UPCOMING
EVENTS:

• Monday: Eurozone Retail Sales. (China on holiday)
• Tuesday: Japan Average Cash Earnings, RBA Meeting Minutes,
  US NFIB Small Business Optimism Index.
• Wednesday: RBNZ Policy Decision, FOMC Meeting Minutes.
• Thursday: Japan PPI, ECB Meeting Minutes, US CPI, US
  Jobless Claims, New Zealand Manufacturing PMI.
• Friday: UK GDP, Canada Labour Market report, US PPI, US
  University of Michigan Consumer Sentiment, BoC Business Outlook Survey.

Tuesday

The Japanese
Average Cash Earnings Y/Y is expected at 3.1% vs. 3.6% prior. Wage growth has
turned positive lately in Japan and that’s something the BoJ always wanted to
see to meet their inflation target sustainably. The data shouldn’t change much for the
central bank for now as they want to wait some more to assess the developments
in prices and financial markets following the August rout.

Wednesday

The RBNZ is
expected to cut the OCR by 50 bps and bring it to 4.75%. The reason for such
expectations come from the unemployment rate being at the highest level in 3
years, the core inflation rate being inside the target range and high frequency
data continuing to show weakness. Moreover, Governor Orr in the last press
conference said that they considered a range of moves in the last policy
decision and that included a 50 bps cut.

Thursday

The US CPI Y/Y is
expected at 2.3% vs. 2.5% prior, while the M/M figure is seen at 0.1% vs. 0.2%
prior. The Core CPI Y/Y is expected at 3.2% vs. 3.2% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.

The last US labour
market report came out much better than expected and the market’s pricing for a
50 bps cut in November evaporated quickly. The market is now finally in line
with the Fed’s projection of 50 bps of easing by year-end.

Fed’s Waller
mentioned that they could go faster on rate cuts if the labour market data
worsened, or if the inflation data continued to come in softer than everybody
expected. He also added that a fresh pickup in inflation could also cause the
Fed to pause its cutting.

Given the recent
NFP report, even if the CPI misses slightly, I don’t think they would consider
a 50 bps cut in November anyway. That could be a debate for the December
meeting if inflation data continues to come below expectations.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably in the last
weeks.

This week Initial
Claims are expected at 230K vs. 225K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release showed a
decrease to 1826K.

Friday

The Canadian
Labour Market report is expected to show 28K jobs added in September vs. 22.1K
in August and the Unemployment Rate to increase to 6.7% vs. 6.6% prior. The
market is pricing an 83% probability for a 25 bps cut at the upcoming meeting
but since inflation continues to surprise to the downside, a weak report will
likely raise the chances for a 50 bps cut.

The US PPI Y/Y is
expected at 1.6% vs. 1.7% prior, while the M/M figures is seen at 0.1% vs. 0.2%
prior. The Core PPI Y/Y is expected at 2.7% vs. 2.4% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.

Again, the data is
unlikely to get the Fed to debate a 50 bps cut at the November meeting even if
it misses. The risk now is for inflation to get stuck at a higher level or even surprise to the upside.

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

Crude Oil Price Forecast: Navigating the Next Moves 🛢️📈

Hello traders and investors! This is Itai Levitan, an experienced market analyst at ForexLive.com, tracking crude oil for you today as well as what I am looking at. Let’s dive into the insights you need to make informed trading decisions. 🌊

Recent Rally Highlights 🚀

Strong Uptrend: Crude oil prices have surged by approximately 14% in less than four days, which signals significant bullish momentum. This sharp rally reflects market dynamics, particularly supply constraints, Iran’s ballistic missile attack on Israel (will there be an Israel response on Iran?) and heightened demand.
Personal Experience Tip: I see a lot of retail traders looking at the rally with FOMO. In my experience, such rapid price movements often suggest that traders may be pricing in unexpected news or geopolitical developments but pros should focus more on where to enter, more than where oil is going. The key is the entry point. Now you’re ready for my Crude Oil price forecast video.

