  expectations while the ISM Services PMI came in
  line with forecasts in another sign that the US economy remains resilient.
• The miss in the ADP report
  yesterday led to some USD weakness which might continue if the data in the next
  couple of days misses as well.
• The market doesn’t expect the Fed to hike again at
  the moment.

EU:

• The ECB hiked by 25 bps at the
  last meeting and added a line in the statement that hinted to the end of the
  tightening cycle.
• President Lagarde didn’t push back against the idea
  of them having reached already the terminal rate and highlighted the slowdown
  in Eurozone economy.
• The Eurozone CPI missed
  across the board last week supporting the ECB’s stance.
• The labour market remains
  very tight with the unemployment rate hovering at record low levels.
• Overall, the economic data lately has been showing
  signs of fast deterioration in the economy.
• Most ECB members are leaning towards keeping rates
  higher for longer now.
• The market doesn’t expect the ECB to hike anymore.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the EURUSD pair
has pulled back recently with the miss in the ADP report yesterday giving it a
bit of relief after a series of strong US data. From a risk management
perspective, the sellers would have a much better risk to reward setup shorting
from the resistance around
the 1.0620 level where we have the confluence with the
trendline, the
38.2% Fibonacci retracement level
and the red 21 moving average. The
buyers, on the other hand, will need the price to break above the trendline to
change the trend around.

EURUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a divergence with the
MACD right
around the key 1.05 support. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, we might see a pullback
into the previously mentioned 1.0620 resistance zone, so the buyers are likely
to pile around here to position for a rally into the resistance.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
market structure on this timeframe is bullish as the price has made a new
higher high and the moving averages have crossed to the upside. The buyers
should lean on the support around the 1.0495 level with a defined risk below it
to target the 1.0620 level. More conservative buyers may want to wait for the
price to break above the recent high at 1.0532 before joining the rally. The
sellers, on the other hand, will want to see the price breaking below the
1.0495 support to pile in again and extend the drop to new lows.

Upcoming Events

Today we have the Jobless Claims report, which
continues to show a solid labour market and given the reaction to the miss in
the ADP yesterday, we can expect a rally in case of a miss and a drop in case
of a beat. Tomorrow, it will be the time for the NFP report which is the only
one the Fed will see before its next rate decision.

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

• It is below what we would have expected last year

This is in part one reason why the ECB has to be careful so as to not tighten financial conditions any further, more so when economic conditions are also weakening considerably. From July: Eurozone firms‘ demand for credit falls to lowest on record in Q2

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

• There are clear signs that rate hikes are having an impact
• But perhaps it may be that the effect is weaker than in the past or still delayed
• Sees UK inflation reaching target in 2 years‘ time

The BOE is in a rather unenviable spot right now. They are starting to move to the sidelines but are worried that they may not have done enough in the inflation fight. Adding to that is a worsening economy amid the rise in recession risks and further tightening could risk a hard landing going into next year.

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

Yesterday we got another strong US jobs report as
the Job Openings data
beat expectations by a big margin. Coupled with the last week’s beat in Jobless Claims and this
week ISM Manufacturing PMI, the
market is starting to lose faith in a quick return to lower interest rates and
might even fear higher rates. Overall, the data is still supporting the soft
landing narrative but the market shouldn’t be priced for neither higher rates
nor a hard landing.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite remains under pressure and the fall back below the key support is a bad
omen for the buyers. The buyers should keep on defending this level and target
a rally into the downward trendline, but if
the price breaks the low, the sellers are likely to pile in even more
aggressively and take the price into the next support around the 12274 level.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the Nasdaq
Composite bounced on the key support and pulled back into the red 21 moving average and the
38.2% Fibonacci retracement level
where it found strong sellers waiting for another leg lower. The buyers will
need the price to break above the 38.2% Fibonacci retracement level to turn
around the trend and target new highs.

Nasdaq Composite
Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see the low
around the 12965 which is going to be the last line of defence for the buyers
and might turn into a double bottom pattern.
This is where we are likely to see the buyers stepping in with a defined risk
below the low to position for a rally into the highs. The sellers, on the other
hand, will want to see the price breaking below the low to pile in even more
aggressively and extend the drop into the 12274 support.

Upcoming
Events

Today on the agenda we have the ADP report and the
ISM Services PMI. Tomorrow, we will see the latest Jobless Claims data, which
continues to show a solid labour market. Finally on Friday, it will be the time
for the NFP report which is the only one the Fed will see before its next rate
decision.