Technical Patterns: From the above video showing crude oil technical analysis as well as my predictions, I am starting out from the broaer view on the weekly chart, where I’ve identified:

• Three perfect touchpoints along the bottom trendline, showcasing a consistent support level.
• A triangle pattern formed by the top red resistance line with significant touchpoints, suggesting potential breakout scenarios.

Key Technical Levels to Watch 🔍

Potential Retracement Zones:

• $73.30 Level: This level aligns with the red trendline retest and notable volume profile levels. Historically, such alignments can indicate strong support.
• $72.00 Zone: Between $71.90 and $72.10, this range has served as a strategic entry point in previous market cycles.

Resistance Areas:

• First Zone: Between $76.50 and $77.50, marked by the purple VWAP line from a key high. According to technical studies by John Murphy, VWAP often acts as a dynamic support or resistance zone, especially in volatile markets.
• Second Zone: Near $78.50, just below the August open at $78.59, this area could present a significant barrier as it represents prior high liquidity zones.

Trading Strategy Insights 🧠

Risk Management:

Placing stop-loss orders is essential to managing potential downside risks. In case support levels like $72.00 fail, it’s crucial to re-evaluate your strategy. Consider setting stop-loss orders just below the trendline, ensuring you’re protected from unexpected reversals.

Profit Targets:

• Partial Profit-Taking: Securing profits between $76.50 and $77.50 can mitigate risk, while monitoring the price near $78.50 for full profit potential. Historically, major resistance zones can cause significant retracements, so taking some off the table helps manage exposure.
• Market Participation: Swing traders could capitalize on the broader market momentum, while day traders should keep adjusting their strategies to accommodate shorter timeframes.

From my own trading experience, patience in waiting for optimal entry points tends to improve risk-to-reward ratios, especially in trending markets like crude oil.

Final Thoughts 💭

While the bullish trend in crude oil is currently strong, entry timing is crucial due to recent rapid price movements. Keep a close eye on the highlighted levels, and stay adaptable to changes in market dynamics, including geopolitical tensions, economic reports, or unexpected supply disruptions.

I have covered my own opinion for the short term crude oil price prediction. You should always do your own research and for those that want to look at a higher timeframe and fundamentals, you can check out the International Energy Agency on oil, as fluctuations in global supply chains remain a key factor influencing short-term price movements.

As always, trade wisely, stay informed, and manage your risks!

For more insights and real-time updates, visit ForexLive.com. Have a successful trading week! 📊🌟

This article was written by Itai Levitan at www.forexlive.com.

Mixed news out of Saudi Arabia, info comes via Bloomberg citing a pricing list they’ve seen:

• Saudi Aramco raised the official selling price of its key Arab Light crude to Asia by 90 cents, bringing it to a $2.20 per barrel premium over the regional benchmark
• vs. expected 65 cents / bbl
• cut the price of all grades to Europe and the US though

Saudi Aramco is the state owned oil producer.

—

The oil price jumped last week in response to a ratcheting higher of conflict in the Middle East.

Chart from ForexLive free charting, access it here

This article was written by Eamonn Sheridan at www.forexlive.com.

China began its week-long National Day holiday on Tuesday October 1.

In the week leading up to the holiday beginning Chinese authorities announced an array of economic stimulus measures. SOme of the measures were aimed specifically at the property sector, such as:

• reductions in down-payment ratios
• reductions in mortgage rates
• an easing in property buying restrictions

China’s state broadcaster CCTV reported a statement from the Ministry of Housing and Urban-Rural Development on Saturday saying that the measures are having success. The statement cited the number of people visiting houses and sales offices, as a reflection of buying intentions, along with increased participation in sales promotions.

—

The data these officials are citing is not sales, but I think we can give them some benefit of some doubt of increased activity. I’ll be waiting for more solid data. Chinese equity markets have not been waiting for more solid data, they recorded historic gains in the week leading to the holidays and Hong Kong markets, which reopened on Wednesday last week, have added gains also.

I’m not in front of my regular PC to post a chart, so here’s a quick one from CNBC. Shanghai Composite over the past year. You can see the extent of the rally in the last week of September.

Chinese markets reopen on Tuesday, October 8.

This article was written by Eamonn Sheridan at www.forexlive.com.

• WSJs Timiraos: A solid September payroll takes a lot of November Fed meeting
• US major indices close the day higher helped by strong jobs
• White House economic advisor Brainerd expects impact on employment from hurricane Helene
• Oil prices move lower after present Biden says he woul not support striking an oilfield
• REUTERS: US military carries out strikes against multiple Houthi targets in Yemen
• Israeli army is preparing to expand its operation in southern Lebanon
• Baker Hughes oil rig count -5 at 479
• European equity close: Decent finish but down on the week
• JPMorgan now sees the Fed cutting by 25 basis points
• Bank of America now sees Fed cutting 25 bps in November from 50 bps
• More from Goolsbee: Will have discussions about what rate we need to ultimately settle on
• Fed’s Goolsbee: This is a super jobs report
• This was the early tell in the recession reversal trade
• Tech sector rallies: Innovation fuels market gains
• Fed’s Williams doesn’t comment on monetary policy or the outlook
• Good news is good news: US stock futures jump
• US September non-farm payrolls +254K vs +140K expected
• The JPY is the strongest and the NZD is the weakest as the NA session begins
• Forexlive European FX news wrap: Awaiting the US NFP release
• ECB’s De Guindos says inflation to near 2% by 2025 but too early for victory laps

The US September jobs report today exceeded expectations, with non-farm payrolls increasing by 254K compared to the 140K anticipated. The unemployment rate fell slightly to 4.1%, nearly reaching 4.0%, and the participation rate held steady at 62.7%.

Private payrolls surged by 223K, while average hourly earnings rose by 0.4% month-over-month and 4.0% year-over-year, both above forecasts.Manufacturing payrolls dropped by 7K, an improvement over prior data.

The household survey showed a gain of 430K jobs, with a notable increase in full-time employment (+631K) but a decrease in part-time jobs (-201K). The strong data diminished expectations for a Federal Reserve rate cut at the November meeting, driving the US dollar higher, but implies a more solid US economy.

With the Fed feeling that inflation is under control, if the jobs gains fill job needs, there is a chance it may not be inflationary and therefore may keep the Fed on it recalibration path. Fed’s Goolsbee was the only Fed officisl who commented on the report, descriving it as „super,“ and also highlighted the end of the port strike as additional positive news.

However, he cautioned against reacting too strongly to a single data point, emphasizing that more reports like this would increase confidence in achieving full employment. He noted that strong job numbers are likely to reflect strong GDP growth.

While the Fed is still determining the neutral interest rate, he suggested it is likely higher than zero and could fall within the 2.5-3.5% range, though there is time to figure this out. Goolsbee stressed the importance of maintaining current economic conditions, and while productivity growth could lead to a higher neutral rate, the economy would need to handle it.

He also acknowledged that broad indicators show the labor market is cooling, but rejected the notion of a „soft landing“ as the economy continues to move forward.

The Fed’s ideal scenario would see unemployment between 4-4.5% and inflation around 2%, which he believes would satisfy the Fed’s goals. As more data becomes available ahead of the next Fed meeting, Goolsbee warned that external shocks could still derail efforts toward a soft landing.

For now, however, it is back to happy/giddy times. Next week the US CPI data will be released with the expectation for the headline (0.1%) and the core (0.2%) to be on the tame side once again, although the core YoY is still elevated at 3.2%. The headline YoY is expected to dip to 2.3% from 2.5%.

The news today sent stocks higher with the Dow industrial average closing at a new record high. A snapshot of the closing levels shows:

• Dow industrial average rose 341.16 points or 0.81% at 42352.75
• S&P index rose 51.13 points or 0.90% at 5751.07
• NASDAQ index rose 219.37 points or 1.22% at 18137.85

The small-cap Russell 2000 rose 32.65 points or 1.50% at 2212.79.

For the trading week, the gains were modest with the Nasdaq up 0.10%, the Dow up 0.09% and the S&P up 0.22%.