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

• Economic activity likely to remain subdued in the coming months
• Labour market remains resilient
• Underlying price pressures remain strong

Just some token remarks there by de Guindos. Nothing that we don’t already know from the ECB previously.

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

Headlines:

• Dollar down slightly as the bond selling comes off the boil for now
• The bond rout cools off a little, for now at least
• ECB’s Centeno: Inflation is falling faster than when it was rising
• Eurozone August retail sales -1.2% vs -0.3% m/m expected
• Eurozone August PPI +0.6% vs +0.6% m/m expected
• Eurozone September final services PMI 48.7 vs 48.4 prelim
• UK September final services PMI 49.3 vs 47.2 prelim
• US MBA mortgage applications w.e. 29 September -6.0% vs -1.3% prior
• Saudi Arabia reaffirms will continue voluntary oil output cuts until end of December

Markets:

• GBP leads, NZD lags on the day
• European equities higher; S&P 500 futures up 0.1%
• US 10-year yields down 1.5 bps to 4.787%
• Gold up 0.1% to $1,824.08
• WTI crude down 2.0% to $87.47
• Bitcoin up 0.7% to $27,580

As we got into European morning trade, yields were running hot once again and we saw 10-year Treasury yields hit 4.88%. That kept the dollar more bid while equities were smashed lower, with S&P 500 futures marked down by 0.6%.

But as the session trudged along, yields reversed lower in a welcome relief for broader markets after yesterday’s moves.

The greenback lost ground and is sitting lower on the day while S&P 500 futures turned things around to be up 0.1% currently, as 10-year Treasury yields fall down to 4.78%.

It’s a bit part relief for the most part and perhaps a tentative one as we still have US trading to navigate through.

EUR/USD moved up from 1.0460 to 1.0500 while AUD/USD recovered some poise from 0.6290 to 0.6320-30 currently. Meanwhile, despite Tokyo intervention, USD/JPY is largely steady at around 148.95 but was hovering closer to 149.10-20 levels earlier in the day.

With US ADP employment data coming up, the focus stays on the bond market (and how that impacts broader sentiment) still ahead of the Friday jobs report.

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

• Prior -1.3%
• Market index 178.2 vs 189.6 prior
• Purchase index 136.6 vs 144.8 prior
• Refinance index 384.6 vs 411.7 prior
• 30-year mortgage rate 7.53% vs 7.41% prior

Mortgage activity plunged further in the past week as the average rate of the most popular US home loan rises another 12 bps to 7.53% – its highest since November 2000.

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

The breakout of the
triangle is a signal that the global economy might be headed for a downturn as
the central banks keep monetary conditions tight. The fast rise in energy
prices might have also accelerated such an outcome as consumption should have
suffered from it. We have also other markets heading towards a negative outcome
as global yields continue to soar, the US Dollar appreciates every day and
the stock markets are experiencing losses.

Copper Technical Analysis –
Daily Timeframe

On the
daily chart, we can see that after the breakout of the symmetrical triangle, Copper
pulled back to retest the broken trendline, where
we had also the red 21 moving average for confluence, and
sold off again targeting the 3.54 support. We
might see a bounce around the support level as the buyers are likely to step in
with a defined risk below the level to target a rally into the upper trendline
of the triangle. The sellers, on the other hand, will want to see the price
breaking through the support to increase the bearish momentum and start eyeing
the cycle lows.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we even had
another downward trendline around the bottom trendline of the triangle that
added an extra layer of confluence. That’s where the sellers piled in with a
define risk above the trendline to target the 3.54 support. Right now, the
price is in free fall, and we might not see much support until the 3.54 level,
so the buyers are likely to be careful not to catch such a falling knife.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is starting to diverge with
the MACD right
as it trades into the key support level. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. In this case, we might see
the buyers stepping in with conviction around the support level to target the
3.64 resistance. The sellers, on the other hand, are likely to pile in around these
levels to position for a break below the support. If the price breaks above the
3.64 resistance as well, then the buyers should have free way until the major
trendline around the 3.75 level.

Upcoming Events

Today on the agenda we have the ADP report and the
ISM Services PMI. Tomorrow, we will see the latest Jobless Claims data, which
continues to show a solid labour market. Finally on Friday, it will be the time
for the NFP report which is the only one the Fed will see before its next rate
decision. Copper is likely to respond negatively to bad data and positively in
case of good figures.

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