IN the US debt market, yields moved sharply higher with:

• 2 year yield: 3.928%, +21.4 basis points
• 5 year yield 3.807%, +17.4 basis points
• 10-year yield 3.967%, +11.7 basis points
• 30 year yield 4.249%, +.0 basis points

For the trading week:

• 2 year rose 36.5 basis points
• 5 year rose 30.0 basis points
• 10 year rose 21.3 basis points
• 30 year rose 14.5 basis points

Mortgage rates are back up 6.5%

Looking at the strongest weakest of the major currencies, the GBP and the USD are the strongest while the JPY is the weakest.

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

Wall Street Journal’s Nick Timiraos is out with a tweet saying:

• A very solid September payroll report probably takes a lot of the drama out of the November Fed meeting
• Likely leaves officials on course for a 25 basis point cut.

Looking at the probability of a 25 basis point cut, that is now at 99%, while remaining unchanged is that 1%.

At points last week, the intimate 50 basis point cut was upwards of 60% for November.

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

US stocks moved higher despite yields moving higher as US jobs showed strength and the striking dockworkers reached a tentative agreement averting a prolonged closure of key port’s

A snapshot of the closing levels shows:

• Dow industrial average rose 341.16 points or 0.81% at 42352.75
• S&P index rose 51.13 points or 0.90% at 5751.07
• NASDAQ index rose 219.37 points or 1.22% at 18137.85

The small-cap Russell 2000 rose 32.65 points or 1.50% at 2212.79.

For the trading week:

• Dow industrial average was able to reverse declines and close higher by 39.75 points or 0.09%
• S&P index also moved into positive territory with a gain of 12.90 points or 0.22%
• NASDAQ index rose by 18.26 points or 0.10%
• Russell 2000 could not reverse earlier declines and is closing down -11.90 points or -0.53% for the week

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

As the week comes to a close, the USDJPY is trading near the highs for the day and the week. The move to the upside today off the unexpected US jobs report, was able to take the price above a key swing area ceiling around the 147.33 level and also above the 38.2% retracement of the move down from the July 3 high at 148.116.

Both of those levels will be support for traders going into the new trading week. Going forward, if the price can remain above each, the buyers are still in play.

On the topside, the high price from August 15 at 149.356 is the next target to get to and through. Move above that level and traders would start to target a cluster of key targets including the:

• 50% midpoint of the move down from the July high at 150.75
• The 200 day moving average at 151.046
• The 100 day moving average at 151.599.

This week, the Japan’s PM dialed back his call for a hike, and BOJ Ueda said that the markets were unstable. In the past, he commented that he unstable market would keep the Bank of Japan on the sidelines. That has been a tail wind for a weaker JPY. The US jobs report, gave the dollar buyers more incentive to take the USDJPY higher as well.

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

As we head into the close, the EURUSD is trading near lows for the week.

The strong US jobs data today helped to push the pair below a swing area between 1.1001 and 1.1014, and also the 50% midpoint of the move up from the August 1 low at 1.0995. That area will now be close resistance going into the new trading week.

On the downside, the 61.8% retracement of the same move higher comes in at 1.0944. That is within a swing area going back to July 17 between 1.09419 and 1.0949. That will be a key bias-defining level for next week’s traders on the downside. Move below it, and then its 100-day moving average at 1.0928, and traders would then look toward the 200-day moving average of 1.08738 (and moving higher).

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

• Chinese Commerce Ministry releases statement after EU vote on tariffs on China-made electric vehicles.
• Chinese Commerce Ministry, after EU vote on EV tariffs: China firmly opposes EU’s ‚unfair‘, ’non-compliant‘, ‚unreasonable‘ protectionist practices.
• Chinese Commerce Ministry, after EU vote on EV tariffs: ‚Protectionist practices‘ of EU seriously violate rules of WTO.
• Chinese Commerce Ministry, after EU vote on EV tariffs: EU practices disrupt normal international trade order, hinder China-EU trade and investment cooperation.

This article was written by Arno V Venter at www.forexlive.com